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TMI Blog2025 (3) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... the order dated 08.09.2022 by which his information case no. 17 of 2021 filed against Respondent No. 2 has been dismissed by the Competition Commission of India (in short 'Commission'). 2. The Appellant, a partnership firm through one of its partner Balaji, s/o Anand Kumar, filed the information under Section 19(1)(a) of the Act against Respondent No. 2 alleging violation of Section 3(4) and 4 of the Act, alleging inter alia, that the informant is a dealer and supplier of Respondent No. 2. The Informant purchased Tinting machine from Respondent No 2, operated with the help of a software installation on the informant's computer system which is used for mixing the base shade with a colour to produce shade of a desired colour. It is alleged that there are several tiers of dealers and some of them are known as Ezycolor Retailer, Critical Retailer, CPC Club, PC Club and SPC Club. It is further alleged that the informant was classified as a critical retailer (CR) in 2010. It is alleged that on 24.02.2021, the informant took the dealership of Respondent No. 3 and started selling decorative paints manufactured by them. Tinting machine was also installed at the informant's shop on 25.04.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was affected on 28.04.2021 as against the alleged claim of February 2021 by the dealer. Further, the dealer was consistently reducing offtake from Asian Paints, which reduced to less than half over a 10-month period, from October 2020 to July 2021. The retailing tier of the said dealer was restored in June 2021 along with seven other dealers after a review exercise undertaken by Asian Paints on the basis of sales, expected sales, customer outreach and other relevant factors. 69. The Commission observes that, as per the DG, the retailing tier of the said dealer was restored in June 2021 along with seven other dealers after a review exercise undertaken by Asian Paints on the basis of factors such as sales, expected sales, customer outreach and other relevant factors. It has also been brought out by the DG that the restoration of dealers' status was done prior to the filing of information in Case No.17 of 2021. The Commission notes that, as per the DG, the retailing status of the said dealer was changed from Ezy Critical Retailer (Ezy CR) to Critical Retailer in 2018-19, when the said dealer had not even started business with any other competing brand. In view of the findings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Paints who were deposed by the DG; to direct the DG to revise the report based on the material from the cross-examination; and to pass any other order as the Commission may deem fit in the facts and circumstances of this case. In this regard, the Commission notes that the evidence adduced by the dealers has been duly considered by the DG in its Investigation Report. The Commission has not adverted to oral statements, if any, given by any parties or at their behest before the DG for the purposes of passing the present order. In any event, the Commission is of the view that the 1J1formants and even third parties had been ' given ample opportunity during the course of investigation by the DG. JSW Paints has not been able to demonstrate to the satisfaction of the Commission that it is necessa1y and expedient to grant a right of cross-examination to it. Accordingly, the Commission finds no merit in the said application and the same stands disposed of." 7. Aggrieved against the aforesaid order, the present appeal has been filed. 8. It is pertinent to mention that the case set up by the Appellant in the information is that the appellant was having CR status but when it took the dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prejudiced the Appellant because the immediate abusive action of Respondent No. 2 was the association of the Appellant with R3 because of which R2 downgraded the retailer tier of the Appellant in April, 2021 after it took up dealership of R3 in Feb, 2021. 13. It is submitted that it was also a matter of concern for Respondent No. 1 for ordering investigation that though on 17.06.2021 the Appellant was informed by R2 that its CR status will be reinstated only after three months review but It was hurriedly restored on 23.06.2021 to avoid the potential complaint to Respondent No. 1. 14. It is also submitted that no opportunity of evidence was given to the Appellant all that has been done by the Respondent No. 1 was a period of three days was given for evidence which was not sufficient. 15. Counsel appearing on behalf of the Respondent No. 1/CCI has submitted that DG found in his report that the downgrade of Appellant from critical retailer to colour world by Respondent No. 2 was fully justified and had no relationship with starting the business with the competing brand. The inference was drawn by the DG on the following reasons:- The change in the retailing tier was affected o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation of DG, that it has been restored to its original tier i.e. CR prior filing of the information and had also failed to disclose its retailer tier was downgraded from Ezy Critical Retailer to CR in 2018-19 when it was not dealing with R3. It is submitted that because the Appellant has not approached the court with clean hands, therefore, not only the information but also the present appeal deserves to be dismissed. In this regard, reliance has been placed on the following decisions in the case of S.P. Chengalvaraya Naidu Vs. Jagannath, (1994) 1 SCC 1, Satish Khosla Vs. Eli Lilly Ranbaxy Ltd., 1997 SCC Online Del 935 and SJS Business Enterprises (P) Ltd. Vs. State of Bihar, (2004) 7 SCC 166. It is further submitted that the Appellant deliberately did not mention in the information that its grievance has already been addressed by R2 because that itself would have led Respondent no. 1 to close the case on that account. It is further submitted that although in the case of Samir Agrawal (Supra), the Hon'ble Supreme Court has held that proceedings under the Act are in rem but the said judgment is distinguishable because information in that case has been filed in public interest whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dware No change July 2019 9. Siva Sankar Agencies No change November 2019 10. Sri Lakshmi Agencies No change November 2019 11. Sri Naga Sai Maruti Downgraded in 2020-21 but restored in 2021-22 July 2019 12. Sri Sai Balaji Traders Upgraded in 2021-22 July 2019 13. Sri Surya Paints No change November 2019 14. Uma Hardwares Upgraded in 2021-22 August 2019 15. Venkateshwara Paints & Steels No change November 2019 22. Counsel for Respondent No. 2 has also submitted that the criteria of the Appellant was downgraded because of the change in value off take. In this regard, a chart has been produced by Respondent No. 2 since Oct, 2020 to March, 2021 in which the offtake of the Appellant has been shown on the reducing side. The chart is reproduced as under:- S. No. Month and Year Offtake of the Appellant in INR Lakh 1. October 2020 10.36 2. November 2020 6.43 3. December 2020 7.14 4. January 2021 6.56 5. February 2021 4.55 6. March 2021 4.87 23. It is also submitted that the allegation of the Appellant that it was left with deadstock worth Rs. 3.5 lakh is not correct because it can offload that stock in numerous ways including tinting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledge which means that the prayer made in para 47 (a) for immediately reinstatement of CR status of the Appellant was also based upon the information of the Appellant to be correct whereas the CR status of the Appellant had already been restored on 23.06.2021 much before the information was filed on 01.07.2021 and false affidavit was filed in support of it. Besides this fact that the Appellant did not disclose the fact in the information that the issue of downgrade of CR status, which is the bedrock of the information, has already been restored and as far as the Appellant is concerned, the personal injury caused to it has been redressed, it not only filed the information but also continued with it before the R1 and disclosed the same very late. 27. The fact that the personal injury having been redressed has also been taken note of by the R1 in its impugned order where it has been observed that "It has also been brought by the DG that the restoration of the dealer status was down prior to the filing information in case no. 17 of 2021." 28. In this regard, the Hon'ble Supreme Court in the case of S.P. Chengalvaraya Naidu (Supra) has held that "the courts of law are meant for impa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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