TaxTMI 
TaxTMI 
TaxTMI 
2021 (12) TMI 1405
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.... 2002. Thus, the Competition Commission of India formed an opinion that it is a fit case for Director General investigation. The Director General has to investigate the matter for violation of any/all provisions of the Competition At and the said proceedings of initiation states that "Nothing stated in this order shall tantamount to a final expression of opinion on merit of the case and the Director General shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein". Thus, the proceedings dated 08.10.2013 is only an acceptance of complaint and thereafter, a notice under Section 41(2) read with Section 36(2) of the Competition Act, 2002 in CCI Case No. 38 of 2013 was issued to the writ petitioner in notice dated 03.12.2013, which is under challenge in the present writ petition. 3. There is no need to adjudicate the merits of the case in the present writ petition as the respondents are yet to adjudicate the merits of the case by providing opportunity to the parties concerned. Thus, any discussion on merits would cause prejudice to either of the parties and thus, this Court is not inclined to adjudicate the merits with reference to t....
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....itable distribution of electricity and promoting competition. When the Electricity Act is a Special Act as far as the TANGEDCO is concerned, the provisions of the Competition Act is inapplicable and the Electricity Act will prevail over the Competition Act. No doubt, in the absence of any such Regulatory Commission, the respondents would have justified in entertaining a complaint under the Competition Act. When there is an effective redressal mechanism provided by constituting Tamil Nadu Electricity Regulatory Commission, there is no reason whatsoever to entertain a complaint under the Competition Act and thus, the impugned notice issued by the first respondent is beyond the scope of jurisdiction and further, the Competition Act itself is inapplicable with reference to the nature of complaint filed by the third respondent and in view of Section 23 of the Electricity Act, 2003. 9. The learned Additional Advocate General relied on Section 2(64) of the Electricity Act, which defines "State Commission" means the State Electricity Regulatory Commission constituted under sub-section (1) of Section 82 and includes a Joint Commission constituted under sub-section (1) of Section 83. When S....
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....rsons. 98. Thus, with the advent of globalisation/liberalisation leading to free market economy, regulators in respect of each sector have assumed great significance and importance. It becomes their bounden duty to ensure that such a regulator fulfils the objectives enshrined in the Act under which a particular regulator is created. Insofar as the telecom sector is concerned, the TRAI Act itself mentions the objective which it seeks to achieve. It not only exercises control/supervision over the telecom service providers/licensees, TRAI is also supposed to provide guidance to the telecom/mobile market. "Introduction" to the TRAI Act itself mentions that due to tremendous growth in the services it was considered essential to regulate the telecommunication services by a regulatory body which should be fully empowered to control the services, in the best interest of the country as well as the service providers. Likewise, the Statement of Objects and Reasons of this Act, inter alia, stipulates as under: "1. In the context of the National Telecom Policy, 1994, which amongst other things, stresses on achieving the universal s....
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...., amongst other, including ensuring technical compatibility and effective inter-relationship between different service providers; ensuring compliance of licence conditions by all service providers; and settlement of disputes between service providers. 103. We are of the opinion that as TRAI is constituted as an expert regulatory body which specifically governs the telecom sector, the aforesaid aspects of the disputes are to be decided by TRAI in the first instance. These are jurisdictional aspects. Unless TRAI finds fault with the IDOs on the aforesaid aspects, the matter cannot be taken further even if we proceed on the assumption that CCI has the jurisdiction to deal with the complaints/information filed before it. It needs to be reiterated that RJIL has approached the DoT in relation to its alleged grievance of augmentation of POIs which in turn had informed RJIL vide letter dated 6-9-2016 that the matter related to interconnectivity between service providers is within the purview of TRAI. RJIL thereafter approached TRAI; TRAI intervened and issued show-cause notice dated 27-9-2016; and post issuance of show-cause notice and directions, TRAI issued recommenda....
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....le as well. If CCI is allowed to intervene at this juncture, it will have to necessarily undertake an exercise of returning the findings on the aforesaid issues/aspects which are mentioned in para 102 above. Not only TRAI is better equipped as a sectoral regulator to deal with these jurisdictional aspects, there may be a possibility that the two authorities, namely, TRAI on the one hand and CCI on the other, arrive at conflicting views. Such a situation needs to be avoided. This analysis also leads to the same conclusion, namely, in the first instance it is TRAI which should decide these jurisdictional issues, which come within the domain of the TRAI Act as they not only arise out of the telecom licences granted to the service providers, the service providers are governed by the TRAI Act and are supposed to follow various regulations and directions issued by TRAI itself. 113. The conclusion of the aforesaid discussion is to give primacy to the respective objections (sic objectives) of the two regulators under the two Acts. At the same time, since the matter pertains to the telecom sector which is specifically regulated by the TRAI Act, balance is maintained by p....
