Crystallisation of limitation period on Competition cases

[By Avik Sarkar

The author is a student at K.L.E. Society’s Law College, Bengaluru.

The Competition Commission of India has time and proved through its revolutionary judgements that they are the real guardian for consumers and small market players by saving them from harrowingly oppressive policies of the big market players. And on this occasion in the case Neha Gupta v Tata Motors the commission has demystified the limitation aspect with regards to filing complaints before the competition commission of India. The question of applicability of limitation period with regards to competition matters has always been a contentious one 

Introduction

The Competition Act, 2002 is prevalently known to maintain equipoise in the market with a target to protect consumers at the macro level and protect small and medium businesses from the abuse of dominant position and anti-competitive practices by the large enterprises. It has a standardized gambit using which it keeps the dominant players in the market in check. As this act is still in the embryonic stage of its development, we generally see many judgements devolved regarding competition matters. And with each judgement, it is demystifying various conundrums pertaining to contentious questions of the act.

In a recent case in the matter of Neha Gupta v. Tata Motorsthe Competition Commission (hereinafter referred to as CCI) of India demystified its standpoint regarding the applicability of the limitation period in competition matters. The CCI had held that it doesn’t impose any limitation period for filing any complaint. This piece holistically analyses the same.

Factual matrix

The informant Neha Gupta was the owner of the business Varanasi Auto Sales Pvt Ltd (hereinafter referred to as VASPL) which was an authorised dealer of Tata Motors. It was mainly dealers of commercial vehicles, spare parts, etc. The dealership agreement between the two was signed in the year 2011 and had ended in the year 2017.

Neha Gupta had filed a complaint against Tata Motors accusing them of having imposed unfair terms in their dealership deed thereby amounting to an abuse of dominant position (Section 4 of Competition Act, 2002). And simultaneously, Tata Motors had also indulged in a tie-in arrangement with their financial institution name Tata Capital and Tata Motor Finance. This was done in order to maintain their market share which amounted to indulging in anti-competitive practices (Section 3 of Competition Act, 2002). In broad terms, the clauses imposed by Tata Motors were subverting the position of the dealers. A similar allegation was levelled against Tata Motors by another dealer named M/s Kanchan Motors (the dealership agreement signed between the two was in the year 2016 and ended in 2021). Against all the allegations by its dealers, Tata Motors had raised several issues one of them being delay on the part of the informant in bringing up the matter to the commission.

Analysis

In rem issue

Pertaining to the concern of delay in the present matter CCI stated that under Competition Act,2002 there is no limitation period to file a complaint. It can be said that the investigation conducted by CCI are in-rem in nature and are not in-personam disputes. There might be situations when a lis might prima facie come across as an in-personam dispute, but the issue raised might be contentious in nature and may contribute to future market distortions. And in such situations, it becomes important to make the public aware of the market distortions. Merely because the informant doesn’t suffer any direct losses or is not personally aggrieved will not vitiate the in-rem nature of the information. Therefore, any person can file information under the Competition Act, 2002 with regards to abuse of dominant position and anti-competitive practices. The same was held in the case of In Re: XYZ and Indian Oil Corporation which stated that authority orders are in rem and not in-personam.

Anti-trust authorities deal with market situations that are dynamic in nature and are evolving with time. With innovations happening all around the globe the anti-trust authorities have to keep themselves updated and armour themselves with each and every available weapon to tackle unforeseen and unprecedented situations. Therefore, it would be grossly erroneous to apply a limitation period while attempting to tackle such unforeseen situations. And as per the Act, the CCI is empowered to carry out inquisitional functions in public interests. Therefore, application principles of the limitation period in inquiry-based institutions would be grossly iniquitous.

The above dictum of the commission has brought the Indian perspective in parity with the European antitrust law which imposes no limitation on the investigation by the commission. This dictum will surely give a lot of relief to the authority in terms of carrying out an investigation with not much intervention and can thereby deliver a diligent and biased free report on any issue.

Locus Standi demystification

The proceedings before the commission are inquisitional and in-rem in nature therefore the locus standi is not a sine qua non for filing information. The issue relating to the locus of the informant under the Act was further clarified in the case of  Samir Agrawal v. Competition Commission of India where it was stated that “when the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI and the appellate authority, i.e., the NCLAT, must be kept wide open in the public interest, so as to subserve the high public purpose of the Act..”.Thus, questioning the locus of the informant is totally infructuous

On the contrary, it should not be mistaken that the absence of a limitation period may lead to any kind of frivolous information’s being filed. Therefore, CCI shall diligently examine reasons for delayed filings and based on the same it accepts or reject complaints. Any kind of impropriety will lead to the dismissal of the complaint and lead to the imposition of penalties envisaged under section 45 of the Act. But, the process of examining the propriety of information shall vary from situation to situation. This process helps in eliminating frivolous complaints and wastage of public resources and be prevented. The main aim is to detest market players from practices that can have an appreciable adverse effect on the market competition and promote, support and cater to customer needs.

And based on all the above arguments and points the CCI had rejected the contention laid down by Tata against the complaint levelled against it.

Conclusion

However, though the CCI doesn’t impose any limitation period for filing any complaint it does impose a limitation period on appeal against the judgement passed by the CCI. The duration for the appeal granted is 60 days. But if one exceeds 60 days’ time limit to file an appeal then a ‘sufficient cause’ needs to be presented before the authority for such delay. The same was held in the case of  Maj. Pankaj Rai v. Secretary, Competition Commission of India  . In this matter, the appellants were perusing litigation before the High court which was a major cause of their delay. But the court termed this act of the appellant’s as ‘forum shopping’ and didn’t accept this as a ‘sufficient cause’ of delay in appeal. Based on which the appeal was dismissed.

But for conceptual clarity, it must be kept in mind that there is no imposition of the limitation period for filing a complaint before the Competition Commission of India. The limitation period gambit comes into play only when one wants to appeal against the decision of the commission.

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