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