Legal RoundUpTribunals/Regulatory Bodies/Commissions Monthly Roundup

Armed Forces Tribunal (AFT)


Punishment of “Severe Reprimand” after summary trial not a “service matter”; Tribunal has no jurisdiction to deal with such issues

“While interpreting a provision or Statute affecting jurisdiction of courts, their exclusions or inclusions, their extent should be understood in a manner as is explicitly expressed by the law-maker and clearly implied from their intention. All exclusions must either be explicitly expressed or clearly implied.”

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 “Gross injustice done is a case of mind set and adhering to old junk system”; Tribunal imposes exemplary cost of Rs. 75,000 on government for not implementing the order of the High Court for about 23 years

The public interest demands that administration must abide by the promises held out to citizens. It is totally immoral to go back from the promises held out by the mighty state to the detriment of a small people.

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Customs, Excise and Services Tax Appellate Tribunal (CESTAT)


 Whether the supplementary invoices relate to the date of original clearance or the date on which the supplementary invoice was raised? Tribunal answers

 The Coram of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) partly allowed an appeal which was filed assailing order-in-original passed by the Commissioner of Central Excise, Customs & Service Tax, Cochin.

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Competition Commission of India (CCI)


TRP Scam: CCI orders closure of information filed against BARC alleging contravention of Competition Act

The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) refused to examine the information filed against Broadcast Audience Research Council on merits.

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Consumer Disputes Redressal Commission, Gujarat State, Ahmedabad


Hospital is liable with respect to medical negligence that may be direct liability or vicarious liability which means the liability of an employer for the negligent act of its employees.

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Income Tax Appellate Tribunal (ITAT)


‘Power’ of conducting IPL is vitally distinct from ‘Object’ of BCCI: ITAT explains substantive law, allows BCCI to continue registration under S. 12-A of Income Tax Act to avail tax exemption benefits

A two-Member Bench of Pramod Kumar (Vice President) and Ravish Sood (Judicial Member) allowed the Board of Control for Cricket in India (“BCCI”) to continue with its registration under Section 12-A of the Income Tax Act, 1961 making it eligible for income tax exemption benefits. The main controversy arose regarding the commercial nature of the Indian Premier League (“IPL”) organised by BCCI, however, there is significant discussion on substantive law in the decision of the Appellate Tribunal.

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Will hostel facility which is incidental to providing education as per object of assessee be a charitable purpose exempted under S. 11 of Income Tax Act? ITAT answers

Coram of Anil Chaturvedi (Accountant Member) and Suchitra Kamble (Judicial Member) allowed the appeal filed by the assessee challenging the assessment order made by the Income Tax authorities.

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National Consumer Disputes Redressal Commission (NCDRC)


Law on Builder-Buyer Dispute | 9-years delay in delivering possession of apartment: Read NCDRC’s decision on refund and interest

In a builder-buyer dispute, Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member) noting the 9 years delay in delivery of possession of the apartment directed refund to the buyer.

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Law on Unfair Trade Practice | Builder insisting to sign on papers which stated that “buyer was receiving villa in full ready condition” even when it was not in a livable condition: Is builder’s act under ‘unfair trade practice’? NCDRC decides

Offering possession of incomplete construction and without obtaining “Completion Certificate” does not justify the act of the builder.

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Law on Force Majeure | Builder taking shelter of “Force Majeure” clause for delay in handing over possession: Justified or not? Read what NCDRC says

Expressing that the builder cannot take shelter of “Force Majeure” while delay in handing over possession Coram of C. Viswanath (Presiding Member) and Ram Surat Ram Maurya (Member) directed for a refund of buyers’ amount along with interest.

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Does an arbitration clause in an agreement bar consumer forum’s jurisdiction? NCDRC answers relying on SC decision

Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member)reiterated that the presence of an arbitration clause in the agreement does not bar the jurisdiction of consumer fora.

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Condonation of Delay: Is it a matter of right? NCDRC explains

Expressing its opinion of ‘Condonation of Delay’, Coram of C. Viswanath (Presiding Member) and Justice Ram Surat Ram Maurya (Member) dismissed the present appeal calling it an abuse of process of law.

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Under what circumstances will a person cease to be a consumer? Significance of indulging in commercial activities by buying and selling property: Explained

Coram of Justice Deepa Sharma (Presiding Member) and Subhash Chandra (Member)directed a full refund of the principal amount along with interest, due to failure of delivering timely possession of an apartment purchased by the complainant.

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National Company Law Appellate Tribunal (NCLAT)


Existence of Dispute prior to issuance of Demand Notice-NCLT and NCLAT in rhythm, rejects appeal

The Coram of Ashok Bhushan, J (Chairperson), Jarat Kumar Jain, J (Judicial) and Dr Ashok Kumar Mishra (Technical) while dismissing an appeal found no infirmity in the order of the Adjudicating Authority.

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Securities Appellate Tribunal (SAT)


Relents unrelentingly | Tribunal concerns and the concerns of the concerned counterbalanced- 4 weeks and 2000 crore, to lift attachment order while withdraws for some on exigencies and age

“…we are of the opinion that even though it would have been appropriate for the respondent to await the result of the decision of this Tribunal, however, there is no embargo upon the Recovery Officer to proceed independently to recover the amount under Section 28A of the SEBI Act since there was no stay of the impugned order”.

