Temporary injunction can be granted only when it is proved to the satisfaction of the Commission: Competition Commission of India.
One of the most important aspects for invoking Section 33 of the Competition Commission of India Act 2002 is that it is proved to the satisfaction of the Commission, by affidavit or otherwise. The word ‘satisfaction’ in this section clearly signifies that the commission can grant interim relief only it deems necessary. This observation was also made by the Hon’ble Competition Commission of India before Ashok Kumar Gupta (Chairperson), Ms. Sangeeta Verma (Member) and Mr. Bhagwant Singh Bishnoi (Member) in the matter of Nishant P. Bhutada (Informant) vs. Tata Motors Ltd. and Ors. (Case No. 16 of 2020). The facts of the case were that Varanasi Auto Sales Pvt. Ltd. (VASPL) is said to have been founded by the Informant’s parents. After her father died in 2002, her brother took over as CEO of VASPL. The corporation was authorized as a Tata Motors authorised dealer to offer commercial vehicles, spare parts, accessories etc. However, the Informant claimed that the Opponent Parties (OPs), i.e, Tata Motors and Tata Motors Finance, controlled and restricted the funding facility at their discretion. The financing facility loan limit given by OPs to an authorised dealer was increased or lowered based on Tata Motors’ aims rather than the authorised dealer’s financial strength or market demand. The Informant also claimed that the OPs were able to earn illegal money from authorised dealers by imposing high interest rates, punitive interest, other illegal charges, and changes on the channel finance credit facility that they provided. Many other allegations were put by the Informant against the OPs, to which OPs in response denied to all such allegations and submitted that mere existence of purportedly onerous terms in the Dealership Agreement does not constitute violation of the provisions of Section 4(2)(a)(i) of the Act, unless the Informant can prove unfair imposition of such terms and conditions by Tata Motors. In this matter, the informant prayed before the Hon’ble Commission for various interim reliefs u/s 33 of the Competition Commission of India Act 2002. However, the commission held 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. Additionally, the Hon’ble Commission took the reference of the Hon’ble Supreme Court that the case of Competition Commission of India v. Steel Authority of India Ltd., [Civil Appeal No. 7779 of 2010, decided on 09.09.2010], held that this power has to be exercised by the Commission sparingly and under compelling and exceptional circumstances.
COMPETITION COMMISSION OF INDIA Case No. 120 In Re: Opposite Party No. 1 Opposite Party No. 2 Opposite Party No. 3 Nishant P. Bhutada M s Kanchan Motors Opposite Tractor House Mumbai Agra Road Tigrania Corner Dwarka Nashik 422001 Tata Motors Ltd. Bombay House 24 Homi Mody Street Fort Mumbai 400001 Tata Capital Financial Services Limited 11th Floor Tower A Peninsula Business Park Ganpatrao Kadam Marg Lower Parel Mumbai 400013 Tata Motors Finance Ltd. Think Techno Campus2nd Floor Building ‘A’ Off Pokhram Road 2 Adjacent to TCS Yantra Park Thane400601 CORAM Mr. Ashok Kumar Gupta Ms. Sangeeta Verma Mr. Bhagwant Singh Bishnoi Case No. 120 Order under Section 33 of the Competition Act 2002 The present order shall govern the disposal of an application dated 10.11.2021 moved by the Informant seeking interim relief under Section 33 of the Competition Act 2002 “the Act”) against OP 1. Earlier the Commission vide its common order dated 04.05.2021 passed under Section 26(1) in the instant case as also in Case No. 219 prima facie noted a case of contravention of the provisions of Section 3(4) and Section 4 of the Act as detailed therein and ordered the Director Generalto cause an investigation to be made into the matter. In this backdrop during pendency of the investigation the Informant has now preferred an application dated 10.11.2021 seeking various interim reliefs under Section 33 of the Act against OP 1 alleging essentially that OP 1 has illegally and unlawfully blocked the access code in September 2020 which was required by the Informant to conduct business with OP 1 in terms of the dealership agreement dated 10.02.2017. The Informant itself has stated the said agreement to be subsisting and binding upon the parties till 31.03.2021. For felicity of reference the prayers made by the Informant in the instant application are excerpted below: a) That this Hon’ble Commission be pleased to direct the OP 1 to forthwith renew the Agreement dated 10.02.2017 for a period of five year as promised and or assured by the OP 1 b) to direct the OP 1 to forthwith unblocked the access code of the Informant c) In alternative to prayer clauses and to direct the OP 1 to take possession of the entire stock of spare parts