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....ellate Authority under the Electricity Act. The Commission accordingly closed the matter in terms of Section 26(2) of the Act, vide the impugned Order dated 10/2/2016. 14.............. (v) That even if it were assumed that, both the Electricity Act and the Competition Act were special laws, then the principle of leges posteriores priores contrarias abrogant will be applicable as both the Acts, i.e. Electricity Act and Competition Act, were passed by the Union Parliament under Article 246 List III of the Schedule 7 of the Constitution. As the Electricity Act was later in date, therefore, it would prevail over the Competition Act. 15. We have considered the submissions made by the learned counsels appearing for the parties and perused the Electricity Act, the Competition Act, the Regulations made in exercise of powers vested under the aforesaid Acts, and the relevant judicial pronouncements. It is an admitted position that DHBVN enjoyed dominant position in the market for distribution of electricity in its licensed area. The following issues arise for determination: 1. Whether the ....
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....is a Special enactment and the Competition Act, which is a general law would be inapplicable. 17. The learned Additional Solicitor General of India appearing on behalf of the respondents 1 and 2 objected the contentions raised on behalf of the petitioner in entirety. The jurisdiction and applicability of the Act has been well enumerated by the Hon'ble Supreme Court of India in Bharti Airtel case (cited supra) itself. The Hon'ble Supreme Court of India has elaborately discussed the circumstances, under which, complaints are entertainable under the Competition Act and where it is not entertainable. While so, the prima facie case made out against the writ petitioner revealed that it is evident prima facie case was made out regarding abusal of its dominant position by imposing discriminatory conditions in the sale of electricity in the relevant market within the meaning of Section 4(2) (a) (i) of the Competition Act, 2002. Thus, the Competition Commission of India formed an opinion that it is a fit case for Director General investigation in the proceedings itself. It is categorically stated that the notice as well as the contentions shall not tantamount to the final expression....
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....Section 23 or under any other provisions of the Electricity Act. 20. The learned Additional Solicitor General of India drew the attention of this Court with reference to Section 4 of the Competition Act, which contemplates abuse of dominant position. In the present case, the third respondent submitted a complaint for abusal of dominant position by the TANGEDCO/writ petitioner and the Competition Commission of India found that there is a prima facie case for the purpose of conduct of investigation and accordingly, entertained the complaint and issued notice. Instead of defending the case, the writ petitioner has chosen to file the writ petition, challenging the very notice issued and therefore, the writ petition itself is not maintainable and liable to be rejected. 21. It is further contended that with reference to the abusal of dominant position, as referred by the third respondent by way of a complaint, there is no monitoring provision or investigating mechanism under the Electricity Act. Thus, Section 4 of the Competition Act is a stand alone provision, which is specific and in the event of any such complaint of abusal of dominant position, Competition Commission of India is em....
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....ch would bring on record findings on the aforesaid aspects, CCI is ill-equipped to proceed in the matter. Having regard to the aforesaid nature of jurisdiction conferred upon an expert regulator pertaining to this specific sector, the High Court is right in concluding that the concepts of "subscriber", "test period", "reasonable demand", "test phase and commercial phase rights and obligations", "reciprocal obligations of service providers" or "breaches of any contract and/or practice", arising out of the TRAI Act and the policy so declared, are the matters within the jurisdiction of the Authority/TDSAT under the TRAI Act only. Only when the jurisdictional facts in the present matter as mentioned in this judgment particularly in paras 72 and 102 above are determined by TRAI against the IDOs, the next question would arise as to whether it was a result of any concerted agreement between the IDOs and COAI supported the IDOs in that endeavour. It would be at that stage CCI can go into the question as to whether violation of the provisions of the TRAI Act amounts to "abuse of dominance" or "anti-competitive agreements". That also follows from the reading of Sections 21 and 21-A of the Co....
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....tection and promotion of consumer interest and ensure fair competition. It is because of this reason that the powers and functions which are assigned to TRAI are highlighted in the Statement of Objects and Reasons. Specific functions which are assigned to TRAI, amongst other, including ensuring technical compatibility and effective inter-relationship between different service providers; ensuring compliance of licence conditions by all service providers; and settlement of disputes between service providers." 27. A reading of the above judgment would clearly show that, in spite of having come to the conclusion that TRAI is the expert regulator constituted for the purposes of ensuring an orderly and healthy growth of telecommunication infrastructure services, the Supreme Court held that TRAI would not be the sole repository of the jurisdiction to deal even with the Competition Act and violations thereunder. However, the Supreme Court found that the jurisdictional facts and obligations under the TRAI Act, 1997 and the Regulations framed thereunder were first to be determined by the TRAI and therefore, held that the respondent no. 1 had to await the outcome of the pr....
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....oses to take, is or would be contrary to any provision of this Act, whose implementation is entrusted to a statutory authority, then the commission may make a reference in respect of such issue to the Statutory authority. 30. Relying on the said provision, the learned counsel for the third respondent reiterated that after investigation by the Director General and during the course of hearing by the Competition Commission of India, if the writ petitioner is able to establish that the subject must be adjudicated before the Tamil Nadu Electricity Regulatory Commission, then the Commission itself has got powers to refer the issues to the statutory authority namely Tamil Nadu Electricity Regulatory Commission (TNERC) for adjudication under the provisions of the Electricity Act. Therefore, mere initiation cannot be questioned on the ground that the Competition Commission of India has no jurisdiction. When the third respondent has raised a specific allegation of abusal of dominant position, then as per Section 4, the Competition Commission is empowered to initiate action and thus, the writ petition is devoid of merits. 31. Considering the arguments as advanced by the learned Additional ....