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Securities Exchange Board of India (SEBI)


Exception granted for gifting shares in an acquisition| Proposed acquirer to file report within 21 days post-acquisition

S.K. Mohanty, Whole Time Member, while deciding an order, granted exemption to the Anived Family Trust (Proposed Acquirer) from complying with the requirements of Regulation 3(2) of the Takeover Regulations, 2011 with respect to the proposed direct acquisition in the, Renaissance Global Limited (Target Company), by way of proposed transaction as mentioned in the Application.

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Assuring profits in a market already subjected to risk- Debarred from the market for subjecting others to risk

“Investments in securities markets are subject to risks and hence the returns are unpredictable. Therefore, guarantee of assured profits by the Noticee in any manner through its plans/schemes is fraudulent and might have induced the investors to invest in such plans/schemes”.

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Telecom Disputes Settlement & Appellate Tribunal (TDSAT)


Dual Till, Light Touch Regulation and exclusion from liability to pay UDF by transit passenger; Telecom Tribunal’s decision deals a blow to BIAL

“An impression is created by isolated reading of Section 13(1)(d) that the Authority can only monitor such performance standards relating to quality as have been set specifically by the Central Government or its authorized authority. But full reading of the provisions in the Act and the binding effect of the Concession Agreement easily lead to the conclusion that power under Section 13(1)(d) is an additional power and it does not take away powers and duties of the Authority to monitor quality of the services on the basis of current prevailing national and international practices and the standards.”

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Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): Noting that Maruti Suzuki India Limited used to impose penalties on its dealers for the reason of the violation of its ‘Discount Control Policy’, Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) held that,

Maruti Suzuki India Limited was not a third-party in the enforcement of the Discount Control Mechanism.

When a significant player such as MSIL imposes minimum selling price restrictions in the form of maximum discount that can be offered by the dealers, RPM can decrease the pricing pressure on competing manufacturers.

Factual Matrix

Instant matter was taken up suo motu by the Commission based on an anonymous e-mail received from a purported Maruti Suzuki India Limited (MSIL) dealer, wherein it was alleged that MSIL’s sales policy was against the interest of customers as well as the provisions of the Competition Act, 2002.

Discount Control Policy

Further, it was alleged that, in the West-2 Region, (Maharashtra State other than Mumbai & Goa) the dealers of MSIL were not permitted to give discounts to their customers beyond that prescribed by MSIL is the announced ‘consumer offer’. In case, a dealer was found giving extra discounts, a penalty was levied upon the dealer by the MSIL.

Penalty amount imposed was required to be paid via cheque in the name of Swati Kale, wife of Vinod Kale who was the Vice-President of Wonder Cars Pvt. Ltd., an MSIL dealership in Pune, Maharashtra. Prior to charging the penalty, MSIL management would send an email with a ‘Mystery Shopping Audit Report’ to the errant dealership asking for clarification.

The above-said similar Discount Control Policy was implemented by MSIL all across India – specifically in cities where more than 4 to 5 dealerships operated.

Commission vide an order dated 4-7-2019 passed under Section 26(1) of the Act, formed an opinion that there exists a prima facie case of contravention of the provisions of Section 3(4)(e) of the Act, i.e. Resale Price Maintenance, by MSIL.

In view of the above background, Commission had directed the Director General to cause an investigation into the matter and submit a report.

The Commission directed MSIL to furnish its audited balance sheets and profit and loss accounts/turnover details for FYs 2017–18, 2018–19 and 2019–20 along with details of the revenue and profits generated by it from the sale of ‘passenger vehicles in India’ during these FYs by way of Affidavits supported by certificates from Chartered Accountants.

Analysis Law and Decision

Commission noted that MSIL was the manufacturer dealing in the upstream market while its dealers were distributors dealing in the downstream market.

Manufacturer and dealers entered into an agreement which could be examined within the scope of Section 3(4) of the Act, being an agreement amongst enterprises engaged at different stages or levels of the production chain in different markets.

Whether there was an agreement between MSIL and its dealers in terms of Section 3(4) on restricting discounts that may be offered by dealers?

‘Agreement’ for the purposes of Competition Law, is not the same as ‘agreement’ for the purposes of Contract Law.

The definition of ‘agreement’ under Section 2(b) of the Act is very wide and covers all possible agreements/ arrangements/understanding, not only in written form but also in tacit and informal form.

Since MSIL argued that only agreement between them with the dealers was the Dealership Agreement and the same contained no clause restricting discounts but rather allowed dealers to offer any discounts as they deem fit.

Coram opined that such agreement/arrangement/understanding with regard to discount control policy between MSIL and its dealers may exist dehors the Dealership Agreement entered into on writing between them.

Did MSIL have a Discount Control Policy? DG’s investigation

DG in its investigation while looking through the email dump found multiple email exchanged between MSIL and its dealers which showed that MSIL did, in fact, have an agreement with its dealers to not let them offer discounts to customers beyond those permitted from time to time by MSIL without MSIL’s prior approval.

“…dealers were discouraged from giving extra discounts, freebies, etc. to consumers beyond what was permitted by MSIL.” 

“If found to be violating the Discount Control Policy, the dealers were threatened with imposition of penalty, not only upon the dealership, but also upon its individual persons, including Direct Sales Executive, Regional Manager, Showroom Manager, Team Leader, etc., and stopping of supplies.”

MSIL’s contention:

Discount Control Policy, even if found to be existing in certain region, was only a form of policing amongst the dealers themselves inter se, and MSIL had no role in formulating such a policy, except to enforce the same on behalf of the dealers as an independent third-party.

