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2024 (11) TMI 1013
Absolute confiscation of Areca Nuts imported - report received from National Food Laboratory, Ghaziabad reflected that the Areca Nuts were found with presence of visible fungal growth and musty, which did not confirm to the standards laid down under Regulation 2.3.55. of the Food Safety and Standards, Regulations, 2011 - case of the Revenue that as per the prior intelligence received by DRI, certain importers were engaged in malpractice of mixing consignments of Areca Nuts of Sri Lanka origin with that of shipments originating outside the SAARC territory and paying nil basic customs duty on the basis of notification dated 01.03.2000 - Goods found to be ‘substandard’ in terms of Section 3(1)(zx) and unsafe food as per Section 3(1)(zz)(x)(xi)(xii) of the Food Safety and Standards Act, 2006
Whether the Tribunal has erred in setting aside the order in original and order in appeal whereby the absolute confiscation of the Areca Nuts imported by the respondents was ordered? - HELD THAT:- CESTAT hears an appeal, and therefore, all the arguments including the submissions relating to decision on Regulation 10 (11) of the Regulations 2017 can be examined by the Tribunal. Scope of Tribunal is wide enough to examine whether the discretion exercised by the authority was legal and proper. It can also take a different view after examining the reasons taken into consideration by the concerned authority.
In the present case, the CESTAT found that the Areca Nuts may not be fit for human consumption, but the same are of such a nature which can be used for ancillary and industrial purposes by its original consignee or seller. Having reached to such a conclusion, it decided to direct the authority to allow the re-export of the food items which is provided as one of the option available under Regulation 10 (11) of the Regulations 2017. It, therefore, has interfered with the discretion exercised by the concerned authority and directed for re-export.
We also do not find force in the arguments raised by learned counsel for the appellant with regard to reducing of fine of Rs. 2 crores to Rs. 25 lacs and personal fine of Rs. 10 lacs, as no reason has come forward for imposing such a harsh fine. More so, when we find that the goods were sent by the seller to the importer without there being any participation of the importer in receiving substandard Areca Nuts. We, accordingly, reject the aforesaid submission of learned counsel for the appellant also.
We also find that the CESTAT has also examined the wasteful outflow of foreign exchange from Indian Importers for Foreign Buyers as one of the reasons for allowing the re-export. We find such reason to be sound and in accordance with public policy. We, therefore, do not find any ground to warrant interference. The appeals filed by the Revenue are found to be without merit and are accordingly dismissed.
If the goods have not been allowed to be re-exported, the authority shall now allow them to be re-exported forthwith.
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2024 (11) TMI 1012
Maintainability of the appeals before this Tribunal - appeals before the wrong Forum - Appellate Tribunal Jurisdiction to deal with appeals related to drawback claims - HELD THAT:- A perusal of proviso (c) to Section 129A reproduced above clearly indicate that this Tribunal has no jurisdiction to deal with appeals related to drawback matters.
We observe that this issue has been dealt in the case of Commissioner of Customs, Air Cargo Export v. Sans Frontiers [2023 (12) TMI 695 - DELHI HIGH COURT] wherein the Hon'ble Delhi High Court has held that Appeal to CESTAT against order of Commissioner (Appeals) with respect to recovery of duty Drawback on exported goods is not maintainable as per Section 129A of Customs Act, 1962. Also affirmed by the Hon’ble Apex Court [2024 (5) TMI 1488 - SC ORDER].
We also find that the same view has also been held in Arihant Overseas [2024 (5) TMI 212 - DELHI HIGH COURT] wherein as held that in terms of Section 129DD of the Customs Act, 1962, the remedy against such orders is by way of a Revision to Central Government.
We observe that the appellant has filed these appeals before the wrong Forum and hence these appeals are not maintainable before this Tribunal. As it is a genuine mistake, we observe that the appellant should not be penalised for filing appeal before the wrong forum. Accordingly, we grant ‘leave’ to the appellant to file the Revision Applications against the impugned Orders passed by the Commissioner (Appeals) before the Government of India as per Section 129 DD of the Customs Act, 1962, along with condonation of delay.
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2024 (11) TMI 1011
Determination of transaction value - department said that the transaction value declared by respondents is not correct and therefore, they have enhanced the declared value and demanded the differential duty - HELD THAT:- Even though the respondents had pointed out certain reservations about contemporaneous prices relied upon by the department, the Commissioner (Appeals) has not analyzed or made any specific observation on the submissions made by the respondent before the Commissioner (Appeals).
It is noted that the queries raised by the department in relation to the impugned bills of entry as well as replies made thereto by the respondents are also not on record. Therefore, it is not possible to conclude as to what are the nature of replies and the grounds on which the department doubted the veracity of the declared transaction value and the defence taken by the respondents to justify the correctness of the transaction value.
We find that the orders of the Commissioner (Appeals) are not speaking orders and it has not considered certain factual matrix which has got bearing on the outcome of this case. Therefore, the orders of the Commissioner (Appeals) are set aside and the matter is remanded back to the Original Assessing/Adjudicating Authority, who will give opportunities to the importer to produce all the evidence to justify the correctness of the declared transaction value in view of the queries raised by the Department.
