Consequent upon the repeal of the MRTP Act this complaint has been received by transfer on 04.03.2010 from the office of DGIR, MRTP Commission under Section 66(6) of the Competition Act, 2002.

The facts as stated in the complaint, in brief, are: 2 .1 This complaint was filed by the All India Distillers Association against glass bottle manufacturers in India alleging restrictive and monopolistic trade practices being adopted by the four major manufacturers namely: Haldyn Glass Gujarat Limited, Hindustan National Glass and Industries, AGI Glasspac and Mohan Crystal Glass Work who together control 90 of the glass bottle market.

2.2 It has been stated that Potable Alcohol Industry of India comprises of Indian Made Foreign Liquor (IMFL), Country Liquor, Beer and Wine.

The packaging material for the potable alcohol is primarily glass bottles.

The glass bottles are used because these ensure longer shelf life, prevent alcohol from evaporation, retain taste, color and aroma intact even after the opening of bottles.

Other packaging materials like PVC, pet bottles, metal containers etc.

do not have wide-acceptance in the market.

The glass bottles are essential for distribution and marketing of potable alcohol.

The cost of the glass bottles is a major component in the costing of alcoholic beverage ranging from 6 to 35 of the cost of potable liquor.

The Bureau of Indian Standards has prescribed the standard for manufacturing of glass bottles and because of this reason there is homogeneity of the product glass bottle.

3 As per averments made in the complaint the glass bottle manufacturing companies have recently threatened to increase the price of glass bottles by at least 20 on the ground that the cost of some of the inputs has gone up namely Soda Ash by 57, liquid petroleum gas by 14, and furnace oil by 48 though in fact the extent of increase in the price of these inputs is not as much as is being portrayed.

Moreover, there appears to be no increase in the prices of various other main ingredients such as cullet, silica, calcite and host of chemicals.

Thus, the impact of increase in cost is much less than that of the 20 by which the price of glass bottles is being threatened to be increased.

2 .4 It has also been stated that the glass bottles manufacturers have in the past increased the prices of glass bottles to about the same extent and at the same time e.g. prices were hiked by 10 simultaneously in February, 2007, again by 10 in December, 2007 and now again there is a threat that they will increase price by 20 simultaneously.

Thus, these glass bottles manufacturers have been emboldened as their past conduct has remained undetected and unpunished.

2 .5 The complainant has alleged that the uniformity in percentage price increase being sought is unjustified given the difference in variable cost of each glass manufacturer in view of the fact that some glass bottle manufacturer use gas while others use furnace oil, obvious difference in plant efficiency due to their differential age and wide variation in labour cost and transport component.

2.6 It has been further alleged that in view of the unique market structure of the industry, homogeneity of the product, lack of substitutable product, absence of competitive pressure of import, capital intensive industry, low technical advancement, strong ability to exchange information of price and other terms amongst the glass bottle manufacturers and tamed countervailing buyers power, the glass bottles manufacturers in India are indulging in restrictive trade practice of cartelisation with impunity.

2 .7 In order to ensure price increase immediately, glass bottle manufacturers are increasingly refusing to honour their pending commitment to supply under one pretext or the other and there is a serious threat that future supplies would be stopped sooner than later unless the unjustified and unlawful demand for a price increase by the cartel of glass bottle manufactures is met by the potable alcohol industry.

In terms of the powers conferred under Section 11(2) of the MRTP Act, 1969 DG (I and R) initiated probe against the four major manufacturers of glass bottles and vide letter dated 21.08.2008 they were asked to submit relevant information.

Haldyn Glass Gujarat Limited Hindustan Glass and Industries Limited and AGI Glasspac have furnished their replies in response to the probe letter of DG (I and R) whereas Mohan Meakin Limited has stated vide its letter 8.09.2008 that it is a member of the complainant-Association and as such should be deemed to be a complainant and probe letter issued to it should be withdrawn.

4 .1 The respondent Haidyn Glass Gujarat Limited in its reply dated 07.10.2008 has stated that the allegations made by the complainant are baseless as the prices of the glass bottles are increased when the prices of the inputs are increased by the Government and this increase is not due to the collective meeting of minds of glass bottle manufacturers.

Further it has been mentioned that the price is negotiated with the parties and no unilateral decision is imposed on the customers.

4 . 2 The Hindustan National Glass and Industries Limited in its response dated 14.10.2008 has stated that it manufactures glass bottles for industrial users and not for retail sale and customers are directly supplied the product by the company on the basis of mutual negotiation.

The company has never adopted any restrictive practice and the allegations made by the complainant are baseless and devoid of any merit.

4.3 The AGI Glasspac in its reply dated 14.10.2008 has also denied the allegations levelled by the complainant and has stated that synchronization in the increase in prices is merely co-incidental and it has to be viewed in the prevailing economic scenario.

It has also been stated that the prices are calculated on the basis of the input cost of the product and there has not been even a single instance of stopping or reducing the supply of bottles.

The DG (I and R) also issued a letter to the complainant requesting it to furnish the following information documents for the purpose of investigation: Names and addresses of the members of the Association ii) Details of different types of glass bottles purchased by the members of the complainant Association along with details of the prices at which the same were offered for sale by the respondent companies during the last two years iii) In case the respondent companies are issuing price-lists to the buyers of glass bottles in question, copies of the same for the last two years iv) In case the respondent companies are marketing the glass bottles to the members of the complainant Association by way of rate contracts, the details of the same for the last two years Any other information documents which the complainant would like to furnish in support of the allegations made by it.

