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TMI Blog2021 (12) TMI 1517X X X X Extracts X X X X X X X X Extracts X X X X ..... hether an entity qualifies to be an enterprise , the Commission examines this from a functional rather than a formal approach - In view of statutory framework defining enterprise and keeping in view the nature of functions performed by OPs, OPs were prima facie held to be an enterprise within the meaning of the term as defined in Section 2(h) of the Act. Abuse of dominant position by undertakings in the relevant market - HELD THAT:- The Commission observed that WhatsApp message posted by the General Secretary of OP-1 on 30.10.2020, addressed to players/coaches/clubs/academies, appeared to restrict them from joining/playing the non-affiliated clubs/organizations and further stated consequences flowing from non-adherence thereof by way of suspension/non-acceptance of their entries in TT Tournament. Such conduct was prima facie noted as violating the provisions of Section 4(2)(c) of the Act - The Commission also noted that the impugned clauses of MoA of OP-3 prima facie appeared to be unfair being restrictive in nature and in contravention of the provisions of Section 4(2)(a)(i) of the Act. Impugned clauses were also noted as prima facie limiting or otherwise restricting the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 19(1)(a) of the Competition Act, 2002 ( the Act ) against the arrayed OPs alleging contravention of the provisions of Sections 3 and 4 of the Act. 4. As per the averments made in the Information, the Informant is an NGO registered under Section 8 of the Companies Act, 2013, incorporated on 06.08.2020. The Informant is stated to work with the sole purpose of the promotion of table tennis (TT) in India, as stated in the Objective Clauses of its Memorandum of Association, and conducts friendly TT matches for its members around Mumbai City, Mumbai Suburban and Thane District in Maharashtra, as per the convenience of players and the availability of venues, without any concept of prize money, referee, cup, medal, certificate or ranking of any sort. OP-1 is a registered society and is the district body headquartered in Mumbai having an affiliation with the State Body, with jurisdiction over Mumbai Suburban District only, responsible for conducting open district ranking tournaments in Mumbai Suburban jurisdiction for the selection of players to represent the State as well as promotion of table tennis in its jurisdiction. OP-2 is the State Body headquartered in Pune, Maharashtra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier registered with the Informant, did not join the Informant by paying the one-time lifetime membership fee of Rs. 500/-. 7. It is further stated by the Informant that to get complete clarity regarding the illegal notice issued by OP-1, the Informant sent objection letters to OP-1, OP-2 and OP-3 on their respective official e-mail addresses, asking OP-2 and OP-3 to intervene in the matter. However, no reply was received by the Informant from the OPs. 8. In addition, the Informant has alleged certain clauses of OP-3 s Memorandum of Association (MOA) related to the definition of tournament, sanction for open tournament, restriction of players from participating in any unrecognised tournament and right to prohibit unauthorised tournaments by the Executive Committee of OP-3, as anti-competitive. 9. The Informant has also alleged nexus and collusion by and between the OPs in as much as Mr. Rajeev Bodas, President of OP- 2 also holds a seat in the Executive Committee of OP-3 as Vice-President, similarly, Mr. Prakash Tulpule, Honorary Secretary of OP-2, is also Joint Secretary of OP-3. 10. The Commission considered the Information in its ordinary meeting held on 11.08.2021 and decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, in its rejoinder, pointed out that there is a catena of cases of sports federations/bodies already decided by the Commission on the issue of limiting/controlling the provision of services, restricting market access and abuse of dominant position. The Informant on the issue of locus standi, contended that if any illegal bylaws exists in the Memorandum of Association of any of the OPs, which is in violation of the provisions of the Act, then the challenge to such illegal laws by any person/association/body, clearly falls within the jurisdiction of the Commission. 15. The Informant also stated that OP-1 conducts district and state ranking/selection tournaments in its jurisdiction, distributes prize money, trophies, medals and certificates to TT players, and selects players to represent their respective districts besides receiving sponsorships, donations, royalty etc. and also collects yearly subscription fees from players in its jurisdiction as well as clubs fees in the sub-urban district for inter-club tournaments. Based on this, it was pointed out that such revenue generating activities, being economic in nature, bring OP-1 within the purview of the term enterprise as defined i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising. 20. The thrust of the definition of the term enterprise is on the economic nature of the activities discharged by the entities concerned. It is immaterial whether such economic activities were undertaken for profit making/ commercial purposes or for philanthropic purposes. Thus, even non-commercial economic activities would be subject to the discipline of the Act as the Act does not distinguish economic activities based on commercial or non-commercial nature thereof. In ascertaining as to whether an entity qualifies to be an enterprise , the Commission examines this from a functional rather than a formal approach. 21. Moreover, it was also pointed out that Section 3 of the Act prohibits anti-competitive agreements and, inter alia, mandates that no enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Federation (OP-3). OP-3 is the National Sports Federation (NSF) for the sport of table tennis in India, recognized by the Ministry of Youth Affairs and Sports under the National Sports Code 2011, headquartered at Delhi, and is a registered society under the Societies Registrations Act 1860, formed on 28.02.1961, responsible for conducting national ranking tournaments and the selection of players from States to represent the country in various international competitions such as Olympics, Commonwealth and Asian Games. OP-3 is the apex body of the country recognized by the International Table Tennis Federation and is also an affiliate member of the Indian Olympic Association for regulation of game of table tennis in India. As such, all the OPs are linked and affiliated to each other in the pyramidal structure, they are responsible for representing, coordinating, administering, marketing and developing the sport. Accordingly, the Commission was of the prima facie opinion that that OPs hold a dominant position in the relevant market as delineated supra. 26. As regards abusive conduct, the Commission observed that WhatsApp message posted by the General Secretary of OP-1 on 30.10.2020, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even giving notice to such party. A plain reading of Section 33 of the Act makes the legal position plain when it provides that where, during an inquiry, the Commission is satisfied that an act in contravention of sub-section (1) of Section 3 or sub-section (1) of Section 4 or Section 6 has been committed and continues to be committed or that such act is about to be committed, the Commission may, by order, temporarily restrain any party from carrying on such act until the conclusion of such inquiry or until further orders without giving notice to such party, where it deems it necessary. 32. Further, the principles for grant of interim relief as laid down by the Hon ble Supreme Court in the case of Competition Commission of India v. Steel Authority of India Ltd., Civil Appeal No. 7779 of 2010, decided on 09.09.2010, may be noticed. It was noted by the Hon ble Court that where during an inquiry the Commission is satisfied that the impugned act is in contravention of the provisions of the Act, it may issue an order temporarily restraining the party from carrying on such act, until the conclusion of such inquiry or until further orders without giving notice to such party, where it deem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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