- (1.) M /s. Swastik Stevedores Private Ltd. (hereinafter, the 'Informant') has filed information in the present case under section 19(1)(a) of the Competition Act, 2002 (hereinafter, the 'Act') against M/s. Dumper Owners' Association (hereinafter, 'DOA' or 'Opposite Party No. 1') and M/s. Paradip Port Trust (hereinafter, 'PPT' or 'Opposite Party No. 2') for their alleged infringement of the provisions of section 3 and section 4 of the Act in provision of the services of dumpers and hywas for intra -port transportation of cargo inside the Paradip Port prohibited area.
(2.) FACTS The facts of the matter, as culled out from the information, may be briefly noted: 2.1 The Informant is a company registered under the Companies Act, 1956, inter -alia, engaged in the business of stevedoring and intra -port transportation of various type of cargo that are imported to and exported from India within the premises of Paradip Port. The Opposite Party No. 1 is an association of dumper owners registered under the Societies Registration Act, 1860 and has been working as a facilitator between the licensed stevedores and owners of dumpers and hywas for handling of cargo and their intra -port transportation inside the Paradip Port. The Opposite Party No. 2 is a registered port trust under the Indian Port Trust Act, 1908; functioning under the Ministry of Shipping, Government of India. It is the sole authority managing all activities being carried out in the port premises of Paradip Port. 2.2 The Opposite Party No. 1 is stated to be the only association inside the Paradip Port for making available dumpers and hywas of its members to the registered stevedores for intra -port transportation of cargo. It is stated that because of its monopoly position, stevedores are fully dependent on the Opposite Party No. 1 for supply of dumpers and hywas. It is averred that taking advantage of its monopoly position, the Opposite Party No. 1 in connivance with the Opposite Party No. 2, has been refusing to provide dumpers and hywas to the Informant and enlisting the Informant for availing the services of dumpers and hywas. As per the Informant, the said acts of the Opposite Parties are in violation of the provisions of sections 3 and section 4 of the Act. 2.3 Several instances have been cited in the information when the Opposite Party No. 1 has denied dumpers to the Informant. The first of such incidents occurred when the Opposite Party No. 1 denied dumpers to the Informant for unloading and intra -port transportation of cargo comprising 59,500 MT of coking coal imported from Australia through the vessel MV Galateia which reached Paradip Port on 6.10.2011. As a result, the vessel was stranded inside the Port and the cargo could not be unloaded and transported by the Informant. 2.4 Left with no option the Informant filed a writ petition [WP (C) No. 27527 of 2011] before the Hon'ble High Court of Odisha at Cuttack against the Opposite Parties. The Hon'ble High Court passed an interim order on 17.10.2011 directing the Opposite Party No. 2 to issue necessary direction to the Opposite Party No. 1 to provide dumpers and hywas to the Informant for unloading and intra -port transportation of the said cargo. 2.5 It is averred that despite the said direction of the Hon'ble High Court of Odisha, the Opposite Party No. 1 did not provide any dumpers to it. The Opposite Party No. 2, being hand in glove with the Opposite Party No. 1, did not take any action against it for defying the order of the Hon'ble High Court. Resultantly, the Informant was constrained to file a contempt application before the Hon'ble High Court for non -implementation of its order. 2.6 It is the case of the Informant that despite repeated directions of the Hon'ble High Court, the Opposite Party No. 1 did not provide dumpers to it and the Informant was forced to hire dumpers by paying 5% more than the prevailing market rate. 2.7 The Informant vide its letter dated 18.11.2011 again requested the Opposite Party No. 1 to supply dumpers, hywas and allied services for its future assignments and to enlist it for deployment of dumpers, hywas, etc. Further, on 06.01.2012, the Informant requested the Opposite Party No. 1 to provide dumpers for intra -port transportation of cargo comprising 10,000 MT of iron ore imported through the vessel MV Christine B which had reached Paradip Port on 04.01.2012. In response, the Opposite Party No. 1 issued a letter on 09.01.2012 stating that a suitable convenient date and time may be fixed for finalisation of rates, terms and conditions etc., for supply of dumpers. 