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2018 (9) TMI 2121 - AT - Companies LawAnti-Competitive Arrangements - Resale Price Maintenance - Discount Control Mechanism - Contravention of provisions of Section 3(4)(e) read with Section 3(1) of the Act, 2002 through arrangements which resulted into Resale Price Maintenance - relevant geographic market - HELD THAT:- In the present case, the ‘DG’ as well as the Commission has failed to decide the relevant geographic market as also the relevant product market - As per the decision of the Hon’ble Supreme Court in Competition Commission of India v. Coordination Committee of Artistes and Technicians of West Bengal Film and Television and Ors [2017 (3) TMI 1692 - SUPREME COURT] for inquiring into an alleged contravention, the factors mentioned in sub-section (3) of Section 19 is required to be taken into consideration. The Commission has failed to inquire into the agreement in the light of sub-section (3) of Section 19. It has not taken into consideration whether the agreement creates any barrier to new entrants in the market; driving existing competitors out of the market or foreclosure of competition by hindering entry into the market. It has also failed to consider whether the said agreement accrual of benefits to consumers and improvements in production or distribution of goods or provision of services. The relevant geographic market and the relevant product market having not been taken into consideration, the inquiry is incomplete being violation of sub-section (6) of Section 19. Section 26 of the Act, 2002 prescribes procedure for inquiry under Section 19 but in the present case no such inquiry has been made in terms of Section 19 - the Commission though directed the DG to cause an investigation but thereafter, the matter having not closed by the Commission, the Commission was required to make inquiry in terms of Section 27 to find out whether any agreement referred to in Section 3 or action of an enterprise, is in contravention of the provision. The procedure for inquiry under Section 19 is not a mere formality rather the inquiry by the Commission into an agreement under Section 27 cannot be completed without appreciation of relevant evidence - The DG report is merely an investigation report, in terms of subsection (3) of Section 26 but DG’s report alone cannot be relied upon or cited for finding and the Commission which is required to make independent analysis based on evidence brought on record. The finding that the Appellant has mandated its dealers to use recommended lubricants/ oils and penalised them for use of nonrecommended lubricants and oils is also not based on any evidence. Nothing brought on the record by the DG or the Commission to suggest that the Appellant penalised one or other dealer for not utilising the recommended lubricants and oils. The Commission has failed to appreciate the evidence and the impugned order not based on any specific evidence and has been passed merely on the basis of opinion of DG. The DG as well as the Commission also failed to decide relevant geographic market or a relevant product market as required under Section 19 (6) & (7) of the Act, 2002 - the impugned order set aside - appeal allowed.
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