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Law of Competition - Case Laws

Showing 61 to 80 of 341 Records

• 2023 (5) TMI 19
  

  Levy of penalty under section 43-A of Competition Act, 2002 - alleged failure to give notice under Sub-section 2 of Section 6 of the Act - Appellant submitted that once the CCI had found that there was no ‘appreciable adverse effect on competition’ in the relevant markets as a result of Transactions I and II, the jurisdiction did not lie with the CCI to open proceedings under Section 43A.

  HELD THAT:- The clarificatory notification dated 27.3.2017 issued by the Ministry of Corporate Affairs makes it clear where a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated with another enterprise, the value of assets of the said portion or division or business and are attributable to it, shall be the relevant assets and turnover to be taken into account for the purposes of calculating the threshold under section 5 of the Act. The Press Release issued on 30.3.2017 gives information to the public about the nature of this notification and mentions that this notification is to provide clarity on the calculation method for assets and turnover because such a matter was causing confusion among the business entities. The said notification, therefore, being clarificatory in nature, applies with retrospective effect.

  It is noted that this Tribunal in the matter of Eli Lilly and Company [2020 (3) TMI 1446 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] considered that the De Minimis notification dated 4.3.2011, and Notification dated 4.3.2016, both issued by the Ministry of Corporate Affairs under Section 54 of the Act provide exemption to certain transactions due to their small size. Further, the Press Release dated 30.3.2017 states and informs that for combination that fall within the threshold limits, there would be no requirement for their filings to be notified before the CCI. After considering the De Minimis notification dated 4.3.2016 and the Press Release dated 30.3.2017, this Tribunal decided that for the purpose of calculation of assets and turnover, what is being acquired is relevant as the assets and turnover of what is left over with the seller after the acquisition will not have any role to play in the context of the business of the purchaser/acquirer after the acquisition. On this basis, this Tribunal set aside the order of CCI in the Eli Lilly case.

  The clarificatory notification dated 27.3.2017 gives a purposive construction to the earlier De Minimis notifications dated 4.3.2011 and 4.3.2016 and therefore, the notification dated 4.3.2016 would have retrospective effect insofar as the jurisdictional threshold for Transactions I and II are concerned. In view of the fact that the total turnover of the acquisition i.e. acquired trademarks ‘Savlon’ and ‘Shower to Shower’ is only Rs.68.37 crores, it is opined that ITC would not be required to notify the Transactions I and II before the CCI as these transactions would be exempt in the light of the De Minimis notification. Thus, the penalty imposed by the CCI on ITC for the reason it did not notify the Transactions I and II under section 6(2) of the Act, should not have been imposed and to that extent we set aside the Impugned Order of the CCI.

  No penalty was required to be imposed on the Appellant - The appeal is, therefore, allowed to the limited extent of the issue of penalty.

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• 2023 (4) TMI 1387
  

  Invocation of the "Book Examination Clause" by the respondent - abuse of dominant position in violation of Sections 3 and 4 of the Competition Act, 2002 - unilateral revision of rates by the respondent without appealing the Competition Commission of India's (CCI) decision - HELD THAT:- The petitioner entered into an agreement with M/s Arthur Flury AG. The CORE floated the online global tender on their website for supply of 28 sets of SNS Assembly (Phase Breaks). The petitioner firm also participated in the global tender. The bid was opened on 18.10.2017 and the petitioner's bid was accepted. Consequently, the purchase order was given to the petitioner on 12.1.2018 for supply of 28 sets of SNS Assembly (Phase Breaks) for Rs. 2.31 crores. Admittedly, the said material was supplied by the petitioner firm. Meanwhile, another global tender was published by the CORE and the global bids were opened on 29.11.2017 for supply of 238 sets of SNS Assembly (Phase Breaks). The petitioner firm again participated in the said global tender and it's bid was accepted for supply of 176 sets, out of total tender quantity of 238 sets - Admittedly, in response of the purchase order dated 27.2.2018, the petitioner supplied the entire articles through various Challan-cum-Tax Invoices dated 26.6.2018 but instead of clearing the outstanding amount to the petitioner firm, the second respondent sent a letter dated 17.05.2018 stating that they have invoked “Book Examination Clause” for the present order as well as the previous order of 2013.

  The price trend does not support the allegation of abuse of dominant position made by the informant by artificially determining the sale price in terms of the provisions contained in Section 4(2)(a)(ii) of the Act, 2002. In view of the above assessment, the Commission was of the view that the petitioner does not appear to have abused its dominant position in terms of the provisions of Section 4 of the Act, 2002 and no case of contravention of the provisions of Section 4 of the Act, 2002 was made out against the petitioner, accordingly the matter was ordered to be closed in terms of the provisions contained in Section 26(2) of the Act, 2002 - there are no justification to entertain the writ petition to sit in appeal or to upset the findings recorded by the CCI in its order dated 27.8.2018, which was affirmed by the NCLAT in the order dated 23.1.2020 and in the review order dated 13.4.2022.

  A Constitutional Bench of Hon'ble Supreme Court in L. Chandra Kumar vs. Union of India [1997 (3) TMI 90 - SUPREME COURT] has held that the power vested in the High Courts to exercise judicial superintendence over the decisions of all courts and tribunals within their respective jurisdictions is also part of the basic structure of the Constitution and the decisions of Tribunals would be subject to the High Court’s Writ jurisdiction under Article 226/227 of the Constitution before a Division Bench of the High Court within whose territorial jurisdiction the particular Tribunal falls.

  A careful perusal of Section 53T of the Act, 2002 would show that an appeal to the Supreme Court is provided against “any order passed by the Appellate Tribunal”. Therefore, the appropriate remedy for the respondent was to file an appeal against the judgment and order dated 23.01.2020 passed by the Tribunal before Hon'ble Supreme Court of India in terms of the aforesaid provisions of the Act, 2002 within the period of limitation prescribed therein. Admittedly, the respondent did not prefer any appeal before Hon'ble Supreme Court neither within the period of limitation nor even any delayed appeal was filed after expiry of the limitation period.

  Conclusion - Once the respondent/CORE has lost the reference made on similar allegations of excessive pricing on the same material on record before the CCI, which are referred in the impugned orders, and the appeal and review preferred by the CORE before the NCLAT have also been dismissed, the findings arrived by the CCI has attained finality in the event of the order not challenged before Hon'ble Supreme Court in terms of Section 53T of Act, 2002, then the issue involved in the present writ petition stood settled and covered by the order passed by the CCI dated 27.08.2018.

  The impugned orders dated 12/13.9.2018 as well as demand notice dated 26.9.2018 are liable to be set aside - Petition allowed.

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• 2023 (4) TMI 1187
  

  Invocation of doctrine of necessity for initiating non-compliance proceedings against Google - non-effective compliance by Google of the CCI’s final order - Section 42 of the Competition Act, 2002 - CCI is validly constituted presently with two members to continue its adjudicatory roles or not - effect of Section 15 of the Act - whether, in the present case, would there remain any requirement to apply the principles of doctrine of necessity at all?

  HELD THAT:- A plain reading of the provision of Section 15 brings to fore that it contemplates two different functions of CCI which would be governed by the said Section, namely an “act” or “proceeding”. It is manifest that the “act” contemplated, would obviously be distinguishable from the “proceeding”, in that, a “proceeding” would be relatable to adjudicatory powers exercised by the CCI and anything other than an adjudicatory process would be covered by the word “act” which could mean regulatory or administrative powers of the CCI. Moreover, it is trite that when an enactment uses the word “or”, it clearly indicates that the same ought to be read disjunctively, meaning thereby, that the saving clause of section 15 would equally apply to adjudicatory/judicial powers of the CCI. So read, the intention of the Legislature to ensure that the adjudicatory functions of the CCI does not get impeded for defect arising out of vacancy or constitution arising out of vacancy, becomes clear - any adjudicatory process wherein there is a vacancy or any defect in the constitution of the Commission would not invalidate the proceedings of CCI. It is trite that a statutory interpretation ought to be based on plain reading of the Section itself unless there is any ambiguity which would entail reliance upon extraneous materials.

