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Mittal Auto Sales & Services & Another v/s Global Automobiles & Another

    Appeal No. 6 of 2010
    Decided On, 19 May 2011
    At, Competition Appellate Tribunal
    By, (CHAIRMAN)
    By, (MEMBER)
    For the Appearing Parties: Rahul Trivedi, Pallav Saxena, Advocates.

Judgment Text
We have heard the learned counsel for the appellant. Challenge in this appeal is to the Order passed by the Competition Commission of India (in short the "CCI") in Case No.14 of 2010. The impugned order was passed under Section 26 (2) of the Competition Act, 2002 (in short the "Act').

The basic allegation is that Respondent No. 1 abused its dominant position in terms of Section 4(1) and 4(2) of the Act. It was alleged that respondent No. 1 placed reliance on Clause 17 of the Agreement entered into between Respondent No.1 and the Appellant to discontinue the arrangement entered into between the parties.

The CCI on consideration of the information purported to have been given under Section 4(1) / 4(2) came to hold that the allegations at the most relate to breach of contract and there was no element of abuse of dominance as alleged. It was specifically noted that no material was placed on record to show or establish infringement of Section 4(1) of the Act. 

Learned counsel for the appellant submitted that placing reliance on the agreement in question appellant incurred huge expenditure and made investments of a huge sum of money and the action of R-1 is contrary to the agreement. He submitted in addition to Section 4 of the Act, the case is also covered by Section 3 of the Act.

Section 4 of the Act speaks of abuse of dominant position. Section 4 reads as follows:-

"Prohibition of abuse of dominant position: Abuse of dominant position

[(1) No enterprise or group shall abuse its dominant position.]

(2) There shall be an abuse of dominant position [under sub-section (1), if an enterprise or a group],-

(a) directly or indirectly, imposes unfair or discriminatory--

(i) condition in purchase or sale of goods or service; or

(ii) price in purchase or sale (including predatory price) of goods or service.

Explanation.--For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not include such discriminatory condition or price which may be adopted to meet the competition; or

(b) limits or restricts--

(i) production of goods or provision of services or market therefor; or

(ii) technical or scientific development relating to goods or services to the prejudice of consumers; or

c) indulges in practice or practices resulting in denial of market access [in any manner]; or

(d) makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or

(e) uses its dominant position in one relevant market to enter into, or protect, other relevant market.

Explanation.--For the purposes of this section, the expression--

(a) "dominant position" means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to--

(i) operate independently of competitive forces prevailing in the relevant market; or

(ii) affect its competitors or consumers or the relevant market in its favour;

(b) "predatory price" means the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.

(c) "group" shall have the same meaning as assigned to it in clause (b) of the Explanation to section 5."

Section 4(2) deals with the situation when a case of abuse of dominant position is made out. The Expression "dominant position" is defined in the Explanation of Sub-section (2).

Coming to the question about the applicability of Section 3 of the Act, it is to

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be noted that the information given under Section 19 of the Act, to CCI specifically referred to Section 4(1) and 4(2) of the Act and there was even remote reference to Section 3 of the Act. There was no material placed before the CCI to show that the enterprise enjoyed a position of strength in the relevant market. The CCI has, therefore, rightly refused to interfere in the matter. We find no reason to take a different view. Hence dismissed.