Commission’s Opinion:

Commission noted that, meetings on Discount Control Policy were conducted by MSIL and it formulated policies wherein discounts were defined by way of limiting maximum discount allowed in cash or in terms of accessories, etc.

Adding to the above, it was noted that, MSIL dictated that any dealership, after price rise, if found selling/billing on old price, will be considered violating selling norms and it will be treated as a discount offered to customers

MSIL circulated communications of warning and threats of imposing high penalties in case dealers offered extra discounts without prior approval

Hence, Coram opined that MSIL did not seem to be merely a third-party in the Discount Control mechanism as contended.

MSIL nowhere could establish that the discounts were given by the dealers without seeking any prior approval from MSIL.

Significantly, the Commission observed that MSIL was the approving authority of the maximum discounts that may be offered by its dealers to customers, despite its claim that it had a principal-to-principal relationship with the dealers.

MSAs Role with respect to Discounting Policy

To enforce its Discount Control Policy, MSIL used to appoint MSAs who used to pose as customers to MSIL dealerships to find out if any additional discounts were being offered by such dealerships to customers or not. If found offered, the MSA would report to MSIL management with proof (audio/video recording) who, in turn, would send an e-mail to the errant dealership with a ‘Mystery Shopping Audit Report’, confronting them with the additional discount offered and asking for clarification.

If clarification was not to the satisfaction of MSIL, penalty would be imposed on the dealership and its employees, accompanied in some cases, by the threat of stopping supplies. MSIL would even dictate to the dealership where the penalty had to be deposited.

MSIL contended:

Appointment of MSAs was done by the dealers only and MSIL had no role to play in this regard.

Commission’s view:

Commission opined that MSIL had tried to pick-up isolated statements from its emails, which appeared to be self-serving statements, to allege that it was the dealers who has appointed the MSAs.

Adding to its opinion, Coram stated that there was absolutely no indication in the e-mails that the appointment of MSAs was done by the dealers themselves.

DG when questioned Swati Kale, she submitted that her role was to receive cheques as per the instructions of Regional Manager of MSIL and deposit the same in her account and issue cheques as per his instructions when required.

It was further noted that the amount collected in the account of Ms Swati Kale was used by MSIL to pay the bills of advertisements.

Whether any AAEC in the market had been caused or was likely to be caused as aresult of such an agreement between MSIL and its dealers?

In Commission’s opinion, the imposition of maximum discount limits by MSIL upon its dealers amounted to Resale Price Management (RPM) as defined under Explanation (e) to Section 3(4) of the Competition Act.

RPM can prevent effective competition both at the intra- brand level as well as at the inter-brand level.

 Present Scenario

In the present matter, RPM imposed upon the dealers led to the denial of benefits to the consumers in terms of competitive prices being offered by MSIL dealers.

Restriction on intra-band competition

Coram stated that, when all the dealers are controlled by a Discount Control Policy, they are forced to sell the same product at the same price which, to a large extent, eliminates price competition amongst them.

Due to almost nil intra-brand competition amongst MSIL dealers, the consumers would have had to purchase MSIL vehicles at fixed prices without flexible discounts being offered to them by MSIL dealers, thereby leading to charging of higher prices/ denial of discounts in kind, to them.

Hence, had there been no discount control policy enforced by MSIL, customers of MSIL would have been able to buy MSIL vehicles at lower prices.

Anti-competitive impact of the above practice of MSIL was reinforced by the fact that MSIL had more than 50% market share in the passenger vehicles segment, as observed by the DG.

Commission, however, opined that, imposition and enforcement of RPM by a player like MSIL, having a significant market share, not only thwarts intra-brand competition but also leads to the lowering of inter-brand competition in the passenger vehicles market.

Noting the above discussion, Coram expressed that RPM as a practice by multiple manufacturers is conducive for monitoring of tacit collusion among such manufacturers.

Arrangement/ Agreement perpetuated by MSIL hindered in the distribution of goods and the provision of services in relation to new cars, further it resulted in creating barriers to new entrants/dealers in the market as the new dealers would take into consideration restrictions on their ability to compete with respect to prices in the intra-brand competition of MSIL brand of cars.

Another significant observation made by the Commission was that by controlling the dealers’ margin, inter brand competition softens due to ease of monitoring of retail prices by the competitors, providing the manufacturer more liberty to regulate its own margin freely.

All dealers of MSIL are subjected to the SOP/SPG and non-compliance with the same also results in the imposition of penalties. As such, the justification put forth by MSIL, that RPM is required to eliminate the problem of free-riding, is not tenable.

Conclusion

Commission concluded that Maruti Suzuki India Limited not only entered into an agreement with its dealers across India for the imposition of ‘Discount Control Policy’ amounting to RPM, but also monitored the same by appointing MSAs and enforced the same through the imposition of penalties, which resulted in Appreciable Adverse Effect on Competition (AAEC) within India, thereby committing contravention of the provisions of Section 3(4)(e) read with Section 3(1) of the Act.

Competition Commission of India having considered the nature of infringing conduct and the post-pandemic phase of recovery of automobile section, deemed it fit to appropriate to impose a penalty of Rs 200 Crores upon MSIL as against a maximum penalty permissible under the provisions of the Act which may extend upto ten percent of the average of the turnover of the entity for the last three preceding financial years.