supplied by the OP 1 and reimburse the Informant for the monies as was paid by the Informant d) to direct the OP 1 to compensate the Informant for the losses and damages suffered by the Informant owing to the illegal action of the OP 1 to block the access code to direct the OP 1 to release the monies to the tune of Rs.30 19 477.30 Rupees Thirty Lakhs Nineteen Thousand Four Hundred and Seventy Seven and Thirty Paise only) of the Informant illegally withheld by the OP 1 in Account No. 1D01500 Case No. 120 f) Pending the hearing and final disposal of the present Interim Application that this Hon’ble Commission be pleased to direct the OP 1 to forthwith renew the Agreement dated 10.02.20217 for a period of one year as promised and or assured by the OP 1 g) Pending the hearing and final disposal of the present Interim Application that this Hon’ble Commission be pleased to direct the OP l to forthwith unblocked the access code of the Informant in terms of the Agreement dated h) Pending the hearing and final disposal of the present Interim Application that this Hon’ble Commission be pleased to direct the OP 1 to take possession of the entire stock of spare parts supplied by the OP 1 and reimburse the Informant for the monies as was paid by the Informant to the OP 1 at the time of purchase of the said spare parts i) Pending the hearing and final disposal of the present Interim Application that this Hon’ble Commission be pleased to direct the OP 1 to release the monies to the tune of Rs.30 19 477.30 of the Informant illegally withheld by the OP 1 in Account No. 1D01500 j) Pending the hearing and final disposal of the present Interim Application that this Hon’ble Commission be pleased to direct the OP 1 to compensate the Informant for the losses and damages suffered by the Informant owing to the illegal action of the OP 1 to block the access code k) Ad interim relief in terms of prayer clauses(g) andl) For costs of this Application m) Any order(s) this Hon’ble Commission may deem fit 3. At the outset it would be apposite to note the parameters and perimeter for grant of interim relief as laid down in Section 33 of the Act. It provides that where during an inquiry the Commission is satisfied that an act in contravention of sub sectionof Section 3 or sub sectionof 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 Case No. 120 it necessary. Elucidating the statutory scheme the Hon’ble Supreme Court of India in the case of Competition Commission of India v. Steel Authority of India Ltd. Civil Appeal No. 77710 decided on 09.09.2010 held that this power has to be exercised by the Commission sparingly and under compelling and exceptional circumstances. Further it was held that the Commission while recording a reasoned order inter alia should:record its satisfaction which has to be of much higher degree than formation of a prima facie view under Section 26(1) of the Act in clear terms that an act in contravention of the stated provisions has been committed and continues to be committed or is about to be committed it is necessary to issue order of restraint and c) from the record before the Commission it is apparent that there is every likelihood of the party to the lis suffering irreparable and irretrievable damage or there is definite apprehension that it would have adverse effect on competition in the market. 4. Coming to the present case it is unnecessary to examine the instant application in any great detail and suffice to observe that as per the Informant’s own averments the dealership agreement was to remain valid till 31.03.2021. In these circumstances the belated attempt by the Informant to impugn the purported denial of access code in September 2020 i.e. after a delay of over one year and that to after lapse of dealership agreement is thoroughly misconceived. When the agreement itself is no longer in currency the plea to get access to the code for conducting the business under the dealership agreement is wholly untenable besides being infructuous in nature. The grant of overarching prayers sought by the Informant as adumbrated supra would virtually revive a lapsed agreement. The Informant has failed to meet any of the parameters laid down by the Hon’ble Supreme Court. 5. Viewed in the aforesaid backdrop the Commission is of the considered opinion that no case whatsoever has been made out by the Informant which warrants grant of interim relief. Resultantly the application stands dismissed. Case No. 120 accordingly. It is made clear that nothing stated in this order shall tantamount to a final expression of opinion on the merits of the case and the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein. The Secretary is directed to communicate to the Parties and the Office of the DG Sd Ashok Kumar Gupta Sd Sangeeta Verma Sd Bhagwant Singh Bishnoi New Delhi Date: 21 12 2021 Case No. 120 