UTPE No. 193/2008 and CA 196/2008. Case: Mohd. Ekram Khan & Sons and Ors. Vs Mahindra & Mahindra Limited and Ors.. COMPAT (Competition Appellate Tribunal)
| Case Number | UTPE No. 193/2008 and CA 196/2008 |
| Counsel | For Appellant: Sanjeev Kumar, Advocate and For Respondents: Guru Krishna Kumar, Senior Advocate, Aditya Narain, Snehal Kakrania and Arnav Narain, Advocates |
| Judges | G.S. Singhvi, J. (Chairman) and Rajeev Kher, Member |
| Issue | Code of Civil Procedure, 1908 (CPC) - Order VI Rule 17; Competition Act, 2002 - Sections 2(f), 50(a), 66, 66(1), 66(4); Constitution Of India - Articles 286, 286(1); Consumer Protection Act, 1986 - Sections 2(d), 2(d)(i), 2(d)(ii), 2(m), 3, 3(ii), 9; Monopolies And Restrictive Trade Practices Act, 1969 - Sections 10, 10(a), 10(a)(i), 10(a)(iv),... |
| Judgement Date | October 19, 2016 |
| Court | COMPAT (Competition Appellate Tribunal) |
Order:
G.S. Singhvi, Chairman
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Whether the alleged refusal of Respondent No. 1 to grant of dealership of Scorpio vehicles to the complainants, influencing of credit facilities given to the complainants by ABN-AMRO Bank, manipulating of Mahindra Dealers Excellence Program, deliberately withholding the settlement of their dues and creation of monopoly of Scorpio dealership in favour of M/s. Raj Group, Varanasi amount to unfair trade practices as defined under Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (for short, 'the 1969 Act') and whether the complainants are entitled to compensation under Section 12B of that Act are the questions which arise for consideration in this complaint.
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Respondent No. 1-Mahindra & Mahindra Limited is engaged in the business of designing, developing, manufacturing, producing, assembling, selling, distributing, exporting, importing and/or marketing commercial vehicles and their parts, components and accessories of various vehicles manufactured by it. At the time of filing of the complaint and the compensation application, which came to be registered as UTPE 193/2008 and C.A. 196/2008 respectively, Respondent No. 2, M/s. Mahindra & Mahindra Financial Services Ltd. was a financing company. Respondent No. 3, Shri Pawan Goenka, was President and Member of the Group Management Board of Respondent No. 1. Respondent No. 4, Shri Bhartendu Kapoor, was General Manager (Sales), North Zone, Respondent No. 5, Shri Rajesh Juijeraker, was Chief of Operations of Respondent No. 1. Respondent No. 6, Shri Gaurav Saxena, was Area Manager at New Delhi. Respondent No. 7, Shri Joydeep Das, was Area Manager at Lucknow. Respondent No. 8, Shri Mudit Mathur, was Area Manager at Patna.
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In the dealership agreements entered between Respondent No. 1 and Complainant No. 1 and as also in the compliant, Complainant No. 1 - M/s. Mohd. Ekram Khan & Sons has been described as the sole proprietorship concern. However, in the compensation application, the complainants have described themselves as partners of firm M/s. Mohd. Ekram Khan & Sons, which was previously a proprietary concern of late Mohd. Ekram Khan.
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Complainant No. 1 is said to be an authorised dealer of Respondent No. 1 at Varanasi since 1954 and is engaged in the marketing, distribution, retail sale, after-sale services and repair of various ranges of vehicles manufactured by Respondent No. 1. During 1987-88, Complainant No. 1 received cash incentive of Rs. 55,000/- from Respondent No. 1 for its sincere efforts in promoting FJPF model of the vehicle manufactured by Respondent No. 1. In June, 2004, Respondent No. 1 was declared as qualified for foreign trip scheme meant for those who achieved the target fixed by Respondent No. 1.
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The documents placed on the record show that Complainant No. 1 and Respondent No. 1 had entered into dealership agreements from time to time. One such agreement was executed on 05.04.2004, whereby Complainant No. 1 was appointed as distributor for retail sales and distribution of the vehicles manufactured by Mahindra, their accessories, spare and parts ("Mahindra Products") mentioned in Annexure-1 to the agreement, for providing after sales service as listed in Annexure-2 within the territory as described in Annexure-3 to the Agreement. Another agreement was executed between the parties sometime in October 2005, whereby Complainant No. 1 was appointed as distributor of the products and to perform the services on behalf of Respondent No. 1. Yet another agreement, which was described as dealership agreement, was executed between Respondent No. 1 and Complainant No. 1 on 26.06.2007, whereby Complainant No. 1 was appointed as dealer for retail sales and distribution of Mahindra Utility Vehicles, namely, Bolero, Bolero Camper, CL, CDR, Savari, MM Thar, Pik-Ups, their spare parts and accessories and for providing after-sale service for a period of three years, i.e., from 01.04.2006 to 31.03.2009. The relevant portions of that agreement are extracted below:
"DEALER AGREEMENT
THIS DEALER AGREEMENT made this 26th day of June 2007 BY AND BETWEEN MAHINDRA & MAHINDRA LIMITED, A Company incorporated under the Indian Companies Act, 1913 and having its Registered Office at Gateway Building, Apollo Bunder, Mumbai - 400 001 (through its Automotive Sector) hereinafter called "Company" (which expression shall unless it be repugnant to the context or meaning thereof be deemed to include its successors and assigns) of the One Part And
M/s. MOHD. EKRAM KHAN & SONS, a Sole Proprietary Concern having its office at EKRAM BLDG., ALAMBAGH, VARANASI CANTT. 221002 UTTAR PRADESH through its Proprietor Mr./Mrs. MOHD. ENAM KHAN, hereinafter referred to as "the Dealer" (which expression shall unless it be repugnant to the context or meaning thereof, include his/her heirs, successors, surveyor or survivors, executors, administrators and permitted assigns) of the Other Part. The Company and the Dealer shall individually be known as "Party" and collectively known as "Parties".