Order

Commission directed MSIL in terms of Section 27(a) to cease and desist from indulging in RPM directly and or indirectly.  [Alleged anti-competitive conduct by Maruti Suzuki India Ltd. in implementing discount control policy vis-a vis dealers, In re.;    2021 SCC OnLine CCI 45, decided on 23-08-2021]


Advocates before the Commission:

For Maruti Suzuki India Limited (MSIL): Dr. Abhishek Manu Singhvi and Mr. Rajshekhar Rao, Senior Advocates, with Ms. Shweta Shroff Chopra, Mr. Rohan Arora and Ms. Supritha Prodaturi, Authorized Representatives of MSIL and Ms. Manjaree Chowdhary, Executive Director and General Counsel of MSIL

Law School NewsOthers

About the Organisation

Increasing Diversity by Increasing Access to Legal Education commonly abbreviated as IDIA is a non-profit organisation working in India, which was founded by late Dr. Shamnad Basheer. It aims to empower underprivileged children by giving them access to quality legal education. It is a student run movement to train underprivileged students and help them transform into leading lawyers and community advocates. For more information, (refer HERE).

About the Event

With an aim to promote legal research and scholarship, IDIA Uttar Pradesh Chapter feels delighted to announce the 2nd edition of National Essay Writing Competition, 2021 as a part of its fundraising initiative in collaboration with the Centre for Criminal Justice Administration (CCJA) of Dr. Ram Manohar Lohiya National Law University.

The authors are encouraged to submit essays, concerned with Criminal Law. The theme mentioned herein is to be construed broadly to include Criminology, International Criminal Law, Comparative and Procedural Criminal Law as well as allied socio-legal disciplines.

Register at: HERE latest by March 05, 2021

Incentives:

  • The winner shall receive a cash prize of Rs.1000.
  • Top 10 entries shall receive an e-certificate of Merit
  • Top 3 entries shall receive an e-certificate of Excellence alongwith a publication of their essay on the CCJA website.
  • Every participant shall receive an e-certificate of participation.

To download the brochure and fetch elaborate details on the event, visit: HERE 

Last date of Submission: March 05, 2021

Minimum Contribution for Registration:

Single authorship: Rs. 150/-

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For any kind of queries, please reach out to –

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or mail us at- idialucknowfr@gmail.com

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) dismissed the case of the informant who alleged that Google is abusing its dominant position by integrating Google Meet App into the Gmail App.

Allegations | Abuse of a Dominant Position

In the present matter, information was filed under Section 19(1)(a) of the Competition Act, 2002 by Informant against Google LLC (OP-1) and Google India Digital Services Private Limited (OP-2) alleging contravention of the provisions of Section 4(2)(e) of the Act.

Gmail is an App from Google, where the user gets all their emails, direct messages, etc., and that Gmail enjoys a ‘dominant position’ in the emailing and direct messaging market. Further, it was claimed that ‘Meet’ is a video-conferencing App from Google, where all kinds of virtual conferences and meetings happen.

Informant alleged that Google which is a dominant player has integrated the Meet App into the Gmail App which amounts to abuse of dominant position by Google.

Analysis, Law and Decision

Commission noted that users of Gmail are not forced to necessarily use Google Meet, and there does not appear to be any adverse consequences on the users of Gmail for not using Google Meet, such as withdrawal of Gmail or any of its functionalities or other services that are so far being provided by Google. A Gmail user at his/ her ‘free will’ can use any of the competing VC apps.

Further, it was added to the above observation that anyone with a Google Account could create an online meeting using Google Meet. For creating a Google account, the user need not be a user of Gmail. He/she can use email ID created on any other platform for creating a Google account.

Google Meet is available as an independent app outside the Gmail ecosystem also.

Therefore, users have the choice to use either of the Apps with all their functionalities without necessarily having to use the other. Even though Meet tab has been incorporated in the Gmail app, Gmail does not coerce users to use Meet exclusively as submitted by Google and the consumers are also at freewill to use either Meet or any other VC app for video conferencing.

Hence, no case was made out. [Baglekar Akash Kumar v. Google LLC, 2021 SCC OnLine CCI 2, decided on 29-01-2021]

Case BriefsHigh Courts

Allahabad High Court: The Division Bench of Prakash Kesarwani and Dr Yogendra Kumar Srivastava, JJ., reiterated the settled position that in normal course it is not open for a person to seek to prevent a rival from exercising the right to carry on business.

Petitioner had a retail outlet dealership of MS/HSD, awarded by the Bharat Petroleum Corporation Limited. The instant petition was filed to seeking to raise a grievance with regard to issuance of a ‘Letter of Intent’ and Addendum to LOI whereunder it was proposed to offer the respondent 6 a retail outlet dealership of Bharat Petroleum Corporation Limited pursuant to an advertisement issued for the purpose.

Question as to whether a competitor in business could seek to prevent a rival party from exercising its right to carry on business came up for consideration in Nagar Rice and Flour Mills v. N.T. Gowda, (1970) 1 SCC 575.

In the above-cited case, it was held that a competitor in business cannot seek to prevent a rival from exercising its right to carry on business.

Analysis, Law and Decision

Bench reiterated the position that in normal course it would not be open to a competitor in business to seek to prevent a rival from exercising a right to carry on business.

Competition in a trade or business may be subject to restrictions as are permissible and as may be imposed by a law enacted in the interests of the general public. However, independent of any such restriction, a person cannot claim that no other person shall carry on business or trade so as to adversely affect his trade or business.