2.8 Also, the Opposite Party No. 2 vide its letter dated 31.01.2012 directed the Opposite Party No. 1 to provide dumpers to the Informant at the same rate, terms and conditions as applicable to the existing stevedores and to enlist the Informant for supply of dumpers. On 02.02.2012, the Informant requested the Opposite Party No. 1 to execute necessary agreement to provide dumpers and heavy machineries for accomplishment of its various overseas contracts. But, the Opposite Party No. 1 did not respond to above said directions and requests. As per the Informant, the said behaviour of the Opposite Party No. 1 is arbitrary and it is acting like a monopolist. 2.9 The Informant further alleged that the Opposite Party No. 1 and six stevedores enlisted with it revised the rate of dumpers and hywas for intra -port transportation of cargos in a meeting and the same was communicated by the Opposite Party No. 1 to all its six enlisted stevedores on 16.02.2012. The Informant was neither informed about the revision of rates nor about the proceeding of the meeting. As per the Informant, the members of Opposite Party No. 1 have formed a cartel to monopolise the services of dumpers and hywas inside the Paradip Port prohibited area which is in contravention of the provisions of section 3 of the Act. 2.10 The Informant vide its letter dated 19.04.2012 requested the Opposite Party No. 2 to issue necessary direction to the Opposite Party No. 1 for supply of dumpers on the same terms and conditions as has been executed with its enlisted stevedores. Accordingly, the Opposite Party No. 2 directed the Opposite Party No. 1 to enlist the Informant to provide dumpers to it on demand at the rate, terms and conditions as applicable to other enlisted stevedores in compliance with the direction of the Hon'ble High Court. The Opposite Party No. 1 vide its letter dated 29.05.2012 replied that its membership cannot be taken as a matter of right as it is purely a voluntary, non -statutory and private association of like -minded dumper owners. The Opposite Party No. 1 claimed that it considered enlisting the Informant for the provision of dumper and hywas services but kept the same pending due to the complaints it received from some dumper owners regarding nonpayment of dues by the Informant. It was also stated in the reply that once the cases against the Informant are disposed of and the Informant withdraws all the baseless allegations against the Opposite Party No. 1, it may reconsider enlisting the Informant for providing dumpers on commercially prudent and feasible terms, provided that the Informant would have to produce a bank guarantee of the entire demanded transportation cost or make advance payment for the same. 2.11 It is also the case of the Informant that it had entered into an agreement with M/s. MRTC India Pvt. Limited ('MRTC'), an enlisted stevedore with the Opposite Party No. 1, for supply of dumpers and hywas for making intra -port transportation of cargos. But, the Opposite Party No. 1 did not allow MRTC to provide dumpers to a non -listed member like the Informant. 2.12 Based on the above facts and averments, the Informant has requested the Commission to cancel the registration of the Opposite Party No. 1 and declare its arrangement with the Opposite Party No. 2 inside the Paradip Port prohibited area as void; to restrain the Opposite Parties from abusing their dominant position and impose penalty as may be appropriate keeping in view the wilful and deliberate abuse of dominant position by the Opposite Parties; to direct the Opposite Parties to pay compensation to the Informant; and to pass such other order(s) as the Commission deems fit and proper. Finding a prima facie case of violation of the provisions of the Act in the matter, the Commission vide its order dated 04.10.2012, under section 26(1) of the Act, directed the Director General (hereinafter, 'DG') to conduct an investigation into the matter. Accordingly, DG investigated the matter and submitted the investigation report to the Commission on 31.10.2013.
