D. Dhanuka, J. By this petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short the said Arbitration Act), the petitioner has impugned the arbitral award dated 6th March 2013 allowing some of the claims made by the respondent and rejecting the counter claims made by the petitioner.

Some of the relevant facts for the purpose of deciding this petition are as under : The respondent was the original claimant in the arbitral proceedings whereas the petitioner herein was the original respondent.

Pursuant to a notice inviting tenders issued by the petitioner, the respondent submitted its bid for providing and fixing vitrified tiles flooring over existing flooring from ground to sixth floor at Aayakar Bhavan, Mumbai.

On 22nd July 2010, the petitioner issued a letter of acceptance in favour of the respondent in respect of the said work.

The petitioner requested the respondent to arrange to start the work at once as 12 months time was given for completing the same.

The bid of the respondent was the lowest bid.

The respondent had quoted an amount of Rs.1,62,44,100/-which was 6.22 below the estimated cost of Rs.1,73,21,362/-.

The parties, thereafter, signed the contract agreement.

Special Condition Number 8 of the contract provided that unless otherwise specified, the brand make of the material, as specified in the item, nomenclature shall be used in the work.

In case of non availability of the brand specified in the contract, the contractor shall be allowed to use alternate equivalent brand of material subject to submission of documentary evidence of non availability of the specified brand.

It is the case of the petitioner that the respondent had considered all the aspects in the tendered documents and had quoted its rates keeping in view the prevailing market rates for various items inclusive of vitrified tiles of size 60x60 cm manufactured by M s.

H R Johnson (India) Limited having the brand known as NUVOLTA DC OBERON DC.

It is the case of the petitioner that only in case of non availability of the brand specified in the contract, the respondent could be allowed to use alternate equivalent brand of material after submission of documentary evidence of non availability of the specified brand.

Since the respondent was not providing and fixing vitrified tiles as per the terms of the agreement, the petitioner issued a show cause notice on 7th October 2010 calling upon the respondent to show cause as to why an action against the respondent be not taken against the respondent on account of the breach of the contract.

The respondent replied to the said show cause notice vide letter dated 27th October 2010.

By a letter dated 16th November 2010, the petitioner issued a letter thereby determining the contract and informing the respondent that the earnest money deposit and the security deposit were already recovered and the performance guarantee stood absolutely forfeited to the government and should be absolutely at the disposal of the government.

The respondent was further informed that the petitioner would take out such part of the work out of hand of the respondent as remained unexecuted for giving it to another contractor to complete the work and then the respondent shall have no claim for compensation for any loss sustained by the respondent by reasons of the respondent having purchased or procured any materials or entered into any engagements or made any advances on account of or with a view to the execution of work or performance of the contract.

The said letter was without prejudice to the rights of the petitioner to take action under any other clauses or sub-clauses of the agreement and to realize government dues and losses and damages whatsoever under those provisions of the contract.

The respondent by its advocates letter dated 26th November 2010 responded to the said letter dated 16th November 2010 and alleged that the repeated pressurizing tactics for the use of Johnson tiles despite the fact that the contract provided otherwise was a clear abuse of dominant position.

The respondent placed reliance on Section 4 of the Competition Act, 2002 in support of this contention.

In the said letter, the respondent alleged that the respondent had always shown inclination towards performance on its part of contract and had always shown willingness to use equivalent brand for executing the work, however, the petitioner never approved the equivalent brand though the contract provided for supply of the equivalent brand.

By the said letter, the respondent conveyed that the respondent was still ready and willing to execute the said work subject to approval of equivalent brand.

The respondent conveyed that if the petitioner was insisting on execution of work with H R Johnson, the respondent will request the petitioner to foreclose the contract and refund the performance guarantee amount without liability on either side.

The respondent reserved its right to claim damages, if the said proposal was not acceptable to the petitioner.

By a letter dated 7th December 2010, the petitioner replied to the legal notice dated 26th November 2010 and conveyed the respondent that sufficient time was given from the date of the award of the contract till the issuance of final notice as per the contract but the respondent had failed to start the work.

It was also conveyed that all the bidders were made clear to have the fair competition amongst them and at no stage of tendering the process, the respondent was prohibited from participating fair competition.

It was further stated that thus it was merely a breach of contract from the respondent and hence the final notice.

The dispute arose between the parties.

The matter was referred to arbitration.

The petitioner also made enquiry with manufacturing company i.e. M s.

H R. Johnson (India) Limited In response to the said enquiry made by the petitioner, the said M section H Johnson (India) Limited informed the petitioner that the requirement of the petitioner for DC design 600x600 Marbonite Nuvolta tiles for Income Tax Building Project at Mumbai was regular and fast moving design of their make.

Before the learned arbitrator, the respondent made various claims.

The said claims were resisted by the petitioner on various grounds by filing written statement.

The petitioner also made counter claim before the learned arbitrator.

By an arbitral award dated 6th March 2013, the learned arbitrator allowed the claim number 1 made by the respondent towards refund of earnest money deposit and performance guarantee and directed the petitioner to pay a sum of Rs.11,58,632/-to the respondent.

In so far as the claim number 3 i.e. loss of profit demanded by the respondent is concerned, the learned arbitrator rejected the said claim.

The learned arbitrator awarded simple interest 10 p.a. on the claim number 1 in favour of the respondent.

The learned arbitrator directed both the parties to bear the arbitration cost.

In so far as the counter claim made by the petitioner is concerned, the learned arbitrator rejected the same.

This arbitral award is impugned by the petitioner on various grounds.

Mr. Sharma, learned counsel for the petitioner invited my attention to various terms and conditions of the contract including condition number 8 of the special condition of the contract and submits that the respondent after evaluating the terms and conditions of the tender, had submitted the documents of competitive grade keeping in mind its obligation to supply various items including vitrified tiles of required size manufacturing of H R Johnson (India) Limited having a particular brand or equivalent.

He submits that only if the said particular brand was not available as specified in the contract, the respondent could have been allowed to use the specified brand or material only after the respondent submitting the documentary evidence for non availability of the specific or equivalent brand.

It is submitted that in response to the petitioners enquiry, the said company informed the petitioner that the requirement of the petitioner was regular brand and was available.

He submits that the respondent thus committed breaches of the terms and conditions of the contract by not providing the particular brand specified in the contract though the same was available.

The respondent, in any event, did not submit any documentary evidence of non- availability of the said specified brand and thus there was no question of the petitioner permitting the respondent to supply any alternate equivalent brand in view of the breach of the terms of the contract.

Learned counsel submits that since the respondent committed a breach by not supplying the requisite brand of the material, the petitioner after giving show cause notice to the respondent and after considering reply of the respondent which was not satisfactory, the petitioner was justified in terminating the contract awarded to the respondent and in forfeiting the security deposit including performance guarantee.

He submits that difference between the 1st lowest and the 2nd lowest bidders was more than Rs.30 lacs in the tender of estimated cost Rs.173 lacs.

He submits that the respondent thus by quoting lower rate obtained the contract and thereafter, refused to supply material as provided in the contract in breach thereof.