In response to the letter of DG (I and R) the complainant vide its letter dated 25.09.2008 intimated that in the absence of any backup information required by the Commission and non receipt of information from its members, it is left with no other alternative but to withdraw the complaint.

At this stage, the case was transferred to the Competition Commission of India with the observation that this matter relates to alleged restrictive trade practices.

The matter was placed before the Commission in the meeting held on 18.06.2010 and the Commission considered the relevant material available on record.

On close examination of the matter it is borne out that the main grievance of the complainant-Association is that the above-mentioned four major glass bottle manufacturers have formed a cartel and they are increasing the prices of the glass bottles arbitrarily on the pretext of increase in the cost of raw material like Soda Ash, LPG, LHSH and furnace oil and are withholding the supply to enforce the increase in price.

On the other hand, the respondent glass manufacturing companies have denied this allegation and have contended that they have not taken any collective decision to increase the price but when the cost of inputs goes up they have no option but to increase the price of glass bottles.

They have also taken the plea that price of the product is always mutually negotiated with the customers.

As far as the allegation of cartelization by the respondent glass manufacturing companies is concerned, no reliable material has been placed on record which can lend support to such an assertion.

Definitely something more than bare allegation is needed to show concerted action on the part of the respondents to fix the prices of glass bottles.

The complainant has itself admitted in the complaint that cost of various inputs which are used in manufacturing of glass bottles like Soda Ash, Liquified Petroleum Gas, Furnace Oil etc.

has gone up though their contention is that the intended increase in price of glass bottles is much more than warranted by the increase in the cost of inputs.

The complainant has also not placed on record any details from which this inference can be drawn that the increase in the price of glass bottles is not commensurate with the escalation in the cost of raw material.

It is also noteworthy that the details sought by the DG (I and R) from the complainant were not furnished and instead the complaint was sought to be withdrawn on the ground that the members of the complainant -Association failed to supply any information in this regard.

In the absence of any credible material, bare assertion of complaint cannot be relied upon and the allegations made by the complainant have remained unsubstantiated and uncorroborated.

On the basis of the material available on record and in view of the forgoing discussion, no case is made out to warrant any further action and the matter deserves to be closed.

The proceedings are hereby closed.

The Secretary is directed to inform the complainant accordingly.

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Order under section 26(2) of the Competition Act, 2002 The informant is a CPWD Class-II (Civil) Registered Contractor, having his office at New Delhi and is eligible to tender for CPWD works costing up to Rs. 5 crores of any civil nature in the northern region (Punjab, Haryana, Himachal Pradesh, Jammu Kashmir, Uttar Pradesh, Rajasthan, Uttarakhand, Delhi and UT of Chandigarh only).

The informant had been doing the said works in CPWD, local bodies and other organisations.

The OP is an agency of the central government operating throughout the country for planning, construction, maintenance and repairs of all works and buildings financed from civil works budget.

It carries out the said works through its established divisions by inviting tenders from the registered contractors.

It is stated in the information that the construction and maintenance works were executed by the respective divisions of the OP, depending upon the magnitude of works and the tenders for the same were open to all registered contractors till 2008- However, in the year 2009, the Division entrusted with the maintenance work classified the annual repair and maintenance works as a specialised nature of work and issued tender notice only for the specialized agencies or contractors.

The informant alleged that the OP reclassified the above said maintenance work as a special category without any logical basis and the works of annual repair and maintenance do not require any special technical expertise or experience.

The informant also alleged that CPWD officers in order to favour certain general category contractors, categorized them as special agencies for annual repair and maintenance works.

The said agencies since had worked in the maintenance division for some years and gained experience, got themselves classified as specialized agencies.

The Informant further alleged that OP was the sole authority responsible for construction and maintenance of public works in India and thus, was able to abuse its dominant position by imposing unfair and discriminatory conditions in the purchase of services.

The informant alleged that the OP indulged in practice that resulted in denial of market access to him.

It is also alleged that the works of annual repair and maintenance were being awarded only to a few so called specialized contractors.

It is revealed from the works awarded by few divisions like S Division, Pushpa Vihar Maintenance Division, Q Division, Electrical Division 13 that the works were being awarded only to a few favoured parties like Swastik Electrotech P. Limited, Niranjan Kumar Garg, N.D. Sharma, Devinder Singh etc.

The Informant alleged that these few agencies in the garb of specialized agencies got the work awarded year after year because of the restrictions put in tender notice by the OP.

The informant also submitted that the rates being quoted were very high ranging from 30-40 above the Delhi Schedule Rates 2012.

The Informant quoted the instance of Delhi Aviation Division CPWD, which had floated tenders for the same nature of maintenance work and got the rates 30 below and the works were being carried out satisfactorily by Shri J.P. Gupta in the year 2012.

The informant alleged that the OP abused its dominant position by awarding civil repairs and maintenance works to the Contractors registered as specialized categorised agencies whereas the work could be done by any ordinary civil contractor.

In order to examine the allegations of the informant, first of all, the relevant market is to be identified.

Considering the facts of the present matter, the relevant product market would be the, maintenance and repairs of civil works and buildings and relevant geographic market would be entire India.

Maintenance and repair of civil works is not confined only to Central Govt.

buildings.

This service is extensively needed by all agencies and private bodies, individuals owing residential or commercial properties in India.

Similarly service field of repair maintenance service is open to all those in this field throughout India.

Thus, the relevant service market in the present case would be the provision of maintenance and repairs of all civil works and buildings within India.