(3.) DG 's Investigation 4.1 Primarily, the following two pertinent issues have been addressed in the DG report: (i) examination of the alleged abuse of dominant position by the Opposite Party No. 1 as per the provisions of section 4 of the Act, and (ii) examination of existence of any anti -competitive agreement between the Opposite Parties and the alleged infraction of the provisions of section 3 of the Act. 4.2 For examination of the alleged infringement of the provisions of section 4 of the Act, the DG, as per the requirement of applicability of section 4, has first examined whether the Opposite Party No. 1 is an enterprise in terms of section 2(h) of the Act. As per the DG report, the Opposite Party No. 1 is itself not directly engaged in the provision of the services of dumpers and hywas for intra -port transportation operations inside the prohibited area of the Paradip Port, which is the relevant market in the instant case. Its activities are limited only to allocation of dumpers of its members to the parties/enlisted stevedores requisitioning the same for intra -port transport operations within the Paradip Port prohibited area. As per the DG report, even though the services being rendered by the Opposite Party No. 1 are bereft of any monetary considerations and it is not directly engaged in the provision of the services of dumpers, the Opposite Party No. 1, by virtue of being engaged in the activity of provision of services of allocation of dumpers, is an 'enterprise' in terms of section 2(h) of the Act. 4.3 It is observed in the DG report that since the Opposite Party No. 1 did not own dumpers and that its service being limited to only allocation of dumpers of its members on requisition to the users/stevedores, the market for the said service is distinct from the services of dumpers for intra -port transportation being rendered by its constituent members. Thus, the Opposite Party No. 1 as an enterprise is operating in a different market i.e., in the market of provision of services of allocation of dumpers; not in the market of services of dumpers for intra port transportation operations in the Paradip Port prohibited area. Accordingly, it is concluded by the DG that since the Opposite Party No. 1 is a non -player in the relevant market, its conduct is not liable to be examined under the provisions of section 4 of the Act. 4.4 As per the DG report, the members of the Opposite Party No. 1, by virtue of their association, have entered into an agreement through a Memorandum of Association (hereinafter, 'MoA'). During the course of DG investigation it has been found that the Opposite Party No. 1 is allocating dumpers owned by its members as per its sole discretion and being the single point source of supply of dumpers for stevedoring, it is controlling the provision of dumper services inside the Paradip Port prohibited area. It has also been reported that by denying services of dumpers to the Informant, the Opposite Party No. 1 has limited the provision of the said services. Accordingly, the DG has concluded that, the options of the stevedores to engage dumpers from any alternate sources being limited, by denying services of dumpers to the Informant, the Opposite Party No. 1 has limited and controlled the provision of the said services which is in contravention of the provisions of section 3(1) read with section 3(3)(b) of the Act. 4.5 It is also observed in the DG report that besides being engaged in the activity of allocation of dumpers of its members, the Opposite Party No. 1 is also engaged in the practice of negotiating and finalising rates of dumpers and hywas on behalf of its members with some stevedores who have formed an association in name of Paradip Port Stevedores Association (hereinafter, 'Opposite Party No. 3' or 'PPSA'). The practice of mutual negotiation and finalization of rates by the two associations i.e., the DOA and PPSA is found to be in the nature of direct or indirect determination of purchase or sale price which is in violation of the provisions of section 3(1) read with section 3(3)(a) of the Act. Further, the five office bearers of the Opposite Party No. 1 namely, Shri Amiya Kumar Sahoo, President; Shri Bhagban Swain, Vice President; Shri Tusharkanta Bhoi, Secretary; Shri Himanshu Pattanaik, Assistant Secretary; and Shri Ajay Kumar Samal, Treasurer are also equally responsible for the practices of the Opposite Party No. 1 that have been found to be anti -competitive under the provisions of section 3(1) read with sections 3(3)(a) and 3(3)(b) of the Act. 4.6 As regards the role of PPSA, the DG has found that PPSA is directly or indirectly determining the purchase prices of the services of dumpers thereby contravening the provisions of section 3(1) read with section 3(3)(a) of the Act. PPSA is found to be following the practice of negotiating and finalizing rates of dumpers and hywas with Opposite Party No. 1 and reserving the exclusive right to do so on behalf of its members as well as non -members. It is also reported that four office bearers of PPSA namely, Shri Anarjyami Pattanaik, Secretary; Shri Mahimananda Mishra, President; Shri R.K. Gosh, Treasurer; and Shri Sarat Kumar Hati, Vice -President are equally complicit in the said practices that have been found to be anti -competitive under the provisions of section 3(1) read with section 3(3)(a) of the Act. 4.7 As per the DG report, grant of permission by the Opposite Party No. 2 to the dumpers owned by the members of the Opposite Party No. 1 for intra -port transportation operations inside the Paradip Port prohibited area does not tantamount to an exclusive agreement between the Opposite Party No. 1 and the Opposite Party No. 2. Further, the Opposite Party No. 2 has not been found to be involved in the process of negotiation and finalization of rates of dumpers between the Opposite Party No. 1 and PPSA. Accordingly, it is concluded by DG that the Opposite Party No. 2 has not infringed any of the provisions of the Act.;