COMPETITION COMMISSION OF INDIA versus M/S FAST WAY TRANSMISSION PVT. LTD. on 24 January 2018

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SUPREME COURT REPORTS

[2018] 2 S.C.R.

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COMPETITION COMMISSION OF INDIA

v.

M/S FAST WAY TRANSMISSION PVT. LTD.

(Civil Appeal No. 7215 of 2014)

BJANUARY 24, 2018

[R. F. NARIMAN AND NAVIN SINHA, JJ.]

Competition Act, 2002 – ss.3, 4 and 27 – Cable TV network– Respondent No.5 (Broadcaster of a News Channel) entered intovarious agreements with respondents No.1 to 4 (Multi SystemCOperators) – Agreements terminated by the Multi System Operators(MSOs) – Complaint filed by respondent no.5 – Director Generalof Investigation found MSOs indulged in practices violative of ss.3and 4 of the Act – Competition Commission held that MSOs were ina dominant position which could be misused and imposed penaltyDon them u/s.27 – However, Appellate Tribunal held that there wasno violation of either s.3 or of s.4 of the Act – Whether there is anabuse of dominant position u/s.4(2)(c) where the respondent-MSOscould be stated to have indulged in a practice resulting in denial ofmarket access in any manner – Held: In instant case, “dominantposition” is clearly made out – Explanation to s.4 specifically refersEto a position of strength that is enjoyed by an enterprise or groupthereof in the relevant market, which in instant case is Punjab andChandigarh, in the Cable TV market, which enables MSOs tooperate independently of competitive forces prevailing in the relevantmarket – On facts, clearly both sub-sections (i) and (ii) of cl.(a) ofFthe Explanation to s.4 apply, and thus, the respondent-MSOs couldbe said to be in a “dominant position”, for the purpose of s.4 –Once a dominant position is made out on facts, whether abroadcaster is in competition with MSOs is a factor that is irrelevantfor the purpose of the application of s.4(2)(c) which, as has beenfound, becomes applicable for the simple reason that the broadcasterGis denied market access due to an unlawful termination of theagreement between the said broadcaster and the MSOs (respondents1- 4) – However, respondent-MSOs were correct in stating that theTRP of the given news channel (respondent no.5) were much lowerthan given to any other channel and this was the reason forH

terminating the agreement with the broadcaster in mid-stream –Though, on facts, s.4(2)(c) has been breached, yet the reason givenby the respondents 1- 4 being otherwise justifiable, no penalty belevied on the facts of the present case – Telecommunication(Broadcasting and Cable Services) Interconnection Regulations,2004 – Regn. 4.2.

Competition Act, 2002 – ss.2,4,18,19,27,41,53B, 53T and 60– Role and Duty of Commission – Held: The Preamble of the Act,read with the ss. 2,4,18,19,27,41,53B,53T and 60 would show thatthe Commission set up by the Competition Act certainly has a positiverole to play – A perusal of s.18 and s.19 would show that it is apositive duty of the Commission to eliminate all practices whichhave an adverse effect on competition – Further the Commissionshould promote and sustain competition, apart from protecting theinterest of consumers, so as to ensure freedom of trade carried onby all participants in markets all over India – Also, a positive role isgiven to the Commission to inquire, suo motu, into the dominantposition of enterprises, and to prohibit anti competitive agreements– S.60 then gives the Act overriding effect over other statutes incase of a clash between the Act and such statues to effectuate thepolicy of the Act, keeping in view the economic development of thecountry as a whole.

