Case No. 73 of 2012. Case: Mr. Karan Sehgal Vs M/s. Lakme Lever Private Limited. Competition Commision of India

Case NumberCase No. 73 of 2012
JudgesH.C. Gupta, R. Prasad, Geeta Gouri, Anurag Goel, M.L. Tayal, Members, Shiv Narayan Dhingra, J. Member and Ashok Chawla, (Chairperson)
IssueCompetition Act, 2002 - Sections 19(1)(a), 19(6), 19(7), 2(s), 2(t), 26(2), 3, 4
Citation2013 CompLR 0400 (CCI)
Judgement DateFebruary 19, 2013
CourtCompetition Commision of India


Order under section 26(2) of the Competition Act, 2002

  1. The information has been filed under section 19(1)(a) of the Competition Act, 2002 ('the Act') by Mr. Karan Sehgal ('the informant') against M/s. Lakme Lever Pvt. Ltd. ('the Opposite Party' -- 'the OP') alleging, inter alia contravention of the provisions of sections 3 and 4 of the Act. As per the information the informant is engaged in the business of running and operating beauty saloons under the name and style M/s. Karan Ores & Specials in New Delhi. He was also running a beauty parlour at DLF Phase-IV, Gurgaon under another sole proprietorship concern Maanya Bellezza.

  2. The OP is an enterprise engaged in the business of providing beauty and wellness services, as well as in the business of sale and delivery of products in relation thereto i.e. for saloon services for women. It has been stated by the informant that OP had opened a chain of nearly 168 retail boutique beauty saloons in various cities of India popularly known as "Lakme Saloon" through its franchisees.

  3. It is alleged by the informant that the OP on account of its numerous retail beauty saloons all over the country has sizable presence and enjoys a position of strength and considerable dominance which enables the OP to operate its business model on its own terms and conditions independently of competition.

  4. The informant alleged that he had entered into a franchisee agreement with the OP on 08.10.2010, whereby the informant was appointed as the Sole Franchisee of the OP to set up, develop and operate 6 Lakme Saloons in Gurgaon and 1 Lakme Saloon in East Patel Nagar i.e. 7 Saloons in all, within a specific time schedule. It has been alleged by the informant that amongst other terms in the agreement, Clause 4.2 granted territorial exclusivity to the informant for a period of 3 years provided that the informant was able to set up the Saloons within the period specified in Clause 6.1.1 of the agreement. Further by Clause 4.2.1 of the said agreement the OP specifically agreed that it shall not have the right to plan any Lakme Saloon during this period (period of agreement) in the said territory.

  5. As per the informant under Clause 2.2 of the agreement, he was required to set up 5 Lakme Saloons within a period of two years from the commencement of the said agreement and the remaining 2 Saloons were to be set up in the 3rd year from the start of the said agreement. Under the agreement, the informant had to pay to OP...

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