  This Court is of the considered opinion that the aims and objects of a particular enactment ought to be interpreted in a manner so as to ensure that the object desired to be fulfilled by the legislature by such promulgation are taken to its logical conclusion. In other words, merely because of a defect or a vacancy in the constitution of the CCI, the CCI cannot be considered as a statutory authority not having jurisdiction to adjudicate the complaints or other proceedings pending before it. Any interpretation, other than the aforesaid, would render the provisions of Section 15 otiose and which could not possibly be the intention of the Legislature either.

  The arguments of Mr. Sandeep Sethi, learned senior counsel in respect of quorum being complete only if three members of the CCI, including the Chairperson, constitute the same, is untenable. For the same reason, the argument of Mr. Sethi, learned senior counsel that the word “vacancy” used in Section 15 read with sub-section 3 of Section 22 of the Act mean that the word “vacancy” would be applicable only and only if the vacancy is in respect of members more than three and less than seven, would also be untenable, considering the plain language of both the Sections. Though the argument, at the first blush, appears to be logical, however, in view of the fact that the provisions of Section 22 are not relatable to the adjudicatory process at all, the interpretation sought to be given to the word “vacancy” in Section 15, by reading the proviso to sub-section (3) to Section 22 of the Act into it, would also stand rejected.

  This Court is of the considered opinion that the provisions of Section 15 act as a saving clause in regard to a situation where a vacancy or a defect in constitution of the CCI would arise and any such vacancy or defect in the constitution would not invalidate any proceedings so far as the adjudicatory powers of the CCI is concerned.

  Doctrine of necessity - HELD THAT:- Having regard to the definition of what constitutes doctrine of necessity as rendered by the Hon’ble Supreme Court in J. MOHAPATRA & CO. VERSUS STATE OF ORISSA [1984 (8) TMI 350 - SUPREME COURT], it is clear that it is only when an adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide, may be required to adjudicate if there is no other person who is competent or authorized to adjudicate or if a quorum cannot be formed without him or if no other competent Tribunal can be constituted, that the doctrine of necessity may become applicable. The Hon’ble Supreme Court has also held that in such cases, the principles of natural justice would have to give way to the necessity, for otherwise there would be no means of deciding the matter and the machinery of justice or administration would break down.

  In the present case, none of the learned senior counsel appearing on behalf of the respondents, at all submitted that the members who presently comprise the CCI are disqualified for any reason. Having regard thereto, the question of examining whether the doctrine of necessity is or is not applicable to the present case does not arise at all.

  There is no impediment, legal or otherwise, in directing the CCI to take up the applications under Section 42 of the Act, as filed by the petitioner, for hearing and considering the same in accordance with law on or before 26.04.2023 - petition disposed off.

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• 2023 (4) TMI 649
  

  Anti-competition - Cartelisation - unfair trade practices - direction to furnish certain documents and details and to make submissions on the quantum of penalty that may be levied in the event, the petitioner is held to have acted in contravention of the Competition Act, 2002 - rejection of request of the petitioner to cross examine the informant - HELD THAT:- In accordance with the procedure under Section 26(8) of the Act read with Regulation 21(7) of the Competition Commission of India (General Regulations), 2009 the CCI forwarded a copy of the Director General’s report to the opposite parties in the respective cases, one of them being the petitioner. The report was so forwarded so that the petitioner is given an opportunity to file its objections / suggestions to the report. The order also indicates that an opportunity of oral hearing was to be provided. These investigation reports dated 17.2.2019 and the order accompanying the report dated 2.5.2019 are on record.

  The impugned orders dated 1.8.2014 and 17.11.2015 only recorded a prima facie opinion that the parties have colluded and formed a cartel for increase of prices in different varieties of paper and thereby warranting investigation for anti-competitive practices under the provisions of Section 3(1) read with Section 3(3)(a) of the Act in the paper industry. What is evident therefore that the information filed was neither restricted to a particular set of manufacturers but was in context of the entire paper industry connected with different varieties of paper.

  Reading the investigation reports and the orders passed under Sections 26(1) read with Section 26(3) of the Act would indicate that the order is an administrative order which only forms a prima facie opinion. The petitioner has been given an opportunity of producing evidence before the DG during the process of investigation and by the orders impugned the DG has called upon the petitioner to file its objections / suggestions to the investigation report. It cannot be said therefore that the petitioners’ doors are closed. After affording a reasonable opportunity and considering the objections and suggestions, the Commission based on the investigation reports will take an appropriate decision - The High Court in its writ jurisdiction cannot delve into the merits and demerits of the report when as is also evident from the impugned order by which the request of the petitioner for cross examination of witnesses has been rejected that the CCI has granted liberty to the petitioner to file affidavits in rebuttal to dispute the conclusions drawn by the DG based on the depositions etc.

  Petition dismissed.

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• 2023 (4) TMI 173
  

  Abuse of dominant position in contravention of the provisions of Section 4(2)(a)(i), Section 4(2)(b)(ii), Section 4(2)(c), Section 4(2)(d) and Section 4(2)(e) of the Competition Act, 2002 - pre-installation of entire GMS suite under MADA - amounts to imposition of unfair condition on the device manufacturers and thereby infract provisions of Section 4(2)(a)(i) and Section 4(2)(d) of the Act or not - Revenue Share Agreement (RSA) - Doctrine of proportionality.

  Whether for proving abuse of dominant position under Section 4 of the Competition Act, 2002 any ‘effect analysis’ of anti-competitive conduct is required to be done? And if yes; what is the test to be employed? - HELD THAT:- For proving abuse of dominance under Section 4, effect analysis is required to be done and the test to be employed in the effect analysis is whether the abusive conduct is anti-competitive or not.

  Whether the order of the Commission can be said to be replete with confirmation bias? - HELD THAT:- The Commission proceeded to consider the materials on the record and submissions of the parties with respect to each of the market and recorded findings and conclusions after considering the evidence on record. Hence, we are unable to accept the submission of the learned Senior Counsel for the Appellant that the order of the Commission is replete with confirmation bias.

  Whether pre-installation of entire GMS Suite amounts to imposing of unfair condition on OEMs which is an abuse of dominant position by the Appellant resulting in breach of Section 4(2)(a)(i) and 4(2)(d)? - Whether the Commission, while returning its finding on breach of Section 4(2)(a)(i) and 4(2)(d), has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? - HELD THAT:- Pre-installation of entire GMS Suite amounts to imposing of unfair condition on OEMs which is an abuse of dominant position by the Appellants resulting in breach of Section 4(2)(a)(i) and 4(2)(d) - The Commission while returning its finding on breach of Section 4(2)(a)(i) and 4(2)(d) has considered the evidence on record and has returned finding that the conduct of the Appellant harms the competition.

  Whether the Appellants by making pre-installation of GMS Suite conditioned upon signing of AFA/ACC for all Android Device Manufacturers (OEMs) has reduced the ability and incentive of the OEMs to develop and sell devices operating on alternative versions of Android i.e., Android Fork and thereby limited technical and scientific development which is breach of the provisions of Section 4(2)(b)(ii) of the Act? - Whether the Commission while returning its finding on breach of Section 4(2)(b)(ii) has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? - HELD THAT:- The Appellant by making pre-installation of GMS suite conditional to signing of AFA/ACC for all Android devices manufacturers, has reduced the ability and incentive of devices manufacturers to develop and sell self-device operating or alternative version of Android and Android Forks and thereby limited technical and scientific development, which is breach of provisions of Section 4(2)(b)(ii) of the Act - The Commission while returning its finding has considered the evidence on record in respect of Section 4(2)(b)(ii) and has also returned finding on anti-competitive conduct of the Appellant.

