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National Company Law Appellate Tribunal, New Delhi: The Bench of Rakesh Kumar, J., Judicial Member, and Dr. Ashok Kumar Mishra, Technical Member, while dismissing a company appeal, imposed a cost of Rs 1 lakh on the appellant for not disclosing his status, to avoid court fees and appearing before the Bench through a third party, who pretended to be an advocate.

Factual Background

The Appellant had filed Information Application under Section 19 (1) (a) of the Competition Act, 2002 before the Competition Commission of India (CCI) against 37 different government agencies. The Appellant alleged in the Information Application that Respondent, National Accreditation Board for Testing and Calibration Laboratories (NABL) had formed various exclusive supply agreements in violation of Section 3(4)(b) of the Competition Act, 2002 with the remaining 36 respondents where no other accreditation service other than that of NABL was allowed.

On 24-02-2022, the CCI passed an order under Section 26(2) of the Competition Act, 2002, and was of the view that there was no contravention of the provisions of Section 3 and 4 of the Competition Act. Aggrieved with the order passed, the Appellant filed the Company Appeal under Section 53B against the order given by the CCI. The Company Appeal was taken up for hearing on 01-06-2022.

Observation, Analysis, and Decision

While hearing the Appeal, the Bench suspected the status of the Appellant and thereof directed his counsel to submit a detailed affidavit verifying the status of his client. After the Affidavit was submitted, the Bench observed that the appellant evaded the applicable court by not mentioning before either the CCI or the Bench that he was a proprietor of an accreditation agency.

Further, the Bench observed that not only the Appellant as well as his acting Counsel, Sumit Jain, misled the court as he was neither a lawyer nor a Chartered Accountant, Company Secretary, or Cost Accountant.

At this juncture, the Bench referred to the provisions under Section 35 and Section 53(s) of the Competition Act and was of the view that a party cannot be represented by any third person who is not included in either of the aforesaid statutory provisions. Therefore, the Bench held that Mr. Sumit Jain had not only unauthorisedly represented the Appellant but impersonated himself to be counsel for the Appellant.

Hence, the Bench opined that neither the Appellant was competent, nor the Company Appeal was competent to be taken note of.

Thereby, the Bench dismissed the Company Appeal on the grounds of non-maintainability and said, “To preserve sanctity of the court proceeding and confidence of the public in the system, simply dismissal of this Appeal may not serve the purpose. Further to prevent recurrence of such activity, while dismissing the appeal it is appropriate to impose cost on the appellant.” Hence, imposed a cost of Rs.1 lakh on the appellant.

Further, the Bench directed CCI to remain vigilant while entertaining Information applications.

[Dushyant v. CCI, COMPETITION APPEAL (AT) NO. 27 OF 2022, decided on 29-07-2022]


Advocates who appeared in this case :

Sumit Jain, Advocate, for the Appellant;

Shama Nargis, Dy. Director, Law, CCI, and Krishan Kumar, Nital Pal, Swikritmala Dubey, Arun Kumar, and Prema Priyadarshini, Advocates, for the Respondent.

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): The Bench of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi, Members, while dealing with a complaint filed by JSW Paints against Asian Paints, held that,

“A stipulation that appears to create barriers to entry and restricts choice of consumers is likely to result in an appreciable adverse effect on competition resulting in higher prices for consumers.”

In the present case, JSW paints after building up its business after 3 years had launched its decorative paints in May 2019 and after the launch of the same, Asian Paints began pressurizing dealers who had agreed to stock and display decorative paints manufactured by them. Such conduct created fear amongst the retailers/dealers, as a result of which a number of them stopped dealing with JSW Paints, despite having provided the initial cheque of Rs 1 lakh as an advance against the launch orders of JSW Paints.

Several dealers were compelled to remove all signage and promotional material from conspicuous locations in their premises to the backside of the premises or their godowns. For the fear of losing dealership of Asian Paints, certain dealers decided to discontinue purchase of JSW Paint’s products.

Asian Paints allegedly pressurised enterprises that provided infrastructure facilities like warehouses to JSW Paints to not keep products of JSW Paints.

It was also stated that earlier on an occasion Asian Paints had taken punitive action against a dealer on account of its decision to stock and sell paints manufactured by Nippon Paint India Private Limited.

By virtue of its dominance, Asian paints hindered the entry of JSW Paints in contravention of Section 4(2) (c) of the Act.  Such practice not only leads to an effective and efficient competitor being driven out of a market or is restricted from entering a market, but also limit consumer choice.

All instances of abusive conduct tantamount to perpetuating anti-competitive agreements as Asian Paints enjoys dominant position in the relevant market.

Commission’s Decision

It noted that JSW Paints appears to be aggrieved by denial of market access by Asian Paints to distribution channels/dealers in the market in abuse of dominant position held by Asian Paints.

Commission held that, Asian Paint’s conduct is alleged to directly aim at foreclosing the entry of a new entrant like JSW Paints from competing in relevant market and also driving existing competitor like Nippon out of the market.

Asian Paints threatened the dealers to discontinue their supplies, disallowed discretionary discounts, etc. These restraints appear to be in the nature of exclusive supply agreement and refusal to deal. The stated restriction limits the benefits to the consumers as well.

Thus, Commission hold that it is prima facie satisfied that imposition of said restraints amounts to contravention of Section 3(1) read with Sections 3(4)(b) and 3(4)(d) of the Competition Act, 2002 by Asian Paints which is prima facie found to enjoy market power.

The present case requires investigation by the DG to determine whether the same has resulted in the contravention of the provisions of Section 4(1) of the Act and 3(1) read with Section 3(4) thereof. [JSW Paints Pvt. Ltd. v. Asian Paints Ltd., 2020 SCC OnLine CCI 1, decided on 14-01-2020]