1

UNIVERSITY INSTITUTE OF LEGAL STUDIES

PANJAB UNIVERSITY, CHANDIGARH

"ABUSE OF DOMINANT POSITION : STEEL

AUTHORITY OF INDIA LIMITED CASE"
A Project report submitted as a part of
curriculum of B.Com LL.B. (Hons.) in the subject of
BUSINESS LAWS
Submitted To : Submitted By :
Ms. Arshwinder Kaur Gagandeep Kaur
B.COM. LL.B. (Hons.)
8th Semester
212/18
2018 – 2023
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ACKNOWLEDGEMENT

I would like to express my sincere thanks of

gratitude to my Business Laws Faculty, Ms.
Arshwinder Kaur who gave me the opportunity to
undertake this research project in the topic
attempts in committing a crime, which helped me in
doing a lot of research and I came to know about so
many new things. I am also grateful to her for her
continuous support and guidance and suggestion
throughout the research. I am thankful to her for
encouraging me to carry out this research. I am
thankful to her for encouraging me to carry out this
research. I would also like to convey my thanks to
the librarian and my fellow classmates for helping
me in this project report.
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CERTIFICATE OF ORIGINALITY

This is to certify, that the project submitted by me is

an outcome of my independent and original work. I
have duly acknowledged all the sources from which
the ideas and extracts have been taken. The project
is free from plagiarism and has not been submitted
elsewhere.

Gagandeep kaur
B.COM L.L.B
BATCH: -2018-2023
212/18
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INDEX

S.NO. CONTENT PAGE NO.

1. Table of cases 5
6
2. Introduction
7
3. Abuse of dominant position
9
4. Factors to determine dominant position
11
5. Relevant market
15
6. Types of dominant position
17
7. Facts of the case
20
8. Issues
24
9. Judgement
27
10. Case analysis
30
11. Conclusion
31
12. References
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TABLE OF CASES

S.NO. PAGE
CASES NO.

1. Atos Worldline vs Verifoneindia, case no. 56 of 2012 12

2. Surinder Singh Barmi vs The Board of Control for 12

Cricket in India (BCCI) case no. 61/2010

3. Bijaya poddar vs Coal India LTD, case no.59 of 2013 13

4. Pankaj Agarwal vs DLF, case no. 13&21 of 2010 and 15

case no. 55 of 2012

5. Re Shri Shamsher Kataria vs Seil Honda, case no. 16

03/2011
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INTRODUCTION

In simple terms ‘dominant position’ means

something in a superior position as compared to
others based on some factors. This concept of
dominance was, however, prevalent in the Indian
society itself, where one “caste” was considered to
be superior to others. However, staying in a better
off position doesn’t harm anyone, unless an
individual is exploiting such power. Therefore
having a dominant position cannot be considered
bad per se. However, abusing such a position based
on its superiority is considered inadequate.
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ABUSE OF DOMINANT POSITION

Abuse is expressed to happen when an undertaking

or a group of endeavors uses its prevailing situation
in the significant market in an exclusionary or/and
in an exploitative way. The Act gives a
comprehensive list of practices that will comprise
abuse of a dominant position and, in which
circumstances these are disallowed. Such practices
will establish misuse just when received by an
endeavor getting a charge out of a prevailing
situation in the pertinent market in India. Abuse of
dominant position is decided as far as the
predefined sorts of acts committed by a prevailing
undertaking. Such acts are precluded under the law.
Any abuse of dominant position indicated in the Act
by a prevailing firm will stand denied. As per
explanation affixed to Section 4 of the Competition
Act, 2002, dominant position implies the quality of
an endeavor in the significant market in India which
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empowers the enterprise to work autonomously of

serious powers winning in the market and to
influence the customers or contenders or the
market in support of it
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FACTORS TO DETERMINE THE

DOMINANT POSITION
Dominance has been customarily characterized as
far as the part of the market share of the enterprise
or group of undertakings are concerned. In any case,
various different elements assume a role in deciding
the impact of an undertaking or a group of endeavors
in the market. These include:
1. a market share.
2. the size and assets of the undertaking.
3. size and significance of contenders or
competitors.
4. the financial intensity of the undertaking.
5. a vertical combination or integration.
6. a reliance on customers on the undertaking or
undertaking.
7. degree of section and exit barriers in the market.
8. countervailing purchasing power.
9. market structure and size of the market.
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10. a source of dominant position viz. regardless

