CCI probe on car makers: High court decides to rehear firms' plea

Asks the single Judge to consider the petition against CCI's decision to investigate all car manufacturers on merit over allegations of anti-competitive methods

A two-judge bench of the high court here has set aside a single judge’s order which had dismissed the petitions of automobile majors Nissan and Hyundai against the decision of the Competition Commission of India (CCI) to initiate an investigation against all car manufacturers.

The bench of judges Satish K Agnihotri and M M Sundresh remanded the matter to the same single judge, to reconsider the case. They made no comment on the merits of any side.

On June 30, judge V Dhanapalan dismissed the petitions of Nissan Motors India Pvt Ltd and Hyundai Motor India Ltd against CCI’s initiating an investigation against all car manufacturers related to alleged anti-competitive methods of the original equipment manufacturers. He said the companies could approach only the Competition Appellate Tribunal for a statutory remedy. It was against this order that Nissan Motor India approached the division bench for a remedy.

The latter bench, in the order, said the single judge had, without deciding the issue raised, dismissed the petition on the ground of availability of statutory remedy under 53 (B) of the Competition Act. However, said the larger bench, “on a plain reading of the provisions...it is clear that no appeal remedy is available...against the proceedings ...which are the subject matters in the writ petition... we hold that no statutory appeal is accordingly available.”

Asked for a comment, Nissan Motor officials said they could not, as the matter was still in court. So did a  Hyundai Motor spokesperson.

The issue started when a Shamsher Kataria filed a complaint in January 2011 with CCI against three car companies —,Honda Siel Cars India, Volkswagen India and Fiat India Automobiles. He alleged anti-competitive methods or agreements and abuse of a dominant position.

CCI decided there seemed enough ground to merit an investigation that anti-competitive practices by these firms had resulted in denial of market access to independent workshops and that the car buyer was forced to buy, repair or use maintenance services from the same manufacturer or its authorised dealers, and that genuine spare parts, diagnostic tools, software and technical information were not being made available to independent repair workshops. it told its investigation arm to probe and give a report within 60 days.

After preliminary investigation, the CCI’s director-general of investigation requested it for directions to initiate an investigation against all other car manufacturers in India. For, it said, similar practices were being followed by all other makers, too, in the areas of after-sales service, procurement and sale of spare parts from original equipment suppliers, and setting up of dealerships.

CCI agreed and the DG’s office issued a notice to the companies, after deciding the Act’s provisions seemed to have been breached. Nissan argued in court on several points in this regard, as did Hyundai. These two are among 17 car makers the CCI is investigating on the alleged anti-competitive practices.