CASE ANALYSIS

COMPETITION COMMISSION OF INDIA

NEW DELHI

[CASE NO. 47/2011]

IN THE MATTER OF:

Dr. Kushal Kumar Pandey

R/o 711, Gaur Galaxy, Sector 5, Vaishali - COMPLAINANT

Ghaziabad (UP)

Versus

1. M/s Raheja Designs & Contract Ltd.,

A-201, Okhla Industrial Area, Phase-I - RESPONDENTS
New Delhi- 110020

2. Shri, Suresh Raheja,

A-201, Okhla Industrial Area, Phase-I - RESPONDENTS
New Delhi- 110020

SUBMITTED BY:
Shaurya Aron
BA.LLB (Hons.) – 4th Semester
Rajiv Gandhi National University of Law
Patiala, Punjab
 INTRODUCTION

The present matter has been considered by the Competition Commission of India
(hereinafter, referred to as the “Commission”), on the basis of information received on
25.02.2011 from Dr. Kushal Kumar Pandey under Section 19(1)(a) of the Competion Act,
2002. The case relates to alleged abuse of dominant position by M/s Raheja Designs &
Contract Ltd. and Shri Suresh Raheja in sale and purchase of apartment in Jaipur in the State
of Rajasthan.
PARTIES TO THE CASE
1) The Complainant: R/o 711, Gaur Galaxy, Sector 5, Vaishali, Ghaziabad (UP) is a
Doctor by Profession.
2) The Respondent No. 1: M/s Raheja Designs & Contract Ltd., A-201, Okhla
Industrial Area, Phase-I, New Delhi- 110020 is a housing contractor working on Group
Housing Scheme constructing luxury apartments in the name of “Raheja Towers” in Jaipur in
the State of Rajasthan.
3) The Respondent No. 2: Shri Suresh Raheja, A-201, Okhla Industrial Area, Phase-I,
New Delhi- 110020

FACTS OF THE CASE

 The complainant was induced by Respondent No. 2 to invest money in the project
work of the housing society which was coming up in the name of Respondent No. 1 and also
returns on the investment were assured. A rosy picture of the proposed housing scheme in
Jaipur, Rajasthan was presented and it was assured that the same project would be concluded
in two years’ time. The complainant was also convinced to involve his friends and relatives
so they could utilize and invest their monies to enjoy a good return. The Complainant is a
Doctor by Profession and Respondent No. 2 was known to him.

 The Complainant paid a sum of Rs. 6,00,000/- (Rupees Six Lakhs) to the Opposite
Parties towards the booking amount for the apartment; Rs. 3 lakhs each paid in the name of
the Complainant himself and his Wife respectively in Delhi at the offices of the Respondents.
Also, one of the friends of the Complainant also submitted the similar amount with the
Opponents.
 The Complainant was assured by the Opponents that an agreement will be furnished
and also a receipts of the said sum will be furnished. But the Opponents failed to provide any
agreement and also hand over the possession of the constructed flats/premises in Jaipur.

 After waiting for a long time, a legal notice was sent to the Opponent Parties on all
the above issues. The Opposite Parties though their legal representatives, in turn, have
challenged the investment decision itself of the complainant. They also blamed the
complainant for not submitting the agreement duly signed by him and his wife.

ALLEGATION MADE BY THE COMPLAINANT

The Complainant has alleged that being in a Dominant Position in the Sale of Apartments in
the city of Jaipur, Rajasthan, the opposite parties are abusing their Dominant Position by
keeping the money they have received from the Complainant between 2006 & 2007 and by
not furnishing the draft agreement for the said deal. The informant has submitted that because
of the said act of the Opposite Parties he is neither getting the Possession of the apartments
by him nor getting a refund on his money.

PROVISIONS OF ACT INVOLVED

a) Section 2(h) of the Competition Act, 2002.
b) Section 4 of the Competition Act, 2002.
c) Section 19(4) of the Competition Act, 2002.

STATEMENT OF THE ISSUE

Whether the case falls under Section 4 of the Competition Act, 2002.

