Samir Agrawal v. Competition Commission of India & Ors.
R. F. NARIMAN, J.
1. The present appeal is at the instance of an Informant who
describes himself as an independent practitioner of the law. The Appellant/
Informant, by an Information filed on 13.08.2018 [“the Information”],
sought that the Competition Commission of India [“ CCI”] initiate an
inquiry, under section 26(2) of the Competition Act, 2002 [“the Act”],
into the alleged anti-competitive conduct of ANI Technologies Pvt. Ltd.
[“Ola”], and Uber India Systems Pvt. Ltd., Uber B.V. and Uber
Technologies Inc. [together referred to as “ Uber”], alleging that they
entered into price-fixing agreements in contravention of s ection 3(1)
read with section 3(3)(a) of the Act, and engaged i n resale price
maintenance in contravention of section 3(1) read with section 3(4)(e)
of the Act. According to the Informant, Uber and Ola provide radio taxi
services and essentially operate as platforms through mobile applications
[“apps”] which allow riders and drivers, that is, two sides of the platform,
to interact. A trip’s fare is calculated by an algorit hm based on many
factors. The apps that are downloaded facilitate payment of the fare by
various modes.
2. The Informant alleged that due to algorithmic pricing, neither
are riders able to negotiate fares with individual drivers for rides that are
booked through the apps, nor are the drivers able to offer any discounts.
Thus, the pricing algorithm takes away the freedom of riders and drivers
to choose the best price on the basis of competition, as bot h have to
accept the price set by the pricing algorithm. As per the terms and
conditions agreed upon between Ola and Uber with their resp ective
drivers, despite the fact that the drivers are independent entities who are
not employees or agents of Ola or Uber, the driver is b ound to accept
the trip fare reflected in the app at the end of the trip, without having any
discretion insofar as the same is concerned. The drivers re ceive their
share of the fare only after the deduction of a commission by Ola and
Uber for the services offered to the rider. Therefor e, the Informant
alleged that the pricing algorithm used by Ola and Uber a rtificially
manipulates supply and demand, guaranteeing higher fares to dri vers
who would otherwise compete against one and another. Cooperat ion
between drivers, through the Ola and Uber apps, results in concerted
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action under section 3(3)(a) read with section 3(1) of the Act. Thus, the
Informant submitted that the Ola and Uber apps function akin to a trade
association, facilitating the operation of a cartel. Further, since Ola and
Uber have greater bargaining power than riders in the determination of
price, they are able to implement price discrimination, w hereby riders
are charged on the basis of their willingness to pay and as a result,
artificially inflated fares are paid. Various other averm ents qua resale
price maintenance were also made, alleging a contravention of section
3(4)(e) of the Act.
3. The CCI by its Order dated 06.11.2018, under section 26(2) of
the Act, discussed the Information provided by the Appellant/Informant
and held:
“13. At the outset, it is highlighted that though the Commission
has dealt with few cases in this sector, the allegations in the present
case are different from those earlier cases. The pre sent case
alleges that Cab Aggregators have used their respective algorithms
to facilitate price-fixing between drivers. The Informant has not
alleged collusion between the Cab Aggregators i.e. Ola and Uber
through their algorithms; rather collusion has been alleged on the
part of drivers through the platform of these Cab Aggregat ors,
who purportedly use algorithms to fix prices which the drivers are
bound to accept.
xxx xxx xxx
15. In the conventional sense, hub and spoke arrangement refers
to exchange of sensitive information between competitors through
a third party that facilitates the cartelistic behaviour of such
competitors. The same does not seem to apply to the facts of the
present case. In case of Cab Aggregators model, the estima tion
of fare through App is done by the algorithm on the basis of large
data sets, popularly referred to as ‘big data’. Such alg orithm
seemingly takes into account personalised information of rider s
along with other factors e.g. time of the day, traffic situation, special
conditions/events, festival, weekday/weekend which all determine
the demand-supply situation etc. Resultantly, the algorithmically
determined pricing for each rider and each trip tends to be different
owing to the interplay of large data sets. Such pricing does not
appear to be similar to the ‘hub and spoke’ arrangemen t as
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
understood in the traditional competition parlance. A hub and spoke
arrangement generally requires the spokes to use a third pa rty
platform (hub) for exchange of sensitive information, includ ing
information on prices which can facilitate price fixing. For a cartel
to operate as a hub and spoke, there needs to be a conspiracy t o
fix prices, which requires existence of collusion in the first place.
In the present case, the drivers may have acceded t o the
algorithmically determined prices by the platform (Ola/Uber), this
cannot be said to be amounting to collusion between the drivers.
In the case of ride-sourcing and ride-sharing services, a hub-and-
spoke cartel would require an agreement between all drivers to
set prices through the platform, or an agreement for the platform
to coordinate prices between them. There does not appear to b e
any such agreement between drivers inter-se to delegate this pricing
power to the platform/Cab Aggregators. Thus, the Commission
finds no substance in the first allegation raised by the Informant.
xxx xxx xxx
17. …In case of app-based taxi services, the dynamic pricing
can and does on many occasions drive the prices to levels much
lower than the fares that would have been charged by independent
taxi drivers. Thus, there does not seem to be any fixed floor price
that is set and maintained by the aggregators for all driv ers and
the centralized pricing mechanism cannot be viewed as a vertical
instrument employed to orchestrate price-fixing cartel amongst
the drivers…
xxx xxx xxx
18. Based on the foregoing discussion, the allegations raised by
the Informant with regard to price fixing under section 3( 3)(a)
read with section 3(1), resale price maintenance agreement under
section 3(4)(e) read with section 3(1). Moreover, the Commission
observes that existence of an agreement, understand ing or
arrangement, demonstrating/indicating meeting of minds, is a sine
qua non for establishing a contravention under Section 3 of the
Act. In the present case neither there appears to be any such
agreement or meeting of minds between the Cab Aggregators
and their respective drivers nor between the drivers inter- se. In
result thereof, no contravention of the provisions of Section 3 of
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the Act appears to be made out given the facts of the prese nt
case.