Adding to the above, bench while parting with its’ decision expressed that where the claim of the petitioner was solely to prevent a rival from exercising a right to carry on business, he would not have the locus standi to maintain a writ petition as the same would essentially be aimed at eliminating healthy competition in business.

In light of the above discussion, petition was dismissed. [Prince Filling Station v. Union Government of India, 2020 SCC OnLine All 1562, decided on 17-12-2020]


Advocates for the parties:

Counsel for the petitioner: Awadhesh Kumar Singh, Abhai Kumar Singh

Counsel for the respondent: A.S.G.I., Anand Tiwari, Anand Tiwari, C.S.C., Vikas Budhwar

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) while addressing the complaint in regard to unfair business by WhatsApp, dismissed the same on finding no competition concern.

Informant has filed the present information under Section 19(1)(a) of the Competition Act, against Whatsapp and Facebook alleging a contravention of provisions of Sections 4 of the Act and both Facebook and Whatsapp are collectively known as “OPs”.

Users of WhatsApp automatically get the payment app owned by WhatsApp i.e. ‘WhatsApp Pay’ installed on their smartphones. This, as per the Informant leads to the contravention of Section 4(2)(a)(i) of the Act as automatic installation of WhatsApp Pay on existing WhatsApp Messenger user’s device amounts to the imposition of an unfair condition on the users/consumers.

COERCION

A user who does not wish to install the Payments App but only the Messenger App does not have the option to do so.

Contravention: Section 4(2)(e)

Automatic installation also amounts to a contravention of Section 4(2)(e) of the Act as the dominance of WhatsApp in the Internet-based instant messaging App market favours and protects it in the UPI enabled Digital Payments Applications Market.

Informant further alleges that the acquisition of WhatsApp, Instagram and Oculus by Facebook causes an adverse effect on the competition as these companies to have huge data sets of users that they can use for their commercial advantage.

Decision and Analysis

Coram observes that the preamble to the Act unequivocally voices the ethos with which the Act was enacted, keeping in view the economic development of the country, for the establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto.

The mere fact that a case has been filed by an aggrieved party under the Competition Act, does not take away its character of being a case in rem involving a larger question of fair and competitive markets.

Further, it was observed that the Informant need to necessarily be an aggrieved party to file a case before the Commission.

Forum Shopping

Informant has indulged in forum shopping being closely associated with a petitioner who has approached the Supreme Court against WhatsApp and Facebook and this apparent non-disclosure reveals the mala fide intent and unclean hands with which the Informant has approached the Commission.

The Commission observes that WhatsApp and Facebook are third-party apps broadly providing internet-based consumer communications services. Consumer communications services can be sub-segmented based on different parameters.

Commission agrees with the Informant that the second relevant market for assessing the allegations of the Informant would be ‘market for UPI enabled Digital Payments Apps in India’.

At the outset, the Commission observes that Facebook and WhatsApp are group entities and though they may operate in separate relevant markets, their strengths can be attributed to each-others’ positioning in the respective markets in which they operate.

Commission added that in the absence of concrete data/information available in the Indian context other than the subjective information on the popularity of WhatsApp, the Commission is of the view that these trends and results can be used as a proxy, the said trends point towards Whatsapp’s dominance.

Barriers to Entry

The barriers to entry, may arise indirectly as a result of the networks effects enjoyed by the dominant player in the market, i.e. WhatsApp, in the present case. Since network effects lead to increased switching costs, new players may be disincentivized from entering the market.

Hence, Commission prima facie finds WhatsApp to be dominant in the first relevant market — market for OTT messaging apps through smartphones in India.

As regards Section 4(2)(a)(i), the Commission does not find much merit in the allegation of the Informant as mere existence of an App on the smartphone does not necessarily convert into transaction/usage.

Incorporating the payment option in the messaging app does not seem to influence a consumer’s choice when it comes to exercising their preference in terms of app usage, particularly since there seems to be a strong likelihood of a status quo bias operating in favour of the incumbents, at present.

With regard to the allegation under Section 4(2)(d) of the Act, the Commission observes that though the Informant has used the word ‘bundling’, the nature of such allegation is more akin to ‘tying’ as understood in the antitrust context generally.

While ‘tying’ refers to a practice whereby the seller of a product or service requires the buyers to also purchase another separate product or service, which essentially is the allegation of the Informant.

Installation of the WhatsApp messenger does not appear to explicitly mandate/coerce the user to use WhatsApp Pay exclusively or to influence the consumer choice implicitly in any other manner, at present.

UPI Market

UPI market is quite established with renowned players competing vigorously. Given the fact that WhatsApp ecosystem does not involve paid services as such for normal users, it seems unlikely that the consumer traffic will be diverted by WhatsApp using its strength in the messenger market. 

Facebook and WhatsApp undeniably deal with customer sensitive data which is amenable to misuse and may raise potential antitrust concerns among other data protection issues.

In the present case, the Informant has only alleged that WhatsApp/Facebook have access to data which they are using for doing targeted advertising, hence there is no concrete allegation.

Informant has also claimed that WhatsApp is in serious non-compliance with critical and mandatory procedural norms.

In view of the above allegation, Commission, do not seem to raise any competition concern and as such may not need any further scrutiny by it.