The petitioner was thus justified in forfeiting the security deposit and the performance guarantee.

Learned counsel appearing for the petitioner then submits that the learned arbitrator has rendered a contradictory and inconsistent finding in the impugned award.

The learned arbitrator has also held that in the absence of list of equivalent brands in the contract, the interpretation of the respondent herein was not acceptable.

It is held that the respondent did not succeed on the basis of the contract conditions.

He submits that on one hand, it is held by the learned arbitrator that he was inclined to agree with the petitioner herein that only M section H R. Johnson (India) Limited was to be used and in case of non-availability of M section H R. Johnson (India) Limited, equivalent brand as an alternative could have been utilized and on the other hand, the learned arbitrator after rendering such findings in favour of the petitioner has held that Special Condition Number 8 was in violation of section 23 of the Indian Contract Act, 1872 and section 3 of Competition Act, 2002 and the contract should be considered void in view of the said alleged violation.

He submits that the provisions of Competition Act, 2002 were not applicable to the parties at all.

The impugned award applying the provisions of Competition Act, 2002 to the parties is patently illegal.

He submits that in the contract, the petitioner had already provided that if M section H R. Johnson Vitrified Tiles was not available, then the contractor was permitted to use alternative to the said tiles.

Therefore the petitioner was not put on dominant position and thus question of applicability of provisions of the said Competition Act, 2002 did not arise.

Learned counsel also invited my attention to the findings of the learned arbitrator that Income Tax Department had not specifically mentioned disregarding the statement of Department that the Income Tax Department wanted tiles as per the sample and description supplied by it.

He submits that the said samples were answering the description of Johnson Vitrified tiles and thus it could not be said that Income Tax Department had not given its choice for the said Johnson vitrified tiles.

He submits that the parties are always free to invite in the terms and conditions of the contract a particular quality and brand and the same would not attract the provisions of the Competition Act, 2002.

Learned counsel for the petitioner submits that there was no prayer in the statement of claim for declaration of the Condition Number 8 of Special Conditions as void or contrary to section 23 of the Indian Contract Act.

Learned arbitrator exceeded his jurisdiction by declaring the contract as void.

Learned counsel for the respondent on the other hand submits that since the petitioner had given final notice on 7th December, 2010, the notice dated 16th November, 2010 issued by the petitioner was not a termination notice.

The petitioner thus could not have forfeited the security deposit and could not have encashed the performance guarantee.

It is submitted by the learned counsel that since the manufacturers of the said Johnson Vitrified tiles were demanding exorbitant rate, the respondent had offered to supply the equivalent tile, which the petitioner refused to accept.

The respondent has thus not committed any default in offering the alternative brand.

She submits that the learned arbitrator has rendered a finding which is not perverse and thus this court cannot interfere with this finding of fact.

Learned counsel for the respondent submits that the petitioner could not have insisted for a use of a particular brand and thus imposing such condition in the contract was in violation of sections 3 and 4 of the Competition Act, and thus contrary to section 23 of the Indian Contract Act, 1872.

She submits that the contract was immoral and oppose to public policy and thus the learned arbitrator was justifying in holding such condition of contract as void.

It is submitted by the learned counsel that the learned arbitrator has only granted refund of earnest money deposit and security deposit in favour of the respondent and has not awarded claim for loss of profit.

The award rendered by the learned arbitrator is fair and reasonable and shall not be interfered with by this court.

Learned counsel for the respondent placed reliance on Delhi Schedule Rates for the year 2007 and would submits that even in the said schedule rates, the brand name of the product prescribed therein stood deleted.

She submits that it is thus clear that the petitioner could not have insisted for a particular brand or tiles contrary to sections 3 and 4 of the Competition Act, 2002.

She submits that the Income Tax Department never insisted for supply of Johnson Vitrified tiles.

The learned arbitrator has thus rightly rendered a finding to that effect.

Learned counsel for the respondent placed reliance on the judgment of Supreme Court in case of K.V. Mohammed Zakir vs Regional Sports Centre  : 2010 (1) Supreme Court Journal 4 and in particular paragraph 6 and would submits that this court should not substitute its own view for the view taken by the arbitrator while dealing with the proceedings for setting aside an award.

Paragraph 6 of the said judgment read thus :- We have heard counsel for the parties and we have perused the award.

The award runs into considerable detail as it is a speaking award.

While dealing with this part of the claim, the arbitrator in paragraph 5.11, 5.12 and 5.13 of the award has given detailed reasons.

We are of the view that the settled position in law is that Court should not substitute its own view for the view taken by the arbitrator while dealing with the proceedings for setting aside an award.

It is equally well settled, where the arbitrator acts within jurisdiction, the reasonableness of the reasons given by the arbitrator is not open to scrutiny by Courts.

However, if the reasons are such as no person of ordinary prudence can ever approve of them or if the reasons are so outrageous in their defiance of logic that they shock the conscience of the Court, then it is a different situation.

And in an appropriate case the Court may interfere.

However, the degree of such unreasonableness must be greater than the standard in a certiorari proceeding.

We find that the arbitrator in this case has reached a finding of fact on the materials on record about the delay on the part of the respondent and it has also been held by the arbitrator that because of such delay the claimant was put in great difficulty in completing the work in time.

It is nobodys case that by doing so the arbitrator has acted beyond his jurisdiction or committed any legal misconduct.

Learned counsel for the respondent placed reliance on the judgment of Supreme Court in case of Reva Electric Car Company Private Limited vs Green Mobil  : (2012) 2 SCC 93 and in particular paragraph 54 and it is submitted that the arbitral tribunal can declare a provision of the agreement as void.

Paragraph 54 of the said judgment of the Supreme Court in case of Reva Electric Car Company Private Limited (supra) reads thus :- Under Section 16(1), the legislature makes it clear that while considering any objection with respect to the existence or validity of the arbitration agreement, the arbitration clause which formed part of the contract, has to be treated as an agreement independent of the other terms of the contract.

To ensure that there is no misunderstanding, Section 16(1) (b) further provides that even if the Arbitral Tribunal concludes that the contract is null and void, it should not result, as a matter of law, in an automatic invalidation of the arbitration clause.

Section 16(1)(a) presumes the existence of a valid arbitration clause and mandates the same to be treated as an agreement independent of the other terms of the contract.

By virtue of Section 16(1)(b), it continues to be enforceable notwithstanding a declaration of the contract being null and void.

In view of the provisions contained in Section 16(1) of the Arbitration and Conciliation Act, 1996, it would not be possible to accept the submission of Ms Ahmadi that with the termination of the MoU on , the arbitration clause would also cease to exist.

Learned counsel for the respondent also placed reliance on the judgment of Supreme Court in case of World Sport Group (Mauritius) Limited vs MSM Satellite (Singapore) Pte.

Limited  : (2014) 11 SCC 639 and in particular paragraphs 30 and 42.

She submits that there was no provision in the contract that the arbitrator cannot declare a provision of the contract void.

