RULEOFREASONUNDERTHEI NDI AN COM OMPETI TI ONACT Edi t or ’ s Not e :Th ea ut ho ro ft h ep ap era na l y s e st h e me an i n g oft hep er s er u l ei n
I ndi anCompet i t i onLaw,t hi si si nl i ghtofSec t i on3( 3)o ft heCompet i t i onAc t ,2002 whi ch pr esume mes cer t ai n agr eeme ment st o have an appr eci abl e adver se effect on c ompet i t i oni nI ndi a. ” I NTRODUCTI ON
Ther ear emanyl egi s l at i onsofc ompet i t i onl awt hatex i s ti nt hewor l dt oday .Someoft he l a wsar eac e nt ur yol dl i k et h eSh er ma nAc toft h eUSwh i l es o mea me r emor er e ce ntl i k e t heI ndi a nCompe t i t i onAc t ,2002andt heSi ngapor eanCompe t i t i onAc t sof2004.Whi l e doi ng bus i nes si nI ndi a, par t i es ar e pr ohi b i t ed f r om e x ec ut i ng ant i c ompe t i t i v e agr eement s .Gener al l y ,t heagr eement swhi c hc aus eorar el i k e l yt oc aus eappr ec i abl e adv er s e eff ec ton c ompe t i t i on ar e ant i c ompet i t i v ea gr eement s . [ 1]Suchagr eeme ment s maybehor i z ont al orv er t i c al .Themos tper ni c i ousf or m ofant i c ompet i t i v eagr eementi s c ar t el i z at i on. Anyagr eementi nr es pec to fp r oduc t i on,s uppl y ,di s t r i but i on,s t or age,ac qui s i t i on or c o nt r o lo fg oo ds orpr o v i s i o no fs er v i c es ,wh i c hc a us e so ri sl i k e l yt oc a us e an appr ec i abl eadv er s eeffec tonc ompet i t i onwi t hi nI ndi a,i sanant i c ompet i t i v eagr eement . [ 2]Such agr eeme ment s ar e voi d agr eeme ment s. [ 3]Th et e r m ‘ a gr e eme nt ’i n c l u de sa ny ar r angementorunder s t andi ngorac t i oni nc onc er twhet herorno tf or malori nwr i t i ngor i si nt endedt obeenf or c eabl ebyl egalpr oc eedi ngs . [ 4]I nRegi s t r aro fRes t r i c t i v eT r ade Agr eement sv .W.H.Smi t h andSons, [ 5]t h ec o ur to bs e r v e d,‘ p eo pl e wh oc o mb mb i n e t oget hert ok eepuppr i c esdonots houti tf r om t hehous et ops .The yk eepi tqui et .The y mak et h ei ro na r r a nge me me nt si nt hec el l u l ar ,wh er en oo nec a ns e e.The ywi l lno tp ut any t hi ngi nt owr i t i ngnorev eni nt owor ds .Soi ti nc l udesnotonl yan‘ agr eement ’pr oper l y s oc al l e d bu ta ny‘ ag r e eme nt ’h owe v eri nf o r ma l ’ .Ho we v er ,i nt h e EU i ns omer e c ent c a se s ,f o re x a mp mp l e ,Bayer ,B [ 6] and Vo l k s wa ge n[ 7] ,t he c our tdi s agr eed wi t ht he EC’ s e xpans i v ei nt er pr et at i onof‘ agr eement ’andhaseff ec t i v el yt oughenedt hes t andar dsf or pr oofofagr eementi nc as esorr es t r i c t i v edi s t r i but i on. Tobr i ngi nt heappl i c at i onofSec t i on3,i ti sper t i nentt hatt heeffec tonc ompet i t i onmus t be‘ appr ec i abl e’ .Thet er m‘ appr ec i abl eadv er s eeff ec tonc ompet i t i on’ ,us edi ns ec t i on 3( 1)hasno tbeendefi nedi nt heAc t .Thede t er mi nat i onof‘ appr ec i abl e ’haspr o v edt o b eamai np r o bl e mu nde rt h eCo mpe mp t i t i o nAc t .Th ea ut h orT . Ra map ma pac o ns i d er st h att o
bec ons i der ed‘ appr ec i abl e’ ,t heeffec thast obes ubs t ant i al . [ 8] Ho we v er ;t h i sma yno tb e i nl i newi t hI ndi anec onomi ci nt er es t s .Ac c or di ngl y ,amor eappr opr i at emean i nghas b ee ng i v e ni nL a w L e x i c o n wh er e‘ a pp r e c i a bl e ’i sd efi n e da s’ c a p ab l eo fb e i n g es t i mat ed,wei ght ed,j udgedoforr ec ogni z edbyt hemi nd’ whi c hi s‘ per c ept i bl ebutnota s y no ny mo fs u bs t a nt i a l . ’Fort hemos tpr ac t i c alpur pos es‘ appr ec i abl e ’hast obemor e t hanj us tadet ec t abl eeffec tbutmaynotbes ubs t ant i al . Se c t i on1 9( 3 )o ft h e Ac ts t at e st h atwh i l ed et e r mi ni ngwh et h era na gr e emen th asa n appr ec i abl eadv e r s eeff ec to nc ompe t i t i onu nders ec t i on3,t hec ommi s s i o ns hal lgi v e duer egar dt oal l oranyoft hef ol l owi ngf ac t or s : •
c r eat i onofbar r i er sofnewent r ant si nt hemar k et ;
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dr i v i ngex i s t i ngc ompet i t or soutoft hemar k et ;
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f or ec l os ur eofc ompet i t i onbyhi nder i ngent r yi nt ot hemar k et ;
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ac c r ua lofb enefi t st oc ons umer s ;
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i mpr ov ement si npr oduc t i onordi s t r i but i onofgoodsorpr ov i s i onofs er v i c es ;
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Pr o mo t i o no ft e c h ni c a l ,s c i e nt i fi ca nd e c o no mi cd e v e l o pme ntb y me an so f pr oduc t i onordi s t r i but i onofgoodsorpr ov i s i onofs er v i c es .