of whether acquired because of resolution or
statute and so on.
11. social expenses and commitments and
commitment of big business getting a charge out
of the prevailing situation to financial
improvement.
The Competition Commission of India is additionally
approved to consider whatever other factors which
it might think about applicability for the assurance of
dominance.
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RELEVANT MARKET
The first thing to be resolved in quite a while of
supposed abuse of dominant position is the
‘relevant market’ in which the accused party has a
predominant position. The reason served by
depicting a relevant market is to characterize the
degree inside which the situation of an endeavor is
to be tried for strength and misuse thereof. The
‘relevant market’ is characterized as ‘product’ and
‘geography’, in other words, the applicable market
recognizes the specific item/administration or class
of items created or benefits rendered by an
enterprise(s) in a given geographic territory.
Relevant Market Product
A market comprises all those products or services
that are interchangeable or are substituted by the
consumer. Factors determining the relevant
product market are :
1. Physical characteristics or end-use of goods.
2. Price of goods or services.
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3. Consumer preference
4. Exclusion of in-house producers.
5. Existence of specialized producers.
6. Classification of Industrial products.
In the case of Atos Worldline v Verifoneindia, Case
No. 56 of 2012, the Competition Commission of
India (CCI), held that the relevant product market is
to be looked at from both demand and supply
perspective based on the characteristics of the
product, its price and intended use. Similarly, in the
case of Surinder Singh Barmi v The Board of Control
for Cricket in India (BCCI), Case No. 61/2010, it was
held that the relevant market was settled on the
thought of demand substitutability of different
types of amusement or entertainment. It was held
that a cricket match couldn’t be held to be
substitutable by some other game dependent on
neither qualities nor the intention of the person
watching the cricket match.
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Relevant Geographic Market

A market comprising the area in which the
condition of competition for supply or demand of
goods or services are distinctly homogeneous and
can also be distinguished from conditions prevailing
in the neighboring areas.
Factors determining the relevant geographic
market:
1. Regulatory trade barriers.
2. Local specialization requirements.
3. National procurement policies.
4. Adequate distribution facilities.
5. Transport cost.
6. Language.
7. Consumer preference.
8. Need for secure or regular supplies or rapid
after-sales service.
In the case of Bijaya Poddar v. Coal India Ltd, Case
No. 59 of 2013, it was held that these are territories
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or areas where demand and supply of products of

administrations can be said to be homogenous and
discernable from markets in neighboring regions.
Similarly, in the case of Atos Worldline v
Verifoneindia, Case No. 56 of 2012, it was held that
naturally, a few factors at that point, as regulatory
trade barriers, local detail necessities, national
acquirement approaches, satisfactory conveyance
offices, transport costs go under the domain of
thought. Consequently, if every such factor were
uniform all through the nation versus an item, the
entire nation would be the relevant geological
region.
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TYPES OF DOMINANT POSITION

There are two types of domination:
Exploitative such as excessive pricing
Exploitative activities are those where the prevailing
body abuses its strength by forcing biased or
potentially low conditions on different firms or
shoppers. In the case of, Pankaj Agarwal v. DLF,
Case No. 13 & 21 of 2010 and Case No. 55 of 2012,
where, for a situation relating to the distribution of
apartment, the agreements drafted singularly by
Delhi Land and Finance (DLF), empowered them to
be discretionary about the designation of super-
area, secretive about data pertinent to the buyer,
like the number of the apartment on the floor, and
to drop portions and relinquish booking sums. The
Commission held the agreements to be exploitative
against purchasers, and consequently, it was one-
sided and abusive.
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Exclusionary such as a denial of market access

Exclusionary activities are those in which the
dominant body utilizes its strength to confine entry
of competition into the relevant market. For
instance, in the case of Re Shri Shamsher Kataria v
Seil Honda, Case No. 03/2011, where there already
existed agreement between the dominant entities
and the Overseas Suppliers of unique vehicle parts
which kept the Overseas Suppliers from providing
parts to free repairers, such understandings were
held to be anti-competitive as they limited passage
of new firms.
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COMPETITION COMMISSION OF INDIA

VS.
STEEL AUTHORITY OF INDIA & ANR.

CITATION:- [2010] INSC 720(9th September 2010)

JUDGE BENCH:- Swatanter Kumar and K.S. Radhakrishnan
APPELLANT:- Competition Commission of India (CCI)
RESPONDENT:- Steel Authority of India Ltd. & Anr.