In order to attract the provisions of section 4 of the Act, the dominant position of the enterprise in the relevant market needs to be examined.

The OP has been seeking services throughout the country for maintenance and repairs of all civil works and buildings, as it does not carry out the said work on its own and invites tenders from various registered contractors for the performance of the work.

However the OP cannot be considered as a dominant purchaser of services in the field of repair and maintenance of civil works in view of its minuscule presence as compared to vast number of buildings owned by private bodies, individuals, several states and autonomous organizations.

In view of the foregoing, the Commission finds that no prima facie case of even dominance of OP was made out against the OP.

The question of abuse of dominance therefore does not arise.

The Commission deems it fit to close the proceedings of the case under Section 26(2) of the Act.

The Secretary is directed to inform the parties accordingly.

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The information in the instant case has been filed under section 19(1)(a) of the Competition Act, 2002 (hereinafter referred to as the Act) by Shri Ashok Kumar Sharma (hereinafter referred to as the Informant) against M section Agni Devices Private Ltd. (hereinafter referred to as the Opposite Party) alleging, inter alia, contravention of the provisions of sections 3 4 of the Act.

Facts of the case, may be briefly noted: As stated in the information, the Informant is running a business under the name and style of Agni Security Devices and trading of fire alarms, fire extinguishers and related equipments.

It is submitted that the Informant, after complying with the statutory formalities, entered into the business of fire fighting systems in 2014 (with a different trade name and mark).

As per the information, the Opposite Party claims itself to be the leading manufacturer, developer, importer and exporter of fire alarm systems, fire alarm panels, signalling equipment, detectors, fire-fighting equipment, security system surveillance systems, auto dialers, integrated fire-cum-security systems etc.

(hereinafter referred to as the fire safety equipment).

It is further submitted that the Opposite Party has been using the trademark trade name AGNI from 1989 which it inherited from its sister-companies Agni Instrument Engineers Pvt.

Limited and Agni Devices Pvt.

Ltd It is alleged that the Opposite Party alongwith its sister-companies is engaged in practices which are in violation of section 3 of the Act.

The Informant has alleged that the trademark Agni granted by the IP Authority in favour of the Opposite Party has led it to abuse its dominant position in the market.

The Informant has alleged that the Opposite Party had served a legal notice dated 16.09.2014 threatening the Informant to refrain from manufacturing fire safety equipment under the trademark AGNI Security Devices.

It is alleged that the threatening language of the said notice indicates abuse of dominance by the Opposite Party which is in contravention of the provisions of section 4 of the Act.

It is also submitted that the Opposite Party is engaged in family business under three different names - Agni, Agni Instrument Engineers Pvt.

Limited and Agni Devices Pvt.

Limited It is alleged that the agreement between these sister companies is in violation of the provisions of section 3 of the Act.

Based on the above allegations and the information, the Informant has alleged that the conduct of the Opposite Party is in contravention of the provisions of sections 3 4 of the Act in the instant matter.

Accordingly, the Informant has prayed, inter alia, for initiating an investigation under section 26(1) of the Act.

The Commission perused the material available on record including the information.

The Counsel on behalf of the Informant was also heard by the Commission on 29.04.2015.

Facts of the case reveal that the Informant is primarily aggrieved by the alleged threats by the OP through its notice to cease and desist from manufacturing fire safety equipment under the trademark AGNI Security Devices.

The Commission notes that the issue involved in the instant case is regarding the use of trademark which appears to have already been registered by the Opposite Party with the Appropriate Authority.

It is noteworthy to mention that the Informant has also filed an application before the Registrar of Trademarks for registration of his trade name and logo.

The said application is pending for its final disposal.

It is further noted that the Informant has also not provided any cogent material to highlight the imposition of any unreasonable conditions on him.

Based on the facts and circumstances of the instant case, the Commission observes that the issue involved herein is purely a trademark dispute and does not raise any competition concern.

In the light of the above analysis, the Commission finds that no prima facie case of contravention of the provisions of sections 3 and 4 of the Act is made out against the Opposite Party in the instant matter.

Accordingly, the matter is closed under the provisions of section 26(2) of the Act.

The Secretary is directed to inform all concerned accordingly.

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Order under Section 26(2) of the Competition Act, 2002 The present reference has been filed by Central Organization for Railway Electrification (hereinafter CORE) through the Office of the Principal Chief Materials Manager (hereinafter the Informant) under Section 19(1)(b) of the Competition Act, 2002 (hereinafter the Act) against M section PPS International, Delhi (hereinafter the Opposite Party OP) alleging contravention of the provisions of Sections 3 and 4 of the Act.

The Informant is an organization under the Ministry of Railways and is entrusted with the responsibility to carry out railway electrification over the entire network of the Indian Railways.

It is stated that the Informant inter alia procures Short Neutral Section Assembly (hereinafter SNS Assembly), also called phase break, for various Railway Zones from the Research Design and Standards Organisation (hereinafter RDSO) approved sources.

It is further stated that there is only one approved source for this item in RDSO approved list i.e. M section Arthur Flury AG Switzerland, the original equipment manufacturer (hereinafter OEM) which sells this product through its authorised Indian distributor i.e. the OP in India.

It is stated that in terms of Railway Board letter bearing number RE(S)14/11/82/0012 Pt.

dated 14.11.2017, SNS Assembly is a centralised procurement item of CORE, where demand of all Zonal Railways is consolidated and procured.

It has been alleged that the OP entered into an agreement with M section Arthur Flury AG and thereby artificially jacked up the prices of SNS Assembly in violation of the provisions of Section 3(3)(a) of the Act.