19. Further, the allegation as regards price discriminatio n also
seems to be misplaced and unsupported by any evidence on record.
Price discrimination can perhaps be scrutinised under Section 4
of the Act, which has not been alleged by the Informant. Imposition
of discriminatory price is prohibited under Section 4(2)(a)(ii) of
the Act only when indulged in by a dominant enterprise. It is not
the Informant’s case that any of the OPs is dominant in the app-
based taxi services market. Given this, the Commission does not
find it appropriate to delve into such analysis given that the market
in question features two players, Ola as well as Uber, none of
which is alleged to be dominant. Further, the provisions of the Act
clearly stipulate dominant position by only one enterprise or one
group and does not recognise collective dominance. This position
was amply made clear in Case Nos. 6 & 74 of 2015 and later
reiterated in Case Nos. 25, 26, 27 & 28 of 2017, both matters
pertaining to the Cab Aggregators market. Thus, given these facts
and legal position, the Commission rejects the allegation of the
Informant with regard to price discrimination.
20. …The situation of cement manufacturers colluding through a
trade association is different from an App providing ta xi/cab
services. If drivers were colluding using an App as a platform, the
said arrangement would have amounted to cartelisation; however,
this cannot be equated with the facts of the present case s as
demanded by the Informant. Ola and Uber are not an association
of drivers, rather they act as separate entities from their respective
drivers. In the present situation, a rider books his/her ride at any
given time which is accepted by an anonymous driver available in
the area, and there is no opportunity for such driver to coordinate
its action with other drivers. This cannot be termed as a ca rtel
activity/conduct through Ola/Uber’s platform. Thus, the present
case is different from the Cement case, not only with r egard to
adoption of digital App but also with regard to other rele vant
aspects as elucidated hereinbefore.
xxx xxx xxx
23. Based on the foregoing, the Commission is of the view that
no case of contravention of the provisions of Section 3 has been
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
made out and the matter is accordingly closed herewith under
Section 26(2) of the Act.”
4. The Appellant/Informant, being aggrieved by the Order of the
CCI, filed an appeal before the National Company Law Appellate Tribunal
[“NCLAT”] which resulted in the impugned judgment dated 29.05.2020.
This judgment recorded that the point as to resale price maintenance
was not pressed before it, after which it delved into the locus standi of
the Appellant to move the CCI. After setting out section 19 of the Act,
the NCLAT held:
“16. It is true that the concept of locus standi has been
diluted to some extent by allowing public interest liti gation,
class action and actions initiated at the hands of consumer
and trade associations. Even the whistle blowers have be en
clothed with the right to seek redressal of grievan ces
affecting public interest by enacting a proper lega l
framework. However, the fact remains that when a statute
like the Competition Act specifically provides for the mode
of taking cognizance of allegations regarding contravention
of provisions relating to certain anti-competitive agreement
and abuse of dominant position by an enterprise in a
particular manner and at the instance of a person apart from
other modes viz. suo motu or upon a reference from th e
competitive government or authority, reference to rece ipt
of any information from any person in section 19(1) (a) of
the Act has necessarily to be construed as a reference t o a
person who has suffered invasion of his legal right s as a
consumer or beneficiary of healthy competitive practic es.
Any other interpretation would make room for unscrupulous
people to rake issues of anti-competitive agreement s or
abuse of dominant position targeting some enterprises wi th
oblique motives. In the instant case, the Informant claims to be
an Independent Law-Practitioner. There is nothing on the record
to show that he has suffered a legal injury at the hands of Ola and
Uber as a consumer or as a member of any consumer or trade
association. Not even a solitary event of the Informant of being a
victim of unfair price fixation mechanism at the hands of Ola and
Uber or having suffered on account of abuse of dominant position
of either of the two enterprises have been brought to the notice of
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this Appellate Tribunal. We are, therefore, constrained to hold
that the Informant has no locus standi to maintain an action qua
the alleged contravention of Act.”
