Invoking the non-compete clause to restrict informants from re-entering business wasn’t abuse of dominance: CCI

Case Details: Anand Moudgil v. Orbit Aviation (P.) Ltd. - [2021] 132 taxmann.com 225 (CCI)

Judiciary and Counsel Details

• • Ashok Kumar Gupta, Chairperson
  • Ms. Sangeeta Verma and Bhagwant Singh Bishnoi, Member

Facts of the Case

In the Instant case, the Informant was engaged in the business of running buses, he filed a petition against Orbit Aviation Private Limited (OP) alleging contravention of the provisions of sections 3 and 4 of the Act.

The Informant sold the buses to OP by entering into the sale agreement. He stated that a clause on non-Compete was forcefully inserted at the time of signing of the Agreement by the OP.

As per the Information, OP was not engaged in carrying out any business of plying buses from Punjab to Delhi Airport, rather its sister concern ICTC is running the same business. Therefore, OP was not allowing the Informant to compete by plying buses with ICTC.

CCI Held

On perusal of the Information and the documents filed therewith, Commission observed that the Informant had not been able to place any material before the Commission wherefrom any entry barrier, much less any insurmountable entry barrier, can be deciphered.

Because of the above, the Commission considered that there was absence of any foreclosure or entry barrier in the market due to the purported non-compete clause entered into by and between the Informant and the OP.

Also considering the nature of the clause and the consideration paid, therefore, the Informant has failed to make out any case of contravention of the provisions of sections 3 or 4 of the Act against the OP. Resultantly, the Commission held that no case of contravention of the provisions of the Act could be made out and directed the matter to be closed forthwith in terms of the provisions contained in section 26(2) of the Act.