FACTS :
The case started when Jindal Steel and power
Limited alleged M/s Steel Authority of India before
the Competition Commission of India by invoking
section 19 read with section 26(1) of Competition
Act for an exclusive supply agreement with Indian
Railways. It was claim that SAIL had used its position
and dominated the market and had not let others
to enter in the market competition and acted
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contrary to section 3(4) and 4(1) of Competition

Act.
Then the Commission directed SAIL to submit it
comments in respect of the information received by
the commission within two weeks but SAIL
requested them to increase it by 6 weeks. Not
finding any justification for it Commission declined
the request. It also formed the opinion that prima
facie case existed against SAIL and Director
General(DG) was also ordered to start the
investigation and it was done under section 16(1)
and 26(1) of competition Act. SAIL was also given
liberties by commission to file its views and
comments before DG during the period of
investigation.
This things was challenged by SAIL as no hearing
was provided to them . Further no reason was
recorded for such decision and the time given to
them was inadequate from beginning. COMPAT did
not let CCI to implead as either necessary party nor
proper party and finally held that under section
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53A(1) of the Act, it had power to listen to appeal

even on the CCI order of investigation where no fair
hearing was given and it can grant STAY order. Thus
CCI appeal to Supreme Court. [1]

1. Shivam Garg, COMPAT CAN’T INTERVENE CCI INVESTIGATION: ANALYSIS OF CCI V. SAIL
,(2010) 10 SCC 744
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ISSUES :
Whether the dictums passed by the CCI in
exertion of its power under Section 26(1) of
the Act establishing a prima facie opinion
would be appealable in terms of Section 53(A)
of the Act?
The Apex Court held that the Section 53A(1) of
the Act certainly provides
directions/decisions/orders may be appealed
before COMPAT, and this does not include a
direction/dictum of CCI under Section 26(1) of
the Act. The Court contemplated that the right
to appeal is a statutory right and if the law
doesn’t provide for an appeal, the Court cannot
surmise such right.

Whether the affected parties (as a matter of

right) are entitled to notice or hearing at the
prefatory stage or forming an opinion as to the
existence of the prima facie case and whether
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it is mandatory on the part of the commission

to record reasons whilst formulating prima
facie opinion?
The Court held that it is not obligatory on the
part of the CCI to issue notice or grant hearing
to the opposite parties prior to the issuance of
direction to the Director General to commence
investigation on an complaint under section
26(1) of the Act , still the Commission may hold
preliminary conference to seek assistance with
the concerned parties before framing a prima
facie opinion under Section 26(1) of the Act,
with regards to the General Regulations,
however, no party can assert it as a matter of
right.
Whether the CCI would be a requisite or at
least a proper party in the proceeding before
the Tribunal in an appeal brought by any
party?
It was held that in cases where the Commission
commences a proceeding on its own motion
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then CCI shall be the dominus litis (the master

of the proceedings or the necessary party)
whilst in other proceedings, it shall be a proper
party.
In which phase and what manner, the CCI can
exert powers vested under Section 33 of the
Act to issue temporary restraint orders?
The Court ratified the power of the Commission
to pass an interim restraint order until the
conclusion of the inquiry, without giving notice
to the party but this power must be exerted
sparingly and under exceptional cases.
Whether it is mandatory on the part of the
Commission to record reasons for shaping
prima facie opinion in terms of Section 26(1) of
the Act?
It was held that the Commission must record
least reasons to corroborate the prima facie
view in no uncertain terms.
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What directions are required to be issued by

the Court to ensure proper compliance of the
procedural requirements whilst keeping in
mind the scheme of the Act and the legislative
intent?
 It was directed that all the proceedings
(including investigation and inquiry) be
discharged by the CCI/ Director General
expeditiously and wherever in the course of an
enquiry the Commission issues an interim
order, it should issue the final order in that
behalf as expeditiously as possible (in any case
not later than 60 days).
 The Director General should present the report
in terms of Section 26(2) of the Act within the
stipulated time frame as directed by
Commission, but in other cases not later than
45 days from the date of the directions issued
under section 26(1) of the Act.
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Hence, the Apex Court had effectively put

forward in detail the rationale behind the
enforcement of the Competition Act, 2002 by
giving autonomy to the Competition
Commission of India to carry out its functions
bluntly.