WHEREAS
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The Company is engaged inter alia in the manufacture and sale of Utility vehicles, Light Commercial Vehicles and Three Wheelers and parts and accessories thereof;
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The Dealer carries on the business of selling vehicles, their spare parts and accessories;
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The Dealer has approached the Company with a request to be appointed a dealer for the retail sales and distribution of the vehicles, manufactured by the Company, their spare parts and accessories, as described in Annexure 1 ("Products") and for providing sales and after sales service as listed in Annexure 2 ("Sales and After Sales Service") and for Area of Concentration as listed in Annexure 3 ("Territory").
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The Company has agreed to this request on the terms and conditions hereinafter appearing.
NOW THIS AGREEMENT WITHNESSETH AND IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:
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GRANT OF NON-EXCLUSIVE RIGHTS:
The Company grants to the Dealer non-exclusive rights, during the term of this Agreement, to purchase for retail sale and distribution within the territory described in Annexure 3 to this Agreement, such of the Products as are described in Annexure 1 hereto and to provide sales and after sales service, workshop, Operations and accessories and spare parts warehouse and operations in the manner described in Schedule 1, 2, 3 and 4 respectively of Annexure 2 hereto, on the terms and conditions hereinafter contained. It is clearly understood and agreed that the Company shall have the right to appoint one or more other persons or entities as dealers for the sale and distribution of the Products in the Territory or any part thereof and further that the Company shall itself to all times have the right to sell wholesale or retail, the Products directly in the Territory. The Dealer will however, have responsibility of providing after sales service in respect of such direct sales by the Company.
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DEFINITIONS:
(a) Territory: The area of concentration as mentioned in Annexure 3;
(b) Products: Products as mentioned in Annexure 1;
(c) Sales and after Sale Service, workshop, accessories and spare parts warehouse and operations: As mentioned in Annexure 2;
(d) Net Price: The price at which Products are sold to the dealer;
(e) Net Dealer's Price List: Net Dealers' Price List as issued by the Company from time to time at which the Products are to be sold to the Dealer by the Company;
(f) Maximum Retail Price: The maximum Price fixed by the Company in respect of the Products upto which the Dealer can sell the Products to the customers in the retail market.
(g) Secondary Transporter: The transporter who will be responsible for transporting vehicles on behalf of Dealer from Company's Regional Sales Office/Stockyard to Dealer Main Branch in various parts of state.
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TERM:
This Agreement shall be effective as of 01/04/2006 and shall remain in force for a period of 3 years i.e. from 01/04/2006 to 31/03/2009 unless terminated earlier in the manner hereinafter expressed. Provided, however that all the relevant clauses of this Agreement shall also be applicable to all the Products sold by the Company to the Dealer prior to the period of this Agreement."
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The complainants have averred that the officers of Respondent No. 1 approached them sometime in 2003 for grant of dealership of Scorpio range of vehicles and suggested a separate piece of land may be purchased for setting up workshop for the new vehicle; that they identified a piece of land measuring 80 x 150 ft. situated at a distance of 9 Kms. from their existing showroom and sent letter dated 29.01.2003 to Respondent No. 8, who was then working as Senior General Manager, Channel and Business Development (Construction Equipment) and was looking after the sale of vehicles in U.P. and informed him about the selection of a piece of land; that Respondent No. 8 visited the site and approved the same. This was conveyed to Complainant No. 2 vide letter dated 31.01.2004, the relevant portions of which are reproduced below:
• The proposed workshop site of 80' x 150' located on the left hand side of Varanasi - Lucknow road is found to be suitable, kindly confirm the possession of the land at the earliest. As suggested, all the factors such as land use conversion & rural land rules should be verified prior to possession.
• The layout of the above-mentioned site to be sent in next 10 to 15 days' time to area office for further forwarding to SHQ for approval.
• Action plans & time schedule for completion of both the workshop & showroom to be submitted immediately. (Time frame of 3 months has been agreed for completion of complete work).
• Final plans for the renovation of showroom confirming to Scorpio standards to be communicated and work started simultaneously along with construction of workshop.
• Orders for all the workshop equipment required for Scorpio standard workshop to be placed immediately.
• Our Mr. Vibhu Hajela has...
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