It has also been alleged that the OP has abused its dominant position to increase the prices of SNS Assembly artificially and the OP has also imposed unilateral conditions regarding commercial and technical compliances in violation of the provisions of Section 4(2)(a)(i) and 4(2)(a)(ii) of the Act.

In support of such allegations, the Informant has provided the following information detailed in Table Number 1: It has been further stated that in the year 2013, the OP had supplied 282 sets of SNS Assembly Rs. 7,25,000/- based on Proforma Invoice rate of OEM 8600 CHF per set.

However, the Office of the Principal Commissioner of Customs (Import) vide letter C. Number VIII/12/ACC-Import Gr-VA Misc./841/2013 dated 22.06.2015 showed that the OP had imported the items CHF 6400.

Thus the OP jacked up the prices taking benefit of its monopoly.

The Informant has also provided one more instance of abuse of monopoly by the OP with respect to tender number CORE S/1271/5530/20473 dated 12.01.2018, wherein the OP had supplied 28 sets Rs. 698500/- per set based on Proforma Invoice rate of OEM 8580 CHF.

It is stated that while processing the bills, it was revealed that the OP had imported the material from M section Arthur Flury CHF 7200 as per its invoice and Bill of Entry.

Based on the above averments and allegations, the present reference has been filed by the Informant against the OP, alleging contravention of the provisions of Sections 3 and 4 of the Act.

The Commission has perused the reference and the documents filed therewith and also considered the material available in public domain.

At the outset, the Commission notes that though the Informant has alleged contravention of the provisions of both Sections 3 and 4 of the Act, yet looking at the nature of allegations and the relationship of the OP with the OEM, the provisions of Section 3(3)(a) of the Act are not applicable to the present case as the OP (distributor) and OEM (manufacturer) are operating at different levels of the production chain in different markets.

Thus, prima facie the provisions of Section 3(3)(a) of the Act are not attracted.

Next, for the purpose of examining the allegations of the Informant under the provisions of Section 4 of the Act, it is necessary to determine the relevant market at the first instance.

Thereafter it is necessary to assess whether the OP enjoys a position of strength required to operate independently of the market forces in the relevant market.

Only when such a position is established, the Commission is required to examine whether the impugned conduct amounts to abuse of dominance or not.

The Commission observes that the product involved in the instant case is SNS Assembly, which is used mainly by the Railways to isolate different phases of power supply in adjoining Over Head Equipment (OHE) fed by adjacent substations, which are normally connected to different phases of supply.

Thus, it is used in overhead contact lines of the Railways to act as an insulator between different power lines (phases).

In this regard, the Commission observes that SNS Assembly is a light weight contact wire insulator of composite type (Resin bonded glass fibre core protected with wear resistance ceramic beads) with Poly Tetra Fluro Ethylene (PTFE).

Thus, its physical characteristics indicate that it is a specialised equipment having a specific function.

Moreover, SNS Assembly is a distinct product in itself having no close substitute.

Accordingly, the relevant product market in the instant case is market for supply of SNS Assembly.

In respect of the relevant geographical market, it may be noted that CORE is a centralised procurement agency for the SNS Assembly as it consolidates the demand of all Railway Zones and centrally procures them.

This shows pan India nature of the demand by different Zones of Railways and its subsequent distribution.

Thus, the relevant geographic market in this case would be India.

Thus, the relevant market in the present case is the market for supply of SNS Assembly in India 1 4 .

On the issue of dominance of the OP in the aforesaid relevant market, the Commission notes that the OP is the sole authorised distributor of M section Arthur Flury AG, Switzerland in India.

Further, it is also observed that there is only one single approved source in the RDSO approved list i.e. M section Arthur Flury AG and its Indian distributor.

The requirement of the RDSO approved sources has also resulted in a situation of high dependence of the Indian Railways for the SNS Assembly on the OP.

Thus, the Commission observes that the OP can be said to be dominant in the above- defined relevant market.

In view of the above assessment, the Commission is of the view that the OP appears to be dominant in terms of the provisions of Section 4 of the Act.

To examine the alleged abuse of dominant position by the OP in the relevant market delineated supra, it is noted that the Informant has not specified any specific condition which can be examined within the framework of Section 4(2)(a)(i) of the Act.

However, on a closer scrutiny of the information, it appears that the Informant is essentially aggrieved by the allegedly high prices charged by the OP for supply of SNS Assembly to CORE.

The Informant has claimed that the OP has increased the prices in last 12 years without any significant inflation in Switzerland.

Thus, the Informant has essentially raised the issue of excessive pricing.

To support the allegations, it has been pointed out that in purchase order dated 13.09.2013, the OP had supplied 282 sets of SNS Assembly on behalf of M section Arthur Flury AG on the basic price (excluding all taxes, duties, freight charges, insurance charges other expanses) i.e. 8600 Swiss Franc (CHF) per set.

But, later on, it was revealed to the Informant that the OP had imported the same goods on the basic price of 6400 Swiss Franc per set.

Similarly, the Informant provided another evidence where the OP in response to the purchase order dated 12.01.2018 had supplied 28 SNS Assembly on the basic price of 8580 Swiss Franc but, later on, it was found through the invoice of M section Arthur Flury AG Bill of Entry that the OP had imported the same at 7200 Swiss Franc per set.

In order to appreciate the allegation of excessive pricing, the Commission deems it appropriate to examine the percentage increase in the prices of SNS Assembly over period of time i.e. from 2006 to 2018.

