Competition Commission of India
Awaz, Ngo For Ventilating Consumer ... vs M/S Indiabulls & Ors on 17 April, 2012
Case No. 08 of 2012 A1;-'11 17, 2012 In «re: C 'Ll. Awaz, NGO for Ventilating Consumer :GrieV 311035 -... Jnformant No.1 2, 3anij.i1a1»Const1'.uctions Ltd. -....Info1-mam-, No.2 A 'v.
:NIJs3In§1ia'o1fl1s V ......O_p_p osite Zfiarty No.1 '2. India Association -of Banking 1Companies ....a-O_p_posite 2No.'2 ,.a
-'Order under section 26(2) of't'he tC'om'petition Act, 2002 in V The present irifonmation has 'been filed 'by ZM_/is Ranijilal iconstnlctions .'Ltd. :('the inforrnanfl) under section Zl9'('l)(a) of the Competition Act, 2002 =.('.fl1e.Act'3 'against M'/S lndiabulls (lndiabulls/"the opposite party No.12) and All India C Association of Banking Companies 1('the opposite party No.23) alleging inter talia zcontravenfion offhe provisions of sections 8 and 4 of me Act.
2. lt is averred in the information that the informant was 'a small scale 'building construction company providing housing complexes for iniddle class people in Delhi 'for many decades. For these activities, the informant earlier availed housing finance of more than Rs.1 crore from Oriental B/ank of Commerce (OBC) at fixed rate of interest i.e. 15% p.a. One of the executive officers of the opposite party No.1 approached the informant and asked it orally to switch over its financing activities from Oriental Bank of Commerce to it at an attractive rate of interest i.e. 10% p.a. The informant was accordingly tempted to enter into contract for seeking re--finance from lndiabulls. Upon an assurance by lndiabulls, the informant agreed to enter into an arrangement for re--financing Rs. l,S0,00,000/- against security of four immovable units and readily signed all the documents as called upon by lndiabulls. It is alleged that material t jgifathis agreement were not determined and fixed. To the detriment of in spaces in the documents were filled-up by lndiabulls on its 0 htaining counter signatures of the v.
informant. lt is alleged that such altérati tamouingted to forgery of documents and criminal breach of trust. This i ""cl§)scri »» s /unfair practice on the part of "*'"'"'1nd'iabu]1s abuse o1 1ts d my iti'o"fi*/as financier. The act of takm g signatures on contractual papers P 2' pi)yéi:%'.p\p§t:<c§i::deterrnined space unfilled, to be r Competition Commission of India -- -» filled-jglp later on is stated to as prevalent practice among all theabanldng and hon--ba.nking financial institutions. It is prayed that for such a prevalent activity, a strict action deserves to be initiated by the Commission to establish falrness in the Commercial World and to sustain fair competition among the lenders and also 'among the borrowers.
3. Further, it is alleged that against the sanctioned loan amount of Rs, 1,50,oOO,'OOO/--., only a sum of Rs.1.,46,aO0,000/-- was credited to the neoounf of ' The borrower; "However, interest was charged on the entire sanctioned loan amount lye' Rs.l,50,00,'0OO /-.. Copy of theloan agreement was never furnished by lndiabulls to the informant and the same could be obtained only after a notice was served through an advocate. Allegations of charging of usurious rates of interest by Indiabulls in contravention of the provisions of the Punjab Relief of Indebtedness Act, 1934 .as extended to the Union Territoijy of Delhi have also been made Charging pre-payment charges by .-lndiabulls is alleged as nnfair and contrary to policy of the RBI.
4. =01: eonsiderafion of the information and fisubmissions nnade, it is evident that the loan agreement containing 'clauses (by owhich informant is aggrieved) was executed between the informant rand lndiabulls on 30.1'.O..2007.. The information was filed on February 08., 2012. The "delay is sought to be -explained by the inforrnant by stating that upon receipt of advice, the Commission was approached at the earliest.