  Whether Appellant has leveraged its dominant position in Play Store to protect its dominant position in Online General Search in breach of Section 4(2)(e) of the Act? - Whether the Commission while returning its finding on breach of Section 4(2)(e) in reference of above has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? - Whether Appellant has abused its dominant position by tying up of Google Chrome App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act? - Whether the Commission while returning its finding on breach of Section 4(2)(e) in reference to tying of Google Chrome with Play Store has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? - Whether Appellant has abused its dominant position by tying up of YouTube App with Play Store and hereby violated provisions of Section 4(2)(e) of the Act? - Whether the Commission while returning its finding on breach of Section 4(2)(e) in reference to tying of YouTube with Play Store has not considered the evidence on record and has not returned any finding regarding the Appellants conduct being anti-competitive? - HELD THAT:- Appellant has leveraged its dominant position in Play Store to protect its dominant position in Online General Search in breach of Section 4(2)(e) of the Act. Commission while returning its finding on breach of Section 4(2)(e) in reference of above has considered the evidence on record and has also returned finding regarding the Appellants conduct being anti-competitive - Appellant has abused its dominant position by tying up of Google Chrome App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act. Commission while returning its finding on breach of Section 4(2)(e) in reference of above has considered the evidence on record and has also returned finding regarding the Appellants conduct being anti-competitive - Appellant has abused its dominant position by tying up of YouTube App with Play Store and thereby violated provisions of Section 4(2)(e) of the Act. Commission while returning its finding on breach of Section 4(2)(e) in reference of above has considered the evidence on record and has also returned finding regarding the Appellants conduct being anti-competitive.

  Whether the investigation conducted by the Director General was in violation of Principles of Natural Justice? - Whether the investigation conducted by the Director General is vitiated due to DG framing leading questions to elicit information? - HELD THAT:- Investigation conducted by the Director General did not violate the principle of natural justice - Investigation conducted by the Director General cannot be said to be vitiated due to the Director General framing leading questions to elicit information.

  Whether order of Commission is vitiated since the Commission did not have any Judicial Member? - HELD THAT:- The impugned order by the Commission is not vitiated on the ground that the Commission did not consist of a Judicial Member.

  Whether the order passed by the Commission in exercise of its power under Section 27(a) is beyond the findings recorded by the Commission and is not in accordance with law? - HELD THAT:- There is no dispute that preinstalled Apps can be disabled by the users in no time. The OEMs are also not obliged to install all 11 suite of Apps of Google, thus the OEMs are free to not preinstall any of the Apps. All the Apps, which are preinstalled can be disabled as per the users’ choice, disabling all the Apps by user serve the purpose of disappearing the Apps from the screen and not performing any functions. The Apps can be enabled, if user so decides. Uninstallation will preclude option of the user to disable and enable the particular App as per its choice - direction in paragraph 617.7 is uncalled for and deserve to be set aside.

  Whether the penalty imposed on the Appellants by the Commission in exercise of its power under Section 27(b) was not based on relevant turnover of the Appellants, disproportionate and excessive? - HELD THAT:- Google has not provided the financial information as sought by the CCI vide its order dated 6.10.2021, and reiterated in its later order dated 17.10.2021. The inadequacy of the data supplied by Google has been mentioned in detail in paragraphs 630, 631, 632, 633 and 634, whereafter the CCI points out to significant inconsistencies and wide disclaimers in presentation of the requisite data by Google. In such a situation, CCI has carried out the “best estimation” on the basis of a financial statements and information submitted by Google - in a conservation approach, the CCI has taken the lower of these two figures as turnover for the FY 2020-221 and imposed a penalty @ 10% of its average of relevant turnover for the last three FYs 2018-19, 2019-20 and 2020-2021. We uphold the amount of penalty imposed by CCI on Google.

  Regarding the issue of imposition of “provisional penalty” consider the argument of the Learned Senior Counsel of the Appellant that there is no provision in the Competition Act for imposing a provisional penalty, with the possibility of revising it on receipt of further information data. We are of the view that the section 27(b) of the Competition Act, 2002 provides for imposition of penalty, which shall not be more than 10% of the average turnover for the last three preceding years upon enterprises, which are parties to such agreements or abuse. Once the CCI has derived the “best estimate” of the relevant turnover for the last three preceding financial years, and imposed a penalty of 10% of the average of such turnover, we are of the opinion that further revision of this penalty on the basis of financial information or data that may come to light in future will not be in keeping with law.

  Appeal is thus disposed off in following manner:

  (i) The impugned order of the Commission dated 20th October, 2022 is upheld, except as indicated at direction (ii) below;

  (ii) Direction issued in paragraphs 617.3, 617.9, 617.10 and 617.7 are set aside. Rest of the directions under paragraph 617 and fine imposed by paragraph 639 are upheld.

  (iii) The Appellant is allowed to deposit the amount of penalty (after adjusting the 10% amount of penalty as deposited under order dated 04.01.2023) within a period of 30 days from today.

  (iv) The Appellant is allowed 30 days’ time to implement the measures as directed in paragraph 617 (to the extent upheld by this order).

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• 2023 (4) TMI 56
  

  Anti-Competition Act - Cartelization - Seeking grant of Lesser penalty under Section 46 of the Act r/w Regulation 5 of the Competition Commission of India (Lesser Penalty) Regulations, 2009 - Appellant argued that Geep Industries is a very small player in the dry batteries market having a minuscule share of about 1% whereas the three major players viz. Eveready, Nippo and Panasonic controlled about 98% of the said market - HELD THAT:- Sub-section (1) of section 3 of the Act prohibits an enterprise to enter into any agreement in respect of supply of goods or services which causes or is likely to cause an ‘appreciable adverse effect on competition’ within India and sub-section (2) of Section 3 of the Act lays down that any agreement entered into in contravention of provisions of sub-section (1) of Section 3 of the Act shall be void. Such an agreement, which directly or indirectly determined purchase or sale price of goods is also ‘presumed’ to have an appreciable adverse effect on competition as per sub-section 3 of section 3 - once an agreement has been entered into by parties which is in contravention of the provision of sub-section 1 of section 3, shall be ‘presumed’ to have an appreciable adverse effect on competition, and there such behaviour is anti-competitive that would invite penalty under section 27 of the Act.

  Geep Industries is very clearly in a ‘bilateral ancillary cartel’ with the Panasonic, while Panasonic is found to be member of ‘primary cartel’ in the dry cell batteries market. Thus, even though Geep is an extremely small player in the dry cell batteries market which may not be capable of influencing the market in any appreciable manner, the fact that it agrees through the PSA to follow market prices as set by Panasonic makes it clear that such behavior is anti-competitive, and Geep Industries being in contravention of Section 3 (1), (2) and (3) is clearly established, as has been adjudicated by the CCI in the impugned order.

  The Proviso to Section 27(B) empowers the CCI to impose upon a cartelizing company a penalty which can be upto three times of its profits for each year of the continuance of such agreement or 10% of its turnover for each year of the continuance of such agreement, whichever is higher. It is not disputed that the duration during which the ‘bilateral ancillary cartel’ was operating by virtue of the PSA was from 01.10.2010 to 30.04.2016 - the quantum of penalty which the Appellant has argued to be very high and disproportionate to its offensive behavior, and sought reduction in the penalty amount. We note that the impugned order, in paragraph 37, records that Geep Industries is a ‘very small player’ having insignificant market share in the market for dry cell batteries and was not in a bargaining/ negotiating position with PECIN. Thus, the Impugned Order recognizes that while Geep Industries is an offender of Section 3 of the Act, it was neither in a bargaining position vis-à-vis PECIN nor having a significant market share to be able to influence prices in the said market.

  The market share of the Appellant in the relevant market was only about 1%, and it was barely able to function with meagre profit, an exorbitant fine would have been fatal for the business of the Appellant and may have thrown the Appellant out of the market. In the present case, it is noted that the Appellant has been imposed a penalty @4% amounting to Rs. 9,64,06,682/- which is certainly exorbitant looking to the annual turnover and profits of the Appellant from 2010-11 to 2016-17 as is evident from para 34 of the impugned order. In such a situation, it is felt that this would be a mitigating factor with respect to Geep Industries in the present case.

