NABL’s Circular Mandating Entity Structure for Cabs Wasn’t Discriminatory, No Competition Issue Arose | CCI

Case Details: Association of Indian Laboratories (‘AOIL’) v. National Accreditation Board for Testing and Calibration Laboratories (‘NABL’) - [2024] 161 taxmann.com 523 (CCI)

Judiciary and Counsel Details

• • Ms Ravneet Kaur, Chairperson, Anil Agrawal, Ms Sweta Kakkad & Deepak Anurag, Member

Facts of the Case

In the instant case, the Informant (i.e. Association of Indian Laboratories) filed an information alleging contravention of the provisions of Section 3 and 4 of the Competition Act, 2002 by the Opposite Party (i.e. National Accreditation Board for Testing and Calibration Laboratories (NABL).

The Informant was a registered non-profit organization with the aim to serve as a common platform for laboratories, which were operating in private as well as public sector.

The OP was an accreditation body, with its accreditation system established in accordance with ISO/IEC 17011. The OP had issued a circular/letter No. NABL/ANCMT/2023/01/22-03 dated 22.03.2023, directing its accredited Conformity Assessment Bodies (CABs) operating as sole proprietors to align with any of the following forms of entity, i.e., One Person Company (OPC), Limited Liability Partnership (LLP), Company, Society/Trust, and Government.

According to the informant, such a forcible transfer of an entity from one form/type of organization structure to another was a violation of the policy of impartiality of NABL i.e., to act impartially and avoid any conflict of interest that would compromise its ability to make impartial decisions.

Further, the said circular was discriminatory, favouring big players and violating the rights of small entrepreneurs.

It was noted that the same circular was challenged as being unfair/violative of the provisions of the Act in a previous case titled as Prem Prakash V. National Accreditation Board for Testing and Calibration Laboratories [2023] 155 taxmann.com 73 (CCI), wherein the CCI , had inter-alia, held that there was no reason to intervene with the impugned circular, as the same mandated a structure which a laboratory had to follow if it wished to seek accreditation services from NABL.

CCI Held

The CCI held that there was no reason to re-examine the contents of the impugned circular from the competition perspective in the present matter. Therefore, no case was made out against the NABL in respect of either Section 3 or 4 of the Competition Act, 2002.

Accordingly, the information filed was directed to be closed forthwith under Section 26(2) of the Act. Consequently, no case for the grant of reliefs as sought under Section 33 of the Act arose.

List of Cases Reviewed

• • Prem Prakash v. National Accreditation Board for Testing and Calibration Laboratories (NABL) [2023] 155 taxmann.com 73 (CCI) (para 14) followed.