Allowing the appeal, the Court

Conclusion

Allowing the appeal, the Court

HELD: 1. The Preamble of the Competition Act, read withsections 2,4,18,19,27,41,53B, 53T and 60 would show that theCommission set up by the Competition Act certainly has a positiverole to play. A perusal of Sections18 and 19 would show that it isa positive duty of the Commission to eliminate all practices whichhave an adverse effect on competition. Further the Commissionshould promote and sustain competition, apart from protectingthe interest of consumers, so as to ensure freedom of tradecarried on by all participants in markets all over India. Also, apositive role is given to the Commission to inquire, suo motu,into the dominant position of enterprises, and to prohibit anticompetitive agreements. Section 60 then gives the Act overridingeffect over other statutes in case of a clash between the Act andsuch statues to effectuate the policy of the Act, keeping in view A

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Athe economic development of the country as a whole. [Para7][246-C-E]

2. On the facts of the present case, it is clear that “dominantposition” is clearly made out. The Explanation to Section 4specifically refers to a position of strength that is enjoyed by anBenterprise or group thereof in the relevant market, which, as isstated hereinbefore, is Punjab and Chandigarh, in the Cable TVmarket, which enables respondents no. 1-4 to operateindependently of competitive forces prevailing in the relevantmarket. The Commission has found, on facts, that since theaforesaid MSOs group has 85% of the subscribers share in theCaforesaid cable TV market in the State of Punjab and Chandigarh,and that they are able to operate independently of competitiveforces prevailing in the aforesaid market. This finding has notbeen set aside by the Appellate Tribunal. Also, the respondentwould fall within Explanation (a)(ii) as well, though it is enoughDthat it would fall within sub-section a(i) of the Explanation. Sub-section (ii) refers to a position of strength as enjoyed by therespondents which enables them to affect consumers in its favour.[Para 8][246-E-H]

3. Relying upon the definition in Section 2(f)(ii), theEappellant correctly argued that a broadcaster would certainly fallwithin the wide language contained in the aforesaid sub-section.Further, in all fairness the respondent has agreed with the same.This being the case, it is clear that as both sub-sections (i) and(ii) of clause (a) of the Explanation apply, the respondent couldbe said to be in a “dominant position”, for the purpose of SectionF

4, in the facts of the present case. [Para 9][247-A-B]

4. Insofar as the question as to whether there is an abuseof such dominant position under Section 4(2)(c) where therespondent could be stated to have indulged in a practice resultingin denial of market access in any manner, it can be seen that inGthe facts of the case, the broadcaster, namely respondent No. 5,had a broadcast agreement which was entered into for a period ofone year. This was sought to be terminated within the aforesaidperiod by the respondent by notices. The TDSAT has, by itsorder adverted to Regulation 4.2 of the relevant H

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Telecommunication (Broadcasting and Cable Services)Interconnection Regulations, 2004 and has found that therespondents have not followed the aforesaid regulations, inasmuchas no reasons for termination have been given in the notices oftermination. This being the case, it is clear that, on the presentfacts, there is an abuse of the dominant position enjoyed by therespondents 1-4 (MSOs) only for the reason that the broadcasterwas denied access to market. The words “in any manner” arewords of wide import and must be given their natural meaning.This being the case, it is difficult to appreciate the reasoning ofthe Appellate Tribunal that, as the broadcaster and MSOs arenot in competition with one another, the provisions of Sections 3and 4 do not get attracted. The “dominant position” held by therespondent MSOs is clearly established for the purpose of Section4 in the present case, and the Commission finding in that behalfis also not set aside by the Appellate Tribunal. If this be so, thenonce a dominant position is made out on facts, whether abroadcaster is in competition with MSOs is a factor that isirrelevant for the purpose of application of Section 4(2)(c) which,as has been found, becomes applicable for the simple reason thatthe broadcaster is denied market access due to an unlawfultermination of the agreement between the said broadcaster andthe respondents 1-4 (MSOs). [Paras 10, 11][247-C-H]

5. A perusal of the average GRP chart would show that theGRP given to the news channel ‘Day and Night’ is much lowerthan that given to any other channel, and that the respondentwas correct in stating that this was the reason for terminating theagreement with the broadcaster in mid-stream. Though, on thefacts of this case, Section 4(2)(c) has been breached, yet the reasongiven by respondents 1 to 4 (MSOs) for termination beingotherwise justifiable, no penalty should be levied on the facts ofthe present case. [Para 13][248-G-H]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7215of 2014.

