Transcript Slide 1

NEW COMPETITION LAW REGIME IN INDIA
VINAY KUMAR SANDUJA
B.COM,LL.B,LL.M,PGDECL (King’s College, London)
ADVOCATE
DUA ASSOCIATES
ADVOCATES
(VIEWS ARE PERSONAL)
COMPETITION
• Competition has become the hallmark of growth in all walks of life, be it
education, sports or trade, industry and commerce.
• Competition is sine qua non for efficient functioning of markets and for
economy as a whole.
• Competition is based on fundamental rule of harm principle, that is "freedom
is guaranteed so long as it doesn't harm others". In this context, competition
law guarantees market actors with the highest level of freedom so long as
they do not harm other market participants such as competing corporations,
shareholders, consumers.
COMPETITON POLICY –GENUS
COMPETITION LAW- SPECIE
• Terms “Competition Policy” and “Competition Law” are not the same thing.
• Competition Policy and Competition Law need to be distinguished.
• The former can be regarded as a genus, of which, the latter is a specie.
• COMPETITION POLICY TYPICALLY INCLUDE both broader measures
to enhance competition in local and national markets (such as liberalized trade
policy, relaxed foreign investment and ownership requirements, and economic
deregulation).
• COMPETITION LAW (also referred to as antitrust or antimonopoly law)
designed to prevent anticompetitive business practices by firms and
unnecessary government intervention in the market place.
COMPETITION IN MARKET
On the analogy, Competition in the market is comparable to a football game:
• Football field is the market;
• Players passionately running in the field are corporations competing with their technology
and quality;
• Rules letting players compete fairly are the competition law;
• Referee showing yellow or red cards against players who violate the rule of the game is the
competition authority;
• Fans watching the football game are consumers.
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If there is no rule to regulate the game:
Players will try to make fouls instead of enhancing their skills;
Fans will leave the stadium sending boos and hisses; and
Eventually, football will become an unpopular sport.
AS OBSERVANCE OF THE GAME RULES IN FOOTBALL IS THE
FOREMOST PREREQUISITE, COMPETITION IS THE MOST ESSENTIAL
CONDITION FOR VITALIZING THE MARKET AND MAKING
CORPORATIONS EFFICIENT.
BENEFITS OF COMPETITION
• Competition in markets is benign for consumers, business houses and
economy as a whole.
• It is increasingly recognized more than ever before that competition in
markets:
o promotes efficiency,
o encourages innovation,
o improves quality,
o boosts choice,
o reduces costs,
o leads to lower prices of goods and services.
o Availability of goods and services in abundance of acceptable quality at
affordable price.
EXAMPLE OF EFFECT OF COMPETITION IN
TELECOM SECTOR IN INDIA
• The effect of competition on PRICE and ACCESSIBILITY is perhaps best
illustrated with an example from Indian telecommunications.
•
TELE-DENSITY IN INDIA has risen from mere 2.32 in 1999 to 11.32 in
December 2005.
• DRAMATIC FALL IN TELECOM TARIFFS from Rs. 16 per minute to
Rs. 1 per minute with increased competition in this sector.
OVERVIEW OF THE COMPETITION ACT
• Competition Act, 2002 replacing MRTP Act 1969.
• Competition Commission of India (CCI) established in October, 2003.
• CCI could not be made functional due to legal challenges.
• Competition (Amendment) Act, 2007 passed in September 2007.
• CCI fully constituted on March 1, 2009.
• Sections 3 (anti-competitive agreements) and 4 (abuse of dominant
position)brought into force on May 20, 2009.
• Sections 5 and 6 relating to Regulation of Combinations (M&A Review)
brought into force on June 1, 2011.
APPLICABILITY OF THE COMPETITION ACT
• Applies to all businesses of all sizes, including government undertakings
covering activities both within and outside India across all sectors.
• Also applies to activities, agreements and conduct of all departments of
Government, statutory bodies.
• Excludes only those activities of the Government which are relatable to the
sovereign functions of the Government including all activities carried on by
the departments of the Central Government dealing with atomic energy,
currency, defense and space.