(emphasis in original)
5. Despite having held that the Informant had no locus standi to
move the CCI, the NCLAT went into the merits of the case and held:
“17. Assuming though not accepting the proposition that the
Informant has locus to lodge information qua alleged contravention
of the Act and appeal at his instance is maintainable, on merits
also we are of the considered opinion that business model of Ola
and Uber does not support the allegation of Informant as regards
price discrimination. According to Informant, the Cab Aggregators
used their respective algorithms to facilitate price fixing between
drivers. It is significant to notice that there is no all egation of
collusion between the Cab Aggregators through their algorithms
which necessarily implies an admission on the part of Informant
that the two taxi service providers are operating indepe ndent of
each other. It is also not disputed that besides Ola and Uber there
are other players also in the field who offer their servi ces to
commuters/ riders in lieu of consideration. It emerges fro m the
record that both Ola and Uber provide radio taxi services on
demand. A consumer is required to download the app before he is
able to avail the services of the Cab Aggregators. A cab is booked
by a rider using the respective App of the Cab Aggregators which
connects the rider with the driver and provides an estimate of
fare using an algorithm. The allegation of Informant that the drivers
attached to Cab Aggregators are independent third party service
provider and not in their employment, thereby price determination
by Cab Aggregators amounts to price fixing on behalf of drivers,
has to be outrightly rejected as no collusion inter se the Cab
Aggregators has been forthcoming from the Informant. The
concept of hub and spoke cartel stated to be applicabl e to
the business model of Ola and Uber as a hub with thei r
platforms acting as a hub for collusion inter se the sp okes
i.e. drivers resting upon US Class Action Suit titl ed
“Spencer Meyer v. Travis Kalanick” has no application as
the business model of Ola and Uber (as it operates in In dia)
does not manifest in restricting price competition a mong
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
drivers to the detriment of its riders. The matter relat es to
foreign antitrust jurisdiction with different connotation and
cannot be imported to operate within the ambit and scope
of the mechanism dealing with redressal of competit ion
concerns under the Act. It is significant to note that the Informant
in the instant case has alleged collusion on the part of dri vers
through the platform of the Cab Aggregators who are stated to be
using their algorithms to fix prices which are imposed on the
drivers. In view of allegation of collusion inter se the drivers through
the platform of Ola and Uber, it is ridiculous on the part of Informant
to harp on the tune of hub and spoke raised on the basis of law
operating in a foreign jurisdiction which cannot be countenanced.
The argument in this core is repelled.
Admittedly, under the business model of Ola, there is no
exchange of information amongst the drivers and Ola. The taxi
drivers connected with Ola platform have no inter se connectivity
and lack the possibility of sharing information with regard to the
commuters and the earnings they make out of the rides provided.
This excludes the probability of collusion inter se the drivers through
the platform of Ola. In so far as Uber is concerned, it provides a
technology service to its driver partners and riders throug h the
Uber App and assist them in finding a potential ride and als o
recommends a fare for the same. However, the driver partner s
as also the riders are free to accept such ride or choose the App
of competing service, including choosing alternative modes of
transport. Even with regard to fare though Uber App wou ld
recommend a fare, the driver partners have liberty to negotiate a
lower fare. It is, therefore, evident that the Cab Aggrega tors do
not function as an association of its driver partners. Thu s, the
allegation of their facilitating a cartel defies the logic and has to
be repelled.
18. Now coming to the issue of abuse of dominant position, be it
seen that the Commission, having been equipped with the
necessary wherewithal and having dealt with allegations of similar
nature in a number of cases as also based on information in public
domain found that there are other players offering taxi ser vice/
transportation service/ service providers in transport se ctor and
the Cab Aggregators in the instant case distinctly do not ho ld
1055
dominant position in the relevant market. Admittedly, these two
Cab Aggregators are not operating as a joint venture or a group,
thus both enterprises taken together cannot be deemed to be holding
a dominant position within the ambit of Section 4 of the Act. Even
otherwise, none of the two enterprises is independently alleged to
be holding a dominant position in the relevant market of providing
services. This proposition of fact being an admitted position in the
case, question of abuse of dominant position has to be outrightly
rejected.”
(emphasis in original)
Based on these findings, the appeal was accordingly dismissed.
6. The Appellant/Informant, who appeared in person before this
Court, referred to a Services Agreement between Uber and its drivers,
updated on 08.09.2015, and an Agreement between Ola and its transport
service providers, dated 01.11.2016. He reiterated the submissions made
before the CCI and the NCLAT. In particular, he attacked the finding of
the NCLAT as to locus standi and referred us to various provisions of
the Act, including, in particular, sections 19 and 35, arguing tha t the
amendments made in the sections would show that any person can b e
an informant who can approach the CCI, as one does not have to b e a
“consumer” or a “complainant”, which was the position before the
Competition (Amendment) Act, 2007 [“ 2007 Amendment ”]. He
contrasted these provisions with sections 53B and 53T of the Act, where
the expression used is “person aggrieved”, but hastened to add that once
an informant had moved the CCI, for the purposes of filing an appeal,
such informant would certainly be a “person aggrieved”, howsoe ver
restricted the expression “person aggrieved” may be in law.
7. The Appellant then argued substantially what was submit ted
before the CCI and NCLAT on the merits, stating that the arrangements
in the present case amounted to “hub and spoke” arrangements and
referred us to a particular diagram depicting Ola and Uber as the “hub”
and drivers as “spokes” (at page 263 of the paper book of th e Civil
Appeal), which indicated that the provisions of section 3 of the Act had
clearly been violated.
8. As against this, Dr. Abhishek Manu Singhvi, learned se nior
advocate appearing on behalf of Uber, took us through the conc urrent
findings of fact of the CCI and the NCLAT, and stated that they could
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
not be said to be, in any sense, even remotely perverse and w ould
therefore have to be upheld. He was at pains to stress that every driver
of a taxi cab, who uses the Ola or Uber app, can have several such apps
including both Ola, Uber and the apps of some of their competitors, and
can take private rides de hors these apps as well. There is, therefore,
complete discretion with the drivers to negotiate fares wi th riders, not
only insofar as Ola and Uber are concerned, but also otherwis e, there
being nothing in either the agreements or practice, which prevents them
from doing so. Furthermore, there would be no question of any anti-
competitive practice in the form of cartelization, as there are thousands
of drivers, none of whom have anything to do with each other, there
being no common meeting of minds as far as they are concerne d. On
the contrary, the apps allow drivers to negotiate fares tha t are below
what is quoted in the app, thereby increasing competition and g iving
riders greater flexibility to take rides with those driver s who offer the
most competitive fares.
