TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 1636
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....e petitioners application for recall/review the impugned order. 3. The impugned order was passed on the basis of a complaint made by respondent no. 2 (hereafter 'the respondent association') wherein it was alleged that petitioners had placed supply orders on alcoholic beverage manufacturers in an arbitrary and discriminatory manner, with no relation to the consumer demand in the market. It was alleged that the petitioners enjoyed complete monopoly in distribution of IMFL in the State of Uttrakhand and the actions of the petitioners had resulted in denial of market access to certain members of the respondent association. It was also alleged that in view of the discriminatory actions on the part of the petitioners, market share of the members of the respondent association in the State of Uttrakhand, had fallen significantly. On the basis of the said complaint - treated as information under Section 19(1) of the Act - the CCI formed a prima facie opinion that the petitioners had restricted production by Indian Made Foreign Liquor (hereafter 'IMFL') resulting in denial of market access in contravention of the provisions of Section (4) (2) (b) (i) and Section 4(2) (c) of....
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....United Spirits Ltd. (hereafter 'USL') and Pernod Recard India Pvt. Ltd. (hereafter 'Pernod') filed separate writ petitions in the High Court of Uttarakhand [W.P. No. 2932 of 2015 (M/S) and W.P. No. 2925 of 2015 (M/S)], inter alia, praying for direction to the Government of Uttarakhand / Excise Commissioner to lay down a detailed mechanism relating to procurement of liquor at all levels in the value chain, to ensure that the concerned parties act in an "efficient, transparent, fair, reasonable and unbiased manner". USL also not prayed that directions be issued to maintain the requisite stocks of liquor commensurate with the actual consumer demand. In the petition filed by USL it, inter alia, alleged that its market share had fallen from 3,56,106 cases during the month of August - October 2014 and 10,776 cases during the month of August-October 2015, thus, leading to a fall from 61% market share to 2% share. USL and Pernod also alleged that petitioner no. 1 was acting in an arbitrary, whimsical manner to the prejudice of certain suppliers, retailers, consumers and the market as a whole. 5.5 After examining the rival contentions, the Uttarakhand High Court held that t....
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....ections for setting up mechanism for procurement and distribution of foreign liquor. He contended that since the issue had already been considered by the High court, the CCI could not proceed with the information on the principles of res judicata. 7. Second, he submitted that the petitioners were only acting as agents of the State of Uttarakhand and, thus, neither of them could be considered as an enterprise within the meaning of Section 2(h) of the Act. 8. Mr. Zoheb Hossain, learned counsel appearing for CCI and Mr. V.P. Singh, learned counsel appearing for respondent no. 2 countered the submissions advanced on behalf of the petitioners. Mr. V.P. Singh, learned counsel appearing for respondent no. 2 referred to the decision of the Supreme Court in Competition Commission of India v. Steel Authority of India Ltd. and Anr.: (2010) 10 SCC 744 and on the strength of the said decision contended that an order under Section 26(1) of the Act was only an administrative order and did not effectively determine any rights and obligations of the parties. He urged that under the scheme of the Act, such orders were not liable to be interfered with. 9. Next, he referred to the decision of the S....
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....rly not relatable to any sovereign function of the State of Uttarakhand and, therefore, the petitioners are not excluded from the ambit of Section 2(h) of the Act. The activities of the Government which are relatable to sovereign functions of the Government including all activities carried on by the departments of Central Government dealing with atomic energy, currency, defence and space fall within the exclusionary provision of Section 2(h) of the Act. However, distribution of liquor cannot by stretch be considered as one of the activities falling within the above exclusionary provision. 12. In Agricultural Produce Marketing Committee v. Ashok Hariuni (supra), the Supreme Court had explained the meaning of sovereign function in the following words:- "32. So, sovereign function in the new sense may have very wide ramification but essentially sovereign functions are primary inalienable functions which only State could exercise. Thus, various functions of the State, may be ramifications of 'sovereignty' but they all cannot be construed as primary inalienable functions. Broadly it is taxation, eminent domain and police power which covers its field. It may cover its le....
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....oceedings before the CCI are not sustainable on the principles of res judicata, is also without merit. 16. First of all, the writ petitions [W.P. No. 2932 of 2015 (M/S) and W.P. No. 2925 of 2015 (M/S)] referred to by the petitioners were filed by two independent manufacturers - USL and Pernod - inter alia, complaining that the conduct of the petitioners was arbitrary and unreasonable. The information on the basis of which the CCI has passed the impugned order was filed by respondent no. 2, which is an association of manufacturers/dealers and thus, the parties in the two proceedings are not the same. 17. More importantly, the scope of the petitions filed before the Uttarakhand High Court and the matter brought before CCI are materially different. The Uttarakhand High Court was not concerned with an abuse of dominant position. Whereas the allegations before the court related to the arbitrary and unreasonable manner in which the petitioners and the State of Uttarakhand were administering the procurement of liquor; the scope of proceedings before the CCI relate to whether the conduct of the petitioners falls foul of certain provisions of section 4 of the Act. 18. At this stage it is....