On May 29, 2020, the National Company Law Appellate Tribunal (“NCLAT”) in the case of Maj. Pankaj Rai v. Secretary, Competition Commission of India had to determine whether the period of 730 (seven hundred thirty) days including 693 (six hundred ninety three) days spent by the appellant, Maj. Pankaj Rai (“Informant”) in seeking remedy before the Telangana High Court (“High Court”) qua the impugned order dated November 28, 2017 passed by the Competition Commission of India (“CCI”) under section 26(2) of the Competition Act, 2002 (“Act”), could be condoned.
The Informant, a franchisee of NIIT Limited (“NIIT”) in Hyderabad engaged in the business of provision of computer education/ training services had alleged that NIIT was abusing its dominant position through its franchise agreements and was indulging in anti- competitive practices. The Informant, inter alia, alleged that NIIT: (a) revoked the rights of Informant in respect of a particular course and continued to offer the same course at its own center in Hyderabad itself, thereby foraying into the territories of the Informant and depriving the Informant of his legitimate share of revenue from that territory; (b) engaged in predatory pricing; (c) poached customers of the Informant; and (d) followed a differential pricing pattern for customers in the metros rendering the prices offered by the franchisees as uncompetitive.
The CCI, relying on information available in the public domain found that NIIT was not holding a dominant position in the relevant market and that no prima facie case of contravention of provisions of sections 3 and 4 of the Act was made out against NIIT. Therefore, the CCI directed closing of the matter in terms of section 26(2) of the Act.
The appeal before the NCLAT was filed by the Informant after 768 (seven hundred sixty eight) days whilst section 53B of Act provides that appeal against, inter alia, an order passed under section 26(2) of the Act is to be filed within 60 (sixty) days from the date of such order being received by the aggrieved person. The NCLAT however is permitted to entertain appeals after the expiry of the 60 (sixty) day period on being satisfied that there was ‘sufficient cause’ for not filing the appeal within the specified period.
The Informant had initially filed a writ petition before the High Court impugning the impugned order passed by the CCI under section 26(2) of the Act. However, the single judge in the High Court held that the impugned order could only be challenged before the NCLAT under the Act and rejected the petition. The Informants then appealed against the decision of the single judge to the division bench, which was also of no avail in view of the efficacious remedy of appeal being available under the Act.
Subsequently, the Informant filed the present appeal before the NCLAT and sought condonation of delay by exclusion of period of 693 (six hundred ninety three) days consumed in litigation before the High Court contending that the matter was prosecuted in good faith before the High Court as the impugned order was non est and obtained by fraud.
The NCLAT referred to, inter alia, section 53B(5) of the Act that provides that the NCLAT shall deal with the appeal as expeditiously as possible and shall make endeavours to dispose it off within 6 (six) months and held that given the objective to be achieved by this special statute and the mechanism provided for speedy disposal of the matters dealing with competition concerns or anti-competitive practices, there can be no hesitation in holding that the Limitation Act, 1963 was never intended to apply to matters covered under the Act for which special limitation is prescribed and that therefore the provisions of Limitation Act, 1963 stand excluded by necessary implication. The NCLAT thus held that it would not be not open to the Informant to take recourse to section 5 of the Limitation Act, 1963 providing for extension of period of limitation prescribed under the Limitation Act, 1963 which had no application to appeal in hand.
Further, in relation to section 53B, the NCLAT observed that the Informant, despite dismissal of his writ petition on the ground of efficacious remedy in the form of appeal being available under the Act, remained adamant at pursuing a remedy before the High Court and filed a writ appeal and upon the dismissal of the writ appeal, filed a review petition before the Supreme Court which was subsequently withdrawn. The NCLAT stated that despite the advice from the writ courts to approach the NCLAT, the Informant persisted in pursuing a remedy before Constitutional courts and this conduct of the Informant would not constitute ‘sufficient cause’ for not exercising the statutory right of appeal within the prescribed 60 (sixty) day period. The NCLAT therefore held that there was no sufficient cause for not filing the appeal withing the statutory period of limitation and dismissed the appeal as being barred by limitation.
Read order here.
This update has been contributed by Adity Chaudhury (Partner) and Deeya Ray (Associate).
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