The table beneath shows the percentage rise in prices of SNS Assembly between 2006-2018: From the above table, it appears that there has not been a continuous trend of price increase over a period of time which could show excessive prices being charged by the OP.

Also between 2013 and 2018, there was either no increase in the prices and rather in year 2016, prices even decreased.

Thus, the price trend does not support the allegation of abuse of dominant position made by the Informant by artificially determining the sale price in terms of the provisions contained in Section 4(2)(a)(ii) of the Act.

In view of the above assessment, the Commission is of the view that the OP does not appear to have abused its dominant position in terms of the provisions of Section 4 of the Act.

Resultantly, the Commission is of the opinion that no case of contravention of the provisions of Section 4 of the Act is made out against the OP and the matter is ordered to be closed in terms of the provisions contained in Section 26(2) of the Act.

The Secretary is directed to communicate to the Informant, accordingly.

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The instant matter filed by the Confederation of Real Estate Developers Association of India - NCR (Informant CREDAI-NCR) against the Department of Town and Country Planning, Government of Haryana (OP-1/DTCP) and the Haryana Urban Development Authority, (OP-2/HUDA) was referred by the Commission to the Director General (DG) for investigation vide order dated 06.04.2018 passed under Section 26(1) of the Competition Act, 2002 (Act).

In the said order, the Commission had held that there exists a prima facie case of contravention of the provisions of Section 4(2)(a)(i) of the Act by the OPs.

On 01.05.2018, the Commission considered the application filed by the Informant under Section 33 of the Act.

In its application, the Informant has prayed that till the Commission decides the matter, the OPs should be (i) restrained from invoking the bank guarantee against the developers (ii) directed to cease and desist from compelling the developers to pay any pending External Development Charges (EDC) and Infrastructure Development Charges (IDC) or any increase thereof, alongwith interest till the disposal of the case (iii) directed to cease and desist from compelling the developers to pay any penal interest and (iv) directed to cease and desist from taking any coercive action against the developers.

The Commission heard the parties on 11.05.2018 and 31.05.2018 and also considered the submissions placed by them on record.

The submissions and contentions of the Informant are as follows: The Sohna Master Plan 2031 (Sohna Master Plan) for Group Housing Colony in the revenue estate of Tehsil Sohna of Gurugram District in Haryana was issued in 2012 and based on this plan, various developers submitted their bids.

Thereafter, the Sohna Letter of Intent (Sohna LOI) and bilateral agreements were executed by them with the Director of OP-1 and licenses were issued to them.

However, till date the OPs have not carried out the requisite infrastructural and External Development Works in the periphery of the residential housing colonies located in the area as per the plan.

In light of complete inaction by the OPs, the developers are faced with the impossible task of fulfilling their obligations under the Sohna LOI, bilateral agreement and licenses within strict timelines and under threat of potential penalties, covering land that has not even been acquired by the OPs.

Additionally, the developers are also exposed to hefty claims from the consumers under the Consumer Protection Act, 1986 for failing to allot plots to them within the timelines stipulated under the arrangements between the developers and the consumers.

Moreover, the OPs permit the developers to pass on such EDC and IDC to the allottees.

Thus, while the OPs have regularly imposed EDC and IDC upon the developers which is being passed on to allottees, the OPs have carried out no Infrastructural or External Development Works on the land.

The ultimate consumers i.e. the allottees are disadvantaged and forced to bear the burden of paying EDC and IDC without enjoying the benefits of the corresponding development works, a situation for which the OPs are solely and exclusively liable.

In response to an application filed under the Right to Information Act, 2005 (RTI Act) as well as counter-affidavit filed with the Commission, OP-1 has stated that, with respect to 41 licences issued by it under the Sohna Master Plan, an amount of Rs. 406.75 crores has been collected towards EDC and Rs. 137.18 crores towards IDC.

In addition, 25 of the EDC amount is secured with it in the form of bank guarantees.

Despite this, the OPs have not even commenced the process of acquisition of land for External Development Works.

Irrespective of the fact that no development work has been undertaken by the OPs, they continue to levy the charges and interest on the developers and are resorting to coercive action against them causing undue hardship to them in the development of their respective projects.

After the present information was filed and preliminary hearing in the case was held by the Commission in September 2017, OP-1 issued various notices threatening to take legal action against several developers.

With respect to the onerous clauses in the Sohna LOI and licenses and conduct of the OPs, the Commission has already formed a prima facie opinion of abuse of dominance.

It is prayed that the interim relief sought by the Informant be granted to restrain the OPs from implementing the one- sided agreements on a continuous basis.

The submissions and contentions made by the OPs are summarised below: The conditions imposed in the Sohna LOI including the furnishing of bank guarantee equivalent to 25 of the tentative EDC and the execution of LC- IV bilateral agreement before grant of license are a matter of record.

The final license is granted to the developer only if the conditions mentioned in the LOI are acceptable to the developer.

LOI as well as conditions of license stipulate that the provision of external development facilities by HUDA may take a long time and the applicant shall not claim any damages against the department for loss occurred, if any.

Most of the licenses to the developers in Sohna were granted in the year 2014 and thereafter.

The developers had executed the bilateral agreement with open eyes and were well aware that Sohna, being a new urban estate, HUDA would take time to execute External Development Works and it was never stipulated in the agreement that the development works would be executed in proportion to the amount paid by the developer.

Hence, they are estopped at this stage to allege that there should be immediate development of the area by HUDA.

It is wrong to allege that no development work has been executed by the Government agencies in Sohna.

