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2022 (7) TMI 917 - Commission - Indian LawsAnti-competitive meeting or not - Informant has alleged that the decisions taken by the OPs in various meetings during 2010 to 2018 are anti-competitive - fixation of tariffs for trailers and not allowing CFS operators to reduce the rate from what was decided by OP - restriction imposed upon the members of the Informant/NACSF and their sister concerns by mandating them not to ply more than 20 trailers of their own for movement of containers - contravention of the provisions of Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act or not - whether OP-1 to OP-10 have been able to rebut the said presumption so as to absolve them of the liability that has arisen? HELD THAT:- Both the allegations raised in the present matter fall under the category of decision taken by, any association of enterprises or association of persons, which are presumed to be having an appreciable adverse effect on competition (AAEC). Generally, in cases concerning horizontal arrangement/collusive conduct falling under Section 3(3) of the Act, the most difficult task is to establish the existence of the agreement/arrangement/understanding amongst the parties, because such agreements are often perpetrated in secrecy. In the present case, however, the existence of the agreement, i.e. the fixation of price, is not under challenge. The DG has found enough evidence that the prices were increased and certain restrictions were imposed collectively by OP-1 to OP-10 through association meetings from 2014 till 2018. OP-1, the only OP that filed response to the Investigation Report, has admitted to these meetings. Rather, it has sought to justify its participation in such meetings by citing the prevailing circumstances at the time when such meetings took place and the mutual nature of such meetings where, admittedly, the members of the Informant also participated. Further, many such meetings were organised at the premises of the Chennai Port Trust and with its knowledge. Circulars were issued by these OPs after the said meetings, which have been received and responded to by the Informant. Thus, the Commission finds no purpose being fulfilled by reiterating the minutes of the meetings and the discussions that took place, which have been amply elucidated in the DG findings - It suffices to say that the minutes of various meetings and various letters exchanged between the Informant and these OPs, relied upon by the DG, establish that the prices for container trailer services were being fixed and increased from time to time, collectively by the OPs, and also that a decision was taken to restrict the number of trailers plied/operated by the members of the Informant and their sister concerns. Section 3(3) being presumptive in nature, the presumption of these practices/decisions taken at the association meet. It is observed that OP-2 to OP-10 have not filed any response to the Investigation Report while OP-1 has filed its submissions. As can be noted from the submissions filed by OP-1, the justifications/reasons offered by it falls into three broad categories. Firstly, it has been stated that there was an increase in the price of fuel, insurance, spares, tyres, repair and maintenance, driver salary, labour charges, etc., besides inflation factor from 2010 to 2014 and from 2014 to 2018, which has not been considered by the DG. Though such increase has not been stated as a justification of collusive conduct, OP-1 has claimed that this provides some perspective on the reasonability of price increase. Secondly, OP-1 has brought forward their plight and financial considerations such as inordinate delay on the part of CFS in clearing the dues to use transportation services of the members of the TOAs; CFSs entering the transportation business, and thus, sidelining members of the TOAs, whose only means of survival was through these transportation services, etc. Thirdly, OP-1 has stated that the decisions taken at the impugned meetings were mutual decisions which had an active involvement of the members of the Informant and the Chennai Port Trust, and thus, the same cannot be held as unilateral price increases on the part of the OPs. The Commission will deal with each of these in the ensuing paras - The Commission observes that, through the first and second justification cited above, OP-1 has tried to demonstrate the role of associations as an instrument to further the economic and social well-being of its otherwise small members having unequal bargaining power. On one hand, OP-1 has cited the comparative increase in the prices of diesel, insurance, tyres, spare parts, driver/cleaner charges, inflation, etc. between 2010 and 2018, and on the other hand, it has brought forward the plight and financial distress of its members. OP-1 has stated that the transportation business is the only means of survival for the members of various associations which have been made OPs in the present matter, thereby making such members solely dependent upon the income derived from the transport business for their livelihood, for payment to their drivers/cleaners, repayment of loans from financial institutions, upkeep of the trailers etc. Further, CFSs were entering the transportation business, and thus, sidelining members of TOAs - While the Commission may tend to have a sympathetic inclination towards certain difficulties, which has been expressed by OP-1 that its members face and is cognizant of the facilitative role of trade associations in furthering the collective interests of its members to alleviate the hardships, if any, the Commission cannot be oblivious to such Association providing its aegis to facilitate coordinated conduct which are otherwise falling foul of the provisions of the Act. Further, as regards the third justification offered by OP-1, i.e. the decisions taken at the impugned meetings were mutual decisions which had an active involvement of the members of the Informant and the Chennai Port Trust, the Commission is hesitant to accept this as a justification for a conduct falling under Section 3(3)(a) and (b) of the Act. The rebuttal of the presumption of AAEC that exists in such cases or is likely to exist, thereby distorting competition, needs to be dispelled by providing concrete evidence to the satisfaction of the Commission on the redeeming nature of the alleged conduct. It has to be shown that the impugned conduct, rather than harming competition has resulted in accruing benefits to consumers or achieving improvements in the production or distribution of goods or provision of services or promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services - The participation of Informant or Chennai Port Trust cannot alter the characterisation of an otherwise collusive conduct/practice. Neither can it dilute the responsibility of the associations involved in such collusive decision making. In a competitive market, the prices of goods or services should ideally be determined by a free interaction between demand and supply forces. Any collective collusive action can manipulate the market outcomes under which the independent decisions between each buyer and seller could have been reached. Seen in this light, the collective action by TOAs has manipulated the market forces and narrowed the scope of competition. The Commission does not find any of the justifications offered by OP-1 to be sufficient to rebut the presumption and discharge the burden of proof that was on it considering the nature of its submissions and evidence in support thereof. In the event thereof, the Commission concludes that the conduct of OP-1 to OP-10 has led to a contravention of the provisions of Section 3(3)(a) and Section 3(3)(b) read with Section 3(1) of the Act - The Commission holds that the decisions taken by OP-1 to OP-10, for the reasons adumbrated in this order, are in contravention of the provisions of Section 3(3)(a) and Section 3(3)(b) read with Section 3(1) of the Act. Accordingly, the Commission directs OP-1 to OP-10 to cease and desist in respect of the anti-competitive conduct committed by it and which has been found to be in contravention of the provisions of the Act. The Commission is of the considered view that a cease-and-desist order under Section 27 of the Act would sub-serve the ends of justice in the matter.
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