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2024 (11) TMI 1010
Liquidation of Corporate Debtor - seeking for issue of an appropriate direction to the liquidator to put on hold the auction of the immovable asset of the Corporate Debtor, to consider his proposal to sell the Corporate Debtor as a going concern - It is the contention of the Appellant that his Resolution Plan was rejected without due diligence - principles of res-judicata - HELD THAT:- This Application came up for consideration before the Learned Adjudicating Authority and the Learned Adjudicating Authority after considering the text of the relief sought in IA No.140/2022, had dismissed by observing that it was on the same grounds / prayers the Appellant had already approached before the NCLAT by filing IA No.436/2021 in CA (AT) (CH) (Ins) No.314/2020 which has been rejected, that the relief as sought for in IA No.140/2022 has already been denied by the NCLAT while deciding IA No.436/2021, that, the Appellant has suppressed the material fact regarding the orders passed on IA No.436/2021 in CA (AT) (CH) (Ins) No.314/2020, and therefore, the relief as it was sought for in IA No.140/2022 would not be tenable owing to the bar created by the decision taken on IA No.436/2021 preferred in CA (AT) (CH) (Ins) No.314/2020. Apart from the aforesaid reason, the Learned Adjudicating Authority has concluded that the relief sought for by the applicant by invoking the provisions contained under section 60(5) of the Insolvency and Bankruptcy Code, 2016 to be read with Rule 11 of the NCLT Rules cannot be granted to the Appellant for the following reasons.
(1) The Resolution Plan which was submitted by the Appellant was already rejected.
(2) The Application filed for modification of the Resolution Plan also stood rejected vide Order dated 30.12.2019.
(3) More importantly, the two orders affirming the rejection of the Resolution Plan was not challenged by the Appellant by invoking the provisions contained under Section 61 of the Insolvency and Bankruptcy Code, 2016 and the same would attain finality, against the Appellant.
(4) Once the rejection of the Resolution Plan submitted by the Appellant had attained finality no cause of action would survive qua the Appellant for filing this instant Appeal as against the order passed in IA No.140/2022.
Besides this, the relief itself as prayed for would be barred by the principle of Res judicata because the same already stood denied by the NCLAT vide its order dated 20.09.2021 passed in IA No.436/2021. In view of the above and primarily on the ground that in the absence of the challenge given to the order of rejection of the Resolution Plan submitted by him, the Appellant relinquishes his right to put a question to an order of appointment of liquidator, as well as, to seek for the relief he has sought in IA No.140/2022, which is the subject matter of Comp App (AT) (CH) (Ins) No.329/2022.
For the aforesaid reasons, this Appeal too would stand dismissed.
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2024 (11) TMI 1009
Oppression and Mismanagement - invocation of provisions contained under Section 96, 173, 241, 244 of the Companies Act of 2013 - Applicability of Section 8 of the Arbitration and Conciliation Act, 1996 - Appellant/ Respondent, had not produced the “Original Copy of the Agreement, nor the Appellant has supplied the certified copy of the said agreement - whether the Authenticated copy of the agreement as filed by the appellant in support of IA No.65/2019, could at all be read in parlance to the certified copy of the Arbitration Agreement or the Original of the Arbitration Agreement? - HELD THAT:- Obviously, under law the certification of a document has to be in accordance with the provisions of Registration Act to be read with Section 76 of Evidence Act, and particularly in the context of the provisions contained under Section 17 of the Registration Act, where certain documents will be inclusive of the present agreement as it dealt with the Subscription of the Shareholders, which itself is a property under law, which had to be mandatory required to be registered and if that be so, in that eventuality when the application under Section 8 of the Act of 1996, was preferred by the Appellant, it ought to have been accompanied with the certified copy of the agreement at the stage, when the initial objection of 10th October 2018 was filed by the Appellant/Respondent, in opposition to the Company Petition. In that view of the matter and for the said reasons, the “authenticated copy” cannot be treated as to be a “certified copy”, which could have been read in evidence under Section 47 of the Registration Act for the purposes to satisfy the restrictions imposed by Sub-Section (2) of Section 8 of the Arbitration and Conciliation Act, 1996.
No such application under Section 8 of the Act of 1996, was filed before National Company Law Tribunal, Amravati Bench, to derive an objection with regards to the maintainability of the proceedings of the Company Petition, under Sections 96, 173, 241 to 244 of the Companies Act. The aforesaid principle literally and in its legal terms, as to what derivation could be made with regards to the certified copy in fact, has been prescribed under the National Company Law Tribunal Rules, where a certified copy would be a copy which has been obtained after compliance of the provisions contained under Section 76 of the Evidence Act”. Since the same has not been complied with, the application under Section 8 was held to be not maintainable because it will not be falling to be, a certified copy under Sub Rule (9) of Rule 2 of the National Company Law Tribunal Rules, which deals as to what would be the certified copy.
There is another logic and which has been rightly attracted by the Learned Adjudicating Authority, at the stage of considering the application under Section 8, by drawing an inference from the Judgment reported in Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., & Ors. [2012 (10) TMI 459 - SUPREME COURT], where it has been observed that since the Arbitration Proceedings, being a consented chosen forum between the consenting parties for the redressal of the dispute, it will not be taken as to be “Judicial Proceedings” so as to create an embargo for filing of a Company Petition, as it would be relatively a “Private Forum”, which cannot deceive the objective of the Procedural Law under the Companies Act, to be read with Insolvency and Bankruptcy Code.
The Application thus preferred being IA No.65/2019, by the Appellant in the Company Petition, didn’t satisfy the parameters prescribed under Section 8 of the Act of 1996, and the legislative bar was created in even entertaining the Application in the absence of satisfying the parameters to sustain the proceedings because the certified copy or the original copy of the Agreement was not filed. Therefore no such proceedings could have been even entertained by the National Company Law Tribunal, Amravati Bench by way of IA No.65/2019 and in these circumstances, when the Law creates a bar in even entertaining of any such Application under Section 8 of Act of 1996, the same would not be maintainable.
The Company Appeal lacks merit and the same is dismissed.
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2024 (11) TMI 1008
Amendment of scheme of amalgamation - section 230-232 read with section 234 of the Companies Act, 2013 - Jurisdiction of NCLT to modify the scheme - HELD THAT:- The amendment can therefore be done at any stage. In IN THE MATTER OF :. HAMBURG SUD INDIA PRIVATE LIMITED, MAERSK LINE INDIA PRIVATE LIMITED [2023 (3) TMI 1541 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH-IV], the Ld NCLT Mumbai while seized of a First Motion Petition passed directions for changing the valuation and the swap ratio.