9. Shri Rajshekhar Rao, learned advocate appearing on behalf of
Ola, also supported Dr. Singhvi’s submissions on merits, but went on to
add that even if the Appellant could be said to be an inform ant for the
purposes of section 19 of the Act, he could not be said to be a “person,
aggrieved” for the purposes of filing an appeal under section 53B under
the Act, and referred to the judgment in Adi Pherozshah Gandhi v.
H.M. Seervai, Advocate General of Maharashtra, (1970) 2 SC C
484, [“Adi Pherozshah Gandhi ”]. He also went on to argue that
information can be provided by persons like the Appellant at the behest
of competitors, which will have a deleterious effect on persons like Ola
and Uber, as the value of their shares in the share market would instantly
drop the moment the factum of the filing of such information before the
CCI would be advertised. In any event, he exhorted us to lay down that
in such cases heavy costs should be imposed to deter such persons from
approaching the CCI with frivolous and/or mala fide information, filed
at the behest of competitors.
10. The learned ASG, Shri Balbir Singh, appearing on behalf of
the CCI, took us through the provisions of the Act together wit h the
regulations made under it, and stated that though he would support the
CCI’s Order closing the case, he would also support the right of the
Appellant to approach the CCI with information.
1057
11. Having heard the learned counsel appearing on behalf of the
various parties, it is necessary to first set out the se ctions of the Act
which have a bearing on the matter before us:
“Definitions
2. In this Act, unless the context otherwise requires,—
xxx xxx xxx
(c) “cartel” includes an association of producers, sellers,
distributors, traders or service providers who, by agree ment
amongst themselves, limit, control or attempt to contro l the
production, distribution, sale or price of, or, trade in goods or
provision of services;
xxx xxx xxx
(f) “consumer” means any person who—
(i) 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;
(ii) hires or avails of any services for a consideration w hich
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 hi res
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;
xxx xxx xxx
(l) “person” includes—
(i) an individual;
(ii) a Hindu undivided family;
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
(iii) a company;
(iv) a firm;
(v) an association of persons or a body of individuals, whether
incorporated or not, in India or outside India;
(vi) any corporation established by or under any Central, State
or Provincial Act or a Government company as defined in
section 617 of the Companies Act, 1956 (1 of 1956);
(vii) any body corporate incorporated by or under the laws of
a country outside India;
(viii) a co-operative society registered under any law relating
to co-operative societies;
(ix) a local authority;
(x) every artificial juridical person, not falling within any of the
preceding sub-clauses;”
“Anti-competitive agreements
3. (1) No enterprise or association of enterprises or person or
association of persons shall enter into any agreement in respe ct
of production, supply, distribution, storage, acquisition or control
of goods or provision of services, which causes or is like ly to
cause an appreciable adverse effect on competition within India.
xxx xxx xxx
(3) Any agreement entered into between enterprises or associations
of enterprises or persons or associations of persons or betwe en
any person and enterprise or practice carried on, or decision taken
by, any association of enterprises or association of p ersons,
including cartels, engaged in identical or similar trade of goods or
provision of services, which—
(a) directly or indirectly determines purchase or sale prices;...
xxx xxx xxx
(4) Any agreement amongst enterprises or persons at diffe rent
stages or levels of the production chain in different markets, in
respect of production, supply, distribution, storage, sale or price
of, or trade in goods or provision of services, including—
xxx xxx xxx
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(e) resale price maintenance”
“Duties of Commission
18. Subject to the provisions of this Act, it shall be the duty of the
Commission to eliminate practices having adverse effe ct 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.”
“Inquiry into certain agreements and dominant position of
enterprise
19. (1) The Commission may inquire into any alleged contravention
of the provisions contained in subsection (1) of section 3 or sub-
section (1) of section 4 either on its own motion or on—
(a) receipt of any information, in such manner and accompanied
by such fee as may be determined by regulations, from any
person, consumer or their association or trade association; or
(b) a reference made to it by the Central Government or a
State Government or a statutory authority…’’
“Procedure for inquiry under section 19
26. (1) On receipt of a reference from the Central Government
or a State Government or a statutory authority or on its own
knowledge or information received under section 19, i f the
Commission is of the opinion that there exists a prima facie case,
it shall direct the Director General to cause an investigation to be
made into the matter:
Provided that if the subject matter of an information received is,
in the opinion of the Commission, substantially the same as or has
been covered by any previous information received, then the new
information may be clubbed with the previous information.
(2) Where on receipt of a reference from the Central Government
or a State Government or a statutory authority or informa tion
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
received under section 19, the Commission is of the opinion that
there exists no prima facie case, it shall close the matter forthwith
and pass such orders as it deems fit and send a copy of its order
to the Central Government or the State Government or the
statutory authority or the parties concerned, as the case may
be….”
“Appearance before Commission
35. A person or an enterprise or the Director General may either
appear in person or authorise one or more chartered accountants
or company secretaries or cost accountants or legal practitioners
or any of his or its officers to present his or its case before the
Commission.
Explanation.—For the purposes of this section,—
(a) “chartered accountant” means a chartered accountant as
defined in clause (b) of sub-section (1) of section 2 of t he
Chartered Accountants Act, 1949 (38 of 1949) and who has
obtained a certificate of practice under sub-section (1 ) of
section 6 of that Act;
(b) “company secretary” means a company secretary as
defined in clause (c) of sub-section (1) of section 2 of the
Company Secretaries Act, 1980 (56 of 1980) and who has
obtained a certificate of practice under sub-section (1 ) of
section 6 of that Act;
(c) “cost accountant” means a cost accountant as defined in
clause (b) of sub section (1) of section 2 of the Cost and Works
Accountants Act, 1959 (23 of 1959) and who has obtained a
certificate of practice under sub- section (1) of section 6 of
that Act;
(d) “legal practitioner” means an advocate, vakil or an attorney
of any High Court, and includes a pleader in practice.”
