2016 (1) TMI 1515 - HC - Law of Competition

Declination to continue the interim order granted - abuse of dominant position - contravention of Section 3 and 4 of the Competition Act 2002 - scope of present appeal - main petition is still pending - whether it is necessary to continue the interim order dated 09.04.2015 as modified on 21.05.2015 till the disposal of the writ petition? - HELD THAT - It is not required to enter into the merits of the case and express any opinion regarding the validity of the order of CCI dated 13.01.2015 which is impugned in the writ petition. Since it is an issue which needs adjudication in the writ petition it is confined only to the issue whether the order of the learned Single Judge warrants interference in an intra court appeal. The law is well settled that the appeals before the Division Bench under Letters Patent are against the exercise of discretion by the Single Bench and therefore it is impermissible to reassess the material and seek to reach a conclusion from the one reached by the Single Bench except where the exercise of discretion by the Single Bench has been shown to have been exercised arbitrarily or perversely or where the settled principles of law regulating grant or refusal of interim protection have been ignored. In the present case the respondents No.2 to 4 were supplying software for electronic payment solutions (BASE-24) to several banks in India which enables the said banks to process transactions at ATMs or at the point of sale terminals of different stores since the software facilitates communication of transactions with the relevant bank s core banking network. It is no doubt true that the said order was in operation till a final order came to be passed by CCI on 13.01.2015. However a clear finding has been recorded by the majority members of CCI in the order dated 13.01.2015 that the alleged dominance of the respondents No.2 to 4 in the relevant market has not been established and consequently the issue of abuse of dominant position does not arise. While arriving at the said conclusion CCI has taken into consideration the entire factual matrix of the case and assigned detailed reasons. CCI has also recorded a clear finding that the contravention of Section 3(4) read with Section 3(1) of the Act as alleged by the informant/appellant herein has not been established. Conclusion - The learned Single Judge thought it fit that the interim order which enables the banks to take customization and integration services from the appellant qua the software owned by the respondents No.2 to 4 herein cannot be continued any longer and accordingly the order under appeal came to be passed - The mere fact that the interim relief has ensured continuous business operations for the appellant is not a valid ground for continuing the interim order. We are also unable to agree with the plea of the appellant that irreparable damage would be caused in the absence of the interim order. In the facts and circumstances of the case the balance of convenience is not in favour of the appellant and therefore the discretion exercised by the learned Single Judge in discontinuing the interim relief cannot be held to be illegal or erroneous. Appeal disposed off.

Summary

Issues Involved:

1. Whether the interim order granted by the learned Single Judge should be continued pending the writ petition.
2. Whether the order of the Competition Commission of India (CCI) dated 13.01.2015 is valid and within jurisdiction.
3. Whether the appellant can be adequately compensated if the interim order is not continued.
4. Whether the learned Single Judge's discretion in discontinuing the interim order was exercised properly.

Issue-wise Detailed Analysis:

1. Continuation of the Interim Order:

The primary issue was whether the interim order dated 09.04.2015, as modified on 21.05.2015, should be continued until the disposal of the writ petition. The learned Single Judge discontinued the interim order, reasoning that no case was made out for its continuation. The court noted that the CCI, a specialized body, had found no contravention of the Competition Act by the respondents, and thus, there was no evident error in CCI's reasoning to justify an interim order. The court emphasized that if the appellant succeeded in the writ petition, compensation could be gauged from existing agreements with banks.

2. Validity of CCI's Order:

The appellant contended that the CCI's order dated 13.01.2015 was ex-facie illegal and contrary to the statutory scheme, arguing that the CCI should have directed further inquiry if it disagreed with the Director General's findings. The Director General had found the respondents in a dominant position, imposing unfair conditions, which the CCI disregarded. However, the court refrained from expressing an opinion on the validity of CCI's order, as the main petition was still pending. The court highlighted that the CCI had recorded a clear finding of no contravention, which the learned Single Judge considered while discontinuing the interim order.

3. Adequate Compensation:

The appellant argued that the interim relief should not be discontinued as it could not be adequately compensated for the anti-competitive conduct of the respondents. The court, however, noted that the financial loss to the appellant could be compensated monetarily if the appellant succeeded in the writ petition. The mere fact that the interim relief ensured continuous business operations was not a valid ground for its continuation. The court found that the balance of convenience was not in favor of the appellant, as the interim order's absence would not cause irreparable damage.

4. Discretion of the Learned Single Judge:

The court evaluated whether the learned Single Judge's discretion in discontinuing the interim order was exercised arbitrarily or perversely. It concluded that the discretion was exercised properly, given the findings of the CCI and the lack of irreparable harm to the appellant. The court emphasized that appeals against the exercise of discretion by the Single Bench are limited to instances where discretion is exercised arbitrarily or settled principles of law are ignored. In this case, the court found no grounds for interference with the learned Single Judge's decision.

Conclusion:

The appeal was disposed of with no interference in the order under appeal. The court requested the learned Single Judge to expedite the disposal of the main petition, ensuring it is decided on its own merits without regard to observations in the current order.