COMPETITION APPELLATE TRIBUNAL Appeal No.60/2014 [Under Section 53B of the Competition Act, 2002 Against the Order Dated 25.08.2
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COMPETITION APPELLATE TRIBUNAL Appeal No.60/2014 [Under Section 53B of the Competition Act, 2002 against the order dated 25.08.2014 passed by the Competition Commission of India in Case No.03/2011] CORAM Hon’ble Shri Justice G.S. Singhvi Chairman Hon’ble Shri Rajeev Kher Member Hon’ble Ms. Anita Kapur Member In the matter of: Toyota Kirloskar Motor Private Limited …Appellant Building 4, Plot 20, Toyota Techno Park Bidadi Industrial Area, Ramnagara Taluk Bangalore (Rural) District 562109 Versus 1. Competition Commission of India …Respondents Through its Secretary Hindustan Times House, 18-20, Kasturba Gandhi Marg New Delhi – 110 001 2. Mr. Shamsher Kataria, E-219 East of Kailash, New Delhi – 110065 3. Carnation Auto India Pvt. Ltd. Through its Managing Director Mr. Jagdish Khattar, 3/16, Shanti Niketan, II Floor, New Delhi – 110021 Appearances: Shri Percival Billimoria, Ms. Roopali Singh, Shri Rahul Goel, Ms. Anu Monga, Shri Rahul Satyan, Shri Samir Agrawal, Ms. Sayobani Basu, Shri Neeraj Lalwani and Shri Rishabh Arora, Advocates for the Appellant Shri Salman Khurshid, Senior Advocate with Shri Vaibhav Gaggar, Ms. Reena Kumari, Shri Tushar Gupta, Shri Saksham Dhingra, Ms. Smriti Jain, Ms. Sakshi Kotiyal, Ms. Sanchita Ain, Ms. Azra Rehman, Ms. Neha Mishra, Shri Shiv Johar, Advocates and Shri Kamal Sultanpuri, DD(Law) for Competition Commission of India – Respondent No.1 2 Appeal No.61/2014 [Under Section 53B of the Competition Act, 2002 against the order dated 25.08.2014 passed by the Competition Commission of India in Case No.03/2011] In the matter of: Ford India Private Limited …Appellant S.P. Koil Post, Chengalpattu – 603204 Versus 1. Competition Commission of India …Respondents Hindustan Times House, 18-20, Kasturba Gandhi Marg New Delhi – 110 001 2. Shri Shamsher Kataria E-219, East of Kailash, New Delhi – 110065 3. Carnation Auto India Pvt. Ltd. A-110, Sector - 5, Noida, Uttar Pradesh - 201301 Appearances: Shri Amitabh Kumar, Shri Gautam Shahi and Ms. Lagna Panda, Advocates for the Appellant Shri Vaibhav Gaggar, Shri Saksham Dhingra, Ms. Neha Mishra, Ms. Reena Kumari, Shri Shiv Johar and Ms. Smriti Jain, Advocates for Respondent No.1 – Competition Commis- sion of India Appeal No.62/2014 [Under Section 53B of the Competition Act, 2002 against the order dated 25.08.2014 passed by the Competition Commission of India in Case No.03/2011] In the matter of: Nissan Motor India Private Limited …Appellant Through its Manager (Legal) ASV Ramana Towers, 3rd Floor, No.37 & 38, Venkatanarayan Raod, T. Nagar, Chennai – 600 017 Versus 1. Competition Commission of India …Respondents Through its Secretary Hindustan Times House, 18-20, Kasturba Gandhi Marg New Delhi – 110 001 2. The Director General, Competition Commission of India, 3 B Wing, HUDCO Vishala, 14, Bhikaji Cama Place, New Delhi – 110 066 3. Mr. Shamsher Kataria, S/o Mr. Subir Kataria, R/o E-219 East of Kailash, New Delhi – 110055 4. Carnation Auto India Pvt. Ltd. Studio 205, IHDP Park, Plot 7, Sector – 127, Noida – 201 301 (U.P.) 5. Honda Siel Cars India Ltd. Plot No.A-1, Sector 40/41, Surajpur – Kansa Road, Greater Noida Indl. Dev. Area, Distt. Gautam Budh Nagar (U.P.) 6. Volkswagen India Pvt. Ltd. E-1, MIDC Indl Area (Phase – III) VIII : Nigoje Mahalunge, Kharabwadi, Tel: Khed, Chakan, Pune – 410 501 7. Fiat India Pvt. Ltd. B/19 Ranjangaon, MIDC, Tel : Shirur, Pune – 412 210 8. BMW India Pvt. Ltd. DLF Cyber City – Phase II Building No.8, Tower B, 7th Floor, Gurgaon – 122 002 9. Ford India Pvt. Ltd. Via S.P. Koil Post, Chengalpattu – 603 204 10. General Motors Ltd. Plot No. : 15, Sector – 32, Institutional Area, Gurgaon – 122 001 11. Hindustan Motor Ltd. Irla Building, 10th Floor, 9/1 R N Mukherjee Road, Kolkata – 700 001 12. Mahindra & Mahindra Ltd. Admin. Bldg, 4th Floor, Akurli Road, Kandivli (E) Mumbai – 400 101 13. Maruti Suzuki India Ltd., Plot No.1, Nelson Mandela Road, Vansant Kunj, New Delhi – 110 070 4 14. Mercedes-Benz India Pvt. Ltd. E-3, MIDC Chakan, Phase – III, Chakan Industrial Area, Kuruli & Nighoje, Tq – Khed, Pune – 410 501 15. Skoda Auto India Pvt. Ltd. Plot No.A-1/1, Shendra, Five Star Industrial Area, MIDC, Tq & Dist : Aurangabad – 431 201 16. Tata Motors Ltd. Bombay House, 24, Homi Mody Street, Mumbai – 400 001 17. Toyota Kirloskar Motor Pvt. Ltd. Plot No.1, Bidadi Industrial Area, Bidadi, Ramnagar Taluk, Bangalore (Rural) Dist. – 561 109 Appearances: Dr. Vijay Kumar Aggarwal, Shri Param Tandon and Shri Ankush Walia, Advocates for the Appellant Shri Joy Basu, Shri Vaibhav Gaggar, Shri Saksham Dhingra, Ms. Neha Mishra, Shri Shiv Johar, Ms. Reena Kumari and Ms. Smriti Jain, Advocates for Respondent No.1 – Competition Commission of India Shri T. Sundar Ramanathan, Ms. Arshia Dhingra and Shri Abir Roy, Advocates for Respondent No.5 Shri R. Sudhinder, Shri Siladitya Chatterjee, Advocates for Re- spondent Nos.6 and 15 Ms. Ritam Arora and Shri Pradyuman Sewar, Advocate for Re- spondent No.8 Shri Akshay Nanda and Ms. Khyati Dhupar, Advocates for Re- spondent No.10 Ms. Nikita Agarwal, Advocate for Respondent No.12 O R D E R Whether the Competition Commission of India (the Commission) erred in holding appellants’ distributions/sales agreements and practices violative of Section 3 (4) & Section 4 of the Competition Act (Act) is the subject matter of these appeals. 