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2025 (2) TMI 145 - AT - Law of CompetitionAnti-competitive practices - abuse of dominant position - delaying the possession of flats and increasing the cost - violation of Section 4(2)(a)(i) read with Section 4(1) of the Competition Act 2002 - entitlement to compensation under Section 42A and Section 53N(1) of the Competition Act - HELD THAT - The compensation is payable in case of contravention of order of CCI. Section 42 A provides that any person may make an application to the Appellate Authority for an order of recovery of compensation from any enterprises for any loss or damage shown to have been suffered by such person as a result of said enterprise violating directions issued by CCI. It is noted that every Appellant has claimed the monthly rental @10, 000 per month amounting to Rs. 10, 20, 000/- for the period from 01.01.2010 to 30.06.2018 which continue till payments. Similarly the Appellants have claimed the damage for inconvenience mental physical loss expectancy loss amounting to Rs. 25, 50, 000/- each. Another claim has been made regarding interest on payment deposited amounting to Rs. 1, 70, 000/- each and finally litigation and out of pocket expenses of Rs. 5, 00, 000/- each. Thus the total compensation by each is Rs. 42, 42, 000/- which continues till payment is made by the Appellants - the eligibility criteria for the applicant to apply for EWS flats was annual earnings ceilings of Rs. 25, 000 each. The claims on face of it do not seems to be convincing. Be that as it may it is already noted in earlier that that the compensation is due only if CCI orders have been violated by the Respondent No. 1 which is not the case here. As such there are no merit in the appeal. It is observed that after giving consent for enhancement of cost of flats it does not lie in the mount of the Appellants to challenge the same. This does not help the cause of the Appellants despite CCI holding that Respondent No. 1 was involved in abusive conduct as dominant player in relevant geographic market. Conclusion - i) The compensation is due only if CCI orders have been violated by the Respondent No. 1 which is not the case here. ii) After giving consent for enhancement of cost of flats it does not lie in the mount of the Appellants to challenge the same. Appeal dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment were: 1. Whether the Respondent No. 1, Ghaziabad Development Authority (GDA), abused its dominant position by delaying the possession of flats and increasing the cost from Rs. 2,00,000 to Rs. 7,00,000, thereby violating Section 4(2)(a)(i) read with Section 4(1) of the Competition Act, 2002. 2. Whether the Appellants are entitled to compensation under Section 42A and Section 53N(1) of the Competition Act for the alleged losses and mental agony suffered due to the delay and increased cost. 3. Whether the penalty imposed by the Competition Commission of India (CCI) on Respondent No. 1 should be recovered and paid to the Appellants as compensation. 4. Whether the Appellants' consent to the increased cost of flats affects their claim for compensation. ISSUE-WISE DETAILED ANALYSIS Issue 1: Abuse of Dominant Position The relevant legal framework involves Section 4 of the Competition Act, which prohibits abuse of dominant position. The CCI had found that GDA abused its dominant position by delaying possession and increasing the cost of flats, and directed GDA to cease such conduct and imposed a penalty. The Tribunal noted that GDA had complied with the CCI's 'cease and desist' order and deposited 10% of the penalty, which led to a stay on the penalty payment. There was no violation of the CCI's order, thus no basis for further compensation claims at this stage. Issue 2: Entitlement to Compensation Under Sections 42A and 53N(1) of the Competition Act, compensation can be sought if there is a contravention of CCI orders. The Tribunal observed that since GDA complied with the CCI's orders, the claim for compensation was premature and lacked merit. The Appellants claimed compensation for rental losses, mental agony, and other damages, but failed to provide supporting documentation or evidence. The Tribunal found the claims unsubstantiated and inconsistent with the Appellants' financial status, given their eligibility for EWS flats. Issue 3: Recovery of Penalty as Compensation The Tribunal emphasized that penalties imposed by the CCI are to be credited to the Consolidated Fund of India, as per Section 47 of the Competition Act. Therefore, the Appellants' request to recover the penalty amount as compensation was not supported by the legal framework. Issue 4: Impact of Consent to Increased Cost The Tribunal noted that the Appellants had consented to the increased cost of the flats. This consent undermined their position in challenging the revised terms. Despite the CCI's finding of abusive conduct, the Appellants' consent weakened their claim for compensation. SIGNIFICANT HOLDINGS The Tribunal held that: "The compensation is due only if CCI orders have been violated by the Respondent No. 1, which is not the case here. As such, we do not find any merit in the appeal before us." Key principles established include the necessity of demonstrating a violation of CCI orders to claim compensation under Sections 42A and 53N(1) and the non-transferability of penalties imposed by the CCI to individual claimants. The Tribunal concluded that the appeal lacked merit and was rejected without costs, affirming that the Appellants could seek other legal remedies if available.
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