“Penalty for offences in relation to furnishing of information
45. (1) Without prejudice to the provisions of section 44, if a person,
who furnishes or is required to furnish under this Act any particulars,
documents or any information,—
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(a) makes any statement or furnishes any document which he
knows or has reason to believe to be false in any material
particular; or
(b) omits to state any material fact knowing it to be material;
or
(c) wilfully alters, suppresses or destroys any document which
is required to be furnished as aforesaid, such person shall be
punishable with fine which may extend to rupees one crore as
may be determined by the Commission.
(2) Without prejudice to the provisions of sub-section (1 ), the
Commission may also pass such other order as it deems fit.”
“Appeal to Appellate Tribunal
53B. (1) 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 sect ion
53A may prefer an appeal to the Appellate Tribunal.
(2) 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 t he
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.
(3) On receipt of an appeal under sub-section (1), the Appell ate
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.
(4) The Appellate Tribunal shall send a copy of every order made
by it to the Commission and the parties to the appeal.
(5) The appeal filed before the Appellate Tribunal under sub-section
(1) shall be dealt with by it as expeditiously as possib le and
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
endeavour shall be made by it to dispose of the appeal within six
months from the date of receipt of the appeal.”
“Awarding compensation
53N. (1) Without prejudice to any other provisions contained in
this Act, the Central Government or a State Government or a
local authority or any enterprise or any person may make an
application to the Appellate Tribunal to adjudicate on cla im for
compensation that may arise from the findings of the Commission
or the orders of the Appellate Tribunal in an appeal against any
findings of the Commission or under section 42A or under sub-
section (2) of section 53Q of the Act, and to pass an order for the
recovery of compensation from any enterprise for any los s or
damage shown to have been suffered, by the Central Government
or a State Government or a local authority or any enterpris e or
any person as a result of any contravention of the provis ions of
Chapter II, having been committed by enterprise.
(2) Every application made under sub-section (1) shal l be
accompanied by the findings of the Commission, if any, and also
be accompanied with such fees as may be prescribed.
(3) The Appellate Tribunal may, after an inquiry made into the
allegations mentioned in the application made under sub-section
(1), pass an order directing the enterprise to make payment to the
applicant, of the amount determined by it as realisable from the
enterprise as compensation for the loss or damage caused to the
applicant as a result of any contravention of the provisions of
Chapter II having been committed by such enterprise: Provi ded
that the Appellate Tribunal may obtain the recommendations of
the Commission before passing an order of compensation.
(4) Where any loss or damage referred to in sub-section (1) is
caused to numerous persons having the same interest, one or more
of such persons may, with the permission of the Appellate Tribunal,
make an application under that sub-section for and on behalf of,
or for the benefit of, the persons so interested, and thereupon, the
provisions of rule 8 of Order 1 of the First Schedule to the Code
of Civil Procedure, 1908 (5 of 1908), shall apply subject to the
modification that every reference therein to a suit or decree shall
be construed as a reference to the application before the Appellate
Tribunal and the order of the Appellate Tribunal thereon.
1063
Explanation.—For the removal of doubts, it is hereby declared
that—
(a) an application may be made for compensation before t he
Appellate Tribunal only after either the Commission or the Appellate
Tribunal on appeal under clause (a) of sub-section (1) of section
53A of the Act, has determined in a proceeding before it that
violation of the provisions of the Act has taken place, or if provisions
of section 42A or sub-section (2) of section 53Q of the Ac t are
attracted.
(b) enquiry to be conducted under sub-section(3) shall be for the
purpose of determining the eligibility and quantum of compensation
due to a person applying for the same, and not for examining
afresh the findings of the Commission or the Appellate Tribunal
on whether any violation of the Act has taken place.”
“Right to legal representation
53S.
xxx xxx xxx
(3) The Commission may authorize one or more charte red
accountants or company secretaries or cost accountants or legal
practitioners or any of its officers to act as presenting officers
and every person so authorized may present the case with respect
to any appeal before the Appellate Tribunal.
Explanation – The expressions “chartered accountant” or
“company secretary” or “cost accountant” or “legal practitioner”
shall have the meanings respectively assigned to them in the
Explanation to section 35.
Appeal to Supreme Court
53T. 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 t he
applicant was prevented by sufficient cause from filing the appeal
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
within the said period, allow it to be filed after the expiry of the
said period of sixty days.”
12. The relevant regulations that are contained in the Competition
Commission of India (General) Regulations, 2009 [“2009 Regulations”]
are set out as under:
“2. Definitions. –
(1) In these regulations, unless the context otherwise requires, –
xxx xxx xxx
(i) “Party” includes a consumer or an enterprise or a per son
defined in clauses (f), (h) and (l) of section 2 of the Act
respectively, or an information provider, or a cons umer
association or a trade association or the Director Gene ral
defined in clause (g) of section 2 of the Act, or the Centra l
Government or any State Government or any statutory authority,
as the case may be, and shall include an enterprise against
whom any inquiry or proceeding is instituted and shall also
include any person permitted to join the proceedings or an
intervener;...”
