TMI Blog2013 (2) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Government under section 31 of the Railways Act, 1989. The exercise of such functions by itself, in the absence of any other cogent evidence establishing that such conduct is in violation of the provisions of the Act, does not justify a direction by the Commission to recommend the DG to investigate and analyse the conduct of the opposite parties as by the statutory provision, the legislature has authorized the Central Government to classify and revise rates/freight with respect to carriage of passenger and goods uniformly applicable for all the entities who wanted to avail the services of Indian railways for transporting their goods. However, in the absence of any prima facie case of violations of the provisions of the Act, being made out on the basis of available material, no interference is warranted by the Commission in instant case as no abuse of dominant position is proved here. - CASE NO. 47 OF 2012 - - - Dated:- 13-12-2012 - ASHOK CHAWLA, H.C. GUPTA, ANURAG GOEL, M.L. TAYAL, GEETA GOURI, R. PRASAD AND S.N. DHINGRA, JJ. ORDER UNDER SECTION 26(2) OF THE COMPETITION ACT, 2002 1. The present information has been filed by M/s Mineral Enterprises Limited ('t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties by Railways in India'. In this market, the Opposite Parties are alleged to have a dominant position. The informant has alleged that the reclassification of iron ore on the basis of end use was unfair in itself. The informant has also alleged that charging different freight for same commodity amounts to abuse of dominant position by the Opposite Parties as the classification was not based on a reasonable basis or intelligible differentiation. The informant has, therefore, prayed the Commission to order DG investigation to analyze the conduct of the Opposite Parties. 6. The Commission has perused the information on record and heard the counsel for the informant at length. The informant challenged the rate circulars/instructions issued by OP No. 2. The relevant question is whether the issuance of rate instructions by OP No. 2 amounts to abuse of dominant position or not. Without going into the determination of relevant market and assessment of dominance of the Opposite Parties, the Commission is of the view that no prima facie case has been made out by the Informant. Based upon the information submitted and the arguments of the counsel of the Informant, the Commission is of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by M/s Mineral Enterprises Limited ('the informant') under Section 19(1)(a) of the Competition Act, 2002 ('the Act') against Ministry of Railways, Union of India ('OP No. 1') and The Railway Board (OP No. 2) alleging inter-alia contravention of Section 4 of the Act. 2. The informant is a duly registered company engaged in varied activities including mining, logistics and infrastructure development. Its core area of business comprise of mining, trading and exports of iron ore. For transportation of iron ore extracted from the mines of the informant, it uses the services of rail transport, owned and controlled by opposite parties. 3. The main allegation against the OPs are that prior to the enactment of Indian Railways Act, 1890, rail transport was largely managed by private players with the interference of Government being limited to coordination, regulation and apportionment of claims amongst the railways companies. Subsequently, the Railways Act, 1989 was enacted, which empowered the Central Government to fix rates for carriage and passengers and goods by the Railways, to classify or reclassify any commodity etc. OP No. 2 prescribes the freight circulars for any commodit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduct of the Opposite Parties. Findings 6. I, however, do not agree with the above findings of the Majority Members. In the cases where government departments have been made opposite parties, it is important to go into the philosophy of Competition Law. The Parliament has enacted a law to ensure that a level playing field is created to all market players irrespective of their size, resources, market position, economic strength etc. The intention of the statute is very clear that there should not be any discrimination between a private player and a government player and all players should be treated equally so that they can operate independently and freely in a given market. This is the reason why section 2(h) has included even the government enterprise. A perusal of the definition would show that any government department which is engaged in any activity relating to carrying a business would be an enterprise under the Competition Act 2002. This interpretation is supported by the following observations made by Ld. Single Judge of the Hon'ble High Court of Delhi in the order passed in W.P. (C) No. 5770 of 2011 on 04.11.2011: "Respondent no. 2, prima facie, would also fall wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different manifestations of economic power in different fields of economic activity. On such manifestation is the achievement by one or more units in an industry of such a dominant position that they are able to control the market by regulating prices or output or eliminating competition. Therefore, the avowed policy of the Government particularly from the point of view of public interest is to prohibit concentration of economic power and to control monopolies so that the ownership and control of the material resources of the Community are so distributed as best to subserve the common good and to ensure that while promoting industrial growth there is reduction in concentration of wealth and that the economic power is brought about to secure social and economic justice. 9. Now coming to the provisions of the Act, the explanation to section 4 states "dominant position means a position of strength enjoyed by an enterprise in the relevant market in India, which enables it to operate independently of competitive forces prevailing in the relevant market; or affect its competitors or consumers or the relevant market in its favour." In the present case, all the OPs are holding a dominant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. In such a case the Court has a power to set aside the policy and the fixation of rates. But the Commission does not have any restriction in examining a policy decision or a fixation of rates if it is unfair and discriminatory. Because as CCI has been mandated by the Parliament under Section 18 of the Competition Act to prevent any conduct and practices which are anti-competitive. 13. I have already held in the case of Arshiya that there are two markets which are relevant to this case (i) the provision of rail services in India and (ii) rail freight services. In this connection the factors mentioned in Section 19 (5), (6) (7) of the Act have to be applied and the geographic market relevant to this analysis would be entire India. Considering the facts of the case, the rail freight services on the rail network are treated as the relevant product market. There is no doubt that railways operates in a larger market known as rail services in India and in this market not only freight but passengers have also to be considered. 14. The next issue to be considered is the issue of position of strength in the relevant market. In the railway services market or the railway freight market ..... X X X X Extracts X X X X X X X X Extracts X X X X
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