Bansi Lal Bhat JUDGMENT
Bansi Lal Bhat, Member (J)
1. This appeal arises out of order dated 30th May, 2018 passed by the Competition Commission of India (hereinafter referred to as 'CCI') under Section 26(2) of the Competition Act, 2002 (the 'Act') in Case No. 11 of 2018 whereby the information relating to allegations of contravention of provisions of Section 4 of the Act filed by the Appellant (Informant before CCI) was ordered to be closed on the ground that the existing Dealership Agreement between the Appellant and Respondent No. 1 stood expired by efflux of time on 31st December, 2017 due to non-renewal thereof and the Informant had not challenged any term of the aforesaid Dealership Agreement which has since expired.
2. For better appreciation of the grievance projected by the Informant a peep into the factual aspects and sequence of events is inevitable. The Informant - 'Parsoli Motor Works Pvt. Ltd.' filed an information with CCI under Section 19 (1)(a) of the Act against 'BMW India Pvt. Ltd.' and 'BMW India Financial Services Pvt. Ltd.' respectively figuring as OP-1 and OP-2 in the Information alleging abuse of dominant position at their hands. Informant - a Private Limited Company, was a dealer for selling BMW cars in the state of Gujarat since 2007 and the dealership subsisted till 31st December, 2017. OP-1 is the manufacturer and seller of BMW cars in India and sells the product in India through dealers while OP-2 is a group company of OP-1 financially supporting the sales effected by OP-1. The Informant alleged that OP-1 was allowing dealers outside Gujarat to sell BMW vehicles to customers based in Gujarat which amounted to abuse of the dominant position resulting in financial loss to the Informant. Allegedly, OP-1 not only violated its own policy but also cheated the State Exchequer.
3. Abuse of dominant position by an enterprise, forbidden under Section 4 of the Act, essentially arises out of a position of strength enjoyed by an enterprise in the relevant market enabling it to operate independent of the competitive forces or affects its competitors or consumers or the relevant market in a manner that tilts the balance in its favour. While holding and enjoyment of a dominant position in itself is not prohibited, its abuse is proscribed. It is therefore relevant to ascertain whether OP-1 did enjoy a position of strength and was dominant in passenger car segment in India and if so, whether termination of the dealership of Informant ensued the consequence of abuse of such dominant position.
4. Based on information available in public domain, the CCI found that BMW India has negligible share in passenger car segment in India which is dominated by its formidable competitors like 'Maruti', 'Hyundai', 'TATA', etc. who hold a significant market share. Thus, it concluded that BMW India cannot be said to be a dominant player, therefore, question of abuse of dominant position did not at all arise.
5. Heard learned counsel for the parties. It is not in dispute that the Informant was a dealer for BMW vehicles for the Gujarat State under a Dealership Agreement and it enjoyed such position since 2001 in terms of an agreement executed inter-se the relevant parties. The dealership was to last till 31st December, 2017. However, OP-1 shot letter dated 7th December, 2017 intimating the Informant that the existing dealership would not be renewed and would expire on 31st December, 2017. The contention put forward on behalf of the Informant that while it was not given sufficient time to exit from the business and the effect of termination of its dealership had the effect of allowing dealers outside Gujarat to sell BMW cars to customers in Gujarat resulting in loss to the Gujarat Exchequer besides causing financial loss to the Informant, would amount to abuse of dominant position is without substance and the competition conce........