Admittedly the present modification to scheme will not require any further / revised adherence in so far as the regulations for inbound merger are concerned. Further, as per FEMA Notification No. FEMA.389/2018-RB dated March 20, 2018 ‘Foreign Exchange Management (Cross Border Merger) Regulations, 2018’, point 9(1) states any transaction on account of a cross- border merger undertaken in accordance with these Regulations shall be deemed to have prior approval of the Reserve Bank of India as required under Rule 25A of the Companies (Compromises, Arrangement and Amalgamations) Rules, 2016. Hence, the proposed modification would also need no additional approval from Reserve Bank of India.
If the impugned order is allowed to sustain then the scheme will have to be remodified to reflect such justification which will result into another round of lengthy compliances all of which would have to be undertaken for the third time.
The Impugned Order is liable to be set aside and the Appeal with the prayers stands allowed.
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2024 (11) TMI 1007
Contravention of the provisions of Section 4 of the Competition Act, 2002 - abuse of dominant position - IREL is an ‘enterprise’ in terms of provisions of the Act or not - ‘relevant market’ in the present case - IREL holds a dominant position in the relevant market.
Whether OP is an ‘enterprise’ as defined in Section 2(h) of the Act? - HELD THAT:- The Commission observes that IREL, the erstwhile Indian Rare Earths Limited is a Public Sector Undertaking and an unlisted Public Company, was incorporated on August 18,1950. It became a full-fledged Government of India Undertaking under the administrative control of Department of Atomic Energy in year 1963. It has its own Board of Directors for managing its overall affairs. Accordingly, the Commission is of the considered view that IREL is not a department of the Government. The Commission notes that Sillimanite is sold by the OP in the open market for monetary consideration. Thus, IREL does not qualify for an exemption from the provisions of Section 2(h) of the Act with respect to the activity of mining and sale of Sillimanite in India. Based on the above and nature of activities carried on by OP, the Commission finds no reason to deviate from its prima facie order dated 03.01.2022 where it held OP to be an enterprise under the Act. Accordingly, the Commission finds OP to be an enterprise under extant provision of Section 2(h) of the Act.
What is the ‘relevant market’ in the present case as defined in Section 2 (r) of the Act? - HELD THAT:- With regard to delineation of relevant geographic market, the Commission notes the submission of DG that there are no geographical barriers for production as well as sale of Sillimanite in India. OP has stated that the relevant geographic market in the matter is India including import. The Commission, while agreeing with this contention of the OP, notes that the import of Sillimanite, if any, in Indian market may be appropriately considered under the relevant product market. However, there would be no change in geographic market as competition concerns (even accounting for imported relevant product) would still be evaluated within the boundary of India. Accordingly, the Commission finds no reason to disagree with the finding of DG and accepts the relevant geographic market in the instant case as ‘India’ - the Commission holds that the relevant market in the present case as “mining and supply of Beach Sand Sillimanite in India”.
Whether OP holds a dominant position within the scope of Section 4 of the Act? - HELD THAT:- The contention of the OP that the market share of an entity cannot be a definitive and exclusive indicator of its dominance and therefore, the findings of DG with respect to dominance of the OP cannot be relied upon. However, the Commission observes that the DG has analysed dominance based on various factors, as provided under Section 19(4) of the Act, and not alone on the basis of market share. Further, market share of an entity can be a strong indicator of its presence in the market and simply cannot be brushed aside in toto in absence of other negating factors - the Commission is in agreement with the conclusion drawn by the DG that the OP enjoyed a dominant position in the defined relevant market.
Whether OP has violated the provisions of section 4(2)(a)(ii) by charging unfair/ excessive prices from the consumers? - HELD THAT:- The price charged by KMML was much higher than IREL despite KMML being a much small player. The Commission also notes that allegation have been levelled in respect of higher quantities being offloaded to a particular company and its associates and also that the price charged is substantially lower vis-à-vis what is being charged from other customers. There seems to be no economic incentives for the OP, being in a dominant position, to indulge in such activities where it sold higher quantities at lower prices. Further, the Commission is of the view that market price is best left to the dynamic interaction between forces of the market and intervention would normally be required only in appropriate cases based on facts and circumstances of such a case - there is no reason for the Commission to hold that OP has indulged in excessive pricing. Resultantly, no case of contravention of Section 4(2)(a)(ii) of the Act is made out against the OP.
Whether the OP violated the provisions of section 4(2)(a)(ii) by charging discriminatory prices? - Whether the OP violated the provisions of section 4 (2)(a)(i) by imposing discriminatory supply conditions? - HELD THAT:- The Commission is of the view that quantity supplied by OP to different categories of consumers of Sillimanite may be different for the reasons such as long-standing business relations, assured off-take quantity, past off-take etc. and therefore, may not be discriminatory. Here, it is trite to say that every commercial enterprise enjoys freedom to carry out trade and take appropriate business decisions. As a normal business prudence, the Commission has reasons to believe that, a party buying in bulk would get better terms (including purchase price) than a small buyer. Unless and until there are manifest contravention of the provisions of the Act, the freedom of enterprise remains sacrosanct and the Commission would not like to dictate the terms of the trade. Based on the facts of the case and analysis, the Commission is of the view that no case of contravention of Section 4(2)(a)(i) of the Act for adopting discriminatory practices in supply of Sillimanite favouring MNCs/foreign customers as against domestic customers is made out against the OP.
Considering the facts and circumstances of the case, material on records, Investigation Report of the DG, submission made by the parties and analysis carried out in preceding paragraphs, the Commission is of the view that the OP is covered under the ambit of enterprise prescribed under extant provision of Section 2(h) of the Act and is dominant in mining and sale of Beach Sand Sillimanite in India. However, no case of contravention of provisions of section 4(2)(a)(i) and 4(2)(a)(ii) of the Act is made out against the OP. Accordingly, the matter is directed to be closed.