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....l be made to the statutory authority concerned. Thus, the writ petitioner has got ample opportunity to defend their case and if they could able to establish the Competition Commission of India has no jurisdiction to deal with the particular subjects on merits, which all are amenable to the provisions of the Electricity Act for effective adjudication, then the Competition Commission of India is well within its power to make such issue to the statutory authority namely Tamil Nadu Electricity Regulatory Commission in the present case. 35. Chapter V Section 41 provides 'Director General to investigate contraventions'. Chapter VI deals with 'Penalties'. This being the provisions of the Competition Act, let us now consider the nature of the complaint given by the 3rd respondent to the Competition Commission of India, which has been elaborately stated in Case No. 38 of 2013, wherein, the 3rd respondent has stated that the load shedding power in entire Tamil Nadu, barring Chennai, extended to about 14 to 18 hours a day. The informant highlighted an order dated 10.01.2011 of the Appellate Tribunal for Electricity directing the State Electricity Commission to initiate procee....
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....ent of a holding company by the name of TNEB Ltd. and two subsidiary companies, namely Tamil Nadu Transmission Corporation Ltd. (TANTRANSCO) and Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO). TANTRANSCO is engaged in electricity transmission, TANGEDCO (opposite party in this case) is engaged in both electricity generation and distribution and is the successor to the erstwhile Tamil Nadu Electricity Board. TANGEDCO operates four large thermal power stations-Ennore Thermal Power Station (ETPS), Mettur Thermal Power Station (MTPS), North Chennai Thermal Power Station (NCTPS), Tuticorin Thermal Power Station (TTPS). Since both these activities, generation and distribution, are solely governed by the opposite party in Tamil Nadu, the opposite party seems to be dominant in this relevant market. Further, the existence of holding-subsidiary relation between TNEB Ltd., TANTRANSCO and Opposite Party makes the electricity sector vertically integrated in the state of Tamil Nadu. Opposite Party is the only distribution licensee, having considerable market share in the electricity distribution in the state. 39. Dealing with the question of abuse, it is important to note tha....
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.... send a copy of this direction to the office of the DG. The DG shall investigate the above matter as stated above. In case the DG finds any company in violation of the provision of the Act, it shall also investigate the role of the persons who at the time of such contravention were incharge of and responsible for the conduct of the business of the company involved so as to fix responsibility of such persons under section 48 of the Act. DG shall give opportunity of hearing to such persons in terms of section 48 of the Act. The report of DG be submitted within 60 days from receipt of the order. Nothing stated in this order shall tantamount to a final expression of opinion on merit of the case and the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein. 42. The above allegations set out in the complaint submitted by the 3rd respondent would reveal that there are certain allegations, which require an investigation. The question to be considered is whether the Tamil Nadu Electricity Regulatory Commission is vested with any power to conduct investigation regarding the abuse of dominant position with reference to the allegation....
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....nducting further adjudication or otherwise. 47. Under these circumstances, whether a prima facie case is made out by the 3rd respondent for initiation of proceedings under the Competition Act or not is the question is to be considered. Secondly, whether there is any scope for the Tamil Nadu Electricity Regulatory Commission to conduct an investigation or impose penalty on the TANGEDCO under the provisions of the Electricity Act or not. 48. In this regard Section 4 of the Competition Act is very clear and it prohibits abuse of dominant position. The abuse of dominant position has been enumerated in clear terms by stating that if an enterprise or a group directly or indirectly imposes unfair or discriminatory, condition in purchase or sale of goods or services or price in purchase or sale of goods or service. 49. As far as the Electricity Act is concerned, there is no provision akin to that of Section 4 specifically deals with prohibition of abuse of dominant position. There is a specialized investigating agency, which is constituted and Section 40(1) of the Competition Act provides Director General to investigate contraventions. 50. In the present case, the Competition Commissio....
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....her action or not, is to be investigated and all appropriate proceedings are to be allowed for the purpose of forming a final opinion. 55. This Court is not inclined to step-in to the nature of the allegations or its veracity or otherwise, which is yet to be investigated by the Director General under the provisions of the Competition Act. The allegations, which all are not yet investigated by the competent authority, it would be unnecessary for the Court to appreciate such allegations or made a finding, which would cause prejudice to either of the parties, either to proceed with the investigation or to form an opinion for initiation of further actions under the provisions of the Competition Act or to refer the matter to the Electricity Regulatory Commission under the Electricity Act by invoking Section 21-A of the Competition Act. This exercise is to be done by the respondents 1 and 2 and this Court is not inclined to provide any findings on the allegations or with reference to the investigations to be conducted by the competent authority. 56. Therefore, once an anti-competitive practices are brought to the notice of the Competition Commission of India by way of complaint and suc....