JUDGEMENT :
The investigation by Director General which was
initiated by CCI under section 26(1) of the act is not
appealable under section 53A(1) of the Act because
26(1) does not determine any obligation of the
parties. The order’s which is not specified can not
be implied. So, the prima facie view and issuing
direction to DG is not appealable.
No statutory duty is cast on the Commission to
issue notice or to grant hearing and the parties also
can not claim so. In the terms of Section 26(1) of
the Act that a prima facie case exist for issuance of
direction to the DG to initiate an investigation to
the matter. But being a statutory body Commission
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exercises inter alia jurisdiction so it can call

concerned parties to render assistance or to provide
information. And the Commission need to form
such a prima facie view without entering upon any
adjudicatory or determinative process.
It was held that the case where the inquiry will be
initiated by CCI Suo moto, there it will be a
necessary party and in all other cases the CCI will be
the proper party before the Tribunal.
Under Section 33 of the Act if the CCI feels that the
act is in contravention of the provision during the
time of inquiry then it can issue an order to
temporarily restrain the party, until further orders
without giving notice to the party, where it deems
fit.
The Commission need to record at least some
reason even while forming a prima facie view. But,
while passing direction and orders dealings with the
right of the parties CCI need to pass a speaking
orders, upon due application of mind , responding
to all the contentions raised before it by the rival
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parties. To ensure proper compliance in regard to

procedural requirements while keeping in mind the
scheme of the Act and legislative intent are as
follows.
• The commission is given maximum of 15 days
time to hold its meeting and record opinion about
its prima facie opinion.
• DG should maintain or follow the objective of the
act.
• DG should submit it reports between the time
which will be given by Commission.
• Confidentiality should be maintained by the
commission.
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CASE ANALYSIS
The apex court in Issue 1 expressed that the
direction of CCI to DG to conduct an investigation
under Section 26(1) of the Act is not appealable
under Section 53A(1) of the Act, because the order
under section 26(1) does not determine any rights
or obligations of the party to the case. The court
reached this after analyzing the provision under Act
and rules of interpretation, to note the difference
between “and” & “or”. It followed the principle of
Expressum facit cessare tacitum[2] . They referred to
Indian and other country legislation like European
and case laws and finally reached to conclusion that
Section 53(1) provides right of appeal which is a
substantive right and this section allows appeal only
in things provided in section.

2. Union of India v. Tulsiram Patel, AIR 1985 SC 1416; Padma Sundara Rao v. State of T.N., AIR
2002 SC 1334
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Further in regard to Issue 2, it highlighted that the

legislature is competent to enact such laws which
exclude the principle of natural justice. Each matter
i.e. facts of each case have to analyzed in the
context of rules and regulation and provision of Act.
If the same are vitiated then the whole
proceeding could be nullified on ground of non
application of principles of natural justice. The
power under Section 26(1) of the Act is regulatory
and inquisitorial, i.e. the its administrative
power and not adjudicatory power of commission.
Its only a step taken by commission to prepare for
future case i.e. collection of data and hence at this
stage right of notice of hearing is not required to be
issued.
Apex court in Issue 3 held that in matter where CCI
initiated matter suo moto, it will be proper party[3]
and in every other it will be necessary party.

3. A proper party is one in whose absence an effective order can be made but whose presence
is necessary for a complete and final decision on the question involved in the proceeding.
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Further with respect to Issue 4, the power under

section 33 is given to Commission which is to be
used in rare situation and only at time of inquiry to
pass temporary order to stop party from carrying on
such act which is according to commission
contravening the provision. This order is limited to
the period till other order is passed or till end of
inquiry. While passing such order, it must be
supported by reasoning.
The commission has responsibility to base its prima
facie opinion as per Issue 5, whose terms must be
unambiguous, on basis of records furnished by
parties and obtained through complainant and
other sources. The Act does not mandate any
detailed reasoning[4] but there must be “minimum
reason” to substantiate the claim of forming prima
facie opinion.

4. S.N. Mukherjee v. Union of India, (1990) 4 SCC 594; Assistant Commissioner, C.T.D.W.C. v.
Shukla and Brothers, JT 2010 (4) SC 35
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CONCLUSION

The judgment played an important role in

development of Competition Law in India, which
was at very native stage in year 2009. The issues
raised in the matter highlight the ambiguity among
people which was clarified by the court. And this
kind of judgment is the first step toward building of
Antitrust jurisprudence in India. The Apex court has
very well explained the intent of legislature while
ruling. The interest of consumer has to be protected
along with freedom of trade. Thus, overall judgment
ensured proper distribution of power between
Commission and COMPAT.
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REFERENCES

Books:
1. Ashish Makhija, Insolvency and Bankruptcy Code
of India, 1st ed, Lexis Nexis Publications.
2. A K Mylsamy & P S Suman : Insolvency and
Bankruptcy Cases, 1st Edn, Lexis Nexis Publications.
Websites:
 https://advocatespedia.com/
 https://www.manupatrafast.in/NewsletterArc
hives/listing/CNB%20Vaish/2010/September-
October,%202010.pdf
 https://competitionlawobserver.wordpress.co
m/