The Commission deems it appropriate to deal with the request of the parties seeking confidentiality over certain documents/information filed by them under Regulation 35 of the Competition Commission of India (General) Regulations, 2009. The Commission notes that during the course of the proceedings, parties had filed their respective submissions in confidential as well as non-confidential version. Certain excerpts from such submissions, over which confidentiality has been sought, have been relied upon by the Commission.
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2024 (11) TMI 1006
Contravention of the provisions of Section 4(2)(c) of the Competition Act, 2002 - abuse of dominant position - HELD THAT:- In the absence of dominant position of the OPs in the delineated relevant market, the allegations of abuse made against the OPs need not be examined by the Commission.
Be that as it may, based on the information available on record, the Commission is of the view that the alleged conduct cannot be considered as an abuse of dominant position by the OPs. The Informant has not provided any evidence indicating that the OPs used the Informant’s information to develop and launch their products. Additionally, there is no evidence suggesting that the OPs prevented the Informant from introducing a similar product into the market. Furthermore, there is no record of the Informant having a similar product in development that was close to being launched and accordingly the Informant lost the first-mover advantage due to OPs’ product launch. Moreover, it is not demonstrated that having a first-mover advantage is crucial in this market.
There does not seem to be any abuse of dominant position by the OPs in the delineated relevant market - the Commission is of the considered opinion that no prima facie case of contravention of the provisions of Section 4 of the Act is made out against the OPs in the present matter. Hence, the matter is directed to be closed in terms of the provisions contained in Section 26(2) of the Act.
All pending applications stand disposed of accordingly.
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2024 (11) TMI 1005
Price fixation and bid-rigging by sugar mills and associations - price parallelism - contravention of the provisions of Section 3(3)(a) and 3(3)(d) read with Section 3(1) of the Competition Act, 2002 - HELD THAT:- It is seen that for the allegations of price cartel amongst ISMA and the sugar mills of the State of Uttar Pradesh in contravention of the provisions of Section 3(3)(a) of the Act, the only credible evidence brought out in the investigation report is a few instances of quotation of identical prices by OP-11 and OP-19 in the Impugned Tender, and exchange of calls by them as well as by key officials of certain other OPs with Shri GK Thakur, Director of ISMA, during the tender period - It is no longer res integra that price parallelism cannot be the sole criteria to establish a cartel. Evidence of parallel pricing must be supplemented with “plus factors” showing that alleged conduct is conscious and not the result of independent business decisions. In the present matters, the plus factors on record to supplement price parallelism by 2 OPs, is exchange of a few calls between the OPs with the representative of the industry association ISMA, which may have been to understand the nuances of the Impugned Tender as it ushered a novel way of tendering process.
The investigation has not brought out sufficient evidence on record for the Commission to arrive at a finding of contravention of the provisions of the Act against any OP in the present matters - It is made clear that all information used in the present order is for the purposes of the Act and as such, in terms of Section 57 of the Act, does not qualify for grant of confidential treatment.
Thus, no case of contravention of the provisions of the Act can be made out in the present matters against any OP and the matters are directed to be closed forthwith - The Secretary is directed to forward certified copy of the present order to the Informants and the OPs, accordingly.
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2024 (11) TMI 1004
Alleged anti-competitive practices under Sections 3(4) and 4 of the Competition Act, 2002 - exclusive supply obligation - forced co-branding - refusal to deal - resale price maintenance - HELD THAT:- The Commission notes that the Informant has primarily relied upon an undated and unsigned document titled ‘Propel Agreement’ to allege ‘exclusive supply obligation’ and ‘forced co-branding’. The Commission also notes that other two allegations i.e., ‘refusal to deal’ and ‘resale price maintenance’ are stated to be imposed through oral directions. Accordingly, the Commission directed the Informant to furnish a copy of an actual agreement signed between the OP-1 and a processor. The Informant, in its response dated 07.02.2024, stated that it does not have access/ possession of a signed agreement.
Despite being given the opportunity, the Commission observes that the Informant has not been able to produce a valid and subsisting copy of the said Propel Agreement on the edifice of which the entire allegations rest - A bare perusal of the said Propel Agreement reveals that it is only an agreement to meet the requirements of the end consumers through the assistance imparted by the manufacturers to the processors by way of supply of raw materials, imparting technical and marketing training, rendering services to the customers as per the requirements, among others.
With regard to the allegation of exclusive supply obligation, the Commission observes that exclusive purchase obligation is said to be imposed on processors only in respect of ‘High Performance Glass & Allied Products’ and ‘Clear Tempered Glass’. However, no such imposition of exclusivity is observed from the submitted Propel Agreement, in respect of clear float glass/other glass, thereby implying that the processor has a choice to procure clear float glass from other glass manufacturers.
With regard to allegation of forced co-branding, the Commission has perused clause 3.3 of the said Propel Agreement which reveals that the OP-1 would facilitate the processor to use its own trademark/brand name alongside trademark/brand name of OP- 1 under certain terms and conditions. Thus, the Commission is of the view that co- branding, in itself, does not raise competition issue.
As regards allegations of refusal to deal, it has been submitted by the Informant that processors/ distributors are being offered significant discounts on products of OP-1, if they purchase exclusively from OP-1. Additionally, the processors who are dealing with competitors of OP-1 will not be sold products of OP-1. The Commission is of the view that the Informant has merely alleged the conduct to be carried out through oral directions and has not substantiated the same with any evidence. It may be noted that offering discounts on the basis of volume of purchase may not be anti-competitive, per se.