  While the quantum of penalty should be such that it acts as a deterrent and regulate anti-competitive behaviour. Geep Industries business dynamics and situation in the market to be such that it was neither in a negotiating strength vis-à-vis PECIN nor having a market share that could actually influence the price in the said market. In view of such a situation, and fully conscious of the fact that Geep Industries has turned losses in the first three years under review by CCI of its anti-competitive behavior.

  The penalties imposed on the respective directors, officers and employees as included in Table-6 in para 43 of the impugned order are commensurate with their offensive behavior as they were the persons responsible for entering into PSA and being knowledgeable persons were supposed to have knowledge and understanding of law in relation to behaviour of corporate entities in a market. Therefore, the penalties imposed on Ms. Pushpa M, Mr. Joeb Thanawala, and Mr. Jainuddin Thanawala by the Impugned Order need no modification.

  Appeal allowed.

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• 2023 (2) TMI 382
  

  Application for interim stay - principal grievance which was urged, when the appeal was taken up, was that while on the one hand, NCLAT noted that “urgency has been shown in passing interim order”, the appeal has been directed to be listed on 3 April 2023 but there has been no expression of opinion, prima facie, on the merits of the order in appeal with a view to evaluating whether a case for interim stay was made out - HELD THAT:- At the present stage, since the appeal is pending before NCLAT, we are desisting from entering a finding on the merits of the rival submissions which have been urged on behalf of the contesting parties. Any expression of opinion of this Court on the merits would affect the proceedings which are pending before the NCLAT. It would suffice to note that the findings which have been arrived at by the CCI cannot be held at the interlocutory stage to be either without jurisdiction or suffering from a manifest error which would have necessitated interference in appeal.

  While we are not inclined to interfere with the impugned order of the NCLAT, we would request the NCLAT to dispose of the appeal by 31 March 2023 - we affirm the order of the NCLAT declining to grant interim relief.

  Appeal disposed off.

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• 2023 (1) TMI 196
  

  Anti-Competitive Acts - whether the warranty policy has (i) potentially resulted in denial of market access to parallel importers & resellers of Boxed Micro-Processors for Desktop and Laptop PCs & (ii) the risk of higher pricing for the said articles in India? - powers under Section 26(1) of the Competition Act, 2002 - HELD THAT:- The argument of learned Senior Advocate Dr. A.M.Singhvi that the investigation now ordered under section 26(1) of the 2002 Act may have a ‘detrimental effect’ on the business reputation of the petitioners, may be arguably true, to some extent. He also contended that the investigation to be undertaken by the Director General in terms of order under section 26(1) of the 2002 Act, (which he termed ‘draconian law’) involves an intrusive and free ranging inquiry into every aspect of his clients’ business.

  Hon’ble Delhi High Court in GOOGLE vs. COMPETITION COMMISSION OF INDIA [2015 (4) TMI 1234 - DELHI HIGH COURT] although did not use the word ‘draconian’ observed that the powers of Director General to investigate under section 26(2) are far wider than the powers of the police under the Code of Criminal Procedure, 1973, is also true. However, similar contentions taken up by the very same counsel in FLIPKART INTERNET PVT. LTD., AMAZON SELLER SERVICES PRIVATE LIMITED VERSUS COMPETITION COMMISSION OF INDIA AND ORS. [2021 (7) TMI 1398 - KARNATAKA HIGH COURT] were repelled by the Division Bench of this Court and the same has attained finality - It would once again be fruitful to advert to the foundational philosophy of competition law. The central concern…is that firm or firms can harm competition and inflict harm on customers and ultimately end consumers where they possess some degree of market power.

  Even otherwise, there are several checks & balances against the abuse of power vested in the Commission which comprises of experts and qualified persons as its constituent members. Commission’s stature and track record as can be ascertained from several rulings of the Apex Court and various High Courts, is also a fair assurance against the abuse of power. An opportunity of hearing is also provided to the stakeholders at the stage of investigation and thereafter whilst punitive or corrective action are being considered. This apart, a right of appeal is provided under section 53 A of the Act, as amended in 2007, once the report of investigation is submitted by the Director General. The adverse consequences of proceedings taken in accordance with law ordinarily fall under the maxim, ‘damnum sine injuria’.

  It is not that in no case in which Commission directs investigation under section 26(1) of the Act arbitrarily and unreasonably, the aggrieved cannot invoke writ jurisdiction. Such cases warranting indulgence of Court ordinarily involve ‘manifest arbitrariness’ as discussed in SHAYARA BANO vs. UNION OF INDIA [2017 (9) TMI 1302 - SUPREME COURT] and therefore, even in respect of proceedings at the preliminary stage, remedy can be had by the aggrieved. However, in this petition no such case is made out, despite lengthy arguments and bulky pleadings of the petitioners that justified indulgence of this Court. The petitioners hastily rushed to this Court and unjustifiably secured an interim order that interdicted an inquiry of preliminary nature, for all these years, to the enormous prejudice of public interest. This Writ Petition, besides being premature and absolutely devoid of merits, is an abortive attempt by the petitioners to scuttle the innocuous statutory proceedings of the Commission. Therefore, this is a fit case for dismissal with exemplary costs.

  This petition is liable to be dismissed and accordingly it is, with a cost of Rs.10,00,000/- only, payable to the 1^st respondent – Competition Commission of India within six weeks.

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• 2023 (1) TMI 58
  

  Anti-competitive acts - bid rigging - use of dominion position - it is alleged that the impugned order of CCI does not comply with the requirements of Section 26(1) of the Competition Act, 2002 and the same is arbitrary, perverse and illegal - formal agreement exists between the parties or not - HELD THAT:- On plain reading of Section 2(b), it clearly reveals that an agreement includes any arrangement or understanding or action in concert, whether it is formal or in writing or whether it is intended to be enforceable by legal proceedings. Thus, for an agreement, under this Act , need not be in writing. On the facts and circumstances of each case, the conduct of the parties to agreement can be inferred. At the same time, under Section 2(c) Cartel would include association of producers, sellers, distributors, traders or service providers, who, by agreement amongst themselves, limit control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services. Thus, even an action which may form itself, may be agreement of creating Cartel. It is obvious that there may not be patent evidence as to forming Cartel or creating an agreement in writing. The facts and circumstances of the case may reflect, primafacie, that there is agreement and/ or Cartel.

  Now, it is well settled that under Section 26(1) of the Act, the Commission is only required to see whether a primafacie opinion exist or not. The order under Section 26(1) of the Act can be passed when there is prima-facie material to direct an inquiry and elaborate reasons are not required, as Commission is required to express only a tentative view. It is also settled that in case elaborate reasons are provided in the order passed under Section 26(1), it will certainly prejudice the person against whom the complaint has been made, and therefore, the Statute provided a safeguard for holding an inquiry after an order is passed under Section 26(1) and the Director General is certainly required to grant an opportunity of hearing by holding inquiry in the matter - considering the provision of Section 53A, admittedly, the order of inquiry passed by the Commission, by virtue of power under Section 26(1) of the Act, no appeal is permissible. Therefore, the Constitutional power under Article 226 is available to the concerned person to challenge the order of the inquiry issued by the Commission under Section 26(1) of the Act. But, the action under Section 26(1) being an administrative in nature, there would be a judicial restrain on the High Court to interfere with such administrative order unless and until it is shown that the order was contrary to law, or relevant factors were not considered or relevant factors were considered or the decision was one which no reasonable person could have taken.

