NCLAT rejects travel agents' plea alleging govt anti-competitive practices

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The NCLAT on Friday upheld a CCI order that rejected a plea by the Travel Agents Association of India (TAAI) alleging anti-competitive practise by the government by exclusively using the services of their own agencies.

A three-member bench also imposed a cost of Rs 5 lakh, observing that Government of India cannot be considered as an enterprise.

The case pertains to a direction issued by the Department of Expenditure(DoE) in March 2006 to all government officials, including employees of PSU units to exclusively utilise the services of either Balmer Lawrie & Co or Ashok Travels and Tours.

Balmer Lawrie & Co is a company under Ministry of Petroleum & Natural Gas while Ashok Travels and Tours is a division of state-owned India Tourism Development Corporation.

Terming the directive anti-competitive, TAAI approached CCI alleging that it has restricted the market access for travel agent services for booking air tickets for the last 14 years and adversely impacted the benefits of fair competition which would have resulted in lower prices and better services.

However, this was rejected by CCI in May 2020, observing that DoE cannot be regarded as an enterprise' in terms of Section 2(h) of the Competition Act as its principal activity was not business but policy-making.

Furthermore, DoE does not have any agreement with these travel agencies but has only issued internal communications to government employees. Thus, it is not a business activity that falls within the ambit of the Competition Act, the commission held.

This CCI order was challenged by TAAI before the National Company Law Appellate Tribunal (NCLAT), which is an appellate authority for the orders passed by CCI.

However, a three-member bench dismissed the petition and imposed costs for repeatedly pursuing litigation against the DoE over the same office memorandum (dated March 24, 2006).

"The Respondent No 2 (DoE) is not an enterprise and OM1 is not an agreement in violation of Section 3(4) of the Act, therefore, these issues cannot be reagitated and the court cannot be called upon to decide the same by passing a lengthy judgment," it said.

The 32-page order further said :"The wasting time which may be used for disposal of a genuine case, therefore, the present appeal is found without any merit and while dismissing this appeal, the appellant (TAAI) is saddled with costs of Rs 5 lakh which shall be deposited by the Appellant in the Prime Minister Relief Fund within a period of 15 days from the date of passing of this order".

Balmer Lawrie & Co. Ltd was represented by MK Ghosh and Tina Garg before NCLAT.