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India – CCI Issues A Series Of Initiation Orders Against Jai Prakash, Coal India, ITPO, Delhi Development Authority And Gujarat Gas Under Section 4.

22 October, 2013

 

 

Earlier this month, CCI made available on its website, a string of initiation orders into the alleged abusive conduct by several entities. In its order dated July 1, 2013, CCI ordered DG to investigate the allegations against Jai Prakash Associates Ltd. (‘JPA’) for imposing one-sided and onerous conditions on allotment agreements entered into with buyers of its residential apartments in Noida and Greater Noida. CCI has already passed initiation orders against JPA in relation to similar complaints filed earlier in the year.


CCI has also received complaints against Coal India Limited (‘CIL’) and its subsidiary companies filed by Sponge Iron Manufacturers Association (‘SIMA’) and West Bengal Power Development Corporation Limited (‘WBPDC’). Both complaints have alleged abuse of dominance by CIL albeit one in the ‘market for sale of coal to thermal power plants in India’ and the other in the ‘market for sale of coal in India’. CCI passed initiation orders in the complaint filed by SIMA on July 23, 2013 and by WBPDC on July 5, 2013. In both complaints, CIL has been accused of inter alia imposing one-sided and onerous conditions in supply agreements, causing an artificial shortage of supply of coal and engaging in differential pricing. In its initiation orders, CCI additionally took note of several pending investigations against CIL, in three of which DG had found CIL to be in contravention of Section 4 of the Act.


Similarly, CCI has directed DG to investigate the anti-competitive practices of the Delhi Development Authority (‘DDA’) on the basis of a complaint filed by an allottee of a flat. It was alleged that DDA failed to hand over possession of the flat even after full payment of the flat. It was further alleged that clauses in the DDA scheme were heavily in favour of DDA. For instance, while the scheme provided for forfeiture of the entire amount paid in case of non-payment, no interest or refund was provided for delayed construction. In its order, CCI observed that the Delhi Development Act, 1957 made DDA responsible for developing and regulating real estate in Delhi. CCI further observed that the size and structure of DDA was unparalleled, and it was the biggest real estate developer in Delhi in the market for provision of service for sale of residential flats. On this basis, CCI found the DDA scheme to have imposed unfair conditions on the allottees and consequently directed DG to investigate DDA’s conduct under Section 4(2)(a)(i) of the Act.


CCI has also initiated an investigation on the basis of a complaint filed by Saint Gobain Glass India Ltd. against Gujarat Gas Company Ltd (‘GGCL’), accusing the latter of abusing its position of dominance. CCI had, in two of its earlier decisions, determined GGCL to be in a dominant position for the ‘transmission and distribution on segment of Compressed Natural Gas in South Gujarat’. Since the present case also pertained to the same relevant market, CCI held GGCL to be in a dominant position. On assessing the terms of the assailed gas supply agreement, CCI found that the absence of an exit clause, imposition of a minimum guarantee off-take liability and GGCL’s reservation of the right of first refusal prima facie indicated abusive conduct which required further investigation by DG.


In an order dated May 6, 2013, CCI directed DG to investigate the allegations of abuse of dominance by the Government-run India Trade Promotion Organization (‘ITPO’) for conditions imposed by it for trade shows and exhibitions held at Pragati Maidan in Delhi. The complaint was filed by the Indian Exhibition Industry Association. It was alleged that ITPO imposed discriminatory conditions of time-gap restrictions for trade shows and accorded itself preferential treatment for organizing trade fairs and exhibitions. It was also accused of denying access to the venue to other exhibitors by altering guidelines and delaying confirmation of allotment dates. CCI has also found ITPO, as the manager of Pragati Maidan, in contravention of Section 3(4) of the Act, by mandating organizers to compulsorily avail of the foyer area along with the allocated area, and to engage only house-keeping agencies which were empaneled with ITPO.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com


Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com


Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

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