Therefore, based on the aforesaid analysis, Commission does not find alleged contravention of the provisions of Section 4 of the Act against WhatsApp or Facebook being made out. [Harshita Chawla v. WhatsApp,  2020 SCC OnLine CCI 32, decided on 18-08-2020]

Law School NewsLive Blogging

Day 1 – Inaugural Ceremony & Preliminary Rounds

The Tenth NLU Antitrust Law Moot Court Competition 2019 has been inaugurated in the honorable presence of Dean Dr. I.P. Massey and the Registrar. The registrations and exchange of memorials between the teams is underway in the auditorium, while the Researchers have begun with the Researcher’s Test!

4.30 PM – Preliminary Round 1 Begins

The judges have been briefed and they are really excited to witness the competition this time. The first Preliminary Rounds are about to begin and we wish all the participants good luck!

6 PM – Preliminary Round 1 ends

The first set of preliminary rounds have ended. The participants are tired after passionately arguing their sides, yet are enthusiastic for the next set. The second set of preliminary rounds will start soon, which will be followed by the reverse prelims.

 

 

8 PM – Preliminary Round 2 ends

The two sets of reverse prelims will begin soon, followed by declaration of the teams advancing to the Octa-finals, to be held tomorrow.

9 PMReverse Prelims begin

The the reverse prelims have begun. This is to ensure each team has an equal chance to argue both sides, and thus maintain a balance in scores. The participants are tired, yet are positive as ever!

11.30 PM Reverse prelims end, results announced

The reverse prelims have been concluded, and due to the brilliant organizers in the tabulation team, we were able to receive the results quickly. Following are the teams qualifying to the Octa-Finals (in no particular order) :

  1. Institute of Law, Nirma University.
  2. Symbiosis Law School, Noida.
  3. National University of Advanced Legal Studies, Kochi.
  4. Gujarat National Law University.
  5. National Law University, Odisha.
  6. ILS Law College, Pune.
  7. Amity Law School, IP.
  8. Rajiv Gandhi National University of Law.
  9. Hidayatullah National Law University.
  10. Symbiosis Law School, Pune.
  11. Government Law College, Mumbai.
  12. School of Law, Christ University.
  13. Faculty of Law, Aligarh Muslim University.
  14. SVKM’S NMIMS KIRIT P Mehta School of Law.
  15. Vivekananda Institute of Professional Studies.
  16. Chanakya National Law University.

Memorials have been exchanged according to the match-ups, and the days events have come to an end. We congratulate the Octa-Finalists!

Day 2 – Octa Finals, Panel Discussion and Quarter Finals

The second day of the Tenth NLU Antitrust Moot Court Competition is successfully underway!

9.30 AM – Octa Finals commence

The judges have been briefed and the Octa Finals have commenced in the respective courtrooms. The participants look fresh and well rested even though they might have been ripping apart their opponent’s memorials all through the night! Wishing them all the best!

Judges scrutinizing the arguments.

1 PM – 4th Antitrust Panel Discussion on Competition Law’s Interface with IBC commences

With the first set of Octa Final rounds over, preparations are in full swing for the reverse Octa Final Rounds. Meanwhile, participants attended the 4th Antitrust Panel Discussion, 2019. The topic for this year’s panel discussion pertains to Interface of Competition Law with the Indian Bankruptcy Code. Our esteemed panelists for this discussion are:

  • Ms. Anubhuti Mishra – An alumnus of King’s College, London and Hidayatullah National Law University, Raipur, she is currently working with the Competition Law team at P&A Law Offices, New Delhi. She has advised on several antitrust enforcement as well as merger review matters.
  • Mr. Shashank Sharma – Graduated from National Law School of India University in 2013. Thereafter, he went on to complete his European Master in Law and Economics in 2017. Since then he has been working with AZB & Partners, where his primary focus is Competition Law, with specific focus on Behavioural & Merger Control.
  • Mr. Toshit Shandilya – Graduated from National Law University, Delhi in 2013, he is currently an associate in the Competition Law team of Talwar Thakore & Associates. He has been involved in various critical enforcement and merger control cases before the CCI, as well as the COMPAT. He has been a law clerk with Justice V.S. Sirpurkar, former chairman, COMPAT where he assisted on a number of important cartel and Abuse of Dominance cases.
Our esteemed Panelists engaging with the participants.

The participants of the panel discussion posed certain interesting questions to our Panelists. The questions ranged from procedural to policy issues, arising from the requirement of taking CCI’s approval for insolvency resolution plans that include combinations. The participants and the Panelists engaged on concepts, such as, the failing firm defence, composite combination transactions, inter-connected transactions, and so on, to name a few. The Panelists also threw some light on their practical experience as Competition Lawyers while dealing with complicated transactions that fall within the regime of the IBC. The interactive session provided the participants an insight into the complex interface between the IBC and Competition Law.

5 PM – Octa’s concluded, results announced

The Octa Finals and the Reverse Octa Finals have been concluded. While the participants argued commendably, our Judges had a tough time reaching consensus. The following are the teams progressing towards the Quater Finals (in no particular order):

  1. National Law University, Odisha.
  2. ILS Law College, Pune.
  3. Symbiosis Law School, Pune.
  4. Institute of Law, Nirma University.
  5. National University of Advanced Legal Studies, Kochi.
  6. SVKM’S NMIMS Kirit P. Mehta School of Law.
  7. Gujarat National Law University, Gandhinagar.
  8. Symbiosis Law School, Noida.

We congratulate the qualifying teams. The exchange of memorials for the Quarter Finals shall be taking place soon at the Registration desk.

A glance into the Quarter Finals.

 

Participant engrossed in the opponent’s arguments.