MAIN PROVISIONS OF THE ACT
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(Preamble)
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
(Substantive Provisions)
To prohibit anti-competitive agreements (S 3)
To prohibit abuse of dominant position (S 4)
To regulate combinations (S 5 & 6)
Competition advocacy (S 49)
REGULATIONS BY CCI
• The Competition Commission of India (General) Regulations, 20009 (AS
AMENDED)
• The Competition Commission of India (Determination of Cost of
Production) Regulations, 2009
• The Competition Commission of India (Lesser Penalty) Regulations, 2009
• The Competition Commission of India (Meeting for Transaction of
Business) Regulations, 2009
• The Competition Commission of India (Procedure for Engagement of
Experts and Professionals) Regulations, 2009
• The Competition Commission of India (Manner of Recovery of
Monetary Penalty) Regulations, 2011
• The Competition Commission of India (Procedure in regard to the
transaction of business relating to combinations) Regulations, 2011 –AS
AMENDED
ANTI-COMPETITIVE AGREEMENTS
•
Section 3 of the Act provides that anti-competitive agreements are void.
(Ex post prohibition assessment by CCI)
•
Section 3 prohibits businesses from entering into any agreement in respect of
production, supply, distribution, storage, acquisition, or control of goods or
services that causes or is likely to cause an appreciable adverse effect on
competition (AAEC) within India.
•
AAEC not defined but certain factors specified u/s 19 (3) of the Act.
(a) creation of barriers to new entrants in the market; (b) driving existing
competitors out of the market;(c) foreclosure of competition by hindering entry
into the market;(d) accrual of benefits to consumers;(e) improvements in
production or distribution of goods or provision of services;(f) promotion of
technical, scientific and economic development by means of production or
distribution of goods or provision of services.
ANTI-COMPETITIVE AGREEMENTS
• Types of agreements covered:
o Horizontal agreements (e.g. cartels)
o Vertical commercial agreements, (e.g. distribution and supply agreements).
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Definition of ‘agreement’ is very broad
written
oral arrangements
understandings
implicit agreements
Agreements relating to intellectual property rights (IPRs) are excluded from the
purview of section 3 prohibition but if it imposes unreasonable restrictions then
cognizance can be taken [section 3(5)].
ABUSE OF DOMINANT POSITION
• Section 4 of the Act prohibits any conduct on the part of enterprise or
group, which is an abuse of dominant position, in a relevant market in India.
• Importantly, the Act does not prohibit a business from being dominant but
prohibits a dominant enterprise from abusing its dominant position.
• Dominance is a position of strength, enjoyed by an enterprise, in the relevant
market in India which enables it to:
o operate independently of competitive forces prevailing in the relevant market;
or
o affect its competitors or consumers or the relevant market in its favour.
ABUSE OF DOMINANT POSITION
•
Factors are provided under the Act to determine dominance such as
Market share of the enterprise; Size and resources of the enterprise; Size and importance
of the competitors; Economic power of the enterprise including commercial advantages
over competitors; Vertical integration of the enterprise including commercial advantages
over competitors; Dependence of the consumers on the enterprise; 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; 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; Market structure and size of market; Social
obligations and social costs; 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; Any other factor which the CCI may consider
relevant for inquiry.
ABUSE OF DOMINANT POSITION
• Dominance has significance for competition only when the relevant
market has been defined.
• Relevant Market means the market that may be determined by the CCI
with reference to the relevant product market or the relevant
geographic market or with reference to both the markets.
• Factors to be taken into account by the CCI while defining the relevant
market provided in the Act.
ABUSE OF DOMINANT POSITION
• Examples of abusive behavior by a dominant enterprise or group
include imposition of unfair or discriminatory condition in purchase
or sale; or price in purchase or sale of goods or services (including
predatory price) of goods or services-SECTION 4 (2) OF THE
COMPETITION ACT.
• Strictly speaking section 4 does not require appreciable adverse effect
on competition to be proved.
REGULATION OF COMBINATIONS
• Both domestic and cross border transactions will be affected if the acquirer’s
and the target’s asset values or turnover is in excess of the prescribed
threshold.
• M&A transaction to be examined by CCI:
o Various types of “combinations” contemplated by the Act
[Merger, Amalgamations, Acquisitions (M&As)]
o If thresholds specified in terms of assets or turnover are met as provided
under Section 5 then M&A termed as Combination (unless special
exemptions provided in the Act or procedural regulations issued by CCI or
any notification by the Government of India), and unless exempted, the
proposed transaction will have to be notified to the CCI
REGULATION OF COMBINATIONS
o Combination must be notified within 30 days of:
 Approval of the proposal relating to merger or amalgamation by the board of
directors of the enterprises concerned
 Execution of any agreement or other document for acquisitions
o Once notified, there is standstill obligation, i.e. the combination must not be
implemented before its notification and until it has been cleared pursuant to
the CCI decision or 210 days whichever is earlier.
o CCI will then examine whether a ‘combination’ cause or is likely to cause an
appreciable adverse effect on competition in the relevant market in India,
such combination shall be void.