  Considering the material placed on record, it reveals that the Commission has initiated proceedings in accordance with Section 26 of the Act, pursuant to it, forming an opinion under Section 26(1) of the Act as to the existence of a prima-facie case. This exercise has been undertakne on the basis of the information received by the Commission from Respondent No.3 regarding the Cartel in the form of anti-competitive agreement. No Statutory right is availabe to the person concerned against whom any inquiry is ordered to be initiated by the Commission on the exercise of its administrative power available to it under the Act. Further, it is well settled that in an order of Inquiry under Section 26, which is only prima-facie opinion and does not affect the rights of any person, it cannot be reviewed by the High Court unless and until it is shown that it is contrary to any provisions of the Act or irrelevant material has been considered or relevant material has not been considered - it is the prerogative of the Commission to invite any person or sought information from any person for forming primafacie opinion as to whether any inquiry contemplated under Section 26(1) of the Act is necessary or not. Such action of the Commission cannot be said to be bias one or giving any right to other person against whom any order of inquiry is passed.

  The Commission has considered material placed on record by the respondent No.3 as well as GCEE for forming its primafacie opinion as to initiate inquiry under Section 26(1). It clearly reveals that while passing order for initiation of inquiry, the Commission has also considered that the allegation of the informant regarding provision of restriction on Standard terms and conditions have not been accepted by the Commission. Thus, the Commission has considered every material placed before it before arriving at the prima-facie opinion as to inquiry.

  Now, the main grievance of the petitioner is the interpretation of L1 price and negotiation price in each packet and has submitted that the Commission has misinterpreted the information provided to it. However, it needs to be observed that it is for the Commission to interprete and consider the information provided to it by the person concerned relating to material, which may be in the form of business transactions, information relating to Accounts or such statistical data, etc. The Court has no such expertise in evaluating or interpreting the business data or statistical data pertaining to a particular commercial activity. Any such information which is in the form of statistical data relating to any business or commercial transaction and accounting procedure may be interpreted in a different manner by different person having such expertise, knowledge in such fields. The angle of interpretation of such data may be different by different person and, therefore, the submission of the petitioner that information relating to the statistical datea including the interpretation of effect of L1 price in each packet and the negotiated price thereof, etc., is misunderstood by the Commission, cannot be accpeted at this stage, as it is prerogative of the Commission to form prima-facie opinion as to initiation of inquiry.

  In the considered opinion of this Court, unless and until a detailed inquiry is conducted by the Director General, the question of dealing a finding in respect of violation of the statutory provision does not arise. Therefore, the petitioner should not have hesitated in participating in the inquiry which is yet to be commenced by the Director General and all the grounds raised by the Petitioners will be available before the Director General as well as before the Commission. The impugned order passed under Section 26(1) is only a starting point of the process and the petitioners want to stop process at the threshold and the Commission is not being permitted by the petitioner to proceed ahead in the matter - Further, it is well settled that when questions of fact are involved in any matter, the High Court may not exercise its constitutional power under Article 226 of the Constitution. Admittedly, in this case, as discussed hereinabove, the disputed question of facts relating to interpreation of information in the form of data is agitated. Therefore, on this ground also, this court deems it fit not to exercise its discretionary power under Article 226 of the Constitution of India, especially when the impugned order is administrative in nature.

  This Court is of the considered opinion that the Writ-Petitions are devoid of merit and deserved to be dismissed. However, it is pertinent to note that during the pendency of the petitions, the Director General has also issued certain notices to initiate penalty proceedings under Section 43 of the Act, as there was no stay in operation against the impugned order of the Commission - since all the petitions are devoid of merits and deserve to be dismissed, all are hereby dismissed.

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• 2022 (12) TMI 1153
  

  Abuse of dominant position - scope of CCI’s (Respondent No.1) power and jurisdiction under S.26(1) of the Act, 2002vis-à-vis the scope of interference by High Court under Article 226 of Constitution of India - whether the order dated 03.10.2019 passed by Respondent No. 1 forming a prima facie opinion regarding existence of abuse of dominant position is liable to be set aside as similar reliefs were claimed by Respondent No.2 in W.P. No. 13298 of 2019 and the same is pending before this Court? - HELD THAT:- An order passed under S.26(1) of the Act, directing investigation by the Director General is an administrative order passed only to determine whether the allegations made by the informant under S.19 (1) of the Act, about possible violations of competition law are true. Once information is received under Section 19(1) of the Act, CCI, based on the material produced by the informant has to form a prima facie opinion regarding the possible competition law violations. It is relevant to note that while forming a prima facie opinion, CCI has to only determine if the allegations along with the material produced are taken to be true, will that result in breach of competition law. CCI cannot determine the legality or correctness of the allegations by going into the merits of the case. It only has to see whether the allegations, prima facie, constitute violation of competition law.

  It is also relevant to note that the scope of interference of High Courts under Article 226 of the Constitution of India, in an order passed directing investigation under Section 26(1) is extremely limited. CCI and the authorities under the Act, 2002 are well equipped to conduct investigation and possess expertise in the said field. High Courts cannot interfere with such investigation unless there is an abuse of process and prima facie it appears that the investigation was marred by mala fides.

  A same cause of action may have reliefs under different areas of law and the party aggrieved by the same can invoke both remedies. For instance, remedy for fraud is available under civil law which may include a claim of money and under criminal law the said fraud can be prosecuted under IPC. Similarly, a party may claim damages for defamation under tort law and also initiate criminal proceedings under S.499 of IPC. Therefore, it cannot be said that Respondent No. 2 could not have approached CCI with concerns of abuse of dominant position of Petitioner No. 1.

  The other contentions raised by the Petitioners that CCI/Respondent No. 1 delineated the relevant market, the share of and participation of the parties in the downstream and upstream market erroneously cannot be decided at the preliminary stage when investigation is yet to be completed. The said grounds can be raised by the Petitioners at an appropriate stage if it is found that they are guilty of abusing their dominant position. At this stage when matter is yet to be investigated, this Court cannot consider disputed questions of facts.

  The writ petition is dismissed.

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• 2022 (12) TMI 1062
  

  Conspiracy - omission and commission of misconduct by official of Pune Municipal Corporation in connivance with appellants filed a detailed information application before the CCI - levy of penalty - HELD THAT:- On examination of entire material we are of the opinion that sufficient evidence were brought on record to show forming cartelisation by the appellants in influencing tender. It was specific case of contravention of Section 3(3)(d) of the Act read with Section 3(1) of the Act. Besides evidence by way of filing leniency application all the appellants have already accepted their guilt. Most of the appellants on the strength of their leniency application have also got reduction in the penalty which is reflected from the relevant portion of the impugned order which we have quoted in the present order. We are of the opinion that disclosure made in leniency application admitting involvement amounts to confession. If confessional statement is also corroborated even by some sort of evidence one is precluded to assail an order imposing penalty/punishment on such confession. Moreover, in the present case at the time of admission itself it was admitted by the appellants that the appeal may be heard on the point of penalty only.

  Now coming to the discretionary jurisdiction of the CCI in considering the turnover on the higher level i.e. 10% which is maximum percentage prescribed under Section 27(b) of the Act is concerned we are of the opinion that though CCI is empowered to take turnover upto 10% but while taking up such percentage i.e. maximum as prescribed in the Act it was required for the CCI to elaborately assign reason for coming to the conclusion for maximum penalty. It may not be held that CCI in no case can impose higher penalty upto 10% but in such situation it would be required for the CCI to afford full opportunity to the concerned party to address the CCI as to why such higher penalty may not be imposed - On going through the impugned order we find no indication as to whether the appellants were asked to explain regarding exemplary penalty i.e. maximum 10% or detailed reasons has been assigned for the same. It is true that in respect of imposing penalty discretion has been given to the CCI, but at the same time it is settled that discretion may not be exercised indiscreet manner.

  Though discretionary jurisdiction may not be interfered with but in view of facts and circumstances particularly the fact that discretion by the CCI in the present case has not been exercised in a reasonable manner it would be a fit case for remanding back the matter to CCI to examine the issue to afford opportunity to the appellants to address on the point as to whether instead of exemplary penalty i.e. upper limit of 10%, the appellants are entitled to get the said percentage reduced or not.

