2011 (11) TMI 648 - HC - Law of Competition

Court Orders Probe into Chess Federation for Possible Anti-Competitive Practices.

The court dismissed the petition for a writ of mandamus against respondent no.1, as no statutory obligation was identified. However, it recognized a prima ... Direct the Competition Commission to enquire into the alleged contravention of the provisions of Section 3 and Section 4 by respondent no.2 by its aforesaid constitutional provisions and conduct under Section 26 of the Competition Commission Act, 2002. The petitioner may appear before the Commission on 28.11.2011. The petitioner shall present before the Commission a memorandum containing its grievances in this respect on the said date. It is made clear that observations made by me in relation to the case of respondent no.2 are only prima facie, and shall not prejudice their case and the Commission shall enquire into the same independently. Issues Involved:1. Issuance of writ of mandamus against respondent no.1 (UOI).2. Conduct and policies of respondent no.2 (All India Chess Federation).3. Rights of chess players to participate in tournaments organized by other associations.4. Jurisdiction and authority of the High Court to refer the matter to the Competition Commission.5. Applicability of the Competition Act, 2002 to respondent no.2.Issue-wise Detailed Analysis:1. Issuance of writ of mandamus against respondent no.1 (UOI):The petitioners sought a writ of mandamus directing respondent no.1 (UOI) to take steps to prevent respondent no.2 (All India Chess Federation) from banning or threatening to ban chess players associating with other chess associations. The court noted that the petitioners failed to point out any statutory obligation on the part of respondent no.1 to issue such directions. Consequently, the court was not inclined to entertain the writ petition for this relief.2. Conduct and policies of respondent no.2 (All India Chess Federation):The petitioners argued that respondent no.2's conduct was monopolistic and anti-competitive, as it prohibited registered players from participating in tournaments not approved by it, threatening disciplinary action and expulsion. The court observed that respondent no.2 appeared to be exercising its dominant position to stifle the growth of other chess associations, which could potentially violate competition laws.3. Rights of chess players to participate in tournaments organized by other associations:The petitioners claimed that respondent no.2's policies infringed on their right to play chess freely. The court highlighted that the issue was not about the recognition of respondent no.2 as the National Sports Federation (NSF), but about the players' right to form other associations and organize or participate in tournaments without facing punitive actions from respondent no.2.4. Jurisdiction and authority of the High Court to refer the matter to the Competition Commission:The court considered whether it could refer the matter to the Competition Commission under the Competition Act, 2002. Despite respondent no.2's arguments that the Act only applied to commercial matters, the court found that the Act's provisions were broad enough to include respondent no.2. The court cited the Supreme Court's decision in State of West Bengal vs. Committee for Protection of Democratic Rights, which recognized the High Court's power to direct investigations by statutory bodies in appropriate cases.5. Applicability of the Competition Act, 2002 to respondent no.2:The court concluded that respondent no.2 fell within the definition of an 'enterprise' under the Competition Act, as it rendered services to registered players for a fee. The court noted that the Act aimed to prevent practices adversely affecting competition, which could include the monopolistic practices alleged against respondent no.2. The court directed the Competition Commission to investigate the alleged contraventions of Sections 3 and 4 of the Competition Act by respondent no.2.Conclusion:The court dismissed the petition for a writ of mandamus against respondent no.1 but recognized the prima facie case of anti-competitive practices by respondent no.2. It directed the Competition Commission to investigate the matter under the Competition Act, 2002. The observations made by the court were preliminary and would not prejudice the investigation by the Commission.