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TMI Blog2019 (7) TMI 2006X X X X Extracts X X X X X X X X Extracts X X X X ..... y different than the violation of Section 6(1) (i.e. combination is likely to cause or has caused an appreciable adverse effect on competition), therefore, while passing order under sub-section (2) of Section 6, the Commission cannot hold abuse of dominant position, though it may hold that the combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India and thereby void in terms of Section 6(1) - In the present case, the Appellant alleges violation of Section 4 and not challenged the order dated 17th September, 2015 passed by the Commission under Section 31 of the Act. Further, as the question of abuse of dominant position will arise only after combination comes into effect in terms of sub-section (2) of Section 6 read with Section 31, the allegation of abuse of dominant position cannot be looked at the stage of approval of combination under Section 31. The intimation given by the 'Commission' by letter dated 3rd November, 2015 to the Appellant is also not under challenge. The Appellant has also suppressed the aforesaid fact. It is the second time when such intimation given by letter dated 16th June, 2016, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Combination is placed on the website of the 'Commission' for the information of general public. 4. It was further informed that the aforementioned Combination was approved by the 'Commission' on 17th September, 2015. Subsequently, on receipt of first application dated 23rd September, 2015, the 'Commission' considered the submission in its meeting held on 27th October, 2015 and was of considered opinion that the combination is not likely to have any appreciable adverse effect on competition which was conveyed to the Informant by letter dated 3rd November, 2015. 5. The issue wise observations of the 'Commission' was also communicated by impugned letter dated 16th June, 2016. 6. Learned counsel appearing on behalf of the Respondents while raised locus standi of the Appellant also raised question of the maintainability of the appeal under Section 53B of the Act. 7. Learned counsel appearing on behalf of the Appellant submitted that the appeal has been filed because the 'Commission' refused to consider and take note of the information submitted by the Appellant on 22nd September, 2015, 29th January, 2016 and 30th May, 2016, in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on merit. 16. Learned counsel appearing on behalf of the 2nd and 3rd Respondents submitted that the 'Commission' passed order under Section 31(2) of the Act on 17th September, 2015 and approved the acquisition of the entire share capital of 'BG by Shell', resulting in 'BG' becoming a wholly owned subsidiary of 'Shell' in accordance with law. 17. Further, it was submitted that the Appellant had failed to establish locus standi as a person aggrieved by the 'Commission' to prefer the appeal under Section 53B. 18. It is further submitted that the 'Commission' neither issued any direction under Section 29(2) of the Act nor did invite any objection from any third party. More so, the 'Commission' never formed any prima facie view under Section 29(1) of the Act. 19. We have heard the parties, gone through the records and the provisions of law. 20. In terms of Section 6, the proposal for combination is required to be given to the 'Commission' by way of notice in the form as may be prescribed with the fee, which reads as follows: 6. Regulation of combinations--(1) No person or enterprise shall enter into a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned to it in clause (b) of the Explanation to clause (23 FB) of section 10 of the Income-tax Act, 1961(43 of 1961) 21. From the aforesaid provisions, following facts emerge: i. Section 6 relates to 'Regulation of combinations'. Sub-section (1) of Section 6 prohibits a person or enterprise from entering into a combination which causes or is likely to cause an appreciable adverse effect on competition with the relevant market in India and if that be so, in such case, a combination shall be void. ii. As per sub-section (2) of sub-section (6), a person or enterprise, who or which proposes to enter into a combination is required to give notice to the 'Commission' in the form along with fee disclosing the details of the proposed combination within 30 days. iii. Sub-section 2A prescribes the time period of maximum two hundred and ten days for passing an order under Section 31. iv. Under sub-section (3), the Commission after receipt of notice under sub-section (2) is required to deal with such notice in accordance with the provisions contained in Sections 29, 30 31. 22. Section 29 deals with 'Procedure for investigation of combinations', which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions contained in section 31. 23. From the aforesaid procedure, it is clear that where the 'Commission' is of the prima facie opinion that a combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India then it is required to issue a notice to show cause to the parties to combination and further required to call for report from the Director General. 24. As per sub-section (2) of Section 29, the 'Commission' if it is prima facie of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition, it shall within seven working days from the date of receipt of the response of the parties to the combination or the receipt of the report from Director General direct the parties to the said combination to publish details of the combination in the manner as the time stipulated therein. 25. As per sub-section (3) of Section 29, the 'Commission' may invite any person or member of the public, affected or likely to be affected by the Commission, to file his written objections, if any. 26. On plain reading of Section 6 with Section 29, it is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odification proposed by the Commission under sub-section (3), such parties may, within thirty working days of the modification proposed by the Commission, submit amendment to the modification proposed by the Commission under that subsection. (7) If the Commission agrees with the amendment submitted by the parties under subsection (6), it shall, by order, approve the combination. (8) If the Commission does not accept the amendment submitted under subsection (6), then, the parties shall be allowed a further period of thirty working days within which such parties shall accept the modification proposed by the Commission under sub-section (3). (9) If the parties fail to accept the modification proposed by the Commission within thirty working days referred to in sub-section (6) or within a further period of thirty working days referred to in sub-section (8), the combination shall be deemed to have an appreciable adverse effect on competition and be dealt with in accordance with the provisions of this Act. (10) Where the Commission has directed under sub-section (2) that the combination shall not take effect or the combination is deemed to have an appreciable adverse effect on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the combination has, or is likely to have an appreciable adverse effect on competition, it is required to follow the procedure as laid down in sub-sections (2), (3), (4), (5) (6) of Section 29 and if so necessary Section 30. 30. Therefore, we hold that for forming prima facie opinion as to whether the combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India, the Commission is required only to go through the information given under sub-section (2) of Section 6 therein including the details of combination. For forming such opinion, the Commission is not required to follow the procedure as laid down under Section 29 or Section 30 of the Act. 31. Section 4 of the Act is different and distinct from sub-section (1) of Section 6 of the Act. The 'Commission' on receipt of information under sub-section (2) of Section 6 if finds prima facie case and after following all the procedure under Section 29 30 comes to a definite conclusion that the combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India, then in terms of sub-section (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Explanation to section 5.] 33. The violation of Section 4 (i.e. Abuse of dominant position) is completely different than the violation of Section 6(1) (i.e. combination is likely to cause or has caused an appreciable adverse effect on competition), therefore, while passing order under sub-section (2) of Section 6, the Commission cannot hold abuse of dominant position, though it may hold that the combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India and thereby void in terms of Section 6(1). 34. For determining abuse of dominant position (Section 4) a different procedure has to be followed, than the procedure to be followed for finding out whether the combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India. 35. In the present case, the Appellant alleges violation of Section 4 and not challenged the order dated 17th September, 2015 passed by the Commission under Section 31 of the Act. Further, as the question of abuse of dominant position will arise only after combination comes into effect in terms of sub-section (2) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Government or a local authority or enterprise or any person, aggrieved by any direction, decision or order referred to in clause (a) of section 53A may prefer an appeal to the Appellate Tribunal. (2) Every appeal under sub-section (1) shall be filed within a period of sixty days from the date on which a copy of the direction or decision or order made by the Commission is received by the Central Government or the State Government or a local authority or enterprise or any person referred to in that sub-section and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of sixty days if it is satisfied that there was sufficient cause for not filing it within that period. (3) On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the direction, decision or order appealed against. (4) The Appellate Tribunal shall send a copy of every order made by it to the Commission and the par ..... 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