In rejoinder, Mr. Sharma, learned counsel for the petitioner submits that the notice dated 7th December, 2010 was not a final notice but a notice dated 16th November, 2010 was a final notice.

He submits that the respondent was bound by the terms of the contract.

The respondent deliberately chose to quote reduced rates and below the estimated bid and after obtaining the contract from the petitioner failed and neglected to supply the material to the petitioner on the false pretext.

The petitioner was thus justified in forfeiting the security deposit and money by exercising right under the provisions of the contract.

He submits that Income Tax Department was the end user.

The Competition Act 2002 was not applicable to the contract entered into between the parties.

He submits that the award shows patent illegality on the face of the award.

The findings rendered by the learned arbitrator are totally perverse and this court shall interfere with such perverse finding and shall set aside the same.

REASONS AND CONCLUSIONS :- A perusal of the contract entered into between the parties clearly indicates that the respondent was under obligation to use the brand make of the material as specified in the nomenclature unless it was specified.

Only in the case of the non- availability of the brand specified in the contract, the contractor was permitted to use alternative equivalent brand of the material subject to submission of documentary evidence of non-availability of specified brand.

The relevant clause of the contract is extracted as under :- Size of tile 60 x 60 cm, make NUVOLTA DC of H R Johnson (India) Limited or equivalent Unless otherwise specified, the brand make of the material as specified in the item nomenclature shall be used in the work.

In case of non availability of the brand specified in the contract the contractor shall be allowed to use alternate equivalent brand of the material subject to submission of documentary evidence of non availability of specified brand.

The necessary cost adjustment on account of above change shall be made for the material with wastage and contractors profit.

The petitioner had produced before the learned arbitrator a letter issued by M section H R. Johnson (India) Limited informing the petitioner that the said brand of vitrified tiles which was described in the contract was a regular item and was available.

The respondent did not bring it to the notice of the petitioner that the said brand was not available.

The only case of the respondent was that the manufacturer of the said brand was demanding exorbitant price.

The respondent did not produce any documentary evidence of non-availability of the said specified brand to the petitioner.

A perusal of the record indicates that the rate quoted by the respondent was after considering the terms and conditions of the contract.

The rates quoted by the respondent was 6 below the estimated price.

The difference between the first lowest price and the second lowest bidder was more than Rs.30 lacs.

It is thus clear that the respondent deliberately quoted the rates which were found the lowest with a view to obtain the said contract and thereafter not to supply the particular brand in terms of the contract.

The petitioner was thus not bound to permit the respondent to supply any other brand when the brand mentioned in the contract was available in the market.

A perusal of the impugned award clearly indicates that the learned arbitrator has rendered a finding in favour of the petitioner that the respondent was liable to use the only H R. Johnson Vitrified Tiles and in case of non-availability of the said tiles, equivalent brand as an alternative could have been utilised.

Learned arbitrator also held that in the absence of equivalent brand, the interpretation of the contractor shall not acceptable and thus the contractor did not succeed on the basis of the contract condition.

It is not in dispute that the respondent has not challenged the said finding and the same has achieved finality.

Learned arbitrator however has declared the Special Condition Number 8 as violative of Section 23 of the Indian Contract Act, 1872 and Section 3 of the Competition Act, 2002 without giving any reason.

A perusal of the statement of claim clearly indicates that it was not the prayer of the respondent that any part of the condition of contract shall be declared as void by the learned arbitrator.

The learned arbitrator in my view has exceeded his jurisdiction by declaring condition of contract as void allegedly to be in violation of section 23 of the Indian Contract Act and section 3 of the Competition Act, 2002.

Be that as it may, it is not in dispute that in the contract entered into between the parties, the petitioner had provided that if the brand NUVOLTA DC of H R Johnson was not available, the respondent was permitted to use alternative equivalent brand however on the condition that the contractor would submit a certificate of non-availability of the specified brand.

On perusal of the definition of Enterprise defined under section 2(h) of the Competition Act, 2002 it is clear that the petitioner would not satisfy the definition of the Enterprise since the petitioner was not engaged in any activity relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate.

It is thus clear that sections 3 and 4 of the Competition Act, 2002 which was relied upon by the learned arbitrator in the impugned award would not even apply to the petitioner.

The provisions of the Competition Act, 2002 extended to the petitioner by the learned arbitrator shows patent illegality on the face of the award.

The entire award allowing claim numbers 1 and 2 in favour of the respondent is based on such patently illegal findings rendered by the learned arbitrator.

Insofar as the findings of the learned arbitrator that the Income Tax Department had never mentioned use of H R Johnson in correspondence is also perverse.

A perusal of the record indicates that Income Tax Department had provided a sample to the petitioner showing their requirement of the brand to be used in the work awarded to the petitioner which was matching with the H R Johnson brand.

Be that as it may, it is not in dispute that the contract had provided for a particular brand.

The learned arbitrator though rendered a finding of fact that the interpretation of the contractor was not acceptable in the absence of equivalent brand in the contract, the learned arbitrator has rendered a perverse finding that the Income Tax Department had not mentioned the use of the H R Johnson in the correspondence.

The award shows total perversity and deserves to be set aside.

Insofar as judgment of Supreme Court in case of K.V. Mohammed Zakir(supra) relied upon by the learned counsel for the respondent in support of the submission that interpretation of the learned arbitrator shall not be substituted by the court is concerned, in my view since the interpretation of the provisions of the contract and declaring the contract as void is patently illegal and without jurisdiction, and is impossible interpretation which shocks the conscience of the court, this court can interfere with such interpretation.

Supreme Court in the said judgment has held that if the reasons rendered by the arbitrator are such as no person or ordinary prudence can ever approve of them or if the reasons are so outrageous in their defiance of logic that they shock the conscience of the court, then it is a different situation and the court in appropriate court may interfere with such award.

This court has ample power to interfere with such award and set aside the same under section 34 of the Arbitration Act.

Insofar as judgment of Supreme Court in case of Reva Electric Car Company Private Limited (supra) relied upon by the learned counsel for the respondent in support of the contention that the arbitrator can declare the contract as void is concerned, Supreme Court in the said judgment has held that if the arbitral tribunal concludes that the contract is null and void, it should not result, as a matter of law, in an automatic invalidation of the arbitration clause.

In my view the said judgment does not assist the petitioner.

Even otherwise there was no prayer for declaring the contract as void in the statement of claim filed by the respondent.

The learned arbitrator thus could not have declared the said contract or any part thereof as void.

The said judgment of Supreme Court in case of Reva Electric Car Company Private Limited (supra) thus does not assist the case of the respondent.

Insofar as judgment of Supreme Court in case of World Sport Group (Mauritius) Limited (supra) relied upon by the respondent is concerned, the said judgment is not at all applicable to the facts of this case and the reliance placed thereon is totally misplaced.

Learned counsel for the respondent could not dispute that such provisions giving right to the petitioner to forfeit the security deposit and retention money existed in the contract.

Learned counsel for the respondent did not challenge the said rights exercised by the petitioner on any other ground.