OBSERVATIONS OF THE CCI

 The Opposite Party No. 1 is engaged in the business of the Real Estate Development
and hence is covered in the Definition of Enterprise under Section 2(h) of the Competition
Act.
 The commission also notes that any issue relating to competition ought to be looked
into with reference to the relevant market, which happens to be the market for services
provided by the Opponents, which is, the developers providing apartments to the customers
in the City of Jaipur in Rajasthan in the present case.
 Further, the Commission further noted that the Fundamental allegation is that the
Opposite Parties abusing their dominant position by retaining the money given by the
complainant at the time of the booking and on subsequent occasions, not furnishing the draft
agreements for the said deal and not giving possession of the apartment within the agreed
time.
 And in this regard, the commission observed that it is essentially related to dispute
between the Informant and the Opposite Parties and the Complainant has failed to made out a
case sufficiently against the Opposite Parties in support of his arguments that the OPs have
Abused their Dominant Position in the Relevant Market in violation of provision of Section 4
of the Competition Act of India in the matter.
 The opinion of the Commission was that from the information and materials available
on the record, it appears that the Opposite Party No. 1 cannot be said to be Dominant in the
Relevant Market, the question of any Abuse within the meaning of provisions of Section 4 of
the Competition Act of India does not arise.
DECISION OF CCI
The Commission decided that since the Opposite Parties are not in the Dominant Position in
the Relevant Market, they cannot be said to be abusing the dominant position in the relevant
market and it was also held that no prima facie case can be made out for making a reference
to the Director General (DG) for conducting investigation into this matter under Section 26
(1) of the Act. The Commission closed the proceedings of the case under Section 26 (2) of
the Act.
CONCLUSION
For the purpose of examining the allegations under the provisions of section 4 of the
Competition Act, firstly, the relevant market should be defined. After delineating the Market,
it is to be ascertained that whether the enterprise enjoys a Dominant Position in the Relevant
Market. And Dominant Position under the act means that an Enterprise enjoys a position of
Strength and operates independent of the market forces in the Relevant Market. Only after
that is established, it is to be examined whether the impugned conduct amounts of Abuse on
the part of the Enterprise.

In the current market, after analysing the matter on the above basis, Opposite Parties are
clearly not in the Dominant Position. Further, after going through the factors laid down under
Section 19(4) of the Competition Act, 2002 in order to examine the dominance, confirms the
stand of the Oppostie Parties are not dominant players in the relevant market. Therefore,
being not in a Dominant Position in the Relevant Market, there cannot be an Abuse of the
Position. The impugned case is evidently a dispute between the parties and in my opinion,
CCI rendered a correct decision for not ordering for further enquiry by DG. Therefore, the
matter can be closed under Section 26(2) of the Competition Act, 2002.

ANALYSIS

It is observed that Section 4 of the Competition Act of India is not applicable to the present
case as the information and documents provided by the informant for the investigation do not
suggest that the Opposition Parties were in a Dominant Position in the Relevant Market.
Since the Opposition Parties cannot be said to be Dominant in the present Relevant Market,
the question of Abuse of the said Dominant Position within the meaning of Section 4 of the
Act does not arise. Any instance of Abuse of Dominant Position cannot be made out in the
present case. This is a clear case of dispute between the Informant and the Opposite Parties
upon specific non-performance of a contract. The appropriate forum for relief can be
Consumer Courts, Civil Court and pertaining to even fraudulent misrepresentation a
complaint in the criminal court may be filed.

On a careful consideration of the whole matter, in my opinion, the Commission has rightly
observed the facts and allegations in the information in the above-mentioned case. The
dispute between the Complainant and the Respondents has been made out in the support of
his arguments that the Respondents have abused their Dominant Position in the Relevant
Market in the violation of Section 4 of the Act in the matter. Section 4 of the Act is not
applicable in the case as from the information and materials available on record, it appears
that the respondents are not in a Dominant Position in the Relevant Market.

Thus, after considering the reasons given above, I concur that there does not exist a prima
facie case in this matter. Thus, in my view, CCI has taken a correct view by not referring the
matter to DG for further investigation and the matter can be disposed of under Section 26(2)
of the Competition Act, 2002.