 

7.30 PM – Quarter Finals concluded, results announced.

The Quarter Finals of the Tenth NLU Antitrust Law Moot Court Competition have come to an end. Here are the teams that have qualified to the Semi Finals.

  1. Symbiosis Law School, Pune.
  2. Gujarat National Law University.
  3. National Law University, Odisha.
  4. National University of Advanced Legal Studies, Kochi.

A hearty congratulations to all the Semi Finalists!

8 PM – Semi Finals Underway

The Semi Finals are currently underway. The teams are engaged in fierce argumentation before an eminent panel of judges in both court rooms. Here, take a glimpse at the rounds.

Judges Vijay Pratap Chouhan (Associate, Platinum Partners), Anand Vikas Mishra (Deputy Director, Competition Commission of India) and Anisha Chand (Principal Associate, Khaitan & Co).

 

Judge Anand Vikas Mishra testing the participant’s understanding of the law.

 

Judges Anand Kumar Singh (Assistant Professor, National Law University Jodhpur, specialising in Competition Law), Rahul Satyan (Senior Partner, Competition and Antitrust team at AZB & Partners) and Toshit Chandilya (Associate, Competition Law team at Talwar Thakore & Associates) in Court Room 2.

 

Participants observing the arguments of their opponent team.

10.15 PM – Semi Finals concluded

After establishing their ‘dominant position’ in this relevant mooting market, the following two teams will battle it out in the Finale of the Tenth NLU Antitrust Law Moot Court Competition 2019:

  1. Symbiosis Law School, Pune.
  2. Gujarat National Law University.

The Memorials will be exchanged between the finalists soon. May the best market player win the battle.

Day 3 – Finals and Valedictory Ceremony

9.30 AM The audience and judges are seated in the auditorium and the Final rounds of the Tenth NLU Antitrust Moot Court Competition will begin shortly.

9.40 AM – The first speaker from the Applicant’s side, begins his speech. He is calm and is responding well to the judges, who waste no opportunity in grilling him on the law and facts. The bench is fairly active, and all the three judges are participating equally.

Dr. K.D.Singh (Joint Director (Law), Competition Commission of India) and Mr. Rahul Singh (Partner, Khaitan & Co.), having a look at the proposition.

 

Mr. Manas Kumar Chaudhuri (Partner, Khaitan & Co.) indulgent in the oral rounds during the Finals.

10.20 AM – Speaker 2 from the Applicant’s side has now taken over. She begins her submission by trying to prove that DOPE is not an enterprise, as per the statutory definition under Sections 2(h) read with Section 3(3) of the Competition Act, 2002. She relies on the lack of an economic function, to prove so. However, the judges seem unconvinced, and asks the counsel to clarify the origin of this requirement. Mr. Rahul Singh (Partner, Khaitan & Co.) questions the counsel on the intricacies involved while relying on Section 3(3) along with Section 2(h). The counsel further cites the Coordination Committee case, to prove her point.

Respondent’s gearing up for their turn.

10.35 AM – The judges inquire about the ratio of the LPG Gas Cylinder case, and its relevance to the current argument. With only 2 mins left on the clock, the counsel moves to her second issue, regarding cartelisation. She seeks an extension of time, which is granted. Towards the end of her submissions, one of the judges pose a question regarding the lack of any arguments on mitigation of penalty. The counsel confidently replies that her party is not in violation of any competition or antitrust rules, and thereby need not argue on penalty. This creates a good impression upon the judges.

10.46 AM – The first speaker from the Respondent side, takes the podium. He appears immensely composed, and requests 30 seconds to arrange his documents on the podium. His speech is structured and brief, and the judges seem to be nodding in appreciation. He begins his first submission, on the maintainability of Jeevan Pharma’s admission. Mr. Rahul Singh and Dr K.D Singh (Joint Director (Law), Competition Commission of India) question the counsel on the distinction between the ability of the bench to hear the petition, and their power to grant compensation. The Counsel calmly tries to clarify his position, with reliance on the facts and clarifications, citing the relevant paragraphs, perfectly.

The Appellants discussing their strategy during the Finals.

11.00 AM – The counsel then moves to his second submission, regarding Jeevan Pharma’s abuse of its dominant position, and lays down the three tests required to show the same. The judges don’t seem satisfied with increased reliance on foreign cases, in light of extensive Indian jurisprudence in the area, but the counsel responds adequately. He then seeks an extension, which is happily granted by the judges. As the counsel ends his submissions and thanks the bench, the panel of judges apologise for their repeated probe into every submission of his. This lightens the atmosphere. The judges appeared quite pleased with his set of submissions.

11.24 AM – Speaker 2 now arrives at the podium, to continue her fellow counsel’s submissions. She begins her submission by laying out a roadmap, upon the judges seeking a clarification. Her issues pertain to the ability of the DG and CCR to proceed against DOPE, and DOPE’s violation of Section 3(3). The rain of questions continue, as was the case for the previous speakers. The judges question the line of argument, that the cryptic order of DG can be used against anyone. The counsel tries to clarify her position and does not lose hope.

11.35 AM – The counsel moves to her second submission and focuses on the agreement between the manufacturers, as well as between the manufacturers and the DOPE. She informally quotes Lord Denning and then the statutory definition. There is a good level of engagement between the counsel and the judges. After this speech, the judges decide against rebuttals and surrebuttals, However, they give into the finalists’ request. Speaker 1 from the respondent gives a brilliant rebuttal which leaves the audience as well as the judges in awe.

