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M/s V. E. Commercial Vehicles Limited and UPSRTC - (Competition Commission of India) (07 Jan 2016)

UPSRTC tenders divide Competition Commission

MRTP/ Competition Laws

A six member bench of the Competition Commission of India concluded four-to-two that the Uttar Pradesh State Road Transport Corporation did not have a dominant position as the largest procurer of passenger buses for public transport in Uttar Pradesh. The Informant, successful bidder in a tender issued by UPSRTC, had complained that the price it offered towards annual maintenance contracts of the buses was shadowed by the Corporation’s increasing maintenance inclusions. The bidder claimed that it would face significant losses due to such unfair conditions and the discriminatory terms imposed on it, as compared to two other companies, Tata Motors and Ashok Leyland. The majority opinion accepted that UPSRTC procured over half of all passenger buses in the State, but the same did not lead to a presumption of dominance. As such, it being only one of many state transport undertakings and low market share, UPSRTC was not in a dominant position.

Members Sahoo and Justice Mittal’s dissent focused not on UPSRTC’s conduct, which they concurred was not abusive, rather the inquisitorial role of the Commission. They opined the Commission’s responsibility to “ascertain if there exists a prima facie case to proceed further”. It would have to verify if the material on record supported the alleged conduct, and if such was in violation of any of the provisions of the Act, not just those which had been alleged to have been violated. They concluded that preferential treatment in favour of Tata Motors and Ashok Leyland suggested a “strong possibility of some understanding between the parties.” Being empowered to suo moto pursue violations of competition law, both members were in favour of the Commission ordering investigation into parties’ conduct under Section 26(1) of the Competition Act, 2002.

Relevant : Section 26 Competition Act, 2002


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