  In the present case it has been noticed that in the information petition which was filed by the informant it is evident that the informant had alleged that conspiracy and collusion by Accused No.1 and 2 alongwith technically ineligible company (nevertheless qualified) on the one hand and personnel of PMC Accused No.3 on the other hand as a result and by giving effect to this fraud Accused No.2 became L1 in 5 tenders in 2014 bagging contracts for worth of Rs.14,82,94,580/- while the internal estimate was Rs.11.45 crores i.e. 30% lower. Even during investigation DG had examined the role of PMC in its report.

  We are of the opinion that while remitting back the aforesaid appeals to CCI to reconsider the penalty a direction can be issued to the Director General of Police Maharashtra/Director General, Anti-Corruption, Maharashtra to conduct an enquiry in respect of role played by the Pune Municipal Corporation in relation to Tender No.34, 35, 44, 62 and 63 of 2014. It goes without saying that if during enquiry any cognisable offence comes to fore in that event it would be necessary to register FIR for its statutory investigation to its logical end.

  Let a copy of this order be sent to Director General of Police, Maharashtra/Director General, Anti Corruption, Maharashtra.

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• 2022 (12) TMI 981
  

  Issuance of notice under Section 230(5) of the Companies Act - It is submitted that in view of the sole Financial Creditor having approved the scheme, there was no occasion for issuing any notice under Section 230(5) of the Companies Act and Adjudicating Authority had ample jurisdiction to dispense the notice under Section 230(9) of the Companies Act - HELD THAT:- The sole Financial Creditor having approved the scheme, the condition as provided in Section 230(9) were clearly met and the Tribunal can very well dispense with the calling of a meeting of creditor or class of creditors. Present is a case where hundred per cent of the Financial Creditor has approved the scheme.

  The direction of the Tribunal needs to be set aside and the Adjudicating Authority is required to consider the dispensation of the second motion notice in view of the facts of the present case as per Section 230(9) of the Companies Act, 2013.

  Appeal disposed off.

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• 2022 (12) TMI 980
  

  Contravention of the provisions of Section 4 of Competition Act, 2002 - it is alleged that several clauses of the agreement which was entered into between the appellant and Respondent No.2 in the present appeal were violative of provisions of Section 4(2)(a)(i) of the Act - Section 53(B) of the Competition Act, 2002 - HELD THAT:- On examination of the provisions contained in Section 26 of the Act it is evident that the CCI is having a very limited jurisdiction to direct for further investigation that too in a case as per Section 26(5) of the Act if the DG recommends that there is no contravention of provisions of Act then Commission shall invite objections or suggestions and thereafter under sub-section (7) of Section 26 of the Act after consideration of objections and suggestions referred to in sub-section (5) further investigation is necessary only then direct for further investigation. Meaning thereby that purport of Section 26 of the Act is that if after investigation DG submits report disclosing therein violation of the provisions contained in the Act, the CCI is required to pass appropriate order. In a case DG submits a closure report and thereafter under sub-section (5) of Section 26 of the Act, after inviting objections, CCI is satisfied, only then under sub-section (7) of Section 26 of the Act, CCI can issue direction for further investigation. Further investigation as per Act is required in a case of closure not in a case where DG has submitted report showing contravention of provisions of the Act by a party/parties.

  The Regulation 20 describes procedure about the investigation by the DG, whereas Regulation 20(6) empowers the CCI to direct DG for further investigation. However, in view of Section 26 of the Act it can be concluded that Regulation 20 (6) of CCI(General) Regulations, 2009 can be used in furtherance of exercise of jurisdiction under Section 26(7) of the Act which is required to be invoked in a case where DG under Section 26(5) submits report regarding non contravention of the provisions of the Act. In any event taking shelter of Regulation 20(6) of Regulation 2009 CCI was not authorised to pass an order for further investigation and the same cannot be justified - without going into further detail or delving into merit of the case the order impugned is liable to be set aside since the order is primarily passed on the supplementary investigation report submitted by the DG which was conducted on a void order of the CCI.

  The matter is remitted back to the CCI to pass order afresh on the basis of the 1st DG Report i.e. Report dated 18.03.2016 submitted by the DG - Appeal allowed.

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• 2022 (12) TMI 821
  

  Jurisdiction - suo moto power of Institute of Chartered Accountants of India (Institute) to initiate disciplinary proceedings against its members - scope of the word “information” as occurring in Section 21 of the Chartered Accountants Act, 1949 (Act) - HELD THAT:- Section 21 of the Act empowers the Institute to proceed either on the basis of a complaint or on information that may be received. The Court has on due consideration of the relevant provisions, the scheme of the Act and the nature of the duty cast upon the Institute, found that it could also proceed on the basis of cogent information that may be either gathered or may come to light from an external source. The usage of the word information in Section 21 thus clearly places the extent of the power vested on the Institute on a clearly distinct pedestal. It appears to be guided by the intent of the Legislature to enable and empower the Institute to proceed on any material or fact that may either come to its attention or be brought to its notice. Section 21 thus clearly appears to be distinguishable from the various statutory provisions and the scheme of the respective statutes which formed the basis for the various decisions rendered on the subject and which were noticed hereinabove. None of them empowered the authorities to initiate action on the basis of “information”. Viewed in the aforesaid backdrop, this Court is of the considered opinion that Section 21 does empower the Institute to proceed suo moto and unhindered by the absence of a written complaint or allegation that may be submitted. A written complaint or allegation in writing cannot, in any manner, be understood to be a pre-requisite or a sine qua non for the initiation of action under Section 21.

  The Court also bears in mind the significant observations which were made by the Division Bench of this Court in P. Ramakrishna [2013 (3) TMI 367 - HIGH COURT OF DELHI] where while recognizing the intrinsic distinction between a complaint and information, the Court had aptly observed that information would include material that may be made available by a third person or even that which may come to the knowledge of the Institute. The Division Bench clearly held that in case of information, action may be initiated either suo moto or even on the basis of material that may be provided by a third party who may for a variety of reasons be not desirous of filing a formal complaint.

  The answer to the question whether a particular power stands conferred under statute must necessarily be answered on a reading of the statute and on discernment of its scope. The meaning to be conferred upon a statute cannot rest merely on the fact that the power though being found to exist was never invoked earlier. In any case, the respondents disclose and provide details in paragraph 49 of their counter affidavit of a suo moto power having been exercised even in the past. The averments made in the counter affidavit establishes that the Institute had exercised its suo moto powers similarly in relation to the Satyam Computers scam - The report with respect to MNAF’s and the contemporaneous material which was noticed by the Supreme Court in its order would clearly constitute material relating to facts of which cognizance was taken by the Institute.

  The Court notes that it would be wholly incorrect to accept the contention that the initiation of the enquiry was based simply on news reports. As has been averred on behalf of the respondents, the news report only brought certain facts relating to a financial scam which had occurred in PNB to the notice of the respondents. They appear to have consequently elicited preliminary comments from the petitioners in that respect. The matter thereafter appears to have been scrutinised in further detail with appropriate information being gathered from PNB and the LRR also being carefully examined. It also becomes pertinent to note the fact that the huge financial fraud had been duly taken cognisance of and details thereof also provided to SEBI prior to the submission of the LRR, was an admitted position insofar as the petitioners are concerned. This would be evident from their reply to the initial show cause notice itself.

  The recordal of facts would clearly establish that the action which was initiated and the material which was treated as “information” for the purposes of Section 21 was not based on mere newspaper reports. In fact, those reports could not have possibly and on their own constituted material at all since they did not carry any allegation against the petitioners here. What appears to have transpired is of the news reports merely acting as a catalyst for the Institute to delve deeper into the massive fraud which had occurred and to examine whether any member had failed to abide by the SAs’ which applied. It was the material recorded and encompassed in the letter of 13 March 2018 which would constitute the foundation for testing the argument of the petitioner whether there was “information” which merited further enquiry - the Court is of the firm opinion that the Institute did have the requisite information as contemplated by Section 21 and which justified the initiation of the enquiry against the petitioners in the facts of the present case. While the Court is not called upon at this stage to return any definitive or final conclusions with respect to the alleged violation of the various SAs’ as well as SRE 2410, the material placed on the record would clearly belie the contention of the petitioners that the entire initiation of proceedings was based merely on news reports.

