NCLAT Dismisses Travel Agents Association Of India's Allegations Of Anti-Competitive Practices Against Union Govt's Dept Of Expenditure

The NCLAT, New Delhi bench comprising Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the Department of Expenditure, Government of India does not qualify as an "enterprise" under Section 2(h) of the Competition Act, 2002, being a “consumer” of air ticketing services.The Travel Agents Association of India had levelled allegations of anti-competitive practices against the Department of Expenditure, Government of India, that denied market access to private travel agents for official air travel bookings. The Tribunal dismissed the appeal under section 53B of the Competition Act on the ground of res judicata.Brief Facts:The Appellant, Travel Agents Association of India (TAAI) filed the appeal under Section 53B of the Competition Act, 2002, challenging the Competition Commission of India's (“CCI”) order dated 8.05.2020 (“impugned order”). The Appellant had filed information under Section 19(1)(a) of the Act. The Appellant alleged that the Department of Expenditure, Government of India (“Respondent No. 2”), Balmer Lawrie & Co. Ltd. (“Respondent No. 3”), and Ashok Travels and Tours (“Respondent No. 4”) engaged in anti-competitive practices under Section 3(4) and Section 3(1) of the Competition Act, 2002 through exclusionary market practices that denied market access to private travel agents for official air travel bookings. Respondent No. 3 is a government company under the Ministry of Petroleum and Natural Gas and Respondent No. 4 is one of the divisions of the India Tourism Development Corporation, a Government of India undertaking. Both Respondent No. 3 and 4 are the exclusive travel agents, approved by Respondent No. 2.The Appellant had alleged that Respondent No. 2 had issued an Office Memorandum (No. 19024/1/E.IV/2005) on 24.03.2006. The Office Memorandum (“OM1”) contained direction to all government officials including the employees of the public sector companies to exclusively use the services of either Respondent No. 3 or 4 while booking air tickets for official travel and in this manner, foreclosed the market to the private sector travel agents. The appellant had filed an information earlier to challenge OM1, which Respondent No. 1 closed vide its order dated 15.09.2010 under Section 26(2) on the ground that Respondent No. 2 is not an “Enterprise” and the Government being the consumer for such services was entitled to make the choice for booking of air tickets through its authorised travel agents only. The Appellant in the second information had prayed that an enquiry under Section 26(1) of the Act may be initiated against Responent No. 2 and 3 to ascertain whether the OMs issued by the R1 have caused an appreciable adverse effect on competition (“AAEC”) in the market in India. The CCI in the impugned order closed the information under Section 26(2) of the Act, leading to the appeal.Submissions:The Respondents alleged that the second information filed by the Appellant is barred by the principle of res judicata (Section 11 of the Code of Civil Procedure, 1908) because the same issues had already been decided on merit between the same parties in the first information submitted by the Appellant. It was further submitted that the Appellant cannot abuse the process of court by seeking a review of the earlier order dated 15.09.2010 and 26.09.2012 which had been passed in the first information.The Appellant submitted that the market is dynamic. Therefore, second information was filed, which should not have been dismissed by the Tribunal only on the ground of res judicata.The Appellant submitted that the conclusion drawn by Respondent No. 1 that Respondent No. 2 is not an “enterprise” is ex-facie erroneous. Respondent No. 2 is an “enterprise” under section 2(h) of the Act, as it is controlling an economic activity and has foreclosed the entire market for private travel agents. Reliance was placed upon the decision of the Supreme Court in CCI vs. Coordination Committee of Artists and Technicians of W.B. Film and Television [(2017) 5 SCC 17] to contend that any entity constitutes an enterprise within the meaning of section 3 of the Act when it engages in economic activity (herein, the procurement of air tickets through a travel agent). It was further submitted that since the Appellant had challenged OM dated 19.07.2017 and 27.02.2018, the cause of action for filing the information arose almost 7 to 8 years since the CCI last assessed competition in the relevant market. Therefore, CCI's observation that the Appellant had earlier filed a case raising similar issues is untenable under the law. Observations:The tribunal observed Respondent No. 2 does not qualify as an "enterprise" under Section 2(h) of the Act. The tribunal noted the following observations of the CCI:"Government of India is the consumer of air ticketing services…. Department of Expenditure, Ministry of Finance, Government of India cannot be said to be engaged ...

NCLAT Dismisses Travel Agents Association Of India's Allegations Of Anti-Competitive Practices Against Union Govt's Dept Of Expenditure

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NCLAT Dismisses Travel Agents Association Of India's Allegations Of Anti-Competitive Practices Against Union Govt's Dept Of Expenditure

Tazeen Ahmed

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Tazeen Ahmed

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