From the Judgment and Order dated 02.05.2014 of the CompetitionAppellate Tribunal, New Delhi in Appeal No. 116 of 2012.

P. S. Narsimha, ASG, Mrs. Suchitra A. Chitale, Ms. Tanvi Kakar,Gurjyot Sethi, Ms. Jayati Atul Chitale, Advs. for the Appellant.

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AMeet Malhotra, Sr. Adv., Vaibhav Gaggar, G. S. Oberoi, Ms. ReenaRathore, Ms. Smriti Jain, Ms. Shweta Rath, Mrs. Pragya Baghel, Advs.for the Respondents.

The Judgment of the Court was delivered by

R. F. NARIMAN, J. 1. The present appeal by the CompetitionBCommission of India raises several interesting questions relating to itsfunctions under the Competition Act, 2002. The brief facts necessary toappreciate the controversy which arises in the present case are as follows:

An agreement dated 1[st]August, 2010 was entered into betweenrespondent no.5, who was the broadcaster of a News Channel calledC“Day & Night News”, and respondent No.1 to 4 who are Multi SystemOperators (hereinafter referred to as “MSOs”) who carried the aforesaidchannel to persons who watch Cable T.V. A channel placementagreement was entered into, on the same day, between the broadcasterand the MSOs, all of which are stated to belong to the Fast Away Group.DBy notices of termination dated 19[th]January, 2011, the aforesaidagreements were terminated by relying on a clause of the saidagreements which entitled them to do so on the mere giving of a thirtyday notice. This being the case, respondent no.5 complained about theaforesaid termination. The Director General of Investigation lookedinto the complaint of the broadcaster, investigated the matter, and ultimatelyEdelivered its report to the Competition Commission, in which it foundthat the said MSOs indulged in practices which were violative of Sections3 and 4 of the Competition Commission Act, 2002. Going by this report,and after hearing the parties to the dispute, the Competition Commission,by its detailed order dated 3[rd]July, 2012, first held that according to it, theFrelevant market to be looked at for the purpose of Sections 3 and 4would be the State of Punjab and Chandigarh. Having regard to thismarket, so far as Cable TV was concerned, a finding was entered statingthat the MSO group had 85% of the subscriber share in that market, andwas therefore, in a dominant position which could be misused. Ultimately,it found on facts that the group had never terminated any such similarGagreement before the due date except in the instant case, and also foundthat this could not be said to be due to low TRP ratings, inasmuch as thecomplainant’s TRP rating was almost equal to that of some other channels.The Commission then went on to find as follows:

“6.4.9 The evidences as above confirm that there were disruptionsHin the telecast of the channel. The Commission further observes that the OP has argued that as per TRAI regulations it is notbound by “must carry”, as against the informant who is bound bya “must provide” provision. However, the argument of the OPgroup does not take away the fact that the informant is dependenton it for transmission of its channel and if it is denied that, it cannotget access to the market. It is not that the informant was notpaying the placement fee charged by the OP group. There wasno dispute on non-payment of placement or carriage charges. Anagreement was duly executed between the informant and the OPgroup for transmission of the channels of the former.

6.4.10 However, due to the fact that the subscriber base of theOPs is in excess of 40 lacs, every broadcaster including theinformant dependent upon their network. In such a situation, theCommission observes that the OP is in position to affect the marketin its favour. Due to its market power, the OP group has deniedthe opportunity for transmission of channel of the informant. Thegroup has no justification for termination of the agreement and itsargument for justifying its conduct is not based on any soundfootings. Its argument regarding shortage of spectrum for non-transmission of the informant’s channel in face of the fact thatthe spectrum constraint might have been considered at the timeof entering into agreement with the informant upon charge ofpremium from the broadcaster. Once that was considered, thequestion of shortage of spectrum during the period of the agreementdoes not arise. Similarly, the argument of low TRP is also notjustified since in past there has been no practice of review of anyagreement on the basis of TRP ratings in the middle of anagreement. The Commission observes that the argument ofspectrum shortage and low TRP is merely an afterthought to justifyits conduct.

