Appellant Wasn’t Dominant Where There Were Multiple FIs That Were Competing Among Themselves for Extending Property Loans | CCI

Case Details: Synco Industries Ltd. v. Hero FinCorp Ltd. - [2023] 154 taxmann.com 598 (CCI)

Judiciary and Counsel Details

• Ms Ravneet Kaur, Chairperson, Ms Sangeeta Verma & Bhagwant Singh Bishnoi, Member

Facts of the Case

In the instant case, OP was a non-banking financial company (NBFC), registered with the Reserve Bank of India (RBI). The Informant Company sanctioned a loan against property for a sum of Rs. 5 crore from OP’s branch. According to the informant, OP, a dominant entity in the lending market, was engaged in unfair practices and abused its position towards customers and borrowers.

As per information, these alleged practices inter alia included imposing arbitrary and usurious charges for various services, manipulating floating interest rates for pecuniary gains, and disregarding reductions in repo rate to overcharge borrowers, which were in contravention of provisions of section 4 of the Competition Act, 2002.

It was noted that apart from OP, there were multiple financial institutions (within the category of public sector banks, private sector banks, regional rural banks, etc.) that competed among themselves for extending loan against property to eligible borrowers. Furthermore, the informant had not provided any evidence of OP being dominant.

The CCI observed that relying on information available in the public domain, it could not be said that OP was dominant in the relevant market i.e., ‘market for provision for loan against property in India, in terms of section 19(4) of the Competition Act, 2002.

CCI Held

The CCI held that in the absence of dominance, there was no occasion to look into alleged abusive conduct. Thus, no prima facie case of contravention of the provision of section 4 was made out against OP for causing an investigation into the matter and the matter was ordered to be closed forthwith under section 26(2) of the Competition Act.