2024 (11) TMI 999 - CCI - Law of Competition

Mall management company cleared of competition law violations over maintenance charges and common area disputes

CCI dismissed allegations against mall management company and maintenance agency under Sections 3 and 4 of Competition Act, 2002. Retail shop owners ... Contravention of provisions of Section 3 and 4 of the Competition Act, 2002 - abuse of dominant position/dominant enterprise - cartel formation - HELD THAT:- From the facts, the Commission notes that the Informants are the retail shop owners in the Mall and are aggrieved by the way Mall has been managed. The gravamen of grievance is that the management of the Mall has not been handed over to the association of the owners of the Mall (buyers of the retail space in the Mall) and it continues to be in the hands of OP-1 acting through OP-2 (maintenance agency); charging of high maintenance and electricity charges; selling joint common areas without consent of the shop owners. The Commission also notes that the Informants have claimed the Mall to be a relevant market and the conduct of OPs causing AAEC in such market - The Informants have already filed a civil suit against OPs claiming permanent injunction against OPs. The Commission notes from the information available in public domain that Metropolitan Mall is not the only mall situated in Gurugram and there are other malls situated in Gurugram and nearby areas. Thus, the Commission is of the view that the case does not merit any narrow delineation of relevant market for the purposes of Section 4 of the Act. As far as the alleged abuse is concerned, the Commission is of the view that the grievances of the Informants like payment of maintenance and electricity charges, rights and entitlement to joint common areas etc. are in the nature of contractual/civil issues/disputes - The Commission also does not find any merit in the case for its examination under Section 3(4) of the Act. Thus, the Commission is of the view that no competition concerns seem to arise in the present matter given the nature of allegations and the alleged conduct of the parties so arrayed by the Informant. The Commission is, thus, of the opinion that there exists no prima facie case of contravention of the provisions of Section 3 and Section 4 of the Act against the OPs in the present case and therefore, the matter be closed forthwith under Section 26(2) of the Act. Consequently, no case for grant for relief as sought under Section 33 of the Act arises and the same is disposed of accordingly. Issues Involved:1. Alleged contravention of Sections 3 and 4 of the Competition Act, 2002 by the Opposite Parties.2. Abuse of dominant position by the Opposite Parties in the management and maintenance of the Mall.3. Allegations of cartel formation by the Opposite Parties.4. Contractual and civil disputes regarding maintenance and electricity charges, and rights to joint common areas.Detailed Analysis:1. Alleged contravention of Sections 3 and 4 of the Competition Act, 2002 by the Opposite Parties:The Informants alleged that the Opposite Parties (OPs) contravened Sections 3 and 4 of the Competition Act, 2002, by abusing their dominant position and engaging in anti-competitive practices. The Informants claimed that the OPs, particularly OP-1 and OP-2, maintained control over the Metropolitan Mall's management and charged exorbitant maintenance and electricity fees. They also alleged illegal sales and encroachments of joint common areas, which they argued were contrary to the provisions of the Act.2. Abuse of Dominant Position by the Opposite Parties:The Informants contended that OP-1, through OP-2, abused its dominant position by unilaterally imposing high maintenance and electricity charges and incorporating anti-competitive clauses in maintenance agreements. The Informants argued that these actions resulted in an appreciable adverse effect on competition (AAEC) in the relevant market, which they identified as the Metropolitan Mall. However, the Commission noted that the grievances were primarily contractual or civil in nature, such as disputes over maintenance fees and rights to common areas, and did not indicate a competition law violation.3. Allegations of Cartel Formation by the Opposite Parties:The Informants accused the OPs of forming a cartel to limit or control services within the Mall, thereby disadvantaging legitimate owners. The Commission, however, found that the Informants failed to demonstrate the existence of a horizontal relationship necessary to establish a cartel under Section 3(3) of the Act. The Commission also found no merit in examining the case under Section 3(4) of the Act, as the allegations did not meet the criteria for anti-competitive agreements.4. Contractual and Civil Disputes:The Commission observed that the primary issues raised by the Informants, such as the imposition of maintenance and electricity charges and entitlement to joint common areas, were rooted in contractual and civil disputes rather than competition law concerns. The Informants had already initiated a civil suit seeking a permanent injunction against the OPs, which further underscored the contractual nature of the disputes.Conclusion:The Commission concluded that there was no prima facie case of contravention of Sections 3 and 4 of the Competition Act, 2002, by the OPs. Consequently, the Commission decided to close the matter under Section 26(2) of the Act, as the allegations did not raise any competition concerns. The Commission clarified that its order was solely from the perspective of the Competition Act, 2002, and did not address the merits of the ongoing litigation between the parties.