REGULATION OF COMBINATIONS
o Thereafter applying the aforesaid framework CCI can prohibit or
modify (remedies can be provided by CCI or parties)or clear the
combination.
ALL PROCEDURAL MATTERS [such as Filing Fees, Timeline,
Form, Procedure of Inquiry, Remedies etc.] TO BE GOVERNED BY
CCI (PROCEDURE IN REGARD TO THE TRANSACTION
OF BUSINESS RELATING TO COMBINATIONS)
REGULATIONS, 2011 –AS AMENDED
PENALTIES
FOR SECTION 3 & SECTION 4
INFRINGEMENT
In case of violation of section 3 relating to anti-competitive agreements or
section 4 relating to abuse of dominant position, the CCI can impose such
penalty as it may deem fit:
•
which shall be not more than 10% of the average of the turnover for the last
three preceding financial years upon each of such person or enterprise which
are party to such agreement or abuse.
• In case of cartels, a penalty of up to three times of its profits for each year of
the continuance of such agreement or 10% of its turnover for each year of
the continuance of such agreement whichever is higher.
• cease and desist order;
• directions to modify agreement;
PENALTIES
FOR SECTION 3 & SECTION 4
INFRINGEMENT
• directions to abide by such other orders as it may pass and comply
with the directions including payment of costs (if any).
• In relation to aforesaid, it is noteworthy that if CCI comes to finding
that an enterprise in contravention of section 3 or 4 of the Act is a
member of a group and other members of such group are also
responsible for or have contributed to such contravention then it may
pass aforesaid orders against such members of the group.CCI can also
order division of enterprise enjoying dominant position to ensure that
such enterprise does not abuse its dominant position.
PENALTY IN CASE OF REGULATION OF
COMBINATIONS
• PENALTY FOR FAILURE TO GIVE NOTICE TO CCI- Penalty
which may extend to 1% of the total turnover or the assets whichever
is higher of such combination.
• PENALTY FOR FALSE STATEMENT ETC.-Penalty of not less
than Rs. 50 Lakh but which may extend up to Rs. 1 crore for making
false statement or omission to furnish material information in relation
to combination.
CONTRAVENTION OF ORDERS OF CCI
• Contravention of orders of CCI without reasonable cause can attract fine
which may extend to Rs. 1 Lakh for each day during which non-compliance
occurs subject to a maximum of Rs. 10 crore.
• Further, any non-compliance with the aforesaid order is punishable with
imprisonment for a term which may extend to 3 years or with fine which may
extend to Rs. 25 crore or both by the Chief Metropolitan Magistrate upon a
complaint filed by CCI.
OTHER PENALTIES
• Failure to comply with directions of CCI and Director General (DG) without
reasonable cause attracts penalty which may extend to Rs 1 Lakh for each day
during which such failure continues subject to maximum of Rs. 1 crore.
• Further, any person who makes any statement or furnishes any document
which he knows or has reason to believe to be false in any material particular;
or omits to state any material fact knowing it to be material; or willfully alters,
suppresses or destroys any document which is required to be furnished shall
be punishable with fine which may extend to Rs. 1 crore.
EXECUTION OF ORDERS OF CCI
IMPOSING MONETARY PENALTY
• Failure to pay any monetary penalty imposed by CCI will be recovered by
CCI in the manner specified by The Competition Commission of India
(Manner of Recovery of Monetary Penalty) Regulations, 2011.
• CCI issues “Demand Notice”.
• Where an enterprise makes default, CCI issues “Recovery Certificate” to
realize the amount of penalty imposed upon enterprise in default and
authorizes its Recovery Officer to proceed for recovery of penalty imposed in
accordance with various modes specified in the said Regulations including
attachment and sale of movable and immovable property of the enterprise.
• CCI can also make reference to the Income Tax Authority for recovery of the
penalty as “tax due” under the Income Tax Act, 1961.