It is submitted that the Government through various agencies has already executed various works such as fire station, boosting station, sewerage treatment plan, stadium, civil hospital, slaughter house and electric substation.

Most of the developers getting license in Sohna have failed to pay the due installment of EDC.

Therefore, unless the developers pay full amount of EDC, the balance development works cannot be executed.

The Commission has given careful consideration to the submissions contentions of the Informant and the OPs.

The Commission notes that earlier OP-1 had mentioned that the issues raised in this case by the Informant have already been examined and decided by the Honble High Court of Punjab and Haryana in CWP Number 9558 of 2015 titled VPN Buildtech Pvt.

Ltd. v. State of Haryana and Others and other connected petitions, vide order dated 15.12.2015.

It was also stated that against this order, some of the developers have filed Special Leave Petitions (SLP) before the Honble Supreme Court, which are pending, including the main SLP Number 5459 of 2016 titled Magnolia Propbuild Pvt.

Limited State of Haryana and Others.

Further, it was stated that the Honble Supreme Court, vide interim order dated 31.03.2016, has already restrained OP-1 from encashing the bank guarantees submitted by the developers, on account of non- payment of EDC.

In this regard, during the hearing on 11.05.2018, the Commission had inter alia asked the Informant to clarify as to the relief being sought from the Commission keeping in view the relief already granted by the Honble Supreme Court.

The Informant in response has submitted that SLP Number 5459 of 2016 before the Honble Supreme Court of India is in relation to EDC being charged from the developers for their individual projects relating to various master plans in the State of Haryana and the same are not concerned with the Sohna Master Plan.

Moreover, the relief granted by the Honble Supreme Court of India is only qua the 10 developers who have approached it and not a blanket stay on the bank guarantees of all other developers operating in the State of Haryana including the 41 licensees under the Sohna Master Plan.

During the hearing, the learned counsel for the OPs accepted this fact and further stated that due to the direction of the Honble Supreme Court in the said SLPs, the OPs as a matter of practice are not invoking bank guarantees for EDC in all cases.

Considering the fact that the Honble Supreme Court cases are not related to Sohna Master Plan at all, it is evident that the Commission can proceed to deal with the present application.

At the outset, the Commission notes that in the case of M. Gurudas and Others v. Rasaranjan and Others ( : AIR 2006 SC 3275), the Honble Supreme Court has categorically recorded that: While considering an application for injunction, it is well-settled, the courts would pass an order thereupon having regard to: (i) Prima facie case (ii) Balance of convenience (iii) Irreparable injury In light of the above decision, the Commission proceeds to decide the application of the Informant for interim relief.

With respect to the first factor i.e. the existence of a prima facie case, it is noted that, the Commission in its order dated 06.04.2018 passed under Section 26(1) of the Act has already found a prima facie case of abuse of dominant position in the relevant market by the OPs.

The relevant portion of the order is recorded below: though the terms of Sohna LOI, Sohna Agreement and Sohna Licence relating to EDC IDC emanate largely from the statutory provisions of the relevant statutes, prima facie the terms of these documents appear to be one-sided and in favour of the OPs.

Further, the alleged conduct of the OPs such as failure to adhere to its obligations under the Sohna Master Plan in a time-bound manner and imposing onerous obligations on the developers to pay EDC IDC, prima facie, appears to be abusive.

In response to the allegations, OP-1 has not denied that it has not provided External Development Works in accordance with the Sohna Master Plan, rather it has justified that it is not possible to provide such services unless the entire EDC IDC amount is paid by the developers alongwith interest and penal interest.

The Commission finds that the conduct of the Ops whereby they have not undertaken any External Development Works related to the Sohna project is ultimately affecting the end consumers i.e. the allottees home- buyers, as because of non-development by the OPs, the completion of the project is getting delayed and the same is rendered uninhabitable.

Thus, in view of foregoing, the Commission is of the opinion that the conduct of the OPs prima facie appears to be in contravention of the provisions of Section 4(2)(a)(i) of the Act.

However, the Commission also notes the Honble Supreme Courts decision in Competition Commission of India v. Steel Authority of India  : (2010) 10 SCC 744, wherein the Honble Court has laid down the factors and circumstances to be considered while granting interim relief under Section 33 of the Act.

The relevant extracts of this judgment are as follows: During an inquiry and where the Commission is satisfied that the act has been committed and continues to be committed or is about to be committed, in contravention of the provisions stated in Section 33 of the Act, it may issue an order temporarily restraining the party from carrying on such act, until the conclusion of such inquiry or until further orders, without giving notice to such party where it deems it necessary The Commission, while recording a reasoned order, inter alia, should : (a) record its satisfaction (which has to be of much higher degree than formation of a prima facie view under Section 26(1) of the Act) in clear terms that an act in contravention of the stated provisions has been committed and continues to be committed or is about to be committed (b) it is necessary to issue order of restraint and (c) from the record before the Commission, there is every likelihood that the party to the lis would suffer irreparable and irretrievable damage, or there is definite apprehension that it would have adverse effect on competition in the market.

The power under Section 33 of the Act, to pass a temporary restraint order, can only be exercised by the Commission when it has formed prima facie opinion and directed investigation in terms of Section 26(1) of the Act, as is evident from the language of this provision read with Regulation 18(2) of the Regulations.

In context of the above observations of the Honble Supreme Court, the Commission deems it pertinent to take into consideration the conduct of the OPs beyond the passing of the order under Section 26(1) of the Act.

The information in this case was filed with the Commission in July 2017 and the preliminary hearing took place in September 2017.

