TaxTMI 
TaxTMI 
2023 (4) TMI 1387
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....urchase Order No.CORE/S/1271/5226/20473 dated 12.01.2018 and Purchase Order No.CORE/S/1271/4054/20177 dated 13.09.2013 as well as quash the Demand Notice dated 26.09.2018 in respect of purchase order dated 13.09.2013. B. issue a writ, order or direction in the nature of mandamus directing the respondent authorities to make the entire payments of the petitioner forthwith alongwith 18% interest from the actual date of dues of the petitioner. C. issue a writ, order or direction which this Hon'ble Court may deem fit and proper under the circumstances of the case. D. award the cost to the petitioner." 4. The brief facts of the case are that the petitioner is a partnership firm registered under the Partnership Act, 1932 and engaged in business of supply of specialized electrical equipments imported from Europe to the Indian Railways. The petitioner firm is an agent of Arthur Flury, Switzerland, which is an international company engaged in the business of manufacturing several specialized electrical equipments to be used worldwide in the electrification of railways as well as in other fields also. The petitioner firm inter alia procures "Short Neutral Sec....
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....s. It is undisputed that full material was supplied by the petitioner firm. The copy of the challan-cum-tax invoice showing receipt of articles on 15.3.2018 has also been brought on record as Annexure No.7 to the writ petition. 6. Meanwhile, another global tender was advertised by the CORE on their official website and solicited online global bids, which were opened on 29.11.2017 for supply of 238 sets of SNS Assembly (Phase Breaks). The petitioner firm had again participated in the said global tender. Finally, the Members of the Tender Committee accepted the offer of the petitioner and recommended to procure 176 sets, out of total tender quantity of 238 sets. It is also claimed that the decision of the Tender Committee was accepted by the Higher level Purchase Officer i.e. Principal Chief Material Manager of CORE. Thereafter, the respondent issued the purchase order dated 27.2.2018 with detailed terms and conditions for supply of 170 sets for Rs. 14.64 crores. It is not disputed that in response of the purchase order dated 27.2.2018, the petitioner supplied the entire articles through various Challan-cum-Tax Invoices dated 26.6.2018, which is appended as Annexure No.9 to the wr....
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....he notice dated 17.05.2018 the respondent had alleged that the petitioner is taking unreasonable higher profits. Consequently, the second respondent had preferred a complaint dated 12.06.2018 under Section 19(1)(b) of the Competition Act, 2002 Act, 2002 before the Secretary, Competition Commission of India CORE alleging that the petitioner flouted the provisions of Sections 3 and 4 of the Act, 2002. The said complaint was treated as a Reference Case No.05 of 2018 (Central Organisation for Railway Electrification Office of the Principal Chief Materials Manager 1, Nawab Yusuf Road, Civil Lines, Allahabd, U.P vs. M/s PPS International, Greater Noida, UP). Finally, the CCI by its judgment and order dated 27.8.2018 had proceeded to decide the reference holding that no case is made out against the petitioner. 8. The petitioner has preferred the present writ petition in the year 2018 seeking aforementioned reliefs. After filing the writ petition, a time barred Appeal dated 11.10.2019 was filed by the CORE before the National Company Law Appellate Tribunal, New Delhi NCLAT under Section 53(1) & (2) of the Act, 2002 against the judgment and order dated 27.8.2018 and the same was register....
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....ition Commission, the Railway had the freedom to approach the Tribunal constituted under the Act, which they chose not to and unilaterally revised the rates by passing an order dated 12/13.9.2018 and consequently, has issued a demand notice on 26.9.2018 for a sum of Rs. 5,19,47,553.80/-. It is to be further noted that once the Competition Commission already decided the claim of the Railway, prima facie, we are of the view that without filing an appeal, unilaterally rates could not have been revised. The matter requires consideration. Mr. Rajnish Kumar Rai, learned counsel for the respondents prays for and is allowed three weeks' time to file counter affidavit. List this case after expiry of the aforesaid period. Considering the aforesaid, no coercive steps shall be taken against the petitioner pursuant to the order dated 26.9.2018 (Annexure No.4 to the writ petition)." 10. Again on 23.1.2023 the Court had directed the parties to bring on record the reference filed by the CORE before the CCI and consequently, supplementary affidavit was filed on 29.1.2023 bringing on record the certified copy of the Reference Case No.05 of 2018 fil....