  This Court is of the considered opinion that the conclusions which stand recorded in Manubhai are clearly based on an extremely restrictive interpretation of Section 21 of the Act and in any case would amount to recognising Rule 7 as an essay on the scope and ambit of Section 21 of the Act itself. It would essentially amount to according pre-eminence to a subordinate rule and recognise the same as trammelling the scope of Section 21 of the Act. This Court has for reasons aforenoted come to the definitive conclusion that in the absence of the Act and the Rules having specifically defined the words “information” and “complaint”, it is the principles of purposive interpretation which must be adopted bearing in mind the fundamental objectives of the disciplinary procedure as constructed under the Act and the role and duties which the Institute is ordained to discharge. For all the aforesaid reasons, the Court finds itself unable to adopt the line of reasoning which weighed with the learned Judge in Manubhai.

  The writ petitions shall stand dismissed. The Institute shall consequently be entitled to proceed further in accordance with law. It shall therefore be open to the Institute to give effect to the final orders which have been kept in a sealed cover. The rights of the petitioners to question any final decision that may have been taken is kept open.

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• 2022 (12) TMI 731
  

  Powers to impose monetary as well as non-monetary sanctions - online intermediation services - HELD THAT:- This Court has perused the order dated 6th December, 2022 passed by the NCLAT, as also, the order dated 19th October, 2022 passed by the CCI. Various directions have been issued by the CCI vide order dated 19th October, 2022, which were challenged before the NCLAT. One of the components of the said order dated 19th October, 2022 is the aspect relating to penalty. The total amount, which has been fixed as penalty in the case of the Petitioner herein, is to the tune of Rs.223.48 crores.

  The appeal before the NCLAT is a first appeal challenging the order passed by the CCI. Thus, in the opinion of this Court, a pre-deposit of 10% of the penalty amount could not have been made for mere admission of the appeal. It is obvious that the intention, which may not be explicitly made clear in the entire order dated 6th December, 2022 passed by the NCLAT, is against the recovery of the remaining 90% of the penalty amount.

  It is directed that subject to the deposit of 10% of the total penalty amount of Rs.223.48 crores, in accordance with the order of the CCI, as directed by the NCLAT, no recovery shall be effected in respect of the remaining 90% of the penalty amount. The said deposit shall be without prejudice to the rights and contentions of the parties - Petition disposed off.

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• 2022 (11) TMI 705
  

  Anti-competitive conduct - allegation of bid rigging was in the tenders invited by the Department of Agricultural, Govt of UP for soil sample testing in respect of e-tender - contravention of provisions of Section 3(1) read with 3(3)(d) of Competition Act - HELD THAT:- The Commission has correctly and legally held the appellant responsible for violation of Section 3(3)(c) and 3(3)(d) reading with Section 3(1) of the Act and there is no error in respect of order passed under Section 27(a) whereby the appellant was directed to cease and desist from such act from indulging in the practices which were found in contravention of the provisions contained in Section 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act. So far as imposition of penalty is concerned it is evident that appellant was a proprietor firm. Of course imposition of penalty was entirely within the discretion of the CCI and in respect of exercising discretion same may not be interfered with. However, it is also settled that discretion is to be exercised not indiscreet manner.

  In peculiar facts and circumstances of the present case particularly the fact that the appellant was found by the Commission that he being a Member of the Cartel the appellant was providing cover for the success of the bidder, Yash Solutions, it would be difficult to consider penalty on the basis of relevant turn over and as such total turn over which has been considered by the Commission may not termed as erroneous. However, considering the fact that the appellant was a proprietorship firm the Commission may consider to reduce the percentage of average income of the appellant.

  While approving the order of Commission in respect of holding the appellant guilty under Section 3(3)(c) and 3(3)(d) read with Section 3(1) and order passed under Section 27(a) regarding cease and desist order it is felt appropriate to remit back the matter to Commission to reconsider imposition of penalty which has been imposed under Section 27(b) of the Act - appeal disposed off.

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• 2022 (10) TMI 1270
  

  Seeking a writ of mandamus to set aside the order passed by Respondent No. 1 under section 26(1) of the Competition Act, 2002 - jurisdiction to order an investigation into the alleged abuse of dominant position by the Petitioner - HELD THAT:- An order passed under S.26(1) of the Act, directing investigation by the Director General is an administrative order passed only to determine whether the allegations made by the informant under S.19 (1) of the Act, about possible violations of competition law are true. Once information is received under section 19(1) of the Act, CCI, based on the material produced by the informant has to form a prima facie opinion regarding the possible competition law violations. It is relevant to note that while forming a prima facie opinion, CCI has to only determine if the allegations along with the material produced are taken to be true, will that result in breach of competition law. CCI cannot determine the legality or correctness of the allegations by going into the merits of the case. It only has to see whether the allegations, prima facie, constitute violation of competition law.

  A same cause of action may have reliefs under different areas of law and the party aggrieved by the same can invoke both remedies. For instance, remedy for fraud is available under civil law which may include a claim of money and under criminal law the said fraud can be prosecuted under IPC. Similarly, a party may claim damages for defamation under tort law and also initiate criminal proceedings under S.499 of IPC. Therefore, it cannot be said that Respondent No. 2 could not have approached CCI with concerns of abuse of dominant position of Petitioner No. 1. A relief for breach of fundamental rights is independent from a relief sought aggrieved by abuse of dominance. Respondent No. 1/CCI was well within its jurisdiction to entertain information under S.19(1) of the Act, and order investigation on the basis of prima facie opinion.

  In the present case, there is no threat of contrary findings as breach of principles of natural justice by one party towards other has little or no bearing on abuse of dominance which effects the entire market.

  This Court has perused the order dated 3-10-2019. The said order is well-reasoned given that only a prima facie opinion was formed. Respondent No. 1 made it clear that no final opinion was expressed on the merits of the case. Therefore, according to this Court, the Director General shall complete investigation in accordance with law.

  Conclusion - The CCI had jurisdiction to order an investigation, the prima facie determination was valid, and the High Court should not interfere with the CCI's order.

  Petition dismissed.

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• 2022 (10) TMI 1269
  

  Jurisdiction and proceedings initiated by the Competition Commission of India (CCI) under the Competition Act, 2002 - HELD THAT:- The CCI is an independent authority to consider any violation of the provisions of the Competition Act, 2002. When having prima facie opined that it is a case of violation of the provisions of the Act and thereafter when the proceedings are initiated by the CCI, it cannot be said that the same are wholly without jurisdiction.

  Even considering the observations made by this Court in the case of Competition Commission of India vs. Steel Authority of India Limited and Another [2010 (9) TMI 215 - SUPREME COURT], the proceedings before the CCI are required to be disposed of at the earliest. In para 10, it is observed and held 'The Act and the Regulations framed thereunder clearly indicate the legislative intent of dealing with the matters related to contravention of the Act, expeditiously and even in a time-bound programme. Keeping in view the nature of the controversies arising under the provisions of the Act and larger public interest, the matters should be dealt with and taken to the logical end of pronouncement of final orders without any undue delay. In the event of delay, the very purpose and object of the Act is likely to be frustrated and the possibility of great damage to the open market and resultantly, country’s economy cannot be ruled out.'

  Conclusion - The CCI should not be restrained from proceeding further with the enquiry/investigation for the alleged violation of any of the provisions of the Act.

  The Special Leave Petitions stand dismissed.