The alleged facts as they stood on the date of filing of the information remain unaltered till date despite the passing of the order by the Commission for investigation by the DG.

One of the contentions against the OPs in the information is that they have not commenced any external development work despite continuous collection of EDC from the developers.

During the hearing on the application for interim relief, the Informant filed a submission dated 11.05.2018 wherein he brought to notice a response dated 09.02.2018 given by OP-2 to an RTI application, in which OP-2 had stated that no external development work has been executed by HUDA in Sohna Town and that the expenditure booked under EDC service may be considered as NIL.

This has not been disputed by the OPs rather they confirmed that the situation remains the same till date.

However, the OPs in their counter-affidavit filed during the hearing on 31.05.2018 have submitted that the Government through various agencies has executed some of the infrastructure works such as fire station, boosting station, sewerage treatment plan, stadium, civil hospital, slaughter house and electric substation for the benefit of Sohna town including the colonies being developed by the Informant.

In this regard, the Commission has perused the definition of External Development Works given under Section 2(g) of the Haryana Development And Regulation of Urban Areas Act, 1975 (Act of 1975), which reads as under: External Development Works include water supply, sewerage, drains, necessary provisions of treatment and disposal of sewage, sullage and storm water, roads, electrical works, solid waste management and disposal, slaughter houses, colleges, hospitals, stadium sports complex, fire stations, grid sub-stations etc.

and any other work which the Director may specify to be executed in the periphery of or outside colony area for the benefit of the colony area Upon consideration of this definition, it is evident that the infrastructure works claimed to have been done by the OPs do not cover basic facilities like water supply, sewerage, drains, roads, electrical works, etc.

which are to be provided as External Development Works.

It goes without saying that unless these basic facilities are provided by the OPs, the projects of the developers would remain incomplete uninhabitable for the allottees home buyers.

When during the hearing, the learned counsel for the OPs was asked about the progress of the work with respect to these basic facilities, he admitted that no steps have been taken by the OPs in this direction till date.

It was acknowledged that even the process to acquire land for these purposes has not been initiated by the OPs.

At the same time, it is noted that the OPs are continuing to collect EDC from the developers to whom licenses have been granted in Sohna.

In the counter-affidavit filed by the OPs on 08.12.2017, the OPs have submitted that an amount of Rs. 390 crore (approximately) towards EDC has been paid by the said developers till 21.11.2017.

In the counter-affidavit filed on 31.05.2018, it was submitted that an amount of Rs. 401 crore (approximately) towards EDC has been collected from the developers till 17.05.2018.

Thus, it is evident that the OPs are continuing to collect EDC without committing any amount towards External Development Works in the said area.

Moreover, despite taking no steps towards carrying out External Development Works even after the passing of the order under Section 26(1) of the Act by the Commission, OP-1 is not only continuing to raise demands towards payment of EDC but also charging interest penal interest and threatening cancellation non-renewal of the licenses of the developers.

Further, EDC is being charged despite non-finalisation of any rates.

While OP-1 has published a policy clarifying the imposition of EDC in medium and low potential zones in 2010, allowing relaxations in terms of payment of EDC for developers in these zones by granting them waiver from payment of EDC till the finalisation of rates, in the interest of promoting development no such policy has been issued till date with respect to payments in the high potential zone.

As per the policy for medium and low potential zones, the developers in these zones are exempted from depositing EDC when the same has not been charged from the allottees and they would also receive the benefit of interest on EDC already paid as decided by OP-2 till such date the EDC is finally decided.

However, no similar relief has been given to the developers in high potential zones.

Further, in respect of IDC collected by OP-1, it is observed that approximately 60 (sixty percent) has been transferred and used as loan for refund purposes in other schemes floated by OP-2.

Thus, the Commission considers that the above factual situation shows that the alleged anti-competitive conduct by the OPs is continuing to be committed and the consumers continue to be adversely affected by such conduct.

Next, the Commission has to contemplate whether the balance of convenience lies in favour of allowing interim relief to the Informant and whether any irreparable harm or injury to it is being caused, i.e. whether justice would be best served by passing an interim order in this case restraining the OPs.

In this regard, the Commission notes that on the aspect of irreparable harm or injury, the Honble Supreme Court of India in Dalpat Kumar and Anr.

v. Prahlad Singh and Ors.

: (1992) 1 SCC 719 has observed as follows: The Court further has to satisfy that non-interference by the Court would result in irreparable injury to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession.

Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages.

The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that it is likely to be caused to the other side if the injunction is granted.

If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject-matter should be maintained in status quo, an injunction would be issued.

Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit.

Coming to the facts of the present case, the Commission observes that the developers for the purpose of grant of license have to execute LOI and LC-IV agreement with OP-1 in which the condition regarding payment of EDC is also present.

Such condition stipulates that the payment of EDC amount may be made by the developer either in lump-sum within 30 days from the grant of license or in 8/10 equal six monthly installments of 12.5/10 of which the first installment shall be payable within a period of 30 days from the date of grant of license.

Further, it is contained in the terms that where EDC amount is being paid in installments, the unpaid amount after the payment of first installment would carry an interest of 12 per annum and in case of any delay in payments of installments on the due date, an additional penal interest of 3 per annum would be levied, making the total payable interest as 15 per annum.

In the instant case, most of the developers have exercised the installment payment option whereby they are paying interest on the unpaid portion.

In case of delay in payment of instalments, the OPs are charging penal interest also.