CASE STATUS JUNE 30, 2012
IN RELATION TO SECTION 3 & SECTION 4
• Case pending before DG- 26 (10%)
• Case pending before CCI-39 (14%)
• Case with final orders- 90 (33%)
• Cases at prima facie stage-116 (43%)
SOURCE: FAIR PLAY, THE QUARTERLY NEWSLETTER OF
COMPETITION COMMISSION OF INDIA, VOLUME 1, APRIL-JUNE
2012
INQUIRY-PROCESS
• Receipt of Information or Suo-moto or Reference
• Preliminary Analysis;
• If CCI is of the opinion that there is Prima Facie case--Direction to the DG
for detailed investigation
• DG submits investigation reports to the commission within a specific time
period ; if CCI feels so it may ask DG for further investigation
• CCI sends DG report to both the parties for inviting their comments and
objections
• After further analysis and hearing the concerned parties the CCI pass
appropriate orders
CCI ORDER : CEMENT CARTEL CASE
In Builders Association of India v/s Cement Manufacturer’s Association & Ors,
[Cement Cartel Case]
• CCI has imposed penalty of more than Rs. 6000 crores on cement companies
@ 0.5 times of net profit for 2009-2010 (effective May 20, 2009) and 20102011 on each cement company named as opposite party in the present case
i.e. ACC, Ambuja Cements, Ultratech Cements, JK cements, India Cements,
Madras Cements, Century Cements, Binani Cements, Lafarge India & Jaypee
Cements in violation of section 3 including Cartels pursuant to DG
investigation upon information filed by Builders Association of India.
• As regards, Cement Manufacturers Association, a penalty of 10% of its
average total receipts of two years has been imposed by CCI since it provided
a platform to cement companies and facilitated cartelization in the aforesaid
case.
CCI ORDER: CEMENT CARTEL CASE
CCI observed :
• Cement companies have not utilized the available capacity so as to reduce
supplies and raise prices in times of higher demand;
• Act of cement Companies in limiting and controlling supplies in the market
and determining prices through anti-competitive agreement which included
parallel and coordinated behavior of cement companies on Price, Dispatch
and Supplies.
CCI ORDER: BID RIGGING CASE
In Re: suo-motu case against LPG cylinder manufacturers,
[ Bid Rgging Case]
• CCI imposed aggregate penalty of Rs 169.59 crore @7% of the average
turnover of the companies.
• However, in relation to Hyderabad Cylinders ltd. a penalty @2.1 times of its
net profit was imposed as details of turnover were not available.
CCI ORDER: BID RIGGING CASE
• CCI took suo motto cognizance of the reported manipulation of bids by
manufacturers of LPG Cylinders for supplying 105 lakh, 14.2 kg capacity
LPG cylinders with SC valves to Indian Oil Corporation Limited(IOCL)
during 2011-12.
• Based on analysis of evidence the DG concluded that the LPG cylinder
manufacturers had procured order for supply of LPG cylinders by quoting
IDENTICAL QUOTES IN GROUPS through an UNDERSTANDING
AND COLLUSIVE ACTION violated section 3 (3) (d) of the Act.
• CCI after considering DG report held bidders had contravened section 3 (3)
of the Act.
CCI ORDER: ABUSE OF DOMINANT POSITION
In Belaire Owner's Association v/s DLF Limited and HUDA
• CCI imposed a penalty of Rs. 630 crore @ 7% of the average of 3 years
annual turnover.
• DLF Apartment owners associations such as Bellaire Owners Associations,
Gurgaon filed information with CCI against DLF in 2010 alleging that DLF
imposed arbitrary, unfair, and unreasonable conditions on the apartment
allottees in the Bellaire situated in DLF City Phase V, Gurgaon .
CCI ORDER: ABUSE OF DOMINANT POSITION
CCI held that:
• DLF was a dominant player in the relevant market of “High End Residential
Units” which are developed and sold to the prospective buyers on the basis
of not only Market share and size of resources and economic power of DLF
but also its practices have given DLF a superlative market power over its
competitors which helped DLF affecting consumers in its favour and acted
without being restrained or constrained by competitors
CCI ORDER: ABUSE OF DOMINANT POSITION
• CCI noted that the moot point in this case and indeed the competition
concern is that a dominant builder / developer is in a position to impose such
blatantly unfair conditions in its Apartment Buyers Agreement (“the
Agreement”) with its customers and bind them in such one-sided contractual
obligation.
CCI ORDER: ABUSE OF DOMINANT POSITION
• CCI considered the impact of conditions imposed by DLF and specifically
noted a number of terms of the Agreement, including the following
(discussed hereinafter) which constituted abuse of dominant position u/s 4
(2) (a) (i) of the Act i.e. for imposing unfair conditions on the sale of its
services to consumers.
• Under the agreement , DLF Could make the changes without informing
consumers or requiring consent.