In my view the findings rendered by the learned arbitrator is inconsistent and contradictory and shows patent illegality on the face of the award.

The findings rendered by the learned arbitrator are perverse while declaring the contract entered into between the parties as void and deserves to be set aside.

In my view the award is totally unsustainable being in conflict with public policy and deserves to be set aside.

Arbitration Petition is made absolute in terms of prayer clause (a) in so far as claim numbers1 and 2 allowed by the learned arbitrator and the corresponding interest thereon is concerned.

Award in respect of claim numbers1 and 2 is set aside.

Rest of the award is upheld.

There shall be no order as to costs.

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SC_B Himmatlal Agrawal vs Competition Commission of India and Ors 18052018 SC

K. Sikri, J. A neat question of law which arises for consideration in this appeal is as to whether the order of the National Company Law Appellate Tribunal (hereinafter referred to as the Appellate Tribunal) dismissing the main appeal itself of the Appellant herein for non-compliance of the direction to deposit the amount as a condition for grant of stay, is justified and legal.

In order to decide this question, it is not necessary to take stock of the factual matrix in detail.

Narration of the following facts, which are germane for deciding this appeal, would suffice.

The Appellant herein is a partnership firm, engaged in the business of transportation of coal and sand since 1981.

In June, 2014, the Appellant firm participated in two tenders, bearing numbers 03/2014-15 and 06/2014-15 floated by the Respondent Number 2 herein i.e. M section Western Coalfields Limited.

The Appellant firm was L-II and not the lowest bidder for allotment of the tenders.

In June, 2015, the Appellant firm received a notice from the Competition Commission of India, New Delhi (hereinafter referred to as CCI) asking to show cause Under Section 19(1)(a) read with Section 3 of the Competition Act, 2002 (hereinafter referred to as the Act).

In the said notice, it was alleged that the Appellant firm was involved in anti-competitive and unfair trade practices in collusion with nine other firms.

The Appellant firm filed its reply.

The CCI after considering the same passed orders Under Section 26 of the Act and directed the inquiry to be conducted by the Director General (DG) of the CCI.

DG submitted its report after the inquiry giving his findings to the effect that the Appellant had indulged in anti-competitive and unfair trade practices in collusion with the other firms.

The Appellant was given a chance to file its objections thereto.

After considering those objections, the CCI passed orders dated September 14, 2017 affirming the findings of the DG and imposed penalties on the Appellant firm as well as nine parties.

Insofar as Appellant is concerned, penalty of Rs. 3.61 crores has been imposed.

The Appellant filed the statutory appeal there against before the Appellate Tribunal which was registered as Competition Appeal (AT) Number 24/2017.

The Appellant also prayed for interim stay of the penalty order.

Arguments were heard on admission as well as on stay.

Vide orders dated November 20, 2017, Appellate Tribunal admitted the appeal.

It also granted stay on the orders of the CCI with the condition of depositing 10 of the total penalty (i.e. a sum of Rs. 36,12,222/-) imposed by CCI, to be paid by the Appellant, within two weeks i.e. by December 4, 2017.

The Appellant could not fulfill the said condition of deposit.

When the matter was taken up on December 4, 2017, the Appellant pleaded before the Appellate Tribunal that non-compliance because of financial crunch which the Appellant was facing.

The Appellate Tribunal, however, passed orders dated December 4, 2017 to the following effect: By way of last opportunity, the Appellant is given time till 20th December, 2017 to deposit 10 of the penalty amount, failing which, the appeal stands disposed without referring further to the bench.

As per the Appellant, since it was in deep financial trouble, it could not deposit the amount by December 20, 2017 in spite of all bona fide intentions.

The Appellant accordingly filed I.A. Number 84 of 2017 on December 18, 2017 seeking modification of orders dated December 4, 2017.

It was stated in the said application that it had incurred net loss of Rs. 3,72,45,393.94 for the Financial Year 2016-17 and, therefore, was not in a position to deposit the said amount.

The request of the Appellant was, however, not acceded to and vide orders dated December 21, 2017, the Appellate Tribunal has dismissed I.A. Number 84 of 2017.

At the same time, it has dismissed the appeal of the Appellant as well for non-compliance of its order dated December 4, 2017.

The order dated December 21, 2017 reads as under: 21.12.2017 - We find no ground made out to modify our interim order dated 20th November, 2017.

In fact, the stay order was passed on the request of the learned Counsel for the Appellant and the amount having not deposited within the time, last opportunity was given on 4th December, 2017 to deposit the amount.

In terms of the order dated 4th December, 2017 the appeal now stands disposed off without further reference to the Bench.

In view of the order aforesaid dated 4th December, 2017, both the IA Number 84/2017 and Competition Appeal (AT) Number 24/2017 stands disposed off for non-compliance of the Appellate Tribunal.

A pure legal submission which is advanced by the learned Counsel for the Appellant is that even if the Appellant could not comply with orders dated December 4, 2017 vide which conditional stay was granted directing the Appellant to deposit 10 of the penalty amount, the maximum effect thereof was to vacate the stay granted and the Appellate Tribunal was not legally justified in dismissing the appeal itself.

This submission of the Appellant commends acceptance, having due force and substance in law.

From the facts narrated above, it is apparent that order of the CCI was challenged by filing appeal Under Section 53B of the Act.

Along with this appeal, the Appellant had also filed application for stay of the operation of the order of the CCI during the pendency of the appeal.

Appeal was admitted insofar as stay is concerned, which was granted subject to the condition that the Appellant deposits 10 of the amount of penalty imposed by the CCI.

It needs to be understood, in this context, that the condition of deposit was attached to the order of stay.

In case of non-compliance of the said condition, the consequence would be that stay has ceased to operate as the condition for stay is not fulfilled.

However, non-compliance of the conditional order of stay would have no bearing insofar as the main appeal is concerned.

Right to appeal is statutorily provided Under Section 53B of the Act, which reads as under: 53B. Appeal to Appellate Tribunal.

The Central Government or the State Government or a local authority or enterprise or any person, aggrieved by any direction, decision or order referred to in Clause (a) of Section 53A may prefer an appeal to the Appellate Tribunal.

Every appeal Under Sub-section (1) shall be filed within a period of sixty days from the date on which a copy of the direction or decision or order made by the Commission is received by the Central Government or the State Government or a local authority or enterprise or any person referred to in that Sub-section and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of sixty days if it is satisfied that there was sufficient cause for not filing it within that period.

On receipt of an appeal Under Sub-section (1), the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the direction, decision or order appealed against.

The Appellate Tribunal shall send a copy of every order made by it to the Commission and the parties to the appeal.

The appeal filed before the Appellate Tribunal Under Sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal within six months from the date of receipt of the appeal.

The aforesaid provision, thus, confers a right upon any of the aggrieved parties mentioned therein to prefer an appeal to the Appellate Tribunal.

This statutory provision does not impose any condition of pre-deposit for entertaining the appeal.

