TMI Blog2020 (12) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrary to the provisions of the Act, could be said to be aggrieved by an adverse order of the CCI in case it refuses to act upon the information supplied. By way of contrast, section 53N(3) speaks of making payment to an applicant as compensation for the loss or damage caused to the applicant as a result of any contravention of the provisions of Chapter II of the Act, having been committed by an enterprise. When the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI and the appellate authority, i.e., the NCLAT, must be kept wide open in public interest, so as to subserve the high public purpose of the Act. Coming now to the merits, we have already set out the concurrent findings of fact of the CCI and the NCLAT, wherein it has been found that Ola and Uber do not facilitate cartelization or anti-competitive practices between drivers, who are independent individuals, who act independently of each other, so as to attract the application of section 3 of the Act, as has been held by both the CCI and the NCLAT. Appeal dismissed. - CIVIL APPEAL NO. 3100 OF 2020 - - - Dated:- 15-12-2020 - JUSTICE ROHINTON FALI NARIMAN, JUSTICE K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... driver is bound to accept the trip fare reflected in the app at the end of the trip, without having any discretion insofar as the same is concerned. The drivers receive their share of the fare only after the deduction of a commission by Ola and Uber for the services offered to the rider. Therefore, the Informant alleged that the pricing algorithm used by Ola and Uber artificially manipulates supply and demand, guaranteeing higher fares to drivers who would otherwise compete against one and another. Cooperation between drivers, through the Ola and Uber apps, results in concerted action under section 3(3)(a) read with section 3(1) of the Act. Thus, the Informant submitted that the Ola and Uber apps function akin to a trade association, facilitating the operation of a cartel. Further, since Ola and Uber have greater bargaining power than riders in the determination of price, they are able to implement price discrimination, whereby riders are charged on the basis of their willingness to pay and as a result, artificially inflated fares are paid. Various other averments qua resale price maintenance were also made, alleging a contravention of section 3(4)(e) of the Act. 3. The CCI by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set prices through the platform, or an agreement for the platform to coordinate prices between them. There does not appear to be any such agreement between drivers inter-se to delegate this pricing power to the platform/Cab Aggregators. Thus, the Commission finds no substance in the first allegation raised by the Informant. xxx xxx xxx 17. In case of app-based taxi services, the dynamic pricing can and does on many occasions drive the prices to levels much lower than the fares that would have been charged by independent taxi drivers. Thus, there does not seem to be any fixed floor price that is set and maintained by the aggregators for all drivers and the centralized pricing mechanism cannot be viewed as a vertical instrument employed to orchestrate price-fixing cartel amongst the drivers xxx xxx xxx 18. Based on the foregoing discussion, the allegations raised by the Informant with regard to price fixing under section 3(3)(a) read with section 3(1), resale price maintenance agreement under section 3(4)(e) read with section 3(1). Moreover, the Commission observes that existence of an agreement, understanding or arrangement, demonstrating/indicating meeting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to adoption of digital App but also with regard to other relevant aspects as elucidated hereinbefore. xxx xxx xxx 23. Based on the foregoing, the Commission is of the view that no case of contravention of the provisions of Section 3 has been made out and the matter is accordingly closed herewith under Section 26(2) of the Act. 4. The Appellant/Informant, being aggrieved by the Order of the CCI, filed an appeal before the National Company Law Appellate Tribunal [ NCLAT ] which resulted in the impugned judgment dated 29.05.2020. This judgment recorded that the point as to resale price maintenance was not pressed before it, after which it delved into the locus standi of the Appellant to move the CCI. After setting out section 19 of the Act, the NCLAT held: 16. It is true that the concept of locus standi has been diluted to some extent by allowing public interest litigation, class action and actions initiated at the hands of consumer and trade associations. Even the whistle blowers have been clothed with the right to seek redressal of grievances affecting public interest by enacting a proper legal framework. However, the fact remains that when a statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also not disputed that besides Ola and Uber there are other players also in the field who offer their services to commuters/ riders in lieu of consideration. It emerges from the record that both Ola and Uber provide radio taxi services on demand. A consumer is required to download the app before he is able to avail the services of the Cab Aggregators. A cab is booked by a rider using the respective App of the Cab Aggregators which connects the rider with the driver and provides an estimate of fare using an algorithm. The allegation of Informant that the drivers attached to Cab Aggregators are independent third party service provider and not in their employment, thereby price determination by Cab Aggregators amounts to price fixing on behalf of drivers, has to be outrightly rejected as no collusion inter se the Cab Aggregators has been forthcoming from the Informant. The concept of hub and spoke cartel stated to be applicable to the business model of Ola and Uber as a hub with their platforms acting as a hub for collusion inter se the spokes i.e. drivers resting upon US Class Action Suit titled Spencer Meyer v. Travis Kalanick has no application as the business model of Ola a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or and the Cab Aggregators in the instant case distinctly do not hold dominant position in the relevant market. Admittedly, these two Cab Aggregators are not operating as a joint venture or a group, thus both enterprises taken together cannot be deemed to be holding a dominant position within the ambit of Section 4 of the Act. Even otherwise, none of the two enterprises is independently alleged to be holding a dominant position in the relevant market of providing services. This proposition of fact being an admitted position in the case, question of abuse of dominant position has to be outrightly rejected. (emphasis in original) Based on these findings, the appeal was accordingly dismissed. 