REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3100 OF 2020
SAMIR AGRAWAL …APPELLANT
VERSUS
COMPETITION COMMISSION OF INDIA & ORS ....RESPONDENTS
J U D G M E N T
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 section 3(1) read with section 3(3)(a) of the Act, and
engaged in resale price maintenance in contravention of section 3(1)
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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 algorithm 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 both have to accept the price set by the pricing
algorithm. As per the terms and conditions agreed upon between
Ola and Uber with their respective drivers, despite the fact that the
drivers are independent entities who are not employees or agents of
Ola or Uber, the driver is bound 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 receive their share of the fare
only after the deduction of a commission by Ola and Uber for the
services offered to the rider. Therefore, the Informant alleged that
the pricing algorithm used by Ola and Uber artificially manipulates
supply and demand, guaranteeing higher fares to drivers who would
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otherwise compete against one and another. Cooperation between
drivers, through the Ola and Uber apps, results in concerted 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, whereby riders are charged on the basis of their
willingness to pay and as a result, artificially inflated fares are paid.
Various other averments 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 present 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 Aggregators, 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
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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 estimation of fare through
App is done by the algorithm on the basis of large data
sets, popularly referred to as ‘big data’. Such algorithm
seemingly takes into account personalised information of
riders 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’
arrangement as understood in the traditional competition
parlance. A hub and spoke arrangement generally requires
the spokes to use a third party platform (hub) for exchange
of sensitive information, including information on prices
which can facilitate price fixing. For a cartel to operate as a
hub and spoke, there needs to be a conspiracy to fix
prices, which requires existence of collusion in the first
place. In the present case, the drivers may have acceded
to 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 ridesharing 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 be 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 drivers and the centralized pricing
mechanism cannot be viewed as a vertical instrument
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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, understanding 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 the Act appears to be made out
given the facts of the present case.
19. Further, the allegation as regards price discrimination
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
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providing taxi/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 cases 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 cartel activity/conduct through
Ola/Uber’s platform. Thus, the present case is different
from the Cement case, not only with regard to adoption of
digital App but also with regard to other relevant 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 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
litigation, class action and actions initiated at the
hands of consumer and trade associations. Even the
whistle blowers have been clothed with the right to
seek redressal of grievances affecting public interest
by enacting a proper legal framework. However, the
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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 the competitive government or
authority, reference to receipt of any information from
any person in section 19(1) (a) of the Act has
necessarily to be construed as a reference to a person
who has suffered invasion of his legal rights as a
consumer or beneficiary of healthy competitive
practices. Any other interpretation would make room
for unscrupulous people to rake issues of anticompetitive agreements or abuse of dominant position
targeting some enterprises with 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
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
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there is no allegation 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 independent of each
other. It is also not disputed that besides Ola and Uber
there are other players also in the field who offer their
services to commuters/ riders in lieu of consideration. It
emerges from 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 applicable to the business
model of Ola and Uber as a hub with their platforms
acting as a hub for collusion inter se the spokes i.e.
drivers resting upon US Class Action Suit titled
“Spencer Meyer v. Travis Kalanick” has no application
as the business model of Ola and Uber (as it operates
in India) does not manifest in restricting price
competition among drivers to the detriment of its
riders. The matter relates 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 competition
concerns under the Act. It is significant to note that the
Informant in the instant case has alleged collusion on the
part of drivers 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.
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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
through the Uber App and assist them in finding a potential
ride and also recommends a fare for the same. However,
the driver partners 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 would recommend a
fare, the driver partners have liberty to negotiate a lower
fare. It is, therefore, evident that the Cab Aggregators do
not function as an association of its driver partners. Thus,
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 service/ transportation service/
service providers in transport sector and the Cab
Aggregators in the instant case distinctly do not hold
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.
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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 that the amendments made in the sections would
show that any person can be an informant who can approach the
CCI, as one does not have to be 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”, howsoever restricted the
expression “person aggrieved” may be in law.
7. The Appellant then argued substantially what was submitted 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 the
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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 senior advocate
appearing on behalf of Uber, took us through the concurrent findings
of fact of the CCI and the NCLAT, and stated that they could not be
said to be, in any sense, even remotely perverse and would
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 with riders, not only insofar as Ola and Uber are concerned,
but also otherwise, 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 concerned. On the contrary, the apps allow
drivers to negotiate fares that are below what is quoted in the app,
thereby increasing competition and giving riders greater flexibility to
take rides with those drivers who offer the most competitive fares.