11.40 AM – The rounds have been concluded, and the finalists wait for the results.

12.15 – Valedictory ceremony commenced

Vice Chancellor, Ms. Poonam Pradhan Saxena and the Dean, Dr. I.P. Massey, with other esteemed faculty members and the judges have taken their seats in the auditorium. Senior Member of the Moot Court Committee opened the ceremony with a heart warming speech and addressed the participants waiting eagerly for the results.

12.30 – Vice Chancellor felicitates the gathering
The Vice Chancellor thanked Khaitan & Co. for their valuable partnership in organising this year’s Competition. She further stressed upon the importance of Competition Law as an emerging field. She also encouraged the participants to take part in more moot court competitions, as it helps to further one’s advocacy skills and analytical abilities.

12.35 – Dr. K.D. Singh addressed the crowd and informed the audience about CCI’s endeavours and how CCI has been happy to host the moot in association with NLU Jodhpur, for the past 10 years, and expressed his desire to continue the same for the coming years.

12.37 – Vice Chancellor presents the token of appreciation to Dr. K.D. Singh

12.38 – Mr. Manas Kumar Chaudhuri (Partner, Khaitan & Co) thanked Ms. Poonam Saxena and shared his experience as a corporate lawyer and left a very interesting question for the participants sitting in the audience, whether they are administering “justice” by being the extended arm

12.40 – Declaration of results

Mr. Rohan C. Thomas, Faculty Advisor of the Moot Court Committee, announces the results :

Second Best Student Advocate Anshika Jain (Gujarat National Law University)

Best Student Advocate – Juhi Hirani (Institute of Law, Nirma University) and Darshan H. Patankar (Gujarat National Law University)

Best Researcher – Eesha H. Sheth (SVKM’S NMIMS Kirit P Mehta School of Law)

Best Memorial – Faculty of Law, Jamia Millia Islamia.

Best Student Advocate for the Finals – Darshan H. Patankar (GNLU)

RUNNERS UP TEAM – Symbiosis Law School, Pune.

WINNING TEAM – Gujarat National Law University.

Winning Team of the Tenth NLU Antitrust Law Moot Court Competition – Gujarat National Law University

 

Runners Up Team of Tenth NLU Antitrust Law Moot Court Competition – Symbiosis Law School, Pune

12.45 – Closing Speech by the Co-Convener of the Moot Court Committee
Ms. Mansi Srivastava (Co-Convener, Moot Court Committee) shared her experience of being part of the organising committee for the past five years and how it feels surreal to be a part of it for one last time. She thanked the administration, the support staff, the volunteers and all the other Moot Court Committee Members for their support and contribution. She specially thanked Ms. Abhilasha Gupta and Ms. Subarna Saha (Advisors, Moot Court Committee) and Mr. Rahul Mantri (Co-Convener, Moot Court Committee) for being her pillars of strength throughout the competition and providing all the answers when she herself couldn’t find them. Lastly, she thanked Khaitan & Co. for their partnership and the Knowledge partner, SCC Online and Eastern Book Company (EBC) for providing the students with access to SCC Online that helped them in the preparation for their rounds.

 

12.48 – Certificate of participation given out to the participants.

The Tenth NLU Antitrust Law Moot Court Competition has thus been concluded.

Case BriefsForeign Courts

Pakistan Supreme Court: The bidders who were successful in winning the bid challenged the impugned order passed by High Court, Lahore before a 5-Judge Bench of Supreme Court comprising of Mian Saqib Nisar, HCJ., SH. Azmat Saeed, Umar Ata Bandial, Ijaz Ul Ahsan, and Sajjad Ali Shah, JJ., whereby Rules 13 (3) and (4) of Pakistan Electronic Media Regulatory Authority Rules, 2009 were declared ultra vires of the parent Act, i.e., Pakistan Electronic Media Regulatory Authority Ordinance 2002 (PEMRA Ordinance) due to which the entire bidding process was in question.

The brief process involved with broadcasting is that the producers of program sell the program to DTH distributors who then directly beam these programs to the consumers. So, the question before Court was whether the producers/broadcasters of these programs can be excluded from bidding for the DTH licenses by virtue of PEMRA ordinance. Petitioner submitted that High Court erred while interpreting Section 23(2) of the PREMRA Ordinance on the basis of which Rules 13 (3) and (4) was declared ultra vires as nowhere broadcasters/producers participation is stopped from bidding for DTH licences and to the contrary it promotes objectives of Ordinance by enlarging the choice given to people. It was contended that in accordance with this purpose if broadcasters are also involved in distribution, the purpose will be destroyed.

Perusing the contentions, the Court was of the view that the interpretation of the proviso of Section 23 cannot be sustained as the approach used by the courts is not literal interpretation of the law but its purposive interpretation. It would be healthy for the competition if a broadcaster is having both licenses of broadcasting and distribution. Therefore, impugned judgment was set aside. [MAG Entertainment (P) Ltd. v. Independent Newspapers Corporation (P) Ltd., C.A.700 of 2017, 08-05-2018]

AchievementsLaw School News

In what seems to be turning into a great year for NLSIU, Bangalore at ADR tournaments, the team consisting of Nikita Garg, Kshitij Sharma, Saarthak Jain, and Aman Vasavada have won the IBA-VIAC CDRC VIENNA Mediation and Negotiation Competition 2018. With this, NLSIU becomes the only team to have won this competition twice, making it an even bigger feat!