6. The Appellant/Informant, who appeared in person before this Court, referred to a Services Agreement between Uber and its drivers, updated on 08.09.2015, and an Agreement between Ola and its transport service providers, dated 01.11.2016. He reiterated the submissions made before the CCI and the NCLAT. In particular, he attacked the finding of the NCLAT as to locus standi and referred us to various provisions of the Act, including, in particular, sections 19 and 35, arguing that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upported Dr. Singhvi s submissions on merits, but went on to add that even if the Appellant could be said to be an informant for the purposes of section 19 of the Act, he could not be said to be a person, aggrieved for the purposes of filing an appeal under section 53B under the Act, and referred to the judgment in Adi Pherozshah Gandhi v. H.M. Seervai, Advocate General of Maharashtra, (1970) 2 SCC 484, [ Adi Pherozshah Gandhi ]. He also went on to argue that information can be provided by persons like the Appellant at the behest of competitors, which will have a deleterious effect on persons like Ola and Uber, as the value of their shares in the share market would instantly drop the moment the factum of the filing of such information before the CCI would be advertised. In any event, he exhorted us to lay down that in such cases heavy costs should be imposed to deter such persons from approaching the CCI with frivolous and/or mala fide information, filed at the behest of competitors. 10. The learned ASG, Shri Balbir Singh, appearing on behalf of the CCI, took us through the provisions of the Act together with the regulations made under it, and stated that though he would suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erative societies; (ix) a local authority; (x) every artificial juridical person, not falling within any of the preceding sub-clauses; Anti-competitive agreements 3. (1) No enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India. xxx xxx xxx (3) Any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which- (a) directly or indirectly determines purchase or sale prices;... xxx xxx xxx (4) Any agreement amongst enterprises or persons at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or price of, or trade in g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson or an enterprise or the Director General may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of his or its officers to present his or its case before the Commission. Explanation.-For the purposes of this section,- (a) chartered accountant means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act; (b) company secretary means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act; (c) cost accountant means a cost accountant as defined in clause (b) of sub section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate of practice under sub- section (1) of section 6 of that Act; (d) legal practitioner means an advocate, vakil or an attorney of any High Court, and incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Awarding compensation 53N. (1) Without prejudice to any other provisions contained in this Act, the Central Government or a State Government or a local authority or any enterprise or any person may make an application to the Appellate Tribunal to adjudicate on claim for compensation that may arise from the findings of the Commission or the orders of the Appellate Tribunal in an appeal against any findings of the Commission or under section 42A or under sub-section(2) of section 53Q of the Act, and to pass an order for the recovery of compensation from any enterprise for any loss or damage shown to have been suffered, by the Central Government or a State Government or a local authority or any enterprise or any person as a result of any contravention of the provisions of Chapter II, having been committed by enterprise. (2) Every application made under sub-section (1) shall be accompanied by the findings of the Commission, if any, and also be accompanied with such fees as may be prescribed. (3) The Appellate Tribunal may, after an inquiry made into the allegations mentioned in the application made under sub-section (1), pass an order directing the enterprise to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Explanation to section 35. Appeal to Supreme Court 53T. The Central Government or any State Government or the Commission or any statutory authority or any local authority or any enterprise or any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to them; Provided that the Supreme court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed after the expiry of the said period of sixty days. 12. The relevant regulations that are contained in the Competition Commission of India (General) Regulations, 2009 [ 2009 Regulations ] are set out as under: 2. Definitions. (1) In these regulations, unless the context otherwise requires, xxx xxx xxx (i) Party includes a consumer or an enterprise or a person defined in clauses (f), (h) and (l) of section 2 of the Act respectively, or an information provider, or a consumer association or a trade association or the Director General defined in clause (g) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering a matter in an ordinary meeting, the Commission, on an application made to it in writing, if satisfied, that a person or enterprise has substantial interest in the outcome of proceedings and that it is necessary in the public interest to allow such person or enterprise to present his or its opinion on that matter, may permit that person or enterprise to present such opinion and to take part in further proceedings of the matter, as the Commission may specify . 