2. Appellants M/s Toyota Kirloskar Motor Private Limited (Toyota), M/s Ford India Private Limited (Ford) and M/s Nissan Motor India Private Limited (Nissan) 5 filed these appeals against the common order of the Commission dated 25.08.2014 on 17.10.2014 (Toyota) and 30.10.2014 (Nissan & Ford). Earlier Mr. Shamsher Kataria filed information dated 18.01.2011 before the Commission requesting an investigation into alleged abuse of dominant position and anti-competitive agreement/practices adopted by the by the respondents. The Commission considered the information and prima facie having been satisfied that the information warranted investigation directed the Director General to conduct an investigation into the matter and to submit the report within 60 days from the order dated 24.02.2011. FACTS 3. In order to briefly understand the facts in the information, we quote from paragraph 2 of the order under Section 26 (1) of the Act passed by the Commission. “The facts in brief as stated in the information are as under: 2.1 The information has been filed on 18.01.2011 by Mr. Shamsher Kataria, who owns cars manufactured by the respondent companies. 2.2 The informant owns and uses three cars. i) Honda City, Registration No. DL4C AN 1134 ii) Fiat Palio, Registration No. DL3C V 3478 iii) Volkswagen Palo, Registration No. DL3C BM 8312 The informant has alleged that genuine spare parts, diagnostic tools, software and technological information is not made available by these car manufacturers to independent repair workshops (those which are not among authorized service centers of the car manufacturer). Also that these car companies have limited number of authorized service centers located in big towns only and therefore the informant is wary of travelling out of station due to concern of break down assistance. 6 2.3 The informant has stated that he earlier owned a Maruti Suzuki vehicle and could easily get it repaired at independent workshops because the spares and tools were made available by the company in the open market. 2.4 The informant has stated that cost of getting a car repaired in an independent workshop is cheaper by 35-50% as compared to the authorized service centers of the company. The informant has alleged that the respondent companies charge arbitrary and high price to consumers who are forced to avail the spares and the services from their authorized dealers only. Also, the prices charged for repair/maintenance services and for spares by these car companies are even higher than what they charge in other markets like Europe. The informant has alleged that this results in significant increase in maintenance cost to car owners. 2.5 The informant has found that the restriction by these car companies on supplying spares and other required tools and knowhow in the open market, is not a local problem. These companies and dealers appointed by them, as a matter of policy refuse to supply these services in the open market and to independent repair shops. The informant has submitted letters from some independent service stations, where they have expressed inability to service the informants vehicles because the respondents refuse to supply spares and other tools, in support of his allegation. 2.6 The informant has alleged that by not supplying the spares, tools, software etc. required to repair or service their cars, the respondent companies in conjunction with their authorized dealers/service stations have indulged into directly determining the sale price of spare parts and repair/ maintenance services. 7 In addition, such agreement and practice by these car manufactures has resulted into denial of market access to independent repair workshops. 2.7 The informant has stated that as per a CII report, the size of Indian Automotive industry is estimated to be US$ 122-159 billion by the year 2016, which will be larger than the US market. Growth in the market of spare parts, replacement parts, service and maintenance etc. is expected to be proportionate to the growth in the vehicle sales, as enumerated above. 2.8 The informant has alleged that the restrictive and monopolistic trade practices, as detailed above, of the respondents and their authorized dealers/service stations have a negative effect not only on the consumer but the whole economy because it increases the cost of keeping a vehicle.