CCI ORDER: ABUSE OF DOMINANT POSITION
“…the Company has acquired some lands……..such lands as and when licensed and
approved by the competent authority (IES), shall be deemed to be a part of the approved
layout plan of Phase-V…..this Agreement shall automatically stand superseded and be
substituted by such subsequently approved layout plan(s) of Phase-V and shall be deemed
to form a part of this Agreement.” (Ref.: representation B of the Agreement).
CCI ORDER: ABUSE OF DOMINANT POSITION
• “...the apartment Allottee hereby agrees that it shall not be necessary on the part of the
Company to seek consent of the Apartment Allottee for the purpose of making any
changes in order to comply with such directions/conditions/changes and that the layout plan
of Phase-V as may be amended and approved form time to time” (Ref. : representation C
of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “...with each zone as may be earmarked for residential, commercial or other uses, provided
however, the total number of zones and their earmarked uses may be changed as per the
directions of the competent authority(ies) or at the sole discretion of the Company” (Ref.:
representation E of the Agreement)
• “The Apartment Allottee hereby agrees to pay additionally as preferential location
charges… the apartment Allottee has specifically agreed that due to any change in
layout/building plan, the said apartment ceases to be in preferential location, the Company
shall be liable to refund only the amount of preferential location charges without any
interest…in the last installment as stated in schedule of payment…” (Ref.: clause 1.5 of
the Agreement)
• “…the Apartment Allottee agrees and undertakes to pay for the increase in super area
immediately on demand by the Company as and when such demand is intimated to the
Apartment Allottee by the Company irrespective of receipt of the Occupation Certificate
and if there shall be a reduction in the super area, then the refundable amount due to the
Apartment Allottee shall be adjusted by the Company from the final installment as set
forth in the Schedule of Payments in Annexure III” (Ref.: clause 1.6 of the Agreement)
• “It is made clear by the Company and specifically understood by the Apartment Allottee
that the Company may at its sole discretion and for the purpose of complying with the
provisions of Haryana Apartment Ownership Act, 1983 or any other applicable laws
substitute the method of calculating the proportionate share in the ownership of the land
beneath the building and / or common areas and facilities as may be described by the
Company in its sole discretion in any declaration by calculating the same in the ratio of
his/ her apartment‘s value to the total value of the said building (s)/ project/ scheme, as
the case may be, and that the Apartment Allottee agrees not to raise any objections in this
regard” (Ref.: clause 1.7(iii) of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “…the Company has made it specifically clear to the apartment allottee… that the
Company is free to deal with community buildings / sites / recreational and sporting
activities …in any manner as the Company may deem fit.” (Ref.: clause 1.7 (viii) of the
Agreement).
CCI ORDER: ABUSE OF DOMINANT POSITION
• “It is further clarified by the Company and agreed to by the Apartment Allottee that the
Company may at its sole discretion make The Belaire project a part of any other adjacent
project that has already come into existence or may be constructed in future at any time or
keep it separate as an independent estate and the Apartment Allottee shall not raise may
objection for such formation” (Ref.: clause 1.9 of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “It is made clear by the Company and agreed by Apartment Allottee that the payment of
External Development Charges shall always be solely to the account of Apartment
Allottee to be borne and paid by all the Apartment allottees… In the event of such charges
remaining unpaid, the Apartment Allottee shall have no right, title and interest left in the
apartment thereafter. The Apartment Allottee further agrees that he/ she would not be
competent to challenge such action of resumption of the said apartment by the Company
due to default of non-payment of such enhanced external development charges on the part
of the Apartment Allottee” ( Ref.: clause 1.11(a) of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “…the Company or its agents may at their sole discretion…enter into the arrangement of
generating and / or supplying power…... Allottee…....gives complete consent to such an
arrangement including it being an exclusive source of power supply…... and has noted the
possibility of its being to the exclusion of power supply from DHBVN / State Electricity
Boards….. It is further agreed and confirmed by the Apartment Allottee that the Company
or its agents shall have the right to charge tariff for providing/ supplying the power at the
rate as may be fixed from time to time by the Company which may or may not be limited to
the rate then charged by the DHBVN/ State Electricity Boards…” (Ref.: see clause 1.14
of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “The Apartment Allottee hereby authorizes the Company to forfeit out of the amounts
paid/ payable by him/her, the earnest money as aforementioned together with any interest
paid, due or payable along with and any other amount of a non-refundable nature including
brokerage paid by the Company to the brokers in case of booking is done through a
