Competition Commission Closes Complaint Against Honda Motorcycle Filed By Former Dealer, Holds Dispute To Be Commercial In Nature

The Competition Commission of India (Commission) bench, comprising Ms. Ravneet Kaur (Chairperson), Mr. Anil Agrawal (Member), Ms. Sweta Kakkad (Member) and Mr. Deepak Anurag (Member) has closed the complaint filed against Honda Motorcycle & Scooter India by its former dealer. The bench found that the facts of the complaint pertain to commercial disputes arising from the agreement and are not related to anti-competitive practices. Background Facts In 2016, the Informant sought a dealership with Honda Motorcycle & Scooter India (HMSI) [Opposite Party] but was forced to terminate his existing Suzuki dealership as a condition. Reluctantly complying, he signed a dealership agreement with HMSI in August 2017 and relocated his showroom to Thrissur, Kerala. The Informant contended that HMSI abused its dominant position by dumping unsellable two-wheeler models at their showroom without consent, which caused them a loss of business. HMSI also denied approval for a new director who invested Rs.2 crores to rescue the business. On January 22, 2024, HMSI unilaterally terminated the dealership agreement, causing severe financial and operational hardship. Therefore, being aggrieved, the Informant filed a complaint under Section 19(1)(a) of the Competition Act, 2002, against HMSI alleging abuse of dominance under Section 4. The Informant sought an investigation, punitive measures and interim relief to restore his dealership. Observation and Direction by Commission The Commission reviewed the reasons provided by the Informant for the delay in filing the complaint. The Informant claimed he did not approach the Commission earlier because he was bound by his dealership agreement with HMSI until January 22, 2024 and did not want to lose the opportunity of being appointed as a dealer for a dominant brand. However, Commission noted that the Informant had entered into the dealership agreement in 2017 after terminating his agreement with Suzuki and began facing issues in 2018. The dealership agreement was also revised in 2021. Hence, Commission found the Informant explanation for the delay in filing the complaint unconvincing. Despite this informant's allegations were analysed under the framework of the Competition Act. Regarding the allegations of dumping unpopular models and the unilateral termination of the dealership agreement, Commission observed that these were commercial disputes related to business transactions and fall outside the purview of the commission. On the issue of unilateral termination of the dealership, Commission referred to the Opposite Party's statement which cited a lack of improvement in quality standards as the reason. The Opposite Party also mentioned multiple warning and improvement letters issued to the Informant. The Commission held that these correspondences indicates commercial disputes arising from the agreement and not the anti-competitive practices. As a Result Commission closed the matter against the Honda Motorcycle & Scooter India. Case – Mr. Rajesh George Versus Honda Motorcycle & Scooter India Pvt. Ltd. Citation – Case No. 16 of 2024 Date – 14-01-25Click Here To Read/Download The Order

Competition Commission Closes Complaint Against Honda Motorcycle Filed By Former Dealer, Holds Dispute To Be Commercial In Nature

Aryan Raj

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