35. Confidentiality. (1) The Commission shall maintain confidentiality of the identity of an informant on a request made to it in writing. Provided that where it is expedient to disclose the identity of the informant for the purposes of the Act, the Commission shall do so after giving an opportunity to the informant of being heard . 51. Empanelment of special counsel by Commission. (1) The Commission may draw up a panel of legal practitioners or chartered accountants or company secretaries or cost accountants to assist in proceedings before the Competition Appellate Tribunal or any other quasi-judicial body or Court. (2) The Director General may call upon the legal practitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e information to the CCI, mala fide or recklessly, inasmuch as false statements and omissions of material facts are punishable with a penalty which may extend to the hefty amount of rupees one crore, with the CCI being empowered to pass other such orders as it deems fit. This, and the judicious use of heavy costs being imposed when the information supplied is either frivolous or mala fide, can keep in check what is described as the growing tendency of persons being set up by rivals in the trade. 16. The 2009 Regulations also point in the same direction inasmuch as regulation 10, which has been set out hereinabove, does not require the informant to state how he is personally aggrieved by the contravention of the Act, but only requires a statement of facts and details of the alleged contravention to be set out in the information filed. Also, regulation 25 shows that public interest must be foremost in the consideration of the CCI when an application is made to it in writing that a person or enterprise has substantial interest in the outcome of the proceedings, and such person may therefore be allowed to take part in the proceedings. What is also extremely important is regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce punishable under section 494 of the Indian Penal Code, 1860 (being the offence of bigamy), was under consideration. It was held that a person aggrieved need not only be the first wife, but can also include a second wife who may complain of the same. In so saying, the Court held: 25. Even otherwise, as explained earlier, the second wife suffers several legal wrongs and/or legal injuries when the second marriage is treated as a nullity by the husband arbitrarily, without recourse to the court or where a declaration sought is granted by a competent court. The expression aggrieved person denotes an elastic and an elusive concept. It cannot be confined within the bounds of a rigid, exact and comprehensive definition. Its scope and meaning depends on diverse, variable factors such as the content and intent of the statute of which the contravention is alleged, the specific circumstances of the case, the nature and extent of complainant's interest and the nature and the extent of the prejudice or injury suffered by the complainant. Section 494 does not restrict the right of filing complaint to the first wife and there is no reason to read the said section in a restricted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is expected to form its opinion as to the existence of a prima facie case for contravention of certain provisions of the Act and then pass a direction to the Director General to cause an investigation into the matter. These proceedings are initiated by the intimation or reference received by the Commission in any of the manners specified under Section 19 of the Act. At the very threshold, the Commission is to exercise its powers in passing the direction for investigation; or where it finds that there exists no prima facie case justifying passing of such a direction to the Director General, it can close the matter and/or pass such orders as it may deem fit and proper. In other words, the order passed by the Commission under Section 26(2) is a final order as it puts an end to the proceedings initiated upon receiving the information in one of the specified modes. This order has been specifically made appealable under Section 53-A of the Act. 38. In contradistinction, the direction under Section 26(1) after formation of a prima facie opinion is a direction simpliciter to cause an investigation into the matter. Issuance of such a direction, at the face of it, is an administrative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any case, is of generic nature and then lastly mentions any person . Obviously, it is intended that expanded meaning be given to the term persons i.e. persons or bodies who are entitled to appeal. The right of hearing is also available to the parties to appeal. 104. The above stated provisions clearly indicate that the Commission, a body corporate, is expected to be party in the proceedings before the Tribunal as it has a legal right of representation. Absence of the Commission before the Tribunal will deprive it of presenting its views in the proceedings. Thus, it may not be able to effectively exercise its right to appeal in terms of Section 53 of the Act. 105. Furthermore, Regulations 14(4) and 51 support the view that the Commission can be a necessary or a proper party in the proceedings before the Tribunal. The Commission, in terms of Section 19 read with Section 26 of the Act, is entitled to commence proceedings suo motu and adopt its own procedure for completion of such proceedings. Thus, the principle of fairness would demand that such party should be heard by the Tribunal before any orders adverse to it are passed in such cases. The Tribunal has taken this vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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