Issues of purely individual consumer/contractual nature does not merit adjudication by Competition Commission: CCI

Read Order: Mr. Kuldeep Dahiya v. Nishad N.P. and Others

Pankaj Bajpai

New Delhi, September 24, 2021: While passing the order u/s 26(2) of the Competition Act, 2002, the Competition Commission of India has observed that no relief can be given under Competition Act, 2002, unless it stands established that the issues projected by Informant do not reveal any competition issue.

The Coram of Ashok Kumar Gupta (Chairperson), Sangeeta Verma (Member) & Bhagwant Singh Bishnoi (Member) opining that no case of contravention of the provisions of the Act was made out against the Opposite Parties (Ops), ordered the matter to be closed u/s 26(2) of the Act, 2002.

The background of the case was that an information was filed by Kuldeep Dahiya (Informant) against seven Opposite Parties (OPs) alleging contravention of the provisions of Section 3 & 4 of the Act 2002.

It was that the Informant had entered into an Investment Agreement whereby the Informant had invested INR 15 Lakhs. The OPs were a trusted builder in Kerala which started operating in 2010 in Kochi, and later decided to enter into the hospitality sector by forming a Limited Liability Partnership firm (LLP) in Ernakulum by the name and style of “Way One Resorts LLP”.

To carry out the operations, another LLP firm in Ernakulum was formed by the name and style of “Nucleus Hotels and Resorts LLP”. Now, as per the Informant, OPs delayed the completion of the project. Owing to such delays, the Informant requested a surrender of his share and refund of money.

Subsequently, one of the officials of the OPs contacted the Informant and provided an alternative to swap the Informant’s share to Tdew Resorts LLP (another already-running resort of the OPs) for INR 12 Lakhs for a return of INR 8,000/- to 14,000/- p.m. from November 2020 and payment of a difference of INR 3 Lakhs in three months after the execution of new agreement.

The Informant wanted the proposal to be in writing, but the OPs only provided a monthly return of INR 5,000/- in writing. As per the Informant, multiple requests and legal notices were sent to the OPs for sale of his share and refund of money. However, no response was received from the OPs.

Aggrieved by neither receiving any monthly returns nor the refund of INR 15 Lakhs, and after finding that its shares were not transferred to some other resort on equitable terms, the Informant recognized that several clauses thereof are anti-competitive.

Moreover, the Informant alleged that the OPs have abused their dominant position. Thus, a notice u/s 3 and 4 of the Act was served upon the OPs by the Informant, wherein the Informant prayed for payment of INR 23,14,000/- after deducting the amount, if any, paid by way of interim relief within the time as may be prescribed by the Commission or as an alternative relief.

After considering the arguments, the Coram observed that the Informant has not been able to show as to how the clauses of the Investment Agreement and the Lease Agreement, can be said to be anti-competitive in terms of the provisions of Section 3 or Section 4 of the Act.

The Commission also opined that the issues projected by the Informant do not reveal any competition issue and the same appear to be purely individual consumer/ contractual in nature, and as such remedies lie elsewhere.

Therefore, in the event the Informant moves appropriate forum for seeking redressal, the cause of the Informant would be determined in accordance with the law and nothing, shall be construed as an expression of opinion on the merits of the case, added the Commission.