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....plaint dated 12.06.2018 before the CCI, registered as Reference Case No.05/2018 under Section 19(1)(b) of the Act, 2002, against the petitioner alleging contravention of provisions of Sections 3 and 4 of the Act, 2002. On the said complaint/reference the enquiry was made by the CCI on the basis of material filed by the respondent and passed an order on 27.8.2018 and rejected the complaint/reference. He submitted that while preferring the reference against the petitioner the CORE has alleged before the CCI, on the basis of purchase orders, to the effect that the petitioner's monopolistic position of single approved source has increased the rates in recent 12 years without any significant inflation in Switzerland. In support of his submission, he has placed reliance on the Reference Case No.05/2018, wherein the CORE had alleged the excessive pricing viz. "But later on it was revealed vide "Custom's letter dated C. No.VIII/12/ACC-Import/Gr-VA/Misc./841/2013 dated 22.06.2015 that M/s PPS International has imported the material @ CHF 6400 and jacked up prices taking benefit of its monopoly situation." Further, it has been stated in the last paragraph that "From the above it beco....
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....t respect that once the remedy has not been availed by the CORE even at this belated stage then this Court does not inhere the power to sit in appeal or to interfere or upset the findings recorded by the CCI in its order dated 27.1.2018. 14. In support of his submission, learned counsel for the petitioner has placed reliance upon the judgment of Apex Court in Union of India vs. Tantia Construction Pvt. Ltd. 2011 (5) SCC 697 and ABL International Ltd. vs. Export Credit Guarantee Corporation of India Limited 2004 (3) SCC 553. He has also relied upon a Division Bench judgment of Madras High Court in M/s K.J. Hospital vs. M/s Technomed International and others Writ Petition No.7031 of 2018 decided on 20.4.2018. 15. On the other hand, Sri Sudarshan Singh, learned counsel for the respondents has vehemently opposed the writ petition and submitted that the petitioner firm is an agent of Arthur Flury, Switzerland since 1st May, 2008. The Arthur Flury, Switzerland (AF) is an international company, which is engaged in the business of manufacturing several specialized electrical equipment to be used worldwide in the electrification of Railway as well as in another field also. The CORE in....
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....e Railway Board and the same is applicable being statutory amendment. 17. It has been further submitted that while submitting the offer on behalf of M/s Arthur Flury, Switzerland, the petitioner has given proforma invoice in which higher CHF rate was quoted by the petitioner but at the time of supplying the material they have paid only CHF 6400, CHF 7200, CHF 7200 per unit respectively in purchase orders dated 13.9.2013, 12.1.2018 and 27.2.2018. Further the petitioner has declared in their calculation sheet submitted during the negotiation that they were claiming a profit of 2% over and above the offered prices in the tender i.e. CHF 8600, CHF 8590 and CHF 8590 in purchase orders dated 13.9.2013, 12.1.2018 and 27.2.2018 respectively, whereas the actual prices of these material were CHF 6400, CHF 7200 and CHF 7200. The petitioner had misrepresented the actual prices and on the basis of fraud, they have obtained the purchase order on high rate by concealing the material fact. Due to this difference of prices the Book Examination as per IRS-3300 has been conducted and modified advices have been issued for reduction in the rates of all three purchase orders and bills have been passe....
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....ision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which- a. directly or indirectly determines purchase or sale prices; b. limits or controls production, supply, markets, technical development, investment or provision of services; c. shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way; d. directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition. 4. Abuse of dominant position.- 1. No enterprise shall abuse its dominant position. 2. There shall be an abuse of dominant position under sub-section (1), if an enterprise or a group,- a. directly or indirectly, imposes unfair or discriminatory- i. condition in purchase or sale of goods or service; or ii. price in purchase or sale (including predatory price) of goods or service. Explanation.- ....
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.... the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the direction, decision or order appealed against. (4) The Appellate Tribunal shall send a copy of every order made by it to the Commission and the parties to the appeal. (5) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal within six months from the date of receipt of the appeal. 53T. Appeal to Supreme Court.- The Central Government or any State Government or the Commission or any statutory authority or any local authority or any enterprise or any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to them: Provided that the Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed after the expiry of the said period of sixty days." 20....