“10. Contents of information or the reference. –
(1) The information or reference (except a reference under sub-
section (1) of section 49 of the Act) shall, inter alia, separately
and categorically state the following seriatum-
(a) legal name of the person or the enterprise giving the
information or the reference;
(b) complete postal address in India for delivery of summons
or notice by the Commission, with Postal Index Number (PIN)
code;
(c) telephone number, fax number and also electronic mail
address, if available;
(d) mode of service of notice or documents preferred;
(e) legal name and address(es) of the enterprise(s) alleged to
have contravened the provisions of the Act; and
(f) legal name and address of the counsel or other authorized
representative, if any;
1065
(2) The information or reference referred to in sub-regulation (1)
shall contain –
(a) a statement of facts;
(b) details of the alleged contraventions of the Act together
with a list enlisting all documents, affidavits and evidence, as
the case may be, in support of each of the alleged
contraventions;
(c) a succinct narrative in support of the alleged contraventions;
(d) relief sought, if any;
(da) Details of litigation or dispute pending between t he
informant and parties before any court, tribunal, s tatutory
authority or arbitrator in respect of the subject ma tter of
information;
(e) Such other particulars as may be required by th e
Commission.
(3) The contents of the information or the reference mentioned
under sub- regulations (1) and (2), alongwith the appendices and
attachments thereto, shall be complete and duly verified by the
person submitting it.”
“14. Powers and functions of the Secretary. –
xxx xxx xxx
(4) The Commission may sue or be sued in the name of th e
Secretary and the Commission shall be represented in the na me
of the Secretary in all legal proceedings, including appeals before
the Tribunal.”
“25. Power of Commission to permit a person or enterprise
to take part in proceedings.
(1) While considering a matter in an ordinary meeti ng, the
Commission, on an application made to it in writing, if satisfied,
that a person or enterprise has substantial interest in the outcome
of proceedings and that it is necessary in the public in terest to
allow such person or enterprise to present his or its opini on on
that matter, may permit that person or enterprise to present such
opinion and to take part in further proceedings of the matte r, as
the Commission may specify….”
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
“35. Confidentiality. –
(1) The Commission shall maintain confidentiality of the identity
of an informant on a request made to it in writing.
Provided that where it is expedient to disclose the identity of the
informant for the purposes of the Act, the Commission shall do so
after giving an opportunity to the informant of being heard….”
“51. Empanelment of special counsel by Commission.–
(1) The Commission may draw up a panel of legal practitioners or
chartered accountants or company secretaries or cost accountants
to assist in proceedings before the Competition Appellate Tribunal
or any other quasi-judicial body or Court.
(2) The Director General may call upon the legal practitioners or
chartered accountants or company secretaries or cost accountants
from the panel for assistance in the proceedings befo re the
Commission, if so required.
(3) The remuneration payable and other allowances a nd
compensation admissible to counsel shall be specified in consultation
with the Commission.”
13. A reading of the provisions of the Act and the 2009 Regulations
would show that “any person” may provide information to the CCI, which
may then act upon it in accordance with the provisions of the Act. In this
regard, the definition of “person” in section 2(l) of the Act , set out
hereinabove, is an inclusive one and is extremely wi de, including
individuals of all kinds and every artificial juridical person. This may be
contrasted with the definition of “consumer” in section 2(f) of the Act,
which makes it clear that only persons who buy goods for consideration,
or hire or avail of services for a consideration, are recognised as
consumers.
14. A look at section 19(1) of the Act would show that the Act
originally provided for the “receipt of a complaint” fro m any person,
consumer or their association, or trade association. This expression was
then substituted with the expression “receipt of any information in such
manner and” by the 2007 Amendment. This substitution is not without
significance. Whereas, a complaint could be filed only from a person
who was aggrieved by a particular action, information may be received
from any person, obviously whether such person is or is not personally
1067
affected. This is for the reason that the proceedings under the Act are
proceedings in rem which affect the public interest. That the CCI may
inquire into any alleged contravention of the provisions of the Act on its
own motion, is also laid down in section 19(1) of the Act. Further, even
while exercising suo motu powers, the CCI may receive information
from any person and not merely from a person who is aggrieved by the
conduct that is alleged to have occurred. This also follows from a reading
of section 35 of the Act, in which the earlier expression “complainant or
defendant” has been substituted by the expression, “person or an
enterprise,” setting out that the informant may appear either in person,
or through one or more agents, before the CCI to present the information
that he has gathered.
15. Section 45 of the Act is a deterrent against persons who provide
information to the CCI, mala fide or recklessly, inasmuch as false
statements and omissions of material facts are punishable with a penalty
which may extend to the hefty amount of rupees one crore, with t he
CCI being empowered to pass other such orders as it deems f it. This,
and the judicious use of heavy costs being imposed when the information
supplied is either frivolous or mala fide, can keep in check what is
described as the growing tendency of persons being “set up” by rivals in
the trade.
16. The 2009 Regulations also point in the same direction inasmuch
as regulation 10, which has been set out hereinabove, does not require
the informant to state how he is personally aggrieved by the contravention
of the Act, but only requires a statement of facts and detai ls of the
alleged contravention to be set out in the information filed. Also, regulation
25 shows that public interest must be foremost in the conside ration of
the CCI when an application is made to it in writing that a person or
enterprise has substantial interest in the outcome of the proceedings,
and such person may therefore be allowed to take part in the proceedings.
What is also extremely important is regulation 35, by which the CCI
must maintain confidentiality of the identity of an informant on a request
made to it in writing, so that such informant be free from harassment by
persons involved in contravening the Act.
17. This being the case, it is difficult to agree with the impugned
judgment of the NCLAT in its narrow construction of section 19 of the
Act, which therefore stands set aside.