6.4.11 The conduct of OP has resulted in loss to the informant-broadcaster as well as denial of services to the consumers whowant to watch the channel of the informant. As on date theInformant has access to only 56,000 households on the cable TVin the state of Punjab & Chandigarh, where about 45 lacshouseholds are connected on cable network. Thus, the informanthas been effectively wiped out from the entire relevant market bythe conduct of OPs.

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A6.4.12 In the light of the facts and circumstances of this case theCommission observes that due to the acts of the OP group theinformant has been denied the market access and opportunity tocompete and holds that violation of the provisions of section 4(2)(c) of the Act gets established.”

B2. Given the aforesaid finding, the Commission thereafter imposeda penalty in exercise of its power under Section 27 of the Act ofRs.8,40,01,141/-.

3. The appeal by the MSOs group to the Appellate Tribunal foundfavour with the aforesaid Tribunal. Essentially, the Tribunal’s findingCwas that the denial of market access under Section 4(2)(c) can only beby one competitor against another, and that as a broadcaster cannot besaid to compete with MSOs, there would be no violation of either Section3 or Section 4 of the Act. On this short ground the appeal stood allowed.

4. Shri P.S. Narsimha, learned Additional Solicitor General,Dappearing on behalf of the Competition Commission, who is the soleappellant before us, has argued that the role of the CompetitionCommission is delineated in the preamble read with certain provisions ofthe Act, as a positive one. The Commission has to prevent practiceshaving an adverse effect on competition, to promote and sustaincompetition in markets, as also to protect the interest of consumers, soEthat freedom of trade is ensured which in turn leads to healthy economicdevelopment of the nation as a whole. Viewed in this light, and afterreferring to certain other provisions of the Act, the learned AdditionalSolicitor General argued that the Appellate Tribunal has construed theAct in a constricted manner which would impede the Commissions’Ffunctioning in future cases. With his usual fairness, he has left it to thecourt to decide the amount of penalty that ought to be imposed on thefacts of the case.

5. Learned senior counsel appearing on behalf of the respondentMSOs has been equally fair to the Court, and has brought to our noticeGthe judgment of the Telecom Disputes and Settlement Appellate Tribunal(TDSAT) dated 25[th] April, 2012 in which this very termination by theMSOs in the present case was held to be unlawful, in that Regulation4.2 of the Telecommunication (Broadcasting and Cable Services)Interconnection Regulations, 2004 was breached. Clause 4.2 of theaforesaid Regulation, which overrides agreements between the parties,H

specifically speaks about a three weeknotice to the broadcaster clearlygiving reasons for the proposed action of effacing transmission of a TVchannel by the aforesaid MSOs. The notice of termination dated19[th]January, 2011 do not conform to the aforesaid Regulation as reasonsfor the proposed termination have not been given. He further arguesthat no case for penalty has been made out against his clients for thereason that at the relevant time, the analogue platform was used, andthe operational capacity of such platform was only for 80 channels asagainst the existing channels of about 550. He went on to add that theTRP ratings of the broadcaster, namely, respondent No. 5, was the lowestby far among all other news channels, getting a rating of only 3.8 asagainst the lowest rated news channel, which was MH Channel, of 7.This, according to him, was because of an experiment conducted byrespondent No. 5 which failed, because it broadcast news in threedifferent languages, and since most of the viewers were not familiarwith each of these languages, the channel failed and respondent No. 5was no longer in business. Therefore, according to him, even thoughtechnically speaking, Regulation 4.2 was breached, yet a notice oftermination could have been given stating the aforesaid reasons as towhy the agreement between the MSOs and the broadcaster wasterminated. This being the case it is clear that the termination of theagreement did not take place because of the MSOs dominant position inthe market, but because of the factors aforestated. In his view, therefore,this is not a case in which penalty should have been imposed.