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.... the notice is received by the Contractor, or its agencies calling for the production of documents as under clause (i) above. In the event of Contractor's or his agencies failure to do so, the contract price would be reduced and determined according to the best judgment of the purchase which would be final and binding on the Contractor and his agencies." (emphasis supplied) 21. We have proceeded to examine the record in question and find that the CORE is an organization under the Ministry of Railways and is entrusted with the responsibility to carry out railway electrification over the entire network of the Indian Railways. The CORE inter alia procures SNS Assembly also called 'Phase Break' for various Railways Zones from M/s Arthur Flury AG Switzerland, which sells this product through its authorised Indian distributor (petitioner firm). In terms of Railway Board letter dated 14.11.2017, SNS Assembly is a centralised procurement item of CORE, where demand of all Zonal Railways is consolidated and procured. The petitioner entered into an agreement with M/s Arthur Flury AG. The CORE floated the online global tender on their website for supply of 28 sets of SNS Asse....
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....No.05 of 2018. Finally, the Commission has decided the reference on 27.8.2018. The operative portion of the judgment dated 27.8.2018 is reproduced hereinafter:- "8. The Commission has perused the reference and the documents filed therewith and also considered the material available in public domain. 9. At the outset, the Commission notes that though the Informant has alleged contravention of the provisions of both Sections 3 and 4 of the Act, yet looking at the nature of allegations and the relationship of the OP with the OEM, the provisions of Section 3(3)(a) of the Act are not applicable to the present case as the OP (distributor) and OEM (manufacturer) are operating at different levels of the production chain in different markets. Thus, prima facie the provisions of Section 3(3)(a) of the Act are not attracted. 10. Next, for the purpose of examining the allegations of the Informant under the provisions of Section 4 of the Act, it is necessary to determine the relevant market at the first instance. Thereafter it is necessary to assess whether the OP enjoys a position of strength required to operate independently of the market forces in the relevant mark....
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.... of the Act. 16. To examine the alleged abuse of dominant position by the OP in the relevant market delineated supra, it is noted that the Informant has not specified any specific condition which can be examined within the framework of Section 4(2)(a)(i) of the Act. 17. However, on a closer scrutiny of the information, it appears that the Informant is essentially aggrieved by the allegedly high prices charged by the OP for supply of SNS Assembly to CORE. The informant has claimed that the OP has increased the prices in last 12 years without any significant inflation in Switzerland. Thus, the informant has essentially raised the issue of excessive pricing. To support the allegations, it has been pointed out that in purchase order dated 13.09.2013, the OP had supplied 282 sets of SNS Assembly on behalf of M/s Arthur Flury AG on the basic rice (excluding all taxes, duties, freight charges, insurance charges & other expanses) i.e. @ 8600 Swiss Franc (CHF) per set. But, later on, it was revealed to the informant that the OP had imported the same goods on the basic price of 6400 Swiss Franc per set. Similarly, the informant provided another evidence where the OP in resp....
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....lanation offered for inordinate delay of 330 days (wrongly described as 350 days) in preferring the appeal. Admittedly, the impugned order was passed by the Competition Commission of India based at New Delhi and it is inconceivable that the appellant was not aware of the appellate mechanism and the forum empowered to entertain the appeal. The ground sought to be projected for condonation of delay does not constitute a "sufficient cause" so as to warrant condonation as sought. Viewed in that context, we find that the huge delay of 330 days has not been explained satisfactorily and no sufficient cause has been assigned for such delay. The application for condonation of delay is accordingly dismissed. That apart, on merit we find that the Commission has noticed the trend in decrease of price of the relevant product in 2016 and 2018 and in view of the same, no prima facie case for directing investigation by Director General was made out. We find no reason to disagree with the view taken by the Commission. There being no infirmity in the impugned order, we decline to intervene. Appeal is accordingly dismissed." (emphasis supplied) 24. Against the said order, the ....
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....lanation offered for inordinate delay of 330 days in preferring the appeal and no sufficient reason or cause has been assigned for such delay. Consequently, the application for condonation of delay was accordingly dismissed. Further, on merit the NCLAT found that the Commission has noticed the trend in decrease of price of the relevant product in 2016 and 2018 and in view of the same, no prima facie case for directing investigation by Director General was made out. The NCLAT found no reason to disagree with the view taken by the Commission and declined to intervene. The review application was also dismissed by the NCLAT on 13.4.2022 as not maintainable, leaving it open to the aggrieved party to prefer Civil Appeal before the Hon'ble Supreme Court of India against the judgment dated 23.01.2020 passed by the Tribunal in Competition Appeal (AT) No.79 of 2019. 26. It is admitted that the observations and findings returned by the CCI in its order dated 27.8.2018 stood upheld by the NCLAT in its orders dated 23.1.2020 and 13.4.2022. The said orders could only be tested or upset by Hon'ble Apex Court under Section 53-T of the Act, 2002. Therefore, we do not find any justificati....