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
18. With the question of the Informant’s locus standi out of the
way, one more important aspect needs to be decided, and that is the
submission of Shri Rao, that in any case, a person like the Inf ormant
cannot be said to be a “person aggrieved” for the purpose of sections
53B and 53T of the Act. Shri Rao relies heavily upon Adi Pherozshah
Gandhi (supra), in which section 37 of the Advocates Act, 1961 came
up for consideration, which spoke of the right of appeal of “any person
aggrieved” by an order of the disciplinary committee of a S tate Bar
Council. It was held that since the Advocate General could not be said
to be a person aggrieved by an order made by the disciplinary committee
of the State Bar Council against a particular advocate, he would have no
locus standi to appeal to the Bar Council of India. In so saying, the
Court held:
“11. From these cases it is apparent that any person who feels
disappointed with the result of the case is not a “person aggrieved”.
He must be disappointed of a benefit which he would have received
if the order had gone the other way. The order must cause him a
legal grievance by wrongfully depriving him of something. It is no
doubt a legal grievance and not a grievance about material matters
but his legal grievance must be a tendency to injure him. That the
order is wrong or that it acquits some one who he thinks ought to
be convicted does not by itself give rise to a legal grievance….”
(page 491)
19. It must immediately be pointed out that this provision of the
Advocates Act, 1961 is in the context of a particular advo cate being
penalized for professional or other misconduct, which concerned itself
with an action in personam, unlike the present case, which is concerned
with an action in rem. In this context, it is useful to refer to the judgment
in A. Subash Babu v. State of A.P., (2011) 7 SCC 616, in which the
expression “person aggrieved” in section 198(1)(c) of the Code of
Criminal Procedure, 1973, when it came to an offence punishable under
section 494 of the Indian Penal Code, 1860 (being the offence of bigamy),
was under consideration. It was held that a “person aggrieved” need not
only be the first wife, but can also include a second “wife” who may
complain of the same. In so saying, the Court held:
“25. Even otherwise, as explained earlier, the second wife suffers
several legal wrongs and/or legal injuries when the second
marriage is treated as a nullity by the husband arbitrarily, without
1069
recourse to the court or where a declaration sought is granted by
a competent court. The expression “aggrieved person” denotes
an elastic and an elusive concept. It cannot be confined within the
bounds of a rigid, exact and comprehensive definition. Its scope
and meaning depends on diverse, variable factors such as the
content and intent of the statute of which the contrave ntion is
alleged, the specific circumstances of the case, the nature and
extent of complainant’s interest and the nature and the extent of
the prejudice or injury suffered by the complainant. Section 494
does not restrict the right of filing complaint to the first wife and
there is no reason to read the said section in a restricted manner
as is suggested by the learned counsel for the appellant. Section
494 does not say that the complaint for commission of offence
under the said section can be filed only by the wife living and not
by the woman with whom the subsequent marriage takes plac e
during the lifetime of the wife living and which marriage is void by
reason of its taking place during the life of such wife. The complaint
can also be filed by the person with whom the second marriage
takes place which is void by reason of its taking place during the
life of the first wife.”
(page 628)
20. Clearly, therefore, given the context of the Act in which the
CCI and the NCLAT deal with practices which have an adverse effect
on competition in derogation of the interest of consumers, it is clear that
the Act vests powers in the CCI and enables it to act in rem, in public
interest. This would make it clear that a “person aggrieved” must, in the
context of the Act, be understood widely and not be constructed narrowly,
as was done in Adi Pherozshah Gandhi (supra). Further, it is not without
significance that the expressions used in sections 53B and 5 3T of the
Act are “any person”, thereby signifying that all persons who bring to
the CCI information of practices that are contrary to the prov isions of
the Act, could be said to be aggrieved by an adverse order of the CCI in
case it refuses to act upon the information supplied. By way of contrast,
section 53N(3) speaks of making payment to an appli cant as
compensation for the loss or damage caused to the applicant as a result
of any contravention of the provisions of Chapter II of the Act, having
been committed by an enterprise. By this sub-section, clearly, therefore,
“any person” who makes an application for compensation, under sub-
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
section (1) of section 53N of the Act, would refer only to persons who
have suffered loss or damage, thereby, qualifying the express ion “any
person” as being a person who has suffered loss or damage. Th us, the
preliminary objections against the Informant/Appellant filing Information
before the CCI and filing an appeal before the NCLAT are rejected.
21. An instructive judgment of this Court reported as Competition
Commission of India v. Steel Authority of India, (2010) 10 SCC
744 dealt with the provisions of the Act in some detail and held:
“37. As already noticed, in exercise of its powers, the Commission
is expected to form its opinion as to the existence of a prima facie
case for contravention of certain provisions of the Act and the n
pass a direction to the Director General to cause an investigation
into the matter. These proceedings are initiated by the intimation
or reference received by the Commission in any of the ma nners
specified under Section 19 of the Act. At the very threshold, the
Commission is to exercise its powers in passing the direction for
investigation; or where it finds that there exists no prim a facie
case justifying passing of such a direction to the Director General,
it can close the matter and/or pass such orders as it may deem fit
and proper. In other words, the order passed by the Commission
under Section 26(2) is a final order as it puts an en d to the
proceedings initiated upon receiving the information in one of the
specified modes. This order has been specifically made appealable
under Section 53-A of the Act.
38. In contradistinction, the direction under Section 26(1) after
formation of a prima facie opinion is a direction simpliciter to cause
an investigation into the matter. Issuance of such a directi on, at
the face of it, is an administrative direction to one of its own wings
departmentally and is without entering upon any adjudicatory
process. It does not effectively determine any right or obligation
of the parties to the lis. Closure of the case causes determination
of rights and affects a party i.e. the informant; resultantl y, the
said party has a right to appeal against such closure of case under
Section 26(2) of the Act. On the other hand, mere direction for
investigation to one of the wings of the Commission is akin to a
departmental proceeding which does not entail civil consequences
for any person, particularly, in light of the strict confidentiality that
1071
is expected to be maintained by the Commission in terms of Section
57 of the Act and Regulation 35 of the Regulations.”