Therefore, right to file the appeal and have the said appeal decided on merits, if it is filed within the period of limitation, is conferred by the statute and that cannot be taken away by imposing the condition of deposit of an amount leading to dismissal of the main appeal itself if the said condition is not satisfied.

Position would have been different if the provision of appeal itself contained a condition of pre-deposit of certain amount.

That is not so.

Sub-section (3) of Section 53B specifically cast a duty upon the Appellate Tribunal to pass order on appeal, as it thinks fit i.e. either confirming, modifying or setting aside the direction, decision or order appealed against.

It is to be done after giving an opportunity of hearing to the parties to the appeal.

It, thus, clearly implies that appeal has to be decided on merits.

The Appellate Tribunal, which is the creature of a statute, has to act within the domain prescribed by the law statutory provision.

This provision nowhere stipulates that the Appellate Tribunal can direct the Appellant to deposit a certain amount as a condition precedent for hearing the appeal.

In fact, that was not even done in the instant case.

It is stated at the cost of repetition that the condition of deposit of 10 of the penalty was imposed insofar as stay of penalty order passed by the CCI is concerned.

Therefore, at the most, stay could have been vacated.

The Appellate Tribunal, thus, had no jurisdiction to dismiss the appeal itself.

We may mention that the learned Counsel appearing for the CCI had referred to the judgment of this Court in the case of Ultra Tech Cement Limited v. Competition Commission of India and Ors.1 Said judgment has no application to the facts of this case.

That was a case where the Appellant had challenged the jurisdiction of the Appellate Tribunal to pass conditional order i.e. deposit of 10 of the penalty as a condition for grant of stay.

It was argued that the Appellate Tribunal did not have any power to impose such a condition for grant of stay.

This challenge was rejected by the Court holding that Appellate Tribunal could pass a conditional stay order.

No such issue, that has arisen in the instant appeal, was raised therein, namely, whether the Tribunal could dismiss the appeal itself if the condition attached to the grant of stay is not complied with.

Accordingly, we allow this appeal and set aside that part of the impugned order whereby the appeal of the Appellant is dismissed and restore the appeal which shall be decided by the Appellate Tribunal on merits.

We, however, make it clear that as far as stay of the penalty order is concerned, that stood vacated for non-compliance of the condition of deposit of 10 of the penalty and, thus, there is no stay of the CCI order in favour of the Appellant.

No cost.

1 Civil Appeal Numbers 4766-4767 of 2013 with Ors.

decided on June 12, 2013

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SC_Brahm Dutt vs Union of India UOI 20012005 SC

K. Balasubramanyan, J. The Competition Act, 2002 received assent of the President of India on 13.1.2003 and was published in the Gazette of India dated 14.1.2003.

It is an Act to provide for the establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith.

The statement of objects and reasons indicates that the Monopolies and Restrictive Trade Practices Act, 1969 had become obsolete in certain respects in the light of international economic developments relating more particularly to competition laws and there is a need to shift the countrys focus from curbing the monopolies to promoting competition.

Section 1(3) of the Act provides that the Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and provided that different dates may be appointed for different provisions of the Act.

Pursuant to this, some of the sections of the Act were brought into force on 31.

3.2003 vide S.O. 340 (E) and published in the Gazette of India dated 31.3.2003 and majority of the other sections by notification S.O. 715 (E) dated 19.

In view of bringing into force Sections 7 and 8 of the Act, the Central Government had to make prescription for the appointment of a Chairman and the members as composing the Commission in terms of Section 9 of the Act.

In exercise of the Rule making power under Section 63(2)(a) read with Section 9 of the Act, the Central Government made The Competition Commission of India (Selection of Chairperson and Other Members of the Commission) Rules, 2003 and published the same in the Gazette of India on 4.4.2003.

Section 9 of the Act provides for the selection of the Chairperson and the other members as may be prescribed.

The Rules above referred to was that prescription.

Under Rule 3, the Central Government was to constitute a Committee consisting of a person who has been retired Judge of the Supreme Court or a High Court or a retired Chairperson of a Tribunal established under an Act of Parliament or a distinguished jurist or a Senior Advocate for five years or more, a person who had special knowledge of and professional experience of 25 years or more in international trade, economics, business, commerce or industry, a person who had special knowledge of and professional experience of 25 years or more in accountancy, management, finance, public affairs or administration to be nominated by the Central Government.

The Central Government was also to nominate one of the members of the Committee to act as the Chairperson of the Committee.

The function of the Committee was to fill up the vacancies as and when vacancies of Chairperson or a member of the Commission exits or arises or is likely to arise and the reference in that behalf had been made to the Committee by the Central Government.

It is said that the Committee so constituted made a recommendation in terms of Rule 4(3) of the Rules and a Chairman and a member were appointed.

Though, the member claims to have taken charge immediately after being appointed, the person appointed as Chairman, has taken the stand that he had not taken charge since he was content to await the orders of this Court in view of the filing of this Writ Petition.

The present Writ Petition was filed in this Court by a practicing Advocate essentially praying for the relief of striking down Rule 3 of the Competition Commission of India (Selection of Chairperson and Other Members of the Commission) Rules, 2003 (hereinafter referred to as the Rules) and for other consequential reliefs including the issue of a writ of mandamus directing the Union of India to appoint a person who is or has been a Chief Justice of a High Court or a senior Judge of a High Court in India in terms of the directions contained in the decision in S.P. Sampath Kumar v. Union of India and Ors.

: (1987)ILLJ128SC .

The essential challenge was on the basis that the Competition Commission envisaged by the Act was more of a judicial body having adjudicatory powers on questions of importance and legalistic in nature and in the background of the doctrine of separation of powers recognized by the Indian Constitution, the right to appoint the judicial members of the Commission should rest with the Chief Justice of India or his nominee and further the Chairman of the Commission had necessarily to be a retired Chief Justice or Judge of the Supreme Court or of the High Court, to be nominated by the Chief Justice of India or by a Committee presided over by the Chief Justice of India.

In other words, the contention is that the Chairman of the Commission had to be a person connected with the judiciary picked for the job by the head of the judiciary and it should not be a bureaucrat or other person appointed by the executive without reference to the head of the judiciary.

The arguments in that behalf are met by the Union of India essentially on the ground that the Competition Commission was more of a regulatory body and it is a body that requires expertise in the field and such expertise cannot be supplied by members of the judiciary who can, of course, adjudicate upon matters in dispute.

It is further contended that so long as the power of judicial review of the High Courts and the Supreme Court is not taken away or impeded, the right of the Government to appoint the Commission in terms of the statute could not be successfully challenged on the principle of separation of powers recognized by the Constitution.

It was also contended that the Competition Commission was an expert body and it is not as if India was the first country which appointed such a Commission presided over by persons qualified in the relevant disciplines other than judges or judicial officers.

Since the main functions of the expert body were regulatory in nature, there was no merit in the challenge raised in the Writ Petition.

During the pendency of the Writ Petition, two additional counter affidavits were filed on behalf of the Union of India, in which it was submitted that the Government was proposing to make certain amendments to the Act and also Rule 3 of the Rules so as to enable the Chairman and the members to be selected by a Committee presided over by the Chief Justice of India or his nominee.