We have heard learned counsel for the parties.

6. It is important to advert first to the provisions of the Act. ThePreamble to the Act reads as under:

“An Act to provide, keeping in view of the economic developmentof the country, for the establishment of a Commission to preventpractices having adverse effect on competition, to promote andsustain competition in markets, to protect the interests ofconsumers and to ensure freedom of trade carried on by otherparticipants in markets, in India, and for matters connectedtherewith or incidental thereto.

Section 2 Definitions-

In this Act, unless the context otherwise requires,- A

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(b) “agreement” includes any arrangement or understanding oraction in concert,-

(i) whether or not, such arrangement, understanding or action isformal or in writing; or

(ii) whether or not such arrangement, understanding or action isintended to be enforceable by legal proceedings; B

(f) “consumer” means any person who-

(i) buys any goods for a consideration which has been paid orpromised or partly paid and partly promised, or under any systemof deferred payment and includes any user of such goods otherthan the person who buys such goods for consideration paid orpromised or partly paid or partly promised, or under any systemof deferred payment when such use is made with the approval ofsuch person, whether such purchase of goods is for resale or forany commercial purpose or for personal use; C

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(ii) hires or avails of any services for a consideration which hasbeen paid or promised or partly paid and partly promised, or underany system of deferred payment and includes any beneficiary ofsuch services other than the person who hires or avails of theservices for consideration paid or promised, or partly paid andpartly promised, or under any system of deferred payment, whensuch services are availed of with the approval of the first-mentionedperson whether such hiring or availing of services is for anycommercial purpose or for personal use; E

(m) “practice” includes any practice relating to the carrying on ofany trade by a person or an enterprise; F

(r) “relevant market” means the market which may be determinedby the Commission with reference to the relevant product marketor the relevant geographic market or with reference to both themarkets; GSection 4 Abuse of dominant position-

(1) No enterprise or group shall abuse its dominant position.

(2) There shall be an abuse of dominant position under sub-section

(1), if an enterprise or a group-

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(a) directly or indirectly, imposes unfair or discriminatory-

(i) condition in purchase or sale of goods or service; or

(ii) price in purchase or sale (including predatory price) of goodsor service.

Explanation- For the purposes of this clause, the unfair ordiscriminatory condition in purchase or sale of goods or servicesreferred to in sub-clause (i) and unfair or discriminatory price inpurchase or sale of goods (including predatory price) or servicereferred to in sub-clause (ii) shall not include such discriminatoryconditions or prices which may be adopted to meet the competition;or (b) limits or restricts-

(i) production of goods or provision of services or market therefor;or

(ii) technical or scientific development relating to goods or servicesto the prejudice of consumers; or

(c) indulges in practice or practices resulting in denial of marketaccess in any manner; or (d) makes conclusion of contracts subject to acceptance by otherparties of supplementary obligations which, by their nature oraccording to commercial usage, have no connection with the subjectof such contracts; or (e) uses its dominant position in one relevant market to enter into,or protect, other relevant market.

Explanation- For the purposes of this section, the expression- (a) “dominant position” means a position of strength, enjoyed byan enterprise, in the relevant market, in India, which enables itto—

(i) operate independently of competitive forces prevailing in therelevant market; or

(ii) affect its competitors or consumers or the relevant market inits favour; A

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(b) “predatory price” means the sale of goods or provision ofservices, at a price which is below the cost, as may be determinedby regulations, of production of the goods or provision of services,with a view to reduce competition or eliminate the competitors.

(c) “group” shall have the same meaning as assigned to it in clause (b) of the Explanation to section 5.