broker… …in the event of the failure of the Apartment Allottee to perform his/ her
obligations or fulfill all the terms and conditions set out in the application and / or this
Agreement executed by the Apartment or in the event or failure of the Apartment Allottee
to sign and return this Agreement in its original form to the Company within thirty (30)
days of its dispatch by the Company.” (Ref.: clause 4 of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “…the Company shall be unable to or fails to deliver possession of the said Apartment to
the Apartment Allottee within three years…the Apartment Allottee shall be entitled to
give notice to the Company…in that event the Company shall be at liberty to sell and / or
dispose of the said Apartment and the allotted parking space to any other party…without
accounting for the sale proceeds thereof to the Apartment Allottee….the Company shall
within 90 days from the date of full realization of the sale price after sale of said
apartment and the parking space refund to the Apartment Allottee, without any interest,
the amount paid by him/her in respect of the said Apartment and the parking space…”
(Ref.: Clause 11.3 of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
•
“The Apartment Allottee agrees that in consequence of the Company abandoning the
Scheme or becoming unable to give possession within three (03) years from the date of
execution of this Agreement…the Company shall be entitled to terminate this Agreement
whereupon the Company‘s liability shall be limited to refund of the amounts paid by the
Apartment Allottee with a simple interest @9% per annum for the period such amounts
were lying with the Company and to pay no other compensation whatsoever…. the
Company may, at its sole option and discretion… agrees to pay… compensation @Rs. 5/per sq. ft. of the super area of the said Apartment per month for the period of such delay
beyond three (03) years or such extended periods…” (Ref.: clause 11.4 of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
•
“The Company shall have right, without any approval from any Apartment
Allottee in the said Building to make any alterations, additions, improvements or
repairs whether structural or non-structural, interior or exterior, ordinary or extra
ordinary in relation to any unsold apartment(s) within the said Building and the
Apartment Allottee agrees not to raise objections or make any claims on this
account….. The Apartment Allottee agrees and authorizes the Company to make
additions to or put up additional structures in/ upon the said Building or
Additional Apartment Building(s) and/ or structures anywhere in the said
Complex/ Said Portion of Land as may be permitted by competent authorities
and such additional Apartment Building(s) structures shall be the sole property of
the Company which the Company will be entitled to dispose of in any way it choose
without any interference on the part of the Apartment Allottee(s)” (Ref.: clauses
20 & 22 of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “The Apartment Allottee hereby authorizes and permits the Company to raise finance/
loan from any Financial Institution/ Bank by way of mortgage/ Charge/ securitization
of receivables or in any other mode or manner by charge/ mortgage of the said
Apartment/ said Building/ said Complex/ said Portion of Land subject to the condition
that the said Apartment shall be free from all encumbrances at the time of execution of
conveyance deed. The Company/ Financial Institution/ Bank shall always have the first
lien/ charge on the said Apartment for all their dues and other sums payable by the
Apartment Allottee or in respect of any loan granted to the Company for the purpose of
the construction of the said Building/ said Complex.” (Ref.: clause 23 of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “The Company may, at its sole option and discretion… waive the breach by the Apartment
Allottee in not making payments as per the Schedule of Payments given in Annexure III
but on the condition that the Apartment Allottee shall pay the Company interest which
shall be charged for the first ninety (90) days after the due date @ 15% per annum and for
all periods of delay exceeding the first ninety (90) days after the due date an additional
penal interest @3% per annum (total interest 18% per annum only)…” (Ref.: clause 35
of the Agreement)
CCI ORDER: ABUSE OF DOMINANT POSITION
• “If the intending Allotee(s)… to execute and deliver to the Company the Apartment
Buyer’s Agreement in its original form duly signed within thirty (30) days from the date of
dispatch….The Company shall reject and refuse to execute any Apartment Buyer’s
Agreement wherein the Intending Allottee has made any corrections/
cancellations/alterations/modifications. The Company reserves the right to reject to reject
any Apartment Buyer’s Agreement executed by any Intending Allottee without any cause or
explanation or without assigning any reasons therefor and to refuse to execute the
Apartment Buyer’s Agreement… the decision of the company shall be final and
binding.” (Ref.: Important instructions to intending allotees printed on the Agreement”)
CCI ORDERS: REGULATION OF
COMBINATIONS
• As regards filings made in relation to combination review,
• CCI has cleared all combination filings made till date,
• As the transactions did not appear to raise substantive competition law
concerns under the Act.
THANK YOU
Disclaimer Clause: Views expressed in this presentation views
of the author do not necessary reflect those of the Institute.