In relation to allegation of resale price maintenance (‘RPM’) being practiced through oral direction, the Informant has claimed that in certain cases, OP-1 is stated to have directly approached the large bulk customers and negotiated prices directly with them. The processors and distributors are then forced to issue invoices at such prices - the Commission notes that OP-1 would have no control over the price charged by the processors from the end consumers for the services provided by it. It is clear that the processors are free to charge the price from the end users for the value addition/ enhancement they carry out in the glass received from OP-1 and OP-1 does not control it. This nowhere shows that the price of end product is being controlled by the OP-1 as OP-1 only charges for the products it sells to the processor.
The Commission is of the view that no prima facie case is made out against OP-1 in respect of either Section 3(4) or 4 of the Act. Accordingly, the Information filed is directed to be closed forthwith under Section 26(2) of the Act.
Considering the grounds put forth by the Informant for the grant of confidential treatment, the Commission grants confidentiality to such documents/ information in terms of Regulation 35 of the General Regulations read with section 57 of the Act for a period of three years from the passing of this order. The Commission also grants confidentiality on the identity of the Informant as prayed. It is, however, made clear that nothing used in this order shall be deemed to be confidential or deemed to have been granted confidentiality as the same has been used for the purposes of the Act in terms of the provisions contained in Section 57 thereof.
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2024 (11) TMI 1003
Anti-competitive agreements under Section 3 of the Competition Act, 2002 - contravention of the provisions of Section 3(1), 3(2), 4(2)(a)(ii) and 4(2)(c) of Competition Act, 2002 - abuse of dominant position under Section 4 of the Competition Act, 2002 - unfair trade practices and imposition of excessive interest rates - HELD THAT:- The Commission perused the material available on record and information available in public domain. The Commission notes that the Informant is mainly aggrieved with the alleged unfair and discriminatory increase in the rate of interest charged by OP-1. The Informant has alleged that due to imposition of high rate of interest, frequent increase of rate of interest and not allowing pre-payment of Loans (imposition of pre-payment penalty) resulted in the creation of barriers for new entrants in the market, as consumers would be disinclined to switch to a new entrant due to the apprehension of incurring losses. It is also alleged that the competition gets adversely affected as consumers face hindrance in the form of penalties when they switch to another bank. Therefore, the conduct of OP-1 allegedly amounts to be in violation of Sections 3(1) and 3(2) of the Act. It is also alleged that imposing unjust and excessively high rates of interest contravene provisions of Section 4 of the Act.
For the purpose of analysis of conduct of OP-1 under the ambit of Section 4 of the Act, the Commission deems appropriate in the present matter to delineate relevant market as ‘provision of loan against property in India’. The Commission notes that the Informant has suggested that OP-1 has the biggest share in the area of Delhi and NCR and therefore is dominant. The Commission also notes from the information available in public domain that OP-1 is a housing finance company which is India’s third largest non-bank mortgage lender in the country and is regulated by the Reserve Bank of India (RBI) - it is observed from the information in public domain that the relevant market appears to be competitive with the presence of large number of banks and Non-Bank Financial Companies (NBFCs) and housing finance companies and thus, dominance of OP-1 is not established in the aforesaid relevant market. Further, the allegation of aftermarket abuse is misplaced since the loan services of the nature impugned herein do not involve any aftermarket as alleged by the Informant and is, thus, rejected.
The Commission is of the view that there is no prima facie case made out under the provisions of Section 4 of the Act. As far as the provisions of Section 3 of the Act is concerned, the agreement with an end-consumer like in the present case is not envisaged as an anti-competitive agreement under Section 3 of the Act and therefore, no case is made out under the provisions of Section 3 of the Act.
The Commission is of the view that prima facie there is no competition concern arising in the present matter under the provisions of Section 3 and Section 4 of the Act and therefore, the matter is directed to be closed forthwith under Section 26(2) of the Act - the Secretary is directed to communicate the decision of the Commission to the Informant, accordingly.
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2024 (11) TMI 1002
Seeking confidentiality over its identity under provisions of Section 57 of the Act read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009 - bid-rigging and cartelisation - abuse of dominant position - contravention of Section 3 of the Competition Act, 2002 - HELD THAT:- There was a significant difference of more than INR 2000/- between bids quoted by OP-2 and OP-3; in the remaining two tenders viz. Tender Nos. 03221028 and 03211577, there seems to be a minor difference of around INR 10 in the bid amounts of OP-2 and OP-3. However, there is no evidence on record that any part of the remaining two tenders were awarded to OP-2 and/ or OP-3. Further, it is noted that the bids quoted by several remaining bidders (approved or un-approved sources) were in the same range or higher than the bids quoted by OP-2 and OP-3. Specifically, it is noted that in all three tenders, the approved source Nanda Engineering Works, quoted rates higher than the OPs.
The Commission observes that apart from the bid quotations made by OP-2 and OP-3 in two tenders with minor difference in their prices, there is no other evidence on record, which may support the allegations of the Informant regarding cartelisation between them - it is no longer res integra that mere price parallelism is not sufficient to arrive at a finding of cartelisation without there being evidence of any plus factors in support of parallel pricing.
In the present matter, there are no plus factors averred by the Informant indicating meeting of minds or collusion between OP-2 and OP-3 or among OPs. Accordingly, in view of the Commission, neither case of cartelisation in contravention of the provisions of Section 3 of the Act is made out in the present matter against OP-2 and OP-3 nor there arises any question of violation of the provisions of Section 3 of the Act by OP-1.
The Commission is of the view that OP-1 being a consumer/ procurer of the impugned item has freedom to specify its requirements/ conditions/ EC and the said requirements/ conditions/ EC themselves cannot be deemed to be anti- competitive. Thus, the Commission does not find OP-1 to be in violation of the provisions of Section 4 of the Act also.
The Commission finds that no prima facie case of contravention of provisions of the Act is made out against any of the OPs in the present matter and decides to close the matter forthwith in terms of the provisions of Section 26(2) of the Act - The Secretary is directed to communicate certified copy of the present order to the Informant, accordingly.