This position was reiterated at the time of arguments.

Of course, it was also pointed out that the question of amendment had ultimately to rest with the Parliament and the Government was only in a position to propose the amendments as indicated in the additional affidavits.

But it was reiterated that the Chairman of the Commission should be an expert in the field and need not necessarily be a Judge or a retired Judge of the High Court or the Supreme Court.

We find that the amendments which the Union of India proposes to introduce in Parliament would have a clear bearing on the question raised for decision in the Writ Petition essentially based on the separation of powers recognized by the Constitution.

The challenge that there is usurpation of judicial power and conferment of the same on a non- judicial body is sought to be met by taking the stand that an Appellate Authority would be constituted and that body would essentially be a judicial body conforming to the concept of separation of judicial powers as recognized by this Court.

In the Writ Petition the challenge is essentially general in nature and how far that general challenge would be met by the proposed amendments is a question that has to be considered later, if and when, the amendments are made to the enactment.

In fact, what is contended by learned counsel for the petitioner is that the prospect of an amendment or the proposal for an amendment cannot be taken note of at this stage.

Since, we feel that it will be appropriate to consider the validity of the relevant provisions of the Act with particular reference to Rule 3 of the Rules and Section 8(2) of the Act, after the enactment is amended as sought to be held out by the Union of India in its counter affidavits, we are satisfied that it will not be proper to pronounce on the question at this stage.

On the whole, we feel that it will be appropriate to postpone a decision on the question after the amendments, if any, to the Act are carried out and without prejudice to the rights of the petitioner to approach this Court again with specific averments in support of the challenge with reference to the various sections of the Act on the basis of the arguments that were raised before us at the time of hearing.

Therefore, we decline to answer at this stage, the challenge raised by the petitioner and leave open all questions to be decided in an appropriate Writ Petition, in the context of the submission in the counter affidavits filed on behalf of the Union of India that certain amendments to the enactment are proposed and a bill in that behalf would be introduced in Parliament.

We may observe that if an expert body is to be created as submitted on behalf of the Union of India consistent with what is said to be the international practice, it might be appropriate for the respondents to consider the creation of two separate bodies, one with expertise that is advisory and regulatory and the other adjudicatory.

This followed up by an appellate body as contemplated by the proposed amendment, can go a long way, in meeting the challenge sought to be raised in this Writ Petition based on the doctrine of separation of powers recognized by the Constitution.

Any way, it is for those who are concerned with the process of amendment to consider that aspect.

It cannot be gainsaid that the Commission as now contemplated, has a number of adjudicatory functions as well.

Thus, leaving open all questions regarding the validity of the enactment including the validity of Rule 3 of the Rules to be decided after the amendment of the Act as held out is made or attempted, we close this Writ Petition declining to pronounce on the matters argued before us in a theoretical context and based only on general pleadings on the effect of the various provisions to support the challenge based on the doctrine of separation of powers.

The Writ Petition is thus disposed of leaving open all the relevant questions.

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SC_Competition Commission of India vs Fast Way Transmission Pvt Ltd and Ors 24012018 SC

Rohinton Fali Nariman, J. The present appeal by the Competition Commission of India raises several interesting questions relating to its functions under the Competition Act, 2002.

The brief facts necessary to appreciate the controversy which arises in the present case are as follows: An agreement dated 1st August, 2010 was entered into between Respondent Number 5, who was the broadcaster of a News Channel called Day Night News, and Respondent Number 1 to 4 who are Multi System Operators (hereinafter referred to as MSOs) who carried the aforesaid channel to persons who watch Cable T.V. A channel placement agreement was entered into, on the same day, between the broadcaster and the MSOs, all of which are stated to belong to the Fast Away Group.

By notices of termination dated 19th January, 2011, the aforesaid agreements were terminated by relying on a Clause of the said agreements which entitled them to do so on the mere giving of a thirty day notice.

This being the case, Respondent Number 5 complained about the aforesaid termination.

The Director General of Investigation looked into the complaint of the broadcaster, investigated the matter, and ultimately delivered its report to the Competition Commission, in which it found that the said MSOs indulged in practices which were violative of Sections 3 and 4 of the Competition Commission Act, 2002.

Going by this report, and after hearing the parties to the dispute, the Competition Commission, by its detailed order dated 3rd July, 2012, first held that according to it, the relevant market to be looked at for the purpose of Sections 3 and 4 would be the State of Punjab and Chandigarh.

Having regard to this market, so far as Cable TV was concerned, a finding was entered stating that the MSO group had 85 of the subscriber share in that market, and was therefore, in a dominant position which could be misused.

Ultimately, it found on facts that the group had never terminated any such similar agreement before the due date except in the instant case, and also found that this could not be said to be due to low TRP ratings, inasmuch as the complainants TRP rating was almost equal to that of some other channels.

The Commission then went on to find as follows: 6.4.9 The evidences as above confirm that there were disruptions in the telecast of the channel.

The Commission further observes that the OP has argued that as per TRAI Regulations it is not bound by must carry, as against the informant who is bound by a must provide provision.

However, the argument of the OP group does not take away the fact that the informant is dependent on it for transmission of its channel and if it is denied that, it cannot get access to the market.

It is not that the informant was not paying the placement fee charged by the OP group.

There was no dispute on non-payment of placement or carriage charges.

An agreement was duly executed between the informant and the OP group for transmission of the channels of the former.

6.4.10 However, due to the fact that the subscriber base of the OPs is in excess of 40 lacs, every broadcaster including the informant dependent upon their network.

In such a situation, the Commission observes that the OP is in position to affect the market in its favour.

Due to its market power, the OP group has denied the opportunity for transmission of channel of the informant.

The group has no justification for termination of the agreement and its argument for justifying its conduct is not based on any sound footings.

Its argument regarding shortage of spectrum for non-transmission of the informants channel in face of the fact that the spectrum constraint might have been considered at the time of entering into agreement with the informant upon charge of premium from the broadcaster.

Once that was considered, the question of shortage of spectrum during the period of the agreement does not arise.

Similarly, the argument of low TRP is also not justified since in past there has been no practice of review of any agreement on the basis of TRP ratings in the middle of an agreement.

The Commission observes that the argument of spectrum shortage and low TRP is merely an afterthought to justify its conduct.

6.4.11 The conduct of OP has resulted in loss to the informant-broadcaster as well as denial of services to the consumers who want to watch the channel of the informant.

As on date the Informant has access to only 56,000 households on the cable TV in the state of Punjab Chandigarh, where about 45 lacs households are connected on cable network.

Thus, the informant has been effectively wiped out from the entire relevant market by the conduct of OPs.

6.4.12 In the light of the facts and circumstances of this case the Commission observes that due to the acts of the OP group the informant has been denied the market access and opportunity to compete and holds that violation of the provisions of Section 4(2)(c) of the Act gets established.