On the other hand, no external development work has been commenced by the OPs towards providing basic facilities for the area included in the Sohna Master Plan.

Apart from that, it has been brought to the notice of the Commission during the hearing that the developers have to get their license renewed every five years commencing from the date of grant of license and pay renewal fee on each occasion.

Such fee has to be paid even if the reason for which the project is pending is non- completion of external development work by the OPs.

This means that the developers who have been granted license in 2014 would have to pay the renewal fee in 2019 mandatorily if the External Development Works remain pending owing to the complacency of the OPs.

The Commission is of the view that the interest of the developers in this regard can be protected through appropriate directions whereas, in the absence of intervention by the Commission at this stage, neither can the extant position be restored at a later stage nor the likely damages to the developers and the consumers be compensated.

Thus, in the given facts and circumstances, the Commission finds that the balance of convenience lies in granting the interim relief as sought by the Informant.

It has been observed by the Honble Supreme Court in Zenit Mataplast P. Ltd. vs State Of Maharashtra Ors.

: (2009) 10 SCC 388: Interim order is passed on the basis of prima facie findings, which are tentative.

Such order is passed as a temporary arrangement to preserve the status quo till the matter is decided finally, to ensure that the matter does not become either infructuous or a fait accompli before the final hearing.

The object of the interlocutory injunction is, to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial.

In light of the factual situation as discussed in the preceding paras, the case in hand appears to be exceptional in nature, which merits intervention by the Commission.

The Commission notes that the investigation in the present matter is likely to take some time.

In the meanwhile, the members of the Informant could suffer irreparable harm by way of cancellation of licenses and levying of penal interest despite the OPs being at fault.

The Informant has placed on record the fact that the OPs are not discharging their obligation under the agreement and yet have issued several notices to the developers for want of payment of due EDC amount, wherein it is stated that default by the developers would render their license null and void.

Thus, the Commission finds it appropriate and necessary to intervene at this stage to safeguard the members of the Informant against the irreparable and irretrievable losses that may be caused to them.

Regarding the scope of intervention in the form of interim relief, it is observed that the Honble Supreme Court in Dalpat Kumar (supra), has explained as under: The phrases prima facie case balance of convenience and irreparable loss are not rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations presented by mans ingenuity in given facts and circumstances, but always is hedged with sound exercise of judicial discretion to meet the ends of justice.

In view of the foregoing, the Commission finds that the facts of the case make it evident that there is a need for intervention to meet the ends of justice.

While the Commission acknowledges that the collection of EDC is important for the OPs to undertake and carry out the External Development Works in the Sohna area, the fact remains that there is inaction on the part of the OPs to carry out their duties despite collection of Rs. 400 crore (approximately) for the said purpose.

Keeping this in mind, the Commission finds it appropriate to restrain the OPs from taking any coercive steps with respect to the payment of remaining installments of EDC from those developers who have paid 10 (ten percent) of EDC and deposited 25 (twenty-five percent) of EDC in the form of bank guarantee.

No interest or penal interest shall be charged on the remaining installments from such developers.

However, if any amount has been collected by the developers from consumers towards EDC, the same shall be deposited with OP-1.

Further, no coercive action shall be taken by the OPs with respect to the licenses granted to the developers and status quo shall be maintained.

This order shall remain in operation till the final disposal of the proceedings before the Commission or till further orders, whichever occurs earlier.

In the meanwhile, if the OPs initiate steps for acquisition of land for the purposes of undertaking External Development Works for the provision of basic facilities like water supply, sewerage, drains, roads, electrical works, etc., in the area as per the Sohna Master Plan, they may approach the Commission for variation of this order.

It is noted from the interim relief application that the Informant has also sought relief with respect to payment of IDC as well, which the developers are required to pay to the OPs upfront in two instalments within six months.

However, during the hearing, the Informant did not press for this relief.

Further, the OPs have submitted that 90 percent of IDC has already been collected from the developers.

Thus, the Commission finds that the prayer with respect to IDC does not merit interim intervention.

Accordingly, no interim relief is granted with respect to IDC by way of this order.

The Secretary is directed to send a copy of this order to the parties forthwith.

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Fact RulingByLowerCourt Fact ArgumentPetitioner Fact ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentPetitioner ArgumentRespondent ArgumentRespondent ArgumentRespondent ArgumentRespondent ArgumentRespondent ArgumentRespondent ArgumentRespondent ArgumentRespondent ArgumentRespondent ArgumentRespondent None Fact Fact Fact PrecedentNotReliedUpon Fact Fact ArgumentPetitioner ArgumentPetitioner Fact RatioOfTheDecision PrecedentReliedUpon RatioOfTheDecision RulingByLowerCourt RulingByLowerCourt RulingByLowerCourt RulingByLowerCourt RulingByLowerCourt RulingByLowerCourt PrecedentReliedUpon PrecedentReliedUpon RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision PrecedentReliedUpon PrecedentReliedUpon PrecedentReliedUpon PrecedentReliedUpon PrecedentReliedUpon PrecedentReliedUpon PrecedentReliedUpon RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision PrecedentReliedUpon PrecedentReliedUpon PrecedentReliedUpon PrecedentReliedUpon RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision PrecedentReliedUpon RatioOfTheDecision RatioOfTheDecision RulingByPresentCourt RulingByPresentCourt RulingByPresentCourt RulingByPresentCourt RulingByPresentCourt RulingByPresentCourt RatioOfTheDecision RatioOfTheDecision RatioOfTheDecision RulingByPresentCourt RulingByPresentCourt RulingByPresentCourt