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• 2022 (10) TMI 953
  

  Anti-competitive agreements - abuse of dominant position in the markets for licensable mobile OS for smart mobile devices and app stores for Android OS - the Commission agrees with the findings of the DG and holds that all licensable smart mobile device OSs are part of the same relevant market - consideration of relevant markets - alleged contravention of various provisions of Section 4 of Competition Act, 2002 - HELD THAT:- No doubt, the DG has been vested with the limited powers of Civil Court as also the power to conduct search and seizure operations, however, it is for the DG to exercise such powers in the manner as deemed appropriate in the facts and circumstances of each case. No party, much less a party under investigation, can dictate as to the mode and manner of investigation to be undertaken by the DG. As previously pointed out, the role of DG during investigation is essentially fact finding in nature by collecting documents and evidence and to present its recommendations to the Commission based on their analysis. While conducting the investigation, it is neither requirement of the law nor any obligation of the investigator to consult each and every affected or interested participant. On careful perusal of the Investigation Report, the Commission is satisfied that the DG has contacted a cross-section of stakeholders including third parties and in this view of the matter, the allegations, and suggestions of bias in investigation as attributed by Google to the DG lack merit and are rejected.

  Having perused the investigation report, the Commission is satisfied that while analyzing the allegations and reaching its recommendations, the DG has not relied upon such orders and the same are based upon the documents and evidence gathered during the course of investigation. The reference to the prima facie order as made by the DG in the Investigation Report is only to understand the scope of investigation and such reference, by no stretch of arguments, be construed as swaying the independence of the recommendations made by the DG. In fact, if the argument of Google is taken to its logical conclusion, there can be no independent adjudication by the authority also (in this case, the Commission) after making a prima facie opinion while ordering investigation.

  The antitrust investigation is complex in nature and require greater understanding of the subject and so long as the recommendations are made in an independent manner based on material and evidence gathered during investigation, mere reference to such reports for the limited purpose of understanding the issues in itself cannot be said to sway, much less vitiate, the conclusions arrived at by the DG - the Commission is afraid that the submissions of Google are contrary to the express provisions of General Regulations. Unlike civil courts where cross-examination is a matter of course, cross-examination before the DG or the Commission is highly circumscribed by regulatory framework nd can be granted on fulfilling requirements of Regulation 41(5) of the General Regulations.

  It is, thus, evident that the Commission or the DG has the discretion to take evidence either by way of Affidavit or by directing the parties to lead oral evidence in the matter. However, if the Commission or the DG, as the case may be, directs evidence by a party to be led by way of oral submissions, the Commission or the DG, as the case may be, if considers necessary or expedient, may grant an opportunity to the other party or parties, as the case may be, to cross-examine the person giving the evidence. Thus, it is only when the evidence is directed to be led by way of oral submissions that the Commission or the DG may grant an opportunity to the other party or parties to cross-examine the person giving the evidence, if considered necessary or expedient. Hence, even when the evidence is led by oral submissions, the Commission or the DG retains the discretion to consider the request for grant of opportunity to the other party or parties to cross-examine the person giving the evidence if the same is considered necessary or expedient.

  The Commission delineates the following relevant market(s) in the present matter:

  a. Market for licensable OS for smart mobile devices in India

  b. Market for app stores for Android smart mobile OS in India

  c. Market for apps facilitating payment through UPI in India

  The Commission holds Google to be dominant in in the first two relevant markets i.e., market for licensable OS for smart mobile devices in India and market for app store for Android smart mobile OS in India. Further, Google is also found to have abused its dominant position in contravention of the provisions of Section 4(2)(a)(i), Section 4(2)(a)(ii), Section 4(2)(b)(ii), Section 4(2)(c) and Section 4(2)(e) of the Act, as already discussed in the earlier part of this order.

  In terms of the provisions of Section 27 of the Act, the Commission hereby directs Google to cease and desist from indulging in anti-competitive practices that have been found to be in contravention of the provisions of Section 4 of the Act - Google, however, is allowed three months from the date of receipt of this order to implement necessary changes in its practices and/or modify the applicable agreements/ policies and to submit a compliance report to the Commission in this regard.

  Levy of penalty - HELD THAT:- The Commission takes a serious note of such glaring inconsistencies and wide disclaimers in presenting various data points by Google. The Commission is constrained to observe that despite commanding enormous resources, Google has failed to provide the data in the manner sought by the Commission despite grant of sufficient time, as sought by it. Be that as it may, in the interest of justice and with an intent of ensuring necessary market correction at the earliest, the Commission decides to proceed to quantify the provisional monetary penalties on the basis of the data presented by Google. Accordingly, the Commission decides to take the revenue data of Google’s business operations in India, as submitted by it vide submission dated 06.10.2022, as relevant turnover for computation of quantum of penalty.

  Determination of an appropriate amount of penalty to be imposed - HELD THAT:- The Commission is of the view that the ends of justice would be met if a penalty of 7 % of the relevant turnover. Accordingly, the Commission imposes a penalty on Google @ 7 % of its average of the average of relevant turnover for the last three preceding financial years 2018-19, 2019-20 and 2020-21, as provided by Google - the Commission imposes a penalty of Rs. 936.44 crore upon Google for violating Section 4 of the Act. Google is directed to deposit the penalty amount within 60 days of the receipt of this order.

  The Commission deems it appropriate to deal with the request of the parties seeking confidentiality over certain documents / data / information filed by them under Regulation 35 of the General Regulations, 2009 (as amended). Considering the grounds given by the parties for the grant of confidential treatment, the Commission grants confidentiality to such documents / data / information in terms of Regulation 35 of the General Regulations, 2009, subject to Section 57 of the Act, for a period of three years from the passing of this order.

  Application disposed off.

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• 2022 (10) TMI 704
  

  Anti-competitive practices in violation of Section 3(1) and 3(3)(b) of Competition Act, 2002 - sub-section (1) and (2) of Section 53B of the Competition Act, 2002 - Levy of penalty - HELD THAT:- The 1st Respondent herein, find evidence against the Appellant and the 6th Respondent and observed that it has played a significant role in the organization of the press meet and the participation of the 6th Respondent cannot be said to be in his personal capacity and observed that he was the President of the Appellant during the relevant period of time. The commission also takes note the contents in the press meet held on 01.03.2017, wherein the opposite parties participated and actively advocated the cause of condemning dubbed Kannada Films. Further, the commission observed that the press meet was used as a platform to give coverage to the protest by the opposite parties. One of the contentions of the Appellant is that the cause of the Appellant is to promote Kannada literature and to ensure livelihood of artists in Kannada film industries and not otherwise.

  However, from the sequence of events and from the evidences on the record that the conduct of the Appellant and the opposite parties is anti-competitive thus, resulted in limiting production and supply of dubbed movies and their screening within the State of Karnataka which directly hits the provisions of Section 3(1) read with Section 3(3)(b) of the Act.

  This Tribunal is of the view that the order passed by the 1st Respondent dealt all the issues including the evidences led by the Director General and other evidence by the Commission itself. Having dealt the issues meticulously on the basis of the evidence on record, this Tribunal find that there is ample evidence to suggest the existence of anti-competitive conduct by the Appellant and the Opposite Parties. Accordingly, this Tribunal prima-facie holds that the DG and the Commission relied upon the material evidence and comes to a definite conclusion that the Appellant and the Opposite Parties indulge in anti-competitive conduct in violations of the provisions of Section 3 of the Act.

  This Tribunal finds and affirms the findings and the reasons/inference drawn against the Appellant and the Opposite Parties by the 1st Respondent/Commission and the same is ratified by holding the acts of the Appellant and the Opposite Parties is anti-competitive conduct which resulted in limiting production and supply of dubbed movies into Kannada language and their screening within the State of Karnataka, which directly hits the provisions of Section 3(1) read with Section 3(3)(b) of the Competition Act, 2002 - this Tribunal comes to an inescapable and irresistible conclusion that the order passed by the 1st Respondent is in accordance with law and does not warrant any interference by this Tribunal.

  Appeal dismissed.

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