Given the aforesaid finding, the Commission thereafter imposed a penalty in exercise of its power Under Section 27 of the Act of Rs. 8,40,01,141/-.

The appeal by the MSOs group to the Appellate Tribunal found favour with the aforesaid Tribunal.

Essentially, the Tribunals finding was that the denial of market access Under Section 4(2)(c) can only be by one competitor against another, and that as a broadcaster cannot be said to compete with MSOs, there would be no violation of either Section 3 or Section 4 of the Act.

On this short ground the appeal stood allowed.

Shri P.S. Narsimha, learned Additional Solicitor General, appearing on behalf of the Competition Commission, who is the sole Appellant before us, has argued that the role of the Competition Commission is delineated in the preamble read with certain provisions of the Act, as a positive one.

The Commission has to prevent practices having an adverse effect on competition, to promote and sustain competition in markets, as also to protect the interest of consumers, so that freedom of trade is ensured which in turn leads to healthy economic development of the nation as a whole.

Viewed in this light, and after referring to certain other provisions of the Act, the learned Additional Solicitor General argued that the Appellate Tribunal has construed the Act in a constricted manner which would impede the Commissions functioning in future cases.

With his usual fairness, he has left it to the court to decide the amount of penalty that ought to be imposed on the facts of the case.

Learned senior Counsel appearing on behalf of the Respondent MSOs has been equally fair to the Court, and has brought to our notice the judgment of the Telecom Disputes and Settlement Appellate Tribunal (TDSAT) dated 25th April, 2012 in which this very termination by the MSOs in the present case was held to be unlawful, in that Regulation 4.2 of the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations, 2004 was breached.

Clause 4.2 of the aforesaid Regulation, which overrides agreements between the parties, specifically speaks about a three week notice to the broadcaster clearly giving reasons for the proposed action of effacing transmission of a TV channel by the aforesaid MSOs.

The notices of termination dated 19th January, 2011 do not conform to the aforesaid Regulation as reasons for the proposed termination have not been given.

He further argues that no case for penalty has been made out against his clients for the reason that, at the relevant time, the analogue platform was used, and the operational capacity of such platform was only for 80 channels as against the existing channels of about 550.

He went on to add that the TRP ratings of the broadcaster, namely, Respondent Number 5, was the lowest by far among all other news channels, getting a rating of only 3.8 as against the lowest rated news channel, which was MH Channel, of 7.

This, according to him, was because of an experiment conducted by Respondent Number 5 which failed, because it broadcast news in three different languages, and since most of the viewers were not familiar with each of these languages, the channel failed and Respondent Number 5 was no longer in business.

Therefore, according to him, even though technically speaking, Regulation 4.2 was breached, yet a notice of termination could have been given stating the aforesaid reasons as to why the agreement between the MSOs and the broadcaster was terminated.

This being the case it is clear that the termination of the agreement did not take place because of the MSOs dominant position in the market, but because of the factors aforestated.

In his view, therefore, this is not a case in which penalty should have been imposed.

We have heard learned Counsel for the parties.

It is important to advert first to the provisions of the Act.

The Preamble to the Act reads as under: An Act to provide, keeping in view of the economic development of the country, for the establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto.

Section 2 Definitions- In this Act, unless the context otherwise requires,- (b) agreement includes any arrangement or understanding or action in concert,- whether or not, such arrangement, understanding or action is formal or in writing or whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings (f) consumer means any person who- buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, whether such purchase of goods is for resale or for any commercial purpose or for personal use hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person whether such hiring or availing of services is for any commercial purpose or for personal use (m) practice includes any practice relating to the carrying on of any trade by a person or an enterprise (r) relevant market means the market which may be determined by the Commission with reference to the relevant product market or the relevant geographic market or with reference to both the markets Section 4 Abuse of dominant position- No enterprise or group shall abuse its dominant position.

There shall be an abuse of dominant position Under Sub-section (1), if an enterprise or a group- (a) directly or indirectly, imposes unfair or discriminatory- condition in purchase or sale of goods or service or price in purchase or sale (including predatory price) of goods or service.

Explanation-For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or services referred to in Sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in Sub-clause (ii) shall not include such discriminatory conditions or prices which may be adopted to meet the competition or (b) limits or restricts- production of goods or provision of services or market therefor or technical or scientific development relating to goods or services to the prejudice of consumers or (c) indulges in practice or practices resulting in denial of market access in any manner or (d) makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts or (e) uses its dominant position in one relevant market to enter into, or protect, other relevant market.

Explanation-For the purposes of this section, the expression- (a) 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 (b) predatory price means the sale of goods or provision of services, at a price which is below the cost, as may be determined by Regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.

(c) group shall have the same meaning as assigned to it in Clause (b) of the Explanation to Section 5.

Section 18 Duties of Commission- Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India: Provided that the Commission may, for the purpose of discharging its duties or performing its functions under this Act, enter into any memorandum or arrangement with the prior approval of the Central Government, with any agency of any foreign country.

Section 19 Inquiry into certain agreements and dominant position of enterprise- The Commission may inquire into any alleged contravention of the provisions contained in Sub-section (1) of Section 3 or Sub-section (1) of Section 4 either on its own motion or on-- xxxxxxxxxxxx The Commission shall, while inquiring whether an enterprise enjoys a dominant position or not Under Section 4, have due regard to all or any of the following factors, namely: (a) market share of the enterprise (b) size and resources of the enterprise (c) size and importance of the competitors (d) economic power of the enterprise including commercial advantages over competitors (e) vertical integration of the enterprises or sale or service network of such enterprises (f) dependence of consumers on the enterprise (g) monopoly or dominant position whether acquired as a result of any statute or by virtue of being a Government company or a public sector undertaking or otherwise (h) entry barriers including barriers such as regulatory barriers, financial risk, high capital cost of entry, marketing entry barriers, technical entry barriers, economies of scale, high cost of substitutable goods or service for consumers countervailing buying power (j) market structure and size of market (k) social obligations and social costs (l) relative advantage, by way of the contribution to the economic development, by the enterprise enjoying a dominant position having or likely to have an appreciable adverse effect on competition (m) any other factor which the Commission may consider relevant for the inquiry.

Section 27 Orders by Commission after inquiry into agreements or abuse of dominant position- Where after inquiry the Commission finds that any agreement referred to in Section 3 or action of an enterprise in a dominant position, is in contravention of Section 3 or Section 4, as the case may be, it may pass all or any of the following orders, namely: (a) direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be (b) impose such penalty, as it may deem fit which shall be not more than ten per cent of the average of the turnover for the last three preceding financial years, upon each of such person or enterprises which are parties to such agreements or abuse: Provided that in case any agreement referred to in Section 3 has been entered into by a cartel, the Commission may impose upon each producer, seller, distributor, trader or service provider included in that cartel, a penalty of up to three times of its profit for each year of the continuance of such agreement or ten per cent of its turnover for each year of the continuance of such agreement, whichever is higher.