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Section 18 Duties of Commission-

Subject to the provisions of this Act, it shall be the duty of theCommission to eliminate practices having adverse effect oncompetition, promote and sustain competition, protect the interestsof consumers and ensure freedom of trade carried on by otherparticipants, in markets in India:

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Provided that the Commission may, for the purpose of dischargingits duties or performing its functions under this Act, enter into anymemorandum or arrangement with the prior approval of the CentralDGovernment, with any agency of any foreign country.

Section 19 Inquiry into certain agreements and dominant-position of enterprise

(1) The Commission may inquire into any alleged contraventionof the provisions contained in sub-section (1) of section 3 or sub-Esection (1) of section 4 either on its own motion or on—

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(4) The Commission shall, while inquiring whether an enterpriseenjoys a dominant position or not under section 4, have due regardFto all or any of the following factors, namely:- (a) market share of the enterprise; (b) size and resources of the enterprise;

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(d) economic power of the enterprise including commercialadvantages over competitors; (e) vertical integration of the enterprises or sale or service networkof such enterprises; (f) dependence of consumers on the enterprise; H

(g) monopoly or dominant position whether acquired as a result ofany statute or by virtue of being a Government company or apublic sector undertaking or otherwise;

(h) entry barriers including barriers such as regulatory barriers,financial risk, high capital cost of entry, marketing entry barriers,technical entry barriers, economies of scale, high cost ofsubstitutable goods or service for consumers;

(i) countervailing buying power;

(j) market structure and size of market; (k) social obligations and social costs;

(l) relative advantage, by way of the contribution to the economicdevelopment, by the enterprise enjoying a dominant position havingor likely to have an appreciable adverse effect on competition; (m) any other factor which the Commission may consider relevantfor the inquiry.

Section 27 Orders by Commission after inquiry intoagreements or abuse of dominant position- Where after inquiry the Commission finds that any agreementreferred to in section 3 or action of an enterprise in a dominantposition, is in contravention of section 3 or section 4, as the casemay be, it may pass all or any of the following orders, namely:- (a) direct any enterprise or association of enterprises or person orassociation of persons, as the case may be, involved in suchagreement, or abuse of dominant position, to discontinue and notto re-enter such agreement or discontinue such abuse of dominantposition, as the case may be; (b) impose such penalty, as it may deem fit which shall be notmore than ten per cent of the average of the turnover for the lastthree preceding financial years, upon each of such person orenterprises which are parties to such agreements or abuse:

Provided that in case any agreement referred to in section 3 hasbeen entered into by a cartel, the Commission may impose uponeach producer, seller, distributor, trader or service provider includedin that cartel, a penalty of up to three times of its profit for each A

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SUPREME COURT REPORTS

year of the continuance of such agreement or ten per cent of itsturnover for each year of the continuance of such agreement,whichever is higher.

(d) direct that the agreements shall stand modified to the extentand in the manner as may be specified in the order by theCommission; (e) direct the enterprises concerned to abide by such other ordersas the Commission may pass and comply with the directions,including payment of costs, if any; (g) pass such other order or issue such directions as it may deemfit:

Provided that while passing orders under this section, if theCommission comes to a finding, that an enterprise in contraventionto section 3 or section 4 of the Act is a member of a group asdefined in clause (b) of the Explanation to section 5 of the Act,and other members of such a group are also responsible for, orhave contributed to, such a contravention, then it may pass orders,under this section, against such members of the group.

Section 41 Director General to investigate contravention-

(1) The Director General shall, when so directed by theCommission, assist the Commission in investigating into anycontravention of the provisions of this Act or any rules or regulationsmade thereunder.

(2) The Director General shall have all the powers as are conferredupon the Commission under sub-section (2) of section 36.