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2024 (11) TMI 1001
Abuse of dominant position by DAE and IREL under Section 4 of the Competition Act, 2002 - contravention of the provisions of Section 4 of the Competition Act, 2002 - HELD THAT:- From a conjoint reading of Section 2(h) of the Act and the relevant Allocation of Business Rules, it is amply clear that DAE is exempted from the purview of ‘enterprise’ in terms of the provisions of the Act. Accordingly, conduct of DAE does not invite scrutiny under the provisions of the Act.
Furthermore, based on the above, the Commission notes that the IREL has no role to play in renewal of the off-take agreement, rejection of import licenses, and non-approval of an alternate disposal plan.
Based on the facts and circumstance of the instant case and analysis carried out in preceding paragraphs, since no prima facie case is made out either against DAE or IREL, the matter may be closed under Section 26(2) of the Act forthwith. Consequently, no case for grant of relief(s) as sought under Section 33 of the Act arises.
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2024 (11) TMI 1000
Alleged contravention of Section 4 of the Competition Act, 2002 by Maruti Suzuki India Limited regarding pricing strategy for the 'Jimny' SUV - abuse of dominant position - HELD THAT:- In the opinion of the Commission, the OP does not hold a market share large enough to enable it to operate independently of competitive forces prevailing in the market or to affect its competitors or consumers or the market in its favour, especially in the SUV segment of passenger vehicles. As such, the OP does not appear to be a dominant player in the market. Therefore, in the opinion of the Commission, a case of violation of the provisions of Section 4 of the Act cannot be made out against the OP.
Further, the Commission also notes that the grievance raised by the Informant is an inter-se dispute between the Informant and the OP regarding price of the product sold by the OP to the Informant. In the opinion of the Commission, on the basis of the grievances alleged by the Informant, no competition issue or concern seems to arise from the facts and allegations stated by the Informant. Once a buyer purchases a product from a seller at a given price, it cannot insist to avail benefit of any future discount which may be offered on such product by the seller. The discounted price alleged also does not seem to be predatory in nature.
The Commission is of the considered opinion that no prima facie case of contravention of the provisions of Section 4 of the Act is made out against the OP in the present matter. Hence, the matter is directed to be closed in terms of the provisions contained in Section 26(2) of the Act.
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2024 (11) TMI 999
Contravention of provisions of Section 3 and 4 of the Competition Act, 2002 - abuse of dominant position/dominant enterprise - cartel formation - HELD THAT:- From the facts, the Commission notes that the Informants are the retail shop owners in the Mall and are aggrieved by the way Mall has been managed. The gravamen of grievance is that the management of the Mall has not been handed over to the association of the owners of the Mall (buyers of the retail space in the Mall) and it continues to be in the hands of OP-1 acting through OP-2 (maintenance agency); charging of high maintenance and electricity charges; selling joint common areas without consent of the shop owners. The Commission also notes that the Informants have claimed the Mall to be a relevant market and the conduct of OPs causing AAEC in such market - The Informants have already filed a civil suit against OPs claiming permanent injunction against OPs.
The Commission notes from the information available in public domain that Metropolitan Mall is not the only mall situated in Gurugram and there are other malls situated in Gurugram and nearby areas. Thus, the Commission is of the view that the case does not merit any narrow delineation of relevant market for the purposes of Section 4 of the Act. As far as the alleged abuse is concerned, the Commission is of the view that the grievances of the Informants like payment of maintenance and electricity charges, rights and entitlement to joint common areas etc. are in the nature of contractual/civil issues/disputes - The Commission also does not find any merit in the case for its examination under Section 3(4) of the Act. Thus, the Commission is of the view that no competition concerns seem to arise in the present matter given the nature of allegations and the alleged conduct of the parties so arrayed by the Informant.
The Commission is, thus, of the opinion that there exists no prima facie case of contravention of the provisions of Section 3 and Section 4 of the Act against the OPs in the present case and therefore, the matter be closed forthwith under Section 26(2) of the Act. Consequently, no case for grant for relief as sought under Section 33 of the Act arises and the same is disposed of accordingly.
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2024 (11) TMI 998
Dismissal of application filed by the appellant under Section 7 of the Code - Respondent miserably failed to meet its obligation - existence of debt and default - judicious application of mind by the Adjudicating Authority - Appellant assailed the conduct of the Respondent for taking several frivolous grounds including that the application of the Appellant under section 7 of the Code has been rejected earlier and by doctrine of res-judicata the same could not have been filed.
Whether there was a debt and default which could trigger Section 7 application filed by the Appellant? - HELD THAT:- There was outstanding debt and there was a clear default on the part of the Respondent in meeting its obligation which entitles the Appellant to take suitable remedy as per the Code and therefore, he correctly filed the Application under Section 7 of the Code - there are no meaningful and detailed discussion on this issue in the Adjudicating Authority decision in the Impugned Order, especially on issue of default which is against the spirit of the Code. In view of these discussions, the debt and default is established in favour of the Appellant.
Whether, ratio of Vidarbha Industries [2022 (7) TMI 581 - SUPREME COURT] was applicable in the present case based on which the Adjudicating Authority rejected the application of the Appellant filed under Section 7 of the Code? - Whether, there was judicious application of mind by the Adjudicating Authority as evident in the Impugned Order while rejecting the application of the Appellant under Section 7 of the Code? - HELD THAT:- In the present case, the total outstanding of all lenders was thousands of crores and debt claims of Appellant was itself Rs. 646.38 Crores, whereas the Respondent is now hopeful of Rs. 1271 Crores to be recovered from other telecom companies based on Arbitration etc., which are at present at different stages of being finalised, thus, perception of the Respondent looks far from finality. It is anybody’s guess as to when this money, if at all, will come to the Respondent’s account after all sort of claims, counter claims and litigations at various legal fora.