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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 informant 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 SCC 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 with 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.
12
11. Having heard the learned counsel appearing on behalf of the various
parties, it is necessary to first set out the sections 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
agreement amongst themselves, limit, control or attempt to
control 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
which 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 hires 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;
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xxx xxx xxx
(l) “person” includes—
(i) an individual;
(ii) a Hindu undivided family;
(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
respect of production, supply, distribution, storage,
acquisition or control of goods or provision of services,
which causes or is likely 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 between any person and enterprise or practice
carried on, or decision taken by, any association of
enterprises or association of persons, 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
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(4) Any agreement amongst enterprises or persons at
different 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
(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
effect 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
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or on its own knowledge or information received under
section 19, if 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 information 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 the 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
16
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,—
(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 section 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 the 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:
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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
Appellate 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
possible and 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 claim 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 loss
or damage shown to have been suffered, by the Central
Government or a State Government or a local authority or
any enterprise or any person as a result of any
contravention of the provisions of Chapter II, having been
committed by enterprise.
(2) Every application made under sub-section (1) shall be
accompanied by the findings of the Commission, if any,
and also be accompanied with such fees as may be
prescribed.
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(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: Provided 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.
Explanation.—For the removal of doubts, it is hereby
declared that—
(a) an application may be made for compensation before
the Appellate Tribunal only after either the Commission or
the Appellate Tribunal on appeal under clause (a) of subsection(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 subsection(2) of section 53Q of the Act 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.
19
xxx xxx xxx
(3) The Commission may authorize one or more
chartered 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
the applicant was prevented by sufficient cause from filing
the appeal 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
person defined in clauses (f), (h) and (l) of section 2
20
of the Act respectively, or an information provider, or
a consumer association or a trade association or the
Director General defined in clause (g) of section 2 of
the Act, or the Central 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;
(2) The information or reference referred to in subregulation (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
the informant and parties before any court, tribunal,
statutory authority or arbitrator in respect of the
subject matter of information;
21
(e) Such other particulars as may be required by the
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
the Secretary and the Commission shall be represented in
the name 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 meeting, 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 interest to allow such person or
enterprise to present his or its opinion on that matter, may
permit that person or enterprise to present such opinion
and to take part in further proceedings of the matter, as the
Commission may specify….”
“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
22
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 before the Commission, if so
required.
(3) The remuneration payable and other allowances and
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 wide,
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” from 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
23
be received from any person, obviously whether such person is or is
not personally 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 the CCI being empowered to pass other such orders as it
deems fit. This, and the judicious use of heavy costs being imposed
when the information supplied is either frivolous or mala fide, can
24
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
details of the alleged contravention to be set out in the information
filed. Also, regulation 25 shows that public interest must be foremost
in the consideration 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.
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 Informant
25
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 State 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 advocate 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
26
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 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 contravention
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 place
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
27
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 53T of the Act are “any person”, thereby
signifying that all persons who bring to the CCI information of
practices that are contrary to the provisions 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 applicant 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-section (1) of section 53N of the Act, would refer only to persons
who have suffered loss or damage, thereby, qualifying the
expression “any person” as being a person who has suffered loss or
damage. Thus, the preliminary objections against the
Informant/Appellant filing Information before the CCI and filing an
appeal before the NCLAT are rejected.
28
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 then 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
manners 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 prima 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 end 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 direction, 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; resultantly, 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 is
expected to be maintained by the Commission in terms of
Section 57 of the Act and Regulation 35 of the Regulations.”
29
(page 768)
“101. The right to prefer an appeal is available to the
Central Government, 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
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
to 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 may
authorise one or more of chartered accountants or
company 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 parties 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 right of
representation. Absence of the Commission before the
30
Tribunal 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 the 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
has taken this view and we have no hesitation in accepting
that in cases 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 in terms of Regulation 51. Thus, the
assistance rendered by the Commission to the Tribunal
could be useful in complete and effective 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 the 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 consumer interest. The delay in disposal of cases, as well
as undue continuation of interim restraint orders, can
adversely and prejudicially affect the free economy of the
country. Efforts 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 of the Act
31
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 timebound disposal of such matters.
126. The Commission performs various functions including
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 have, 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 out 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
32
findings. Resultantly, the appeal is disposed of in terms of this
judgment.
……………….......................... J.
(ROHINTON FALI NARIMAN)
……………….......................... J.
(K.M. JOSEPH)
……………….......................... J.
(KRISHNA MURARI)
New Delhi;
December 15, 2020.
33