(3) Without prejudice to the provisions of sub-section (2), sections240 and 240A of the Companies Act, 1956 (1 of 1956), so far asmay be, shall apply to an investigation made by the DirectorGeneral or any other person investigating under his authority, asthey apply to an inspector appointed under that Act.

Explanation- For the purposes of this section,-

(a) the words “the Central Government” under section 240 of theCompanies Act, 1956 (1 of 1956) shall be construed as “theCommission”; (b) the word “Magistrate” under section 240A of the CompaniesAct, 1956 (1 of 1956) shall be construed as “the Chief MetropolitanMagistrate, Delhi”.

Section 53B Appeal to Appellate Tribunal-

(1) The Central Government or the State Government or a localauthority or enterprise or any person, aggrieved by any direction,decision or order referred to in clause (a) of section 53A mayprefer an appeal to the Appellate Tribunal.

(2) Every appeal under sub-section (1) shall be filed within a periodof sixty days from the date on which a copy of the direction ordecision or order made by the Commission is received by theCentral Government or the State Government or a local authorityor enterprise or any person referred to in that sub-section and itshall be in such form and be accompanied by such fee as may beprescribed:

Provided that the Appellate Tribunal may entertain an appeal afterthe expiry of the said period of sixty days if it is satisfied thatthere was sufficient cause for not filing it within that period.

(3) On receipt of an appeal under sub-section (1), the AppellateTribunal may, after giving the parties to the appeal, an opportunityof being heard, pass such orders thereon as it thinks fit, confirming,modifying or setting aside the direction, decision or order appealedagainst.

(4) The Appellate Tribunal shall send a copy of every order madeby it to the Commission and the parties to the appeal.

(5) The appeal filed before the Appellate Tribunal under sub-section(1) shall be dealt with by it as expeditiously as possible and endeavorshall be made by it to dispose of the appeal within six monthsfrom the date of receipt of the appeal.

Section 53T Appeal to Supreme Court-

The Central Government or any State Government or theCommission or any statutory authority or any local authority orany enterprise or any person aggrieved by any decision or orderof the Appellate Tribunal may file an appeal to the Supreme Courtwithin sixty days from the date of communication of the decisionor order of the Appellate Tribunal to them:

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Provided that the Supreme Court may, if it is satisfied that theapplicant was prevented by sufficient cause from filing the appealwithin the said period, allow it to be filed after the expiry of thesaid period of sixty days.

Section 60 Act to have overriding effect- B

The provisions of this Act shall have effect notwithstandinganything inconsistent therewith contained in any other law for thetime being in force.”

7. The Preamble of the Act, read with the aforesaid provisions,would show that the Commission set up by the Competition Act certainlyChas a positive role to play. A perusal of Sections18 and 19 would showthat it is a positive duty of the Commission to eliminate all practiceswhich have an adverse effect on competition. Further the Commissionshould promote and sustain competition, apart from protecting the interestof consumers, so as to ensure freedom of trade carried on by allDparticipants in markets all over India. Also, a positive role is given to theCommission to inquire, suo motu, into the dominant position of enterprises,and to prohibit anti competitive agreements. Section 60 then gives theAct overriding effect over other statutes in case of a clash between theAct and such statues to effectuate the policy of the Act, keeping in viewthe economic development of the country as a whole.

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8. On the facts of the present case, it is clear that as “dominantposition” is clearly made out. The Explanation to Section 4 specificallyrefers to a position of strength that is enjoyed by an enterprise or groupthereof in the relevant market, which, as is stated hereinbefore, is Punjaband Chandigarh, in the Cable TV market, which enables respondentsFno. 1-4 to operate independently of competitive forces prevailing in therelevant market. The Commission has found, on facts, that since theaforesaid MSOs group has 85% of the subscribers share in the aforesaidcable TV market in the State of Punjab and Chandigarh, and that theyare able to operate independently of competitive forces prevailing in theGaforesaid market. This finding has notbeen set aside by the AppellateTribunal. Also, the respondent would fall within Explanation (a)(ii) aswell, though it is enough that it would fall within sub-section a(i) of theExplanation. Sub-section (ii) refers to a position of strength as enjoyedby the respondents which enables them to affect consumers in its favour.