(d) direct that the agreements shall stand modified to the extent and in the manner as may be specified in the order by the Commission (e) direct the enterprises concerned to abide by such other orders as the Commission may pass and comply with the directions, including payment of costs, if any (g) pass such other order or issue such directions as it may deem fit: Provided that while passing orders under this section, if the Commission comes to a finding, that an enterprise in contravention to Section 3 or Section 4 of the Act is a member of a group as defined in Clause (b) of the Explanation to Section 5 of the Act, and other members of such a group are also responsible for, or have contributed to, such a contravention, then it may pass orders, under this section, against such members of the group.

Section 41 Director General to investigate contravention- The Director General shall, when so directed by the Commission, assist the Commission in investigating into any contravention of the provisions of this Act or any Rules or Regulations made thereunder.

The Director General shall have all the powers as are conferred upon the Commission Under Sub-section (2) of Section 36.

Without prejudice to the provisions of Sub-section (2), Sections 240 and 240A of the Companies Act, 1956 (1 of 1956), so far as may be, shall apply to an investigation made by the Director General or any other person investigating under his authority, as they apply to an inspector appointed under that Act.

Explanation-For the purposes of this section,- (a) the words the Central Government Under Section 240 of the Companies Act, 1956 (1 of 1956) shall be construed as the Commission (b) the word Magistrate Under Section 240A of the Companies Act, 1956 (1 of 1956) shall be construed as the Chief Metropolitan Magistrate, Delhi.

Section 53B Appeal to Appellate Tribunal- The Central Government or the State Government or a local authority or enterprise or any person, aggrieved by any direction, decision or order referred to in Clause (a) of Section 53A may prefer an appeal to the Appellate Tribunal.

Every appeal Under Sub-section (1) shall be filed within a period of sixty days from the date on which a copy of the direction or decision or order made by the Commission is received by the Central Government or the State Government or a local authority or enterprise or any person referred to in that Sub-section and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of sixty days if it is satisfied that there was sufficient cause for not filing it within that period.

On receipt of an appeal Under Sub-section (1), the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the direction, decision or order appealed against.

The Appellate Tribunal shall send a copy of every order made by it to the Commission and the parties to the appeal.

The appeal filed before the Appellate Tribunal Under Sub-section (1) shall be dealt with by it as expeditiously as possible and endeavor shall be made by it to dispose of the appeal within six months from the date of receipt of the appeal.

Section 53T Appeal to Supreme Court- 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.

Section 60 Act to have overriding effect- The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

The Preamble of the Act, read with the aforesaid provisions, would show that the Commission set up by the Competition Act certainly has a positive role to play.

A perusal of Sections 18 and 19 would show that it is a positive duty of the Commission to eliminate all practices which have an adverse effect on competition.

Further the Commission should promote and sustain competition, apart from protecting the interest of consumers, so as to ensure freedom of trade carried on by all participants in markets all over India.

Also, a positive role is given to the Commission to inquire, suo motu, into the dominant position of enterprises, and to prohibit anti competitive agreements.

Section 60 then gives the Act overriding effect over other statutes in case of a clash between the Act and such statues to effectuate the policy of the Act, keeping in view the economic development of the country as a whole.

On the facts of the present case, it is clear that dominant position is clearly made out.

The Explanation to Section 4 specifically refers to a position of strength that is enjoyed by an enterprise or group thereof in the relevant market, which, as is stated hereinbefore, is Punjab and Chandigarh, in the Cable TV market, which enables Respondents Number 1-4 to operate independently of competitive forces prevailing in the relevant market.

The Commission has found, on facts, that since the aforesaid MSOs group has 85 of the subscribers share in the aforesaid cable TV market in the State of Punjab and Chandigarh, and that they are able to operate independently of competitive forces prevailing in the aforesaid market.

This finding has not been set aside by the Appellate Tribunal.

Also, the Respondent would fall within Explanation (a)(ii) as well, though it is enough that it would fall within Sub-section a(i) of the Explanation.

Sub-section (ii) refers to a position of strength as enjoyed by the Respondents which enables them to affect consumers in its favour.

Replying upon the definition in Section 2(f)(ii), Shri Narsimha, learned ASG has, in our view, correctly argued that a broadcaster would certainly fall within the wide language contained in the aforesaid Sub-section.

We may also add that in all fairness the learned Counsel for the Respondent has agreed with the same.

This being the case, it is clear that as both Sub-sections (i) and (ii) of Clause (a) of the Explanation apply, the Respondent could be said to be in a dominant position, for the purpose of Section 4, in the facts of the present case.

The question which now arises is whether there is an abuse of such dominant position Under Section 4(2)(c) where the Respondent could be stated to have indulged in a practice resulting in denial of market access in any manner.

It can be seen that in the facts of the case, the broadcaster, namely Respondent Number 5, had a broadcast agreement which was entered into for a period of one year from 1st August, 2010.

This was sought to be terminated within the aforesaid period by the Respondent by notices dated 19th January, 2011.

The TDSAT has, by its order dated 25th April, 2012, adverted to Regulation 4.2 of the relevant Telecom Regulations, and has found that the Respondents have not followed the aforesaid Regulations, inasmuch as no reasons for termination have been given in the notices of termination.

This being the case, it is clear that, on the present facts, there is an abuse of the dominant position enjoyed by the Respondents 1-4 only for the reason that the broadcaster was denied market access on and after 19th February, 2011 until 1st August, 2011.

The words in any manner are words of wide import and must be given their natural meaning.

This being the case, it is difficult to appreciate the reasoning of the Appellate Tribunal that, as the broadcaster and MSOs are not in competition with one another, the provisions of Sections 3 and 4 do not get attracted.

As has been held by us, the dominant position held by the Respondent MSOs is clearly established for the purpose of Section 4 in the present case, and the Commission finding in that behalf is also not set aside by the Appellate Tribunal.

If this be so, then once a dominant position is made out on facts, whether a broadcaster is in competition with MSOs is a factor that is irrelevant for the purpose of application of Section 4(2)(c) which, as has been found by us, becomes applicable for the simple reason that the broadcaster is denied market access due to an unlawful termination of the agreement between the said broadcaster and the Respondents 1-4.

Having said this, however, we are of the view that no penalty ought to have been imposed on the facts of the present case.

The finding of the Competition Commission that the TRP rating of the broadcaster was not so low as it was almost equal to that of other channels, is not correct.

In the counter affidavit filed before us by the Respondent, they have specifically stated the TAM ratings of the Respondent channel, as opposed to other news channels, from the month of September 2010 to January 2011, which were as follows: A perusal of the aforesaid chart would show that the GRP given to the news channel Day and Night is much lower than that given to any other channel, and that learned senior Counsel for the Respondent was correct in stating that this was the reason for terminating the agreement with the broadcaster in mid-stream.

Though we find that, on the facts of this case, Section 4(2)(c) has been breached, yet the reason given by Respondents 1 to 4 for termination being otherwise justifiable, we feel that no penalty should be levied on the facts of the present case.

The appeal is accordingly allowed, and the judgment of the Appellate Tribunal, as well as the penalty imposed by the Competition Commission, both stand set aside.

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