Thefi r s tt hr eer el at et ot henegat i v eeffec t sont hec ompet i t i onwhi l et her emai ni ngt hr ee r el at et obenefi ci aleffec t s . [ 9]I A n ut omobi l esDeal er sAs s oc i at i onv .Gl obalAut omobi l es Li mi t ed & Anr . , [ 1 0 ]CCIh el dt h ati two ul db ep r u de ntt oe x a mi n ea na c t i o ni nt h e bac k dr opofal lt hef ac t or sment i onedi nSec t i on19( 3) .Theagr eements houl dbet he c aus eoft headv er s eeff ec tont hec ompet i t i on.Ev e ni fs uc hacons equ enc ei spr obabl e, t he agr eementi s ant i c ompet i t i v e.The pr obabi l i t y and notmer e pos s i bi l i t y ofi t s c ons equenc easappr ec i abl yaff ec t i ngc ompe t i t i oni st her equi r ement . [ 1 1 ] Co mp et i t i o nl a w u s ua l l yp l ac e sa nt i c o mp et i t i v e ag r e eme nt si nt wo c a t e gor i e so f h or i z o nt a la n dv e r t i c a la g r e eme nt s .Th eh or i z o nt a la g r e eme nt sa r ev i e we d mo r e s er i ous l yt hanv er t i c alagr eement s .TheAc tdoes n’ ts pec i fi cal l yus et het er mshor i z ont al a gr ee me ntan dv e r t i c a la gr e eme nt .Ho we v er ,t h ea gr e emen t sr ef er r e di ns ec t i o n3 ( 3 ) ar ehor i z ont al whi l et hos er ef er r edi ns ec t i on3( 4)ar ev er t i c al agr eement . [ 1 2 ]
Ho r i z o nt a la gr e eme nt sr e f e rt oa gr e eme nt sa mo ng c o mp et i t o r s ,i . e . ,a gr e eme nt s be t weent woo rmor eent er pr i s est hatar eatt hes ames t ageoft hepr oduc t i onc hai nand i nt h es a me ma r k e t .A d i s t i n c t i o ni sa l s o ma de b et we en c a r t e l sa s p ec i a lt y p eo f h or i z o nt a lag r e eme nta nd o t h erh or i z o nt a la gr e eme nt s . [ 1 3 ]The Ac tpr o v i desf ort he f ol l owi ngf ourk i ndsofhor i z ont al agr eement s ,whi c har epr es umedt obeant i c ompet i t i v e: [ 1 4 ] ( a) .Agr eement sr egar di ngpr i c es :Agr eement st hatdi r ec t l y / i ndi r ec t l yfi xpur c has e/ s al e pr i c e; ( b) .Agr eement sr egar di ng quant i t i es :Agr eement s ai med atl i mi t i ng o rc ont r ol l i ng pr oduc t i on,s uppl y , mar k et s ,t ec hni c al dev el opmentandi nv es t ment ; ( c ) .Ag r e eme nt sr e ga r d i n g ma r k e ts h a r i n g:Ag r e eme nt sf o rs ha r i n go fma r k e t sb y geogr aphi c al ar ea,t y pesofg oods / s er v i c esandn umberofc us t omer s ;and ( d) .Agr eement sr egar di ngbi ds( c ol l us i v et ender i ngandbi dr i ggi ng) :T ender ssubmi t t ed asar es ul tofj oi ntac t i v i t yoragr eement . Su c ha gr e eme ntma yl e ad t oac a r t e l ,wh i c hi sp er n i c i o us . [ 1 5 ]Ca r t e l sh a v ea n unf av our abl eeffec tonc ompet i t i onandant i t r us tl egi s l at i onal lac r os st hewor l dt r yt o c ur bt hem.Unl i k et heMRTPAc t ,t heCompet i t i onAc te xpl i c i t l ydefi nesCar t el s .The yar e p l a c edu nd erSe c t i o n3 ( 3 )wh er et h er ei sap r e s ume da pp r e c i a bl ea dv e r s ee ffe c to n c ompet i t i on. CART EL I Z A TI ON
Ca r t el sar ea gr ee me nt sbe t wee ne nt e r p r i s e s[ 1 6 ]( i nc l udi ngas soc i at i onofe nt er pr i s es ) n ott oc o mp et e on p r i c e,p r o du ct( i nc l u di n gg ood sa nd s er v i c e s )orc u s t o mer s .Th e pur pos e ofa c ar t eli st or ai s e pr i c e abov ec ompet i t i v el ev el s ,r es ul t i ng i ni nj ur yt o c o ns u me r sa nd t ot h ee c on omy .Fort h ec o ns u me r s ,c ar t el i z at i o nr e su l t si nh i g her pr i c es ,poorqual i t yandl es sornoc hoi c ef orgoodsor / ands er v i c es .I nt heEur opean Uni on,Mar i oMont i ,t hef or merc ommi s s i onerf orCompet i t i on,onc edes c r i bedc ar t el sas “ c a n c er so nt h eo pe nma r k e te c o no my ” [ 1 7 ] ,a ndt h eSu pr e meCo ur ti nUSh asr e f e r r e d t oc ar t el sas“ t hes upr emeev i l ofant i t r us t ” [ 1 8 ] .
