SC sends Flipkart competition case back to NCLAT for fresh review
The Supreme Court set aside a 2020 NCLAT order directing a CCI probe into Flipkart and asked the tribunal to reconsider the case afresh
 "SC sends Flipkart competition case back to NCLAT for fresh review")
The Supreme Court on Tuesday set aside a 2020 order of the National Company Law Appellate Tribunal (NCLAT) that had directed the Competition Commission of India’s (CCI's) Director General to investigate alleged violations of competition law by Flipkart.
Sending the matter back to the appellate tribunal, the court asked the NCLAT to reconsider the case, after taking into account Flipkart’s submission that the earlier ruling had relied on findings recorded by an income tax assessing officer, which were subsequently overturned by the Income Tax Appellate Tribunal (ITAT). The apex court clarified that all questions of law and fact remained open for fresh determination.
A Bench comprising Chief Justice of India Justice Surya Kant and Justices Joymalya Bagchi and Vipul Pancholi said the NCLAT must independently assess whether a prima facie case exists and whether any further probe by the competition regulator is warranted, in line with settled principles laid down by the Supreme Court, including in the Coal India decision.
Appearing for Flipkart Internet, Senior Advocate Abhishek Manu Singhvi argued that neither dominance in the relevant market, nor abuse of dominance had been established against the company. He contended that the NCLAT’s conclusions were founded on observations made during income tax proceedings, which no longer survived after the ITAT set aside the assessment order.
Singhvi also pointed out that the CCI itself had earlier concluded that Flipkart was not a dominant player, maintaining that Amazon held a stronger position in the online marketplace.
During the hearing, the Chief Justice indicated that the matter could be remitted to the NCLAT so that it may examine the issue without placing reliance on the income tax assessment.
Counsel for the All India Online Vendors’ Association (AIOVA), the original informant before the CCI, countered that while the ITAT reversed the assessment on legal grounds, it did not disturb factual observations relating to the business model.
The income tax proceedings concerned Flipkart India, submitted Senior Advocate Rajshekhar Rao, who was representing the unit, which is a business-to-business wholesale entity, separate from Flipkart Internet. He argued that those observations were incorrectly applied to Flipkart Internet, which operates the online marketplace.
The dispute goes back to March 2020, when the NCLAT set aside a Competition Commission order that had closed AIOVA’s complaint seeking an investigation into Flipkart’s practices.
The appellate tribunal had then held that a prima facie case existed under Section 4 of the Competition Act, relating to abuse of dominant position and predatory pricing, and directed a probe by the Director General.
AIOVA, representing over 2,000 online sellers, had alleged that preferential arrangements with large sellers on e-commerce platforms distorted competition and disadvantaged smaller vendors.
However, in November 2018, the Competition Commission had rejected these claims, holding that neither Flipkart, nor Amazon could be considered dominant in the relevant market.