Appeal No. 45/2016, I.A. Nos. 134 and 135/2016. Case: Financial Software and Systems Private Limited Vs Competition Commission of India and Ors.. COMPAT (Competition Appellate Tribunal)
| Case Number | Appeal No. 45/2016, I.A. Nos. 134 and 135/2016 |
| Counsel | For Appellant: Amit Sibal, Senior Advocate assisted by Tahir, G.R. Bhatia, Abdullah Hussain and Prerna Parashar, Advocates |
| Judges | G.S. Singhvi, J. (Chairman), Rajeev Kher and Anita Kapur, Members |
| Issue | Competition Act, 2002 - Sections 19(1)(a), 26(1), 27(b), 3, 3(1), 3(4), 3(4)(a), 33, 4, 4(2), 4(2)(a)(ii), 4(2)(b)(i), 4(2)(b)(ii), 4(2)(c), 4(2)(d), 4(2)(e), 53B, 53B (1); Constitution Of India - Articles 226, 227 |
| Judgement Date | October 17, 2016 |
| Court | COMPAT (Competition Appellate Tribunal) |
Order:
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This appeal filed is directed against order dated 13.01.2015 passed by the Competition Commission of India (for short, 'the Commission') in Case No. 52/2013, whereby majority of the Commission ruled that respondents are not in a dominant position in the relevant market and as such the question of abuse of dominant position and violation of Section 4 of the Competition Act, 2002 (for short, 'the Act') does not arise and further that they have not acted in violation of Section 3(4) read with Section 3(1) of the Act.
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The appellant and Respondent Nos. 2 to 4 had a long standing business relationship, starting from 1991 when the Appellant was acting as a reseller of BASE24 in India. Subsequently, the Appellant became a distributor and service provider for BASE24 in India in 1998 through various distribution agreements between the Appellant and Respondent Nos. 2, 3 and 4. After about nine years, the parties executed Settlement of Release Agreement dated 17.02.2010.
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On 09.07.2013, the appellant filed an information under Section 19(1)(a) of the Act alleging that Respondent Nos. 2 to 4 herein have abused their dominant position in the relevant market and thereby contravened various subsections of Section 4(2) of the Act. The appellant also accused Respondent Nos. 2 to 4 of having acted in violation of Section 3(4) of the Act read with Section 3(1) thereof. Along with the information, the appellant filed an application under Section 33 of the Act for interim relief
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The Commission considered the averments/allegations contained in the information and passed an order dated 04.09.2013 under Section 26(1) of the Act and directed the Director General to conduct an investigation into the matter. The Commission separately considered the application for interim stay and passed order dated 11.02.2014, paragraph 13 of which is reproduced below:
13. In view of the above discussion, the Commission considers the present case where the continuation of ban on the informant by the OPs prima facie would continue to affect the competition adversely and would have adverse effect in the market. The Commission, therefore, allows this application under section 33 of the Act and accordingly, the OPs are restrained from implementing the condition imposed on ACI Banks that they would not take services of the applicant/informant for customization of electronic software being supplied by OPs till the final disposal of the information.
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Respondent Nos. 2 to 4 challenged the aforesaid order in Appeal No. 12/2014 filed under Section 53B of the Act, which was disposed of by the Tribunal, by recording the following observations:
We do not deem it fit, at this juncture, to express any opinion because confirmation of injunction or otherwise would itself affect the investigation by the DG which is pending and it is also likely that it may affect the merits of the matter. In that view, we deem it sufficient to direct that the whole matter should be treated as extremely urgent. We, therefore, direct that the investigation by the DG, which is pending for the last about eight months, should be over, under any circumstances, within one month from today and the report shall be submitted within one month from today indicating the completion of investigation. The CCI is requested to dispose of the matter on merits within two months from the day the investigation report is submitted by the DG before it. The CCI is directed to honour this time-limit scrupulously.
We make it clear that this order shall not be seen as expression on the merits of the matter, in any manner, either for the informant or for the Opponent No. 1. With this, we dispose of the appeal.
Shri Amitabh Kumar, learned counsel appearing for the appellant has apprehension with the injunction being misrepresented to some parties at the instance of the informant. If that is so, they are always at the liberty to approach the CCI for redressal of their grievance.
Both the parties undertake before us that they shall not adopt any dilatory tactics in the matter by obtaining unnecessary and unwarranted adjournments. The CCI shall take special care in this behalf. The same is applicable even to the investigation which shall be carried on with all the possible alacrity and the parties are directed to cooperate in this matter.
The appeal as well as application for stay of the impugned order are disposed of in terms of the above.
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After conducting the investigation, the DG submitted report dated 20.06.2014 with the findings that the respondents were in a dominant position in the relevant market; that they had abused the dominant position and acted in violation of Section 4(2)(b)(i) and (ii), (4)(2)(c), 4(2)(d) and 4(2)(e). The DG also recorded a finding that Respondent Nos. 2 to 4 have acted in violation of Section 3(4)(a),(b) and (c) of the Act read with Section 3(1) thereof.
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The Commission considered the investigation report in its ordinary meeting held on 30th July, 2014 and directed the Secretary to send electronic copy of the non-confidential version of the investigation report to the parties and the named individuals along with pages 143 to 146 from the confidential version, so as to enable them to file replies/objections. Respondent Nos. 2 to 4 were also directed to file their profit and loss accounts/balance sheets/turnover for last three financial years. The individuals were directed...
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