5.. 1n the present matter, the provisions of section 3(8) of the Act have no application as an agreement envisaged thereunder has to be .al1or.izontal agreement entered into between enterprises engaged in 'identical or sirnilar trade or goods or provision of services with intent to control production, supply markets etc. No such horizontal agreement is alleged or otherwise can be gathered from the pleadings. The alleged practice of getting contract papers signed with unfilled blanks is not a competition issue at all. A party signing blank documents cannot complain of unfairness. In this case, the informant was already having loan facility from OBC and had shifted to lndiabulls. It was for him to ensure that terms of loan were clearly written in the contrgst. (as ea-
6; So far as the contravention of provisions o ,_ of the Act is concerned, the appreciable adv ompetition due to such an agreement needs to be considered in /tuligr ' / .«..v:ction 19(3) of the Act viz. creation of e out of market, foreclosure of competi « "p the actors enumerated in (D fig, drfarfii existing competitors one accsy * ofiilrtli efits to consumers, een placed before the x improvements in provision of services etc. 'Ndgm L ~\\.» Commission to even mal~'--e~en-te--7a2=i-ma----fa--ez'- ff erItpf'tlre"appr'e"cial:'>l'e"
g_ .
vial >\ adverse effeqlt,'._on competition due such clauses. Hence, no contravenLi't':n of . section 3(1) read Withsection 3(4)_of the Act is also made out.
7_ The allegations of contraventions of section 4 are equally misplaced. The informants have claimed Indiabulls as a dominant enterprise but no averment has been laid to show as to how it was in a dominant position. No averment has been . made to show that lndiabulls enjoyed a position of strength in the relevant market
-of providing finances which enabled it to operate independently of competitive ' " ' "
aw-10.
forces prevailing in the market or to affect its competitors or consumers or the relevant market in its favour. Nloreover, no material has been placed before the ~Com:mission as required under section 19(4) of the Act to enable the Commission to deterzmine the dominance of the opposite in the light of the factors mentioned {herein viz. market share of enterprise, size and resourczes of the enterprises, size and importance of the competitors, economic power of the enterprises including commercial advantages -over competitors, dependence of consumers on fhe enterprise etc. The documents filed along with the .application seeking interim relief '1'.0:§hOW the dominance of lndiabulls are the documents of lndiabulls alone and no material has been placed about the market share, size and importance etc. of the competitors. ' '8. The counsel appearing for the informants has vehemently contended that while inquiring whether an enterprise enjoys a dominant position or not, the market share of the enterprise alone is not decisive and the same may 'be established in the light of any of the factors enumerated in section l9,(4;) of the .Act. The informant, however, has failed to bring its case Within any of these factors, »-except making a vainplea to argue that dependence of consumers on the enterprise put the opposite party in "a dominant position. The informant has failed to show as to how flie consumers were depended upon the opposite party alone for housing finance. The plea is misconceived.
9. As the dominance of the lndiabulls is not established, the issue of abiise thereof does not arise for consideration.
From a perusal of the prayers made by the informants, it is clear that the instant matter concerns contractual disputes under the loan agreement. The remedies for redressal thereof where. The informant has alleged contravention of the provisions extended to the Union Territ infringement of :he said Act or go /.
have to pursue their remedie 'a%})ro§§' rovisions thereof, the inforrnauis der. For alleged contravention of 3 the policy of the RBI, the rem cafes - iewhgr . Similarly, charges of forgery and criminal breach nftriist could n v" -
e-ferethe~appr--epriate4feinm:-----~--~-rt" ~ i M ' 'Ii? tH€:if€Su1t»I?fi'€T5 §XiSt5 110 Prima facijeicase to direct the Director General to T cause'aI1 investigation to be made into the matter and the matter deserves to Q6 closed forthwith. The informants have also moved an application under section 33 Of the Act Seeking interim T€1i€f- AS there exists no prima facie case, the application does not survive and the same merits dismissal accordingly.
4 4Sd/-
" . I K V ' V v~ 'V Sd/tflfia._fv.iV.M_~__v ,_
- {J _*______M__,,___- ...-.--«-~ 2 A __"____M_ ________ _ - Member (R) Q3» 'I' hiarflber (GG) Sd/-A ' sd/.b 55/.
Member (AG) . Member (T) Member (1)) s4' eiition Commission of India ('Yew Delhi 13:)» 126?
, ,,...........--y-we--rev"