Case Law Details
COMPETITION APPELLATE TRIBUNAL
R.V. Ram Gopal
versus
Competition Commission of India
APPEAL NO. 114 OF 2012
MARCH 13, 2013
ORDER
1. This dispute was between an owner of a small commercial vehicle for which he obtained the finance from the respondent – Shriram Transport Finance Company. It has come in the information that initially the loan was drawn for purchasing three small lorries. The rate of interest was 5.7%. The informant then fell in defaults and therefore his loans were adjusted by creating a separate loan account. This time the loan was adjusted at the rate of 9%. According to the informant this was done under the duress and he was made to sign on the dotted lines. This according to the informant was an abuse of the dominance of the respondent in the market. The Director General deducted the relevant market as the “provision of services for financing pre-owned heavy commercial vehicles by non-banking financial corporation”. The Director General was obviously acting at the behest of the Competition Commission of India (‘CCI’ for short) and had investigated into the matter and had pointed out that the respondent was in the dominant position in the market. When the matter came before the CCI, the CCI found that the relevant market was wrongly decided on by the DG. It should have in fact been “the provision of services for financing commercial vehicles by non-banking finance company in India”.
2. When the matter came before the CCI, it was also advocated before the CCI that the respondent was charging excessive interest at the rate of 9% and the agreement which was got signed under the duress and the informant was actually asked to sign on the dotted lines with the attitude of take it or leave it.
3. The Commission has gone thoroughly into the report of the DG and has found fault with the finding of the DG that the respondent was in a dominant position. It has noted the observation of the DG that the respondent had the market share of about 25% in pre-owned vehicles finance and 8% in the case of new truck finance. It is admitted position that this was a loan for new trucks. The CCI found that there were number of entities both in public and private sector providing finances for the commercial vehicles throughout the country and as such market share of 8% could not be a pointer to the respondent enjoying a dominant position in the relevant market. In that view, the CCI has dismissed the matter suggesting that there has been no contravention of either Section 3 or Section 4 of the Act.
4. Before us the learned counsel very earnestly argued that the CCI was incorrect in firstly deciding upon the relevant market and secondly on the aspect of the respondent being a dominant player in the market. The learned counsel wanted to rely on the prospectus of the respondent which, in our view, would be an irrelevant document to decide the dominance in the market. The informant was expected to point out as to how the respondent enjoyed the dominant position in the market, by collection of evidence and the facts. That unfortunately seems not to have been done by the informant. We cannot find fault, under the circumstances, with the finding of the CCI that the respondent was not enjoying the dominant position in the market. Once that factual position is arrived at, there will be no question of contravention of Section 4 of the Act. If the respondent was not dominant, there was no question of the abuse of dominance.
5. We would also observe the wanton allegation that the respondent had got the new agreement signed under the duress also has absolutely no basis. The learned counsel very earnestly urged before us that had the banks been there in the market, the question would have been different. We find that there is absolutely no material on record to show that the banks do not finance the commercial vehicles. There is no material on record provided by the informant much less argued before us. Under the circumstances, we are constrained to hold that the finding of the CCI was correct. No arguments were advanced before us for breach of Section 3 of the Act.
6. Under the circumstances, we agree with the judgment of the CCI.
7. The learned counsel also argues that the interest charged by the respondent was excessive to even 9% which was much more than the contractual interest. He also alleges that ledger of the company was not produced before the DG though it was asked for. As the Authority under the Act, the CCI was not expected to examine the rates of interest or as to whether the interest was excessively charged unless the CCI came to the conclusion that this was nothing but the abuse of the dominance. We have already pointed out that there was no dominance on the part of the respondent and therefore these questions are absolutely irrelevant. The Appeal is dismissed.