9. Replying upon the definition in Section 2(f)(ii), ShriNarsimha,learned ASG has, in our view, correctly argued that a broadcaster wouldcertainly fall within the wide language contained in the aforesaid sub-section. We may also add that in all fairness the learned counsel for therespondent has agreed with the same. This being the case, it is clearthat as both sub-sections (i) and (ii) of clause (a) of the Explanationapply, the respondent could be said to be in a “dominant position”, for thepurpose of Section 4, in the facts of the present case.

10. The question which now arises is whether there is an abuseof such dominant position under Section 4(2)(c) where the respondentcould be stated to have indulged in a practice resulting in denial of marketaccess in any manner.

11. It can be seen that in the facts of the case, the broadcaster,namely respondent No. 5, had a broadcast agreement which was enteredinto for a period of one year from 1[st]August, 2010. This was sought tobe terminated within the aforesaid period by the respondent by noticesdated 19[th]January, 2011. The TDSAT has, by its order dated 25[th]April,2012, adverted to Regulation 4.2 of the relevant Telecom Regulations,and has found that the respondents have not followed the aforesaidregulations, inasmuch as no reasons for termination have been given inthe notices of termination. This being the case, it is clear that, on thepresent facts, there is an abuse of the dominant position enjoyed by therespondents 1-4 only for the reason that the broadcaster was deniedmarket access on and after 19[th]February, 2011 until 1[st] August, 2011.The words “in any manner” one of wide import and must be given theirnatural meaning. This being the case, it is difficult to appreciate thereasoning of the Appellate Tribunal that, as the broadcaster and MSOsare not in competition with one another, the provisions of Sections 3 and4 do not get attracted. As has been held by us, the “dominant position”held by the respondent MSOs is clearly established for the purpose ofSection 4 in the present case, and the Commission finding in that behalfis also not set aside by the Appellate Tribunal. If this be so, then once adominant position is made out on facts, whether a broadcaster is incompetition with MSOs is a factor that is irrelevant for the purpose ofapplication of Section 4(2)(c) which, as has been found by us, becomesapplicable for the simple reason that the broadcaster is denied marketaccess due to an unlawful termination of the agreement between thesaid broadcaster and the respondents 1-4.

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A12. Having said this, however, we are of the view that no penaltyought to have been imposed on the facts of the present case. Thefinding of the Competition Commission that TRP rating of the broadcasterwas not so low as it was almost equal to that of other channels, is notcorrect. In the counter affidavit filed before us by the respondent, theyhave specifically stated the TAM ratings of the respondent channel, asBopposed to other news channels, from the month of September 2010 toJanuary 2011, were as follows:

S.No. Name of the ChannelAverage GRP of the Channel during five month period (Sept.’10 – Jan.’11) 1. AAJ TAK 33.6 2. Day and Night News 3.8 3. IBN7 24.7 4.MH1 News 7.05.NDTV India 22.56. PTC News 35.6 7. Star News 27.9 8. Zee News 21.5

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13. A perusal of the aforesaid chart would show that the GRPgiven to the news channel ‘Day and Night’ is much lower than thatgiven to any other channel, and that learned senior counsel for theGrespondent was correct in stating that this was the reason for terminatingthe agreement with the broadcaster in mid-stream. Though we findthat, on the facts of this case, Section 4(2)(c) has been breached, yet thereason given by respondents 1 to 4 for termination being otherwisejustifiable, we feel that no penalty should be levied on the facts of thepresent case.

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g )

14. The appeal is accordingly allowed, and the judgment of theAppellate Tribunal, as well as the penalty imposed by the CompetitionCommission, both stand set aside.

Ankit Gyan

Appeal allowed.

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