The Adjudicating Authority has not even discussed the nature of this repayment of Rs. 16915 Crores i.e., whether it was paid in cash component as per loan agreements or major chunk as deemed payable due to conversion of debt into equity as per CDR/ SDR in terms of RBI Guidelines, which Lenders/ Bank had to follow without any option. We note that both the CDR/SDR failed due to default of the Respondent. This could have been relevant factor to determine viability of the Corporate Debtor in terms of Vidarbha Industries - It would have been desirable for the Adjudicating Authority to go into details as what was the total outstanding claims all the lenders pre CDR/SDR as well as post CDR/SDR and what was the total payment made thereon. This would have given a clear picture in terms of total payment made by the Respondent on account of principals, interest and other ancillary charges like penal interest, if any, happened due to non payment on part of the Respondent to the Lenders. The Adjudicating Authority has not gone into any of these details, as such we are not in position to support the Impugned Order rejecting Section 7 application of the Appellant only on the ground of Vidarbha Industries.
The Adjudicating Authority has not applied the ratio of Vidarbha Industries correctly in the present case while rejecting the application of the Appellant, filed under Section 7 of the Code.
Whether the Adjudicating Authority ignored the acknowledgements of debt and default by the Respondent in its various statements, books of accounts, affidavit in reply and Written Submissions filed before the Adjudicating Authority? - HELD THAT:- There are several acknowledgements of debt and default on the part of the Corporate Debtor - there is a clear debt and default backed several acknowledgements by the Respondent which entitled the Appellant to file application under Section 7 of the Code before the Adjudicating Authority.
Whether the Appellant is permitted to raise any disputed issues of facts before this Appellate Tribunal through Rejoinder dated 11.04.2023 to the Affidavit in Reply and Additional Affidavit in reply and whether it is an impediment in the present appeal? - HELD THAT:- The Appellant pleaded that in the present case, the question as to the applicability of Vidarbha Industries is not a new plea set out by the Appellant. It has its basis in the pleadings of the Respondent as well as the Appellant before the Adjudicating Authority - it is already noted the relevant para of Vidarbha Industries [2022 (7) TMI 581 - SUPREME COURT], Innoventive Industries Ltd. [2017 (9) TMI 58 - SUPREME COURT], Vidarbha Review Order and it is already noted the various financial facts and figures regarding viability of the Corporate Debtor, as such the contentions raised by the Respondent does not hold good.
Even without considering the Rejoinder filed by the Appellant, the ratio and applicably of Vidarbha Industries is in the present appeal is required to be taken into consideration along with various financial facts which are found in the pleadings made as well as written submissions and which are based on the financial statements of the Corporate Debtor which are in public domain.
Whether, the Appellant was duty bound to agree with majority of the lenders to assign its debts to EARC? - HELD THAT:- The Appellant is not duty bound to agree with majority of the lenders to assign its debts to EARC - It is clear that it is the commercial wisdom of the lenders is paramount in deciding to assign its debts or to pursue other remedies including filing under Section 7 of the Code or otherwise and these can’t be any judicial intervention on this aspect by the Adjudicating Authority or this Appellate Tribunal.
The case is remanded back to the Adjudicating Authority to hear the original petition of the Appellant a fresh, taking into consideration all the relevant facts - Appeal allowed by way of remand.
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2024 (11) TMI 997
Seeking grant of regular bail - Money Laundering - conspiracy to fraudulently set up Vivo group of companies in India without revealing their true beneficial ownership and carried out mis-declarations before government bodies - concealment of Chinese ownership - Section 45 of the PMLA - HELD THAT:- Since the offence pertains to money laundering, apart from the usual considerations, it would have to be seen whether the twin conditions stipulated in Section 45 of the PMLA are met. A plain reading of Section 45 of the PMLA shows that the public prosecutor must be given an opportunity to oppose the application and the Court should have reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. The twin conditions though restricts the right of accused to be released on bail but do not impose absolute restraint and the discretion vests in the Court.
Section 45 of the PMLA while imposing additional conditions to be met for granting bail, does not create an absolute prohibition on the grant of bail. When there is no possibility of trial being concluded in a reasonable time and the accused is incarcerated for a long time, depending on the nature of allegations, the conditions under Section 45 of the PMLA would have to give way to the constitutional mandate of Article 21. What is a reasonable period for completion of trial would have to be seen in light of the minimum and maximum sentences provided for the offence, whether there are any stringent conditions which have been provided, etc. It would also have to be seen whether the delay in trial is attributable to the accused.
In Senthil [2024 (9) TMI 1497 - SUPREME COURT], the Supreme Court while reiterating the ratio enunciated in Union of India v. K.A. Najeeb (Three Judge bench) [2021 (2) TMI 1212 - SUPREME COURT], also held that if the Constitutional Court comes to the conclusion that the trial would not be able to be completed in a reasonable time, the power of granting bail could be exercised on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions.
The issue of long incarceration and right of speedy trial also cropped up in Manish Sisodia v Directorate of Enforcement, Manish Sisodia v Directorate of Enforcement, [2024 (8) TMI 614 - SUPREME COURT] wherein it has been held by the Supreme Court that the right to bail in cases of delay in trial, coupled with long period of incarceration would have to be read into the Section 439 CrPC as well as Section 45 of PMLA while interpreting the said provisions.
Prem Prakash v. Union of India through the Directorate of Enforcement, Prem Prakash v. Union of India through the Directorate of Enforcement, [2024 (8) TMI 1412 - SUPREME COURT]is another recent decision where it has been reiterated that the fundamental right enshrined under Article 21 cannot be arbitrarily subjugated to the statutory bar in Section 45 of the Act and the constitutional mandate being the higher law, the right to speedy trial must be ensured and if the trial is being delayed for reasons not attributable to the accused, his incarceration should not be prolonged on that account.