(page 768)
“101. The right to prefer an appeal is available to the Centr al
Government, the State Government or a local authori ty or
enterprise or any person aggrieved by any direction, decision or
order referred to in clause (a) of Section 53-A [ought to be printed
as 53-A(1)(a)]. The appeal is to be filed within the period specified
and Section 53-B(3) further requires that the Tribunal, after giving
the parties to appeal an opportunity of being heard, to pass such
orders, as it thinks fit, and send a copy of such order t o the
Commission and the parties to the appeal.
102. Section 53-S contemplates that before the Tribunal a person
may either appear “in person” or authorise one or more chartered
accountants or company secretaries, cost accountants or legal
practitioners or any of its officers to present its case before the
Tribunal. However, the Commission’s right to legal representation
in any appeal before the Tribunal has been specifically mentioned
under Section 53-S(3). It provides that the Commission m ay
authorise one or more of chartered accountants or co mpany
secretaries or cost accountants or legal practitioners or any of its
officers to act as presenting officers before the Tribunal. Section
53-T grants a right in specific terms to the Commission to prefer
an appeal before the Supreme Court within 60 days from the date
of communication of the decision or order of the Tribunal to them.
103. The expression “any person” appearing in Section 53-B has
to be construed liberally as the provision first mentions specific
government bodies then local authorities and enterprises, which
term, in any case, is of generic nature and then lastly mentions
“any person”. Obviously, it is intended that expanded meaning be
given to the term “persons” i.e. persons or bodies who are entitled
to appeal. The right of hearing is also available to the pa rties to
appeal.
104. The above stated provisions clearly indicate that the
Commission, a body corporate, is expected to be party in the
proceedings before the Tribunal as it has a legal r ight of
representation. Absence of the Commission before the Tribunal
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]
will deprive it of presenting its views in the proceedings. Thus, it
may not be able to effectively exercise its right to appeal in terms
of Section 53 of the Act.
105. Furthermore, Regulations 14(4) and 51 support the view that
the Commission can be a necessary or a proper party in t he
proceedings before the Tribunal. The Commission, in terms of
Section 19 read with Section 26 of the Act, is entitled to commence
proceedings suo motu and adopt its own procedure for completion
of such proceedings. Thus, the principle of fairness would demand
that such party should be heard by the Tribunal before any orders
adverse to it are passed in such cases. The Tribunal ha s taken
this view and we have no hesitation in accepting that in case s
where proceedings initiated suo motu by the Commission, the
Commission is a necessary party.
106. However, we are also of the view that in other cases the
Commission would be a proper party. It would not only help in
expeditious disposal, but the Commission, as an expert body, in
any case, is entitled to participate in its proceedings i n terms of
Regulation 51. Thus, the assistance rendered by the Commission
to the Tribunal could be useful in complete and eff ective
adjudication of the issue before it.”
(page 788)
“125. We have already noticed that the principal objects of the
Act, in terms of its Preamble and the Statement of Objects and
Reasons, are to eliminate practices having adverse effect on t he
competition, to promote and sustain competition in the market, to
protect the interest of the consumers and ensure freedom of trade
carried on by the participants in the market, in view of the economic
developments in the country. In other words, the Act requires not
only protection of free trade but also protection of consum er
interest. The delay in disposal of cases, as well a s undue
continuation of interim restraint orders, can adver sely and
prejudicially affect the free economy of the country. Effort s to
liberalise the Indian economy to bring it on a par with the best of
the economies in this era of globalisation would be jeopardised if
time-bound schedule and, in any case, expeditious disposal by the
Commission is not adhered to. The scheme of various provisions
1073
of the Act which we have already referred to including Sections
26, 29, 30, 31, 53-B(5) and 53-T and Regulations 12, 15, 16, 22,
32, 48 and 31 clearly show the legislative intent to ensure time-
bound disposal of such matters.
126. The Commission performs various functions includin g
regulatory, inquisitorial and adjudicatory. The powers conferred
by the legislature upon the Commission under Sections 27(d) and
31(3) are of wide magnitude and of serious ramifications. The
Commission has the jurisdiction even to direct that an agreement
entered into between the parties shall stand modified to the extent
and in the manner, as may be specified. Similarly, where it is of
the opinion that the combination has, or is likely to hav e, an
appreciable adverse effect on competition but such adverse effect
can be eliminated by suitable modification to such combination,
the Commission is empowered to direct such modification.”
(page 794)
22. Obviously, when the CCI performs inquisitorial, as opposed to
adjudicatory functions, the doors of approaching the CCI and the appellate
authority, i.e., the NCLAT, must be kept wide open in public interest, so
as to subserve the high public purpose of the Act.
23. Coming now to the merits, we have already set ou t the
concurrent findings of fact of the CCI and the NCLAT, wherein it has
been found that Ola and Uber do not facilitate cartelization or anti-
competitive practices between drivers, who are independent individuals,
who act independently of each other, so as to attract the application of
section 3 of the Act, as has been held by both the CCI and the NCLAT.
We, therefore, see no reason to interfere with these findings. Resultantly,
the appeal is disposed of in terms of this judgment.
Kalpana K. Tripathy Appeal disposed of.
SAMIR AGRAWAL v. COMPETITION COMMISSION OF INDIA
& ORS. [R. F. NARIMAN, J.]