2024 (11) TMI 938 - CCI - Law of Competition

Competition Commission Dismisses Allegations Against Bank Due to Lack of Competition Issues.

In Re: AV Satheeshkumar, The Chief Manager/CEO, Catholic Syrian Bank Ltd., The Head Recovery (DGM), Catholic Syrian Bank Ltd., The Branch Head, Asset Recovery Branch, CSB Ltd

The Competition Commission concluded that the allegations against CSB Bank and its officials did not constitute a contravention of the Competition Act, ... Contravention under Section 19(1) (a) of the Competition Act, 2002 - fraudulent conduct leading to recovery proceedings against the property of the Informant - HELD THAT:- The Commission is of the view that the above facts and circumstances do not involve any competition issue, and resultantly, does not warrant scrutiny from the perspective of the Act. Given the facts and circumstances of the present case, the Commission finds that no prima facie case of contravention of the provisions of the Act is made out against the OPs. Accordingly, the information is ordered to be closed forthwith in terms of the provisions contained in Section 26(2) of the Act. Consequently, no case for grant for relief(s) as sought under Section 33 of the Act arises and the said request is rejected. Issues: Alleged contravention of provisions of the Competition Act, 2002 by CSB Bank and its officials; fraudulent conduct leading to recovery proceedings against the property of the Informant; request for inquiry, compensation, and relief by the Informant; interim relief sought to stop recovery action by CSB Bank.Analysis:The case involves an Information filed by the Informant against CSB Bank and its officials under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of the Act. The Informant claimed that Mr. Mathew induced him to execute sale deeds of his property without consideration, which were then used to secure loans from Bank of India and Union Bank of India. Subsequently, Mr. Mathew allegedly settled those loans and obtained a new loan from CSB Bank against the Informant's property without his knowledge. The Informant discovered this fraud in 2020 when a possession notice was issued by CSB Bank for recovery of a substantial amount borrowed by Mr. Mathew. The Informant, who had been paying taxes and had a tenant in the property, sought relief through legal proceedings in various forums.The Informant alleged that CSB Bank officials colluded with Mr. Mathew to initiate recovery proceedings against his property, compelling him to sign a 'Private Treaty' and pay a portion of the consideration to prevent losing his property. Additionally, it was claimed that Mr. Mathew sold a portion of his own property, pledged under the same loan account with CSB Bank. The Informant requested the Competition Commission to conduct an inquiry into the conduct of CSB Bank, provide compensation, relieve liability over the property, and grant interim relief to halt the recovery action by CSB Bank until the matter is investigated.The Commission, after considering the Information and relevant material, noted the alleged fraudulent conduct where the Informant's property was mortgaged without his knowledge, leading to recovery proceedings by CSB Bank. However, the Commission found that the facts and circumstances of the case did not involve any competition issue under the Act. As a result, the Commission concluded that no prima facie case of contravention of the Act was established against the Opposite Parties (OPs). Consequently, the Information was ordered to be closed under Section 26(2) of the Act, and the request for relief under Section 33 was rejected. The Secretary was directed to communicate this decision to the Informant.In summary, while the Informant's grievances regarding the alleged fraudulent conduct and collusion between Mr. Mathew and CSB Bank officials were acknowledged, the Competition Commission found that the case did not fall within the purview of competition law and, therefore, no contravention of the Act was established against the OPs.