The right to speedy trial was also upheld and other special legislations where provisions akin to Section 45 PMLA exist.
It is noted that the investigation was initiated in the year 2022 and the Prosecution Complaint has named 48 accused persons and cited 527 witnesses. There are 80,000 pages of documents which need to be analysed. A supplementary Prosecution Complaint dated 19 - In a situation such as the present case, where there are multiple accused persons, thousands of pages of evidence to assess, scores of witnesses to be examined and the trial is not expected to end anytime in the near future and the delay is not attributable to the accused, keeping the accused in custody by using Section 45 PMLA a tool for incarceration or as a shackle is not permissible - The accused in a money laundering case cannot be equated with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, etc.
As held in the catena of judgements discussed herein above, Constitutional Courts have the power to grant bails on the grounds of violation of Part III of the Constitution and Section 45 does not act as a hindrance to the same. The sacrosanct right to liberty and fair trial is to be protected even in cases of stringent provisions present in special legislations - The applicant has been in custody since 10.10.2023 and the trial is at the stage supply of documents under Section 207 Cr.P.C. and charges are yet to be framed. Out of the 7 accused persons who were arrested, arrest of 3 persons was declared illegal by the Trial Court vide order dated 30.12.2023 and the other three, as noted above, have already been released on bail.
The fact that the twin conditions under Section 45 of PMLA stand satisfied, the fact that the all the other accused persons who were arrested are out on bail, the period of custody undergone, the trial is at nascent stage of supply of documents under Section 207 Cr.P.C., keeping in mind the import of the catena of decisions of Supreme Court discussed herein above, it is directed that the applicant be released on regular bail subject to him furnishing personal bond in the sum of Rs.1,00,000/- with one surety of the like amount each to the satisfaction of the concerned Jail Superintendent/Trial Court/Duty J.M./link J.M. and subject to fulfilment of further conditions imposed - The bail application is disposed of.
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2024 (11) TMI 996
Money Laundering - scheduled offence - proceeds of crime - whether the properties purchased prior to the alleged commission of offence would not fall under the definition of "proceeds of crime"? - HELD THAT:- In view of the fact that 'proceeds of crime' has been set out in the complaint impugned in the present petition and the identification of proceeds of crime also has been set out, the grounds raised by the petitioner deserves no merit consideration and all other grounds raised on merits or regarding appreciation of materials would be considered only by the Trial Court. However, the Trial Court while proceeding with the trial, has to consider the materials available on record independently and uninfluenced by the findings recorded by this Court in this petition relating to facts.
This Criminal Original Petition stands dismissed.
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2024 (11) TMI 995
Money Laundering - sale proceeds of lottery tickets - challenge to closure report - offences punishable under Sections 294N, Section 420 and 120B of Indian Penal Code - HELD THAT:- A legislation when brought into force with a legislative intent does not stay in the same shape, as it was intended to be. Evolution of the legislation is inevitable in a growing country. The operation and implementation of the law decides that the legislation is taken forward in its intended spirit and force. Once the legislation is applied and tested, the consequences of such application determine the character and fate of the legislation.
The objects of the PMLA as intended is crystal clear from the day of its inception. Economic interest of our great nation is the soul object. The consequent implementation of the law should be in tandem with the legislative intent. Any misuse or abuse of the law will fracture the bones of PMLA, thereby rendering it wholly ineffective. Legislation of such nature must be handled with caution and must not injure any vital organs of Part III of the Constitution of India.
To remind that facts of the present case at this juncture, the seizure of huge amount of cash of Rs. 7.20/- crores was on 12.03.2012. The sale agreement is said to have been entered into on 02.03.2012. The stamp paper has been released by the State Government only on 09.03.2012 and it was sold by the stamp vendor to one Smt.Vimala on 13.02.2012. It is a clear case of cheating by amassing money by sale of illegally printed lottery tickets attracting Section 420 of IPC, creation of a false document in the form of a sale agreement attracting the provisions of Sections 467, 468 and 471 of IPC and hence prima facie materials are available for both the predicate offence and the offence under PMLA. But the PMLA proceedings are sought to be scuttled by closing the proceedings in the predicate offence.
In the present case, the State Investigating Agency registered the predicate offence, conducted investigation and against the dismissal of quash petition filed SLP before the Hon'ble Supreme Court and the criminal case was restored by the order of the Apex Court. When the prima facie case regarding a predicate offence has been upheld by the Hon'ble Supreme Court by restoring the criminal case in the predicate offence, filing closure report thereafter by the very same State Agency is undoubtedly suspicious and doubtful.
The State Agency has made an attempt to bury the predicate offence against the accused persons in a suspicious manner and on extraneous considerations, which are visible through their actions including the closure report filed by the State police - The State Investigating Agency and the Enforcement Directorate are directed to proceed with the case in tandem, so as to ensure that the criminal case instituted is proceeded in accordance with law. However, the trial must go on uninfluenced by the observations, if any made relating to facts in the present case.
The facts established and the legal position considered made us to arrive at an irresistible conclusion that the Closure Report filed by the 1st respondent dated 14.11.2022 accepted by the learned Judicial Magistrate-I, Alandur by order dated 17.11.2022 made in Crime No.304 of 2012 stands set aside - Accordingly, the Criminal Original Petition stands allowed.
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2024 (11) TMI 994
Service Tax demand under the category of rent a cab service, interest and imposition of penalty - invocation of extended period - HELD THAT:- We find that the issue involved in the instant case relates to the appellant’s understanding with respect of hiring of vehicles. The appellant was under the impression that hiring of vehicles does not fall under the category of renting of cab service, and therefore, the appellant was not discharging service tax in respect of vehicles hired by them.
We hold that while service provided by the appellant is taxable, the Notification of extended period of limitation cannot be sustained. The impugned order is therefore, set aside and matter remanded to the original adjudicating authority for decision in light of above findings.
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