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....us. C.A. No. 1532-33 of 1993 arises as a result of conflicting orders issued by the West Bengal Taxation Tribunal and the Calcutta High Court. Certain petitioners had challenged the constitutional validity of some provisions in three legislations enacted by the West Bengal Legislature before the west Bengal Taxation Tribunal. After examining the matter and hearing the arguments advanced in response by the State of West Bengal, the West Bengal Taxation Tribunal, by this order dated 9.10.1991, upheld the constitutional validity of the impugned provisions. Thereafter, the constitutional validity of the same provisions was challenged in a Writ Petition before the Calcutta High Court. During the proceedings, the State of West Bengal raised the preliminary objection that by virtue of Section 14 of the West Bengal Taxation Tribunal Act, 1987, which excluded the jurisdiction of the High Court in all matters within the jurisdiction of the Taxation Tribunal, the Calcutta High Court had no jurisdiction to entertain the writ petition. However, the High Court proceeded with the case and, by its judgment dated 25.11.1992, declared the impugned provisions to be unconstitutional. These development....
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....I, 114th Report , Industrial/Labour Tribunals 1987 LCI, 122nd Report and Education Tribunals (1987) [LCI, 123rd Report . 91. We may first address the issue of exclusion of the power of judicial review of the High Courts. We have already held that in respect of the power of judicial review, the jurisdiction of the High Courts under Article 226/227 cannot wholly be excluded. It has been contended before us that the Tribunals should not be allowed to adjudicate upon matters where the vires of legislations is questioned, and that they should restrict themselves to handling matters where constitutional issues are not raised. We cannot bring ourselves to agree to this proposition as that may result in splitting up proceedings and may cause avoidable delay. If such a view were to be adopted, it would be open for litigants to raise constitutional issues, many of which may be quite frivolous, to directly approach the High Courts and thus subvert the jurisdiction of the Tribunals. Moreover, even in these special branches of law, some areas do involve the consideration of constitutional questions on a regular basis; for instance, in service law matters, a large majority of cases invo....
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....he High Court within whose territorial jurisdiction the particular Tribunal falls. 93. We may add here that under the existing system, direct appeals have been provided from the decisions of all Tribunals to the Supreme Court under Article 136 of the Constitution. In view of our above-mentioned observations, this situation will also stand modified. In the view that we have taken, no appeal from the decision of a Tribunal will directly lie before the Supreme Court under Article 136of the Constitution; but instead, the aggrieved party will be entitled to move the High Court under Articles 226/227 of the Constitution and from the decision of the Division Bench of the High Court the aggrieved party could move this Court under Article 136 of the Constitution." (emphasis supplied) 28. In L. Chandra Kumar's case (supra) once a Constitution Bench of the Apex Court declared the law that "all decisions of Tribunals created under Article 323A and Article 323B of the Constitution will be subject to the scrutiny before a Division Bench of the High Court within whose jurisdiction the concerned Tribunal falls", then it is impermissible to make any further construction on the sa....
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....#39;ble Supreme Court of India to challenge the order. Relevant paragraphs of the judgment are reproduced hereinafter:- "6. Having due regard to this incontrovertible legal position, in the absence of any explanation from the Petitioner for not having availed the efficacious alternative remedy by way of appeal under Section 53-T of the Competition Act, 2002, before the Hon'ble Supreme Court of India to challenge the impugned order, we do not find any justification to entertain the present Writ Petition and accordingly, the same is dismissed. No costs." 31. In Union of India vs. Tantia Construction Pvt. Ltd. (supra) Hon'ble Supreme Court has dismissed the SLP on the ground that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would not be maintainable. Relevant portion of the judgment is reproduced herein below:- "27. Apart from the above, even on the question of maintainability of the writ petition on account of the Arbitration Clause included in the agreement between the parties, it is now well-established t....
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....ation vs. Registrar of Trade Marks, Mumbai & Ors. [1998 (8) SCC 1]. And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the court thinks it necessary to exercise the said jurisdiction. 53. On the basis of the above conclusion of ours, the question still remains why should we grant the reliefs sought for by the appellant in a writ petition when a suitable efficacious alternate remedy is available by way of a suit. The answer to this question in our opinion, lies squarely in the decision of this Court in the case of ShriLekha Vidyarthi (supra) wherein this court held : "The requirement of Article 14 should extend even in the sphere of contractual matters for regulating the conduct of the State activity. Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in....
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....e limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non-arbitrariness at the hands of the State in any of its actions. x x x " 54. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution. Thus if we apply the above ....