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2023 (8) TMI 620 - AT - Companies LawAnti-Competitive agreements - abuse of dominant position - scheme of merger by absorption of the Inox with PVR was sanctioned and the appointed date of the scheme was fixed mutually as 1st January, 2023 - alleged contravention of the provisions of Section 3(1) of Competition Act, 2002 - Appellant has vehemently argued that the Commission has committed an error on the ground that actual conduct is not being shown whereas the word used in Section 3(1) of the Act is ‘likely’ which mean something which is probable or something which might well happen as it conveys the sense of probability as distinguished from a mere possibility. HELD THAT:- Section 3(1) deals with the anti competitive agreements whereas Section 5 of the Act talks of combination which says that “the acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises and persons or enterprises”. It is apparent that both PVR and Inox have now become a single entity after merger and the effect of a combination as defined under Section 5 of the Act which is regulated by Section 6 of the Act has nothing to do with Section 3(1) of the Act which deals with the anti-competitive agreements in which both the entities retain their separate identities even after the agreement is entered into unlike the merger of two entities which takes effect of a combination in terms of Section 5 of the Act. It has come in the order itself that since the merger of PVR and Inox was not falling within definition of Section 5 because of the issue of threshold, therefore, the information under Section 19(1)(a) has been filed by the Appellant alleging the contravention of Section 3(1) of the Act despite knowing that both entities have become one and do not fall within the definition of Section 3(1) of the Act. Thus, in view of this matter, the application by itself is not in accordance with law for the purpose of initiating action under Section 19(1)(a) of the Act. As regards, Section 4 of the Act is concerned, it is pertaining to abuse of dominant position for which the Commission has rightly observed that even if the proposed transaction is concluded (merger), dominance per se is not anti-competitive and it is only the conduct which falls within the provisions of Section 4 of the Act. The Commission has also further observed that post facto, if any matter of abusive conduct under the provisions of the Act is brought, or comes to the notice of the Commission, the same may be examined at that stage in terms of the provision of the Act - Which means a liberty has been given to the Appellant or the same even be exercised suo motu by the Commission if it comes to its notice that the dominant position has been abused but until and unless there is any such allegation which prima facie prove the conduct, the action under Section 4 could not also be taken. There are no merit in the present appeal and the same is hereby dismissed.
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