TheI ndi anCompe t i t i onAc t ,2002c ov e r sc ar t el su nderSec t i on3( 3) .Ac c or di ngt ot he s e ct i o n,i ti spr e s umed t h ats u c ha gr e eme nt sc a us esa pp r ec i a bl ea dv e r s ee ffe c to n c ompet i t i on.Thust hebur denofpr oofi nan yc ar t elc as ei sont hed ef endantt opr o v e t ha tt h ep r es u mp t i o ni s no tc a us i n ga ppr e c i a bl ea dv e r s ee ffec to nc o mp et i t i o n.A s pec i fi cgoal ofCompet i t i onAc ti st hepr ev ent i onofec onomi cagent sf r om di s t or t i ngt he c o mp et i t i v ep r o c es se i t h ert h r o ug ha gr e eme nt s wi t ho t h erc omp an i e so rt h r o ug h uni l at er al ac t i onsdes i gnedt oex cl udeac t ual orpot ent i al c ompet i t or s . “ Car t e l s ”a r ei n c l u de di nt he c a t e gor yo fa g r e eme nt s ,wh i c ha r ep r e su med t o ha v e appr ec i abl eadv er s eeffec tonc ompet i t i on.Thet er m“ Car t el ”i sex pl i c i t l ydefi nedi nt he Ac tas : -[ 1 9 ] “ Car t eli nc l udesan as soc i at i on ofp r oduc er s ,s el l er s ,di s t r i but or s ,t r ader sors er v i c e pr ov i der swho,byagr eementamongs tt hems el v es ,l i mi t ,c ont r ol orat t emptt oc ont r ol t he pr oduc t i on,di s t r i but i on,s al eorpr i c eof ,or,t r adei ngoodsorpr ov i s i onofs er v i c e” . Ther ear et hr eees s ent i alf ac t or sha v e beeni dent i fi edt oes t abl i s ht hee xi s t enc eofa c ar t el ,namel y 1 . Ag r e eme ntb ywa yo fc o nc e r t e da c t i o ns u gg es t i n gc o ns p i r a c y ; 2. Thefixi ngofpr i ces 3. Thei nt entt ogai namonopol yorr es t r i c t / el i mi nat ec ompet i t i on[ 2 0 ] Par i t yofpr i c escoupl edwi t hameet i ngofmi ndshast obees t abl i s hedt opr ov eac ar t el . Thet es tf orc onc er t edpr ac t i c ei st hatt hepar t i eshav ec ooper at edt oav oi dt her i s ksof c ompet i t i on,andt hi shascul mi nat edi nas i t uat i onwhi c hdoesnotc or r es pondwi t ht he nor mal c ondi t i onsoft hemar k e t . Ac ar t eli sahor i z ont alagr eementt ofi xpr i c es ,al l oc at ec us t omer sort er r i t or i es ,r es t r i c t out putorr i g bi ds .A c ar t eli sr egar ded ast he mos tper ni c i ousf or m ofv i ol at i on of c o mp et i t i o nl a ws i n c ei tun equ i v o c al l yd amag esc o mp et i t i o na nd c a us esl o sst ot h e ec on omyan dt oc ons umer s .Owi n gt ot hes er i ous nes sofc ar t el s ,t he yar es ubj ec tt ot he pers er ul e[ 2 1 ] i nmanyj ur i s di c t i onse. g. ,i nt heUS[ 2 2 ] an di nt h eEu r o pe anUn i o n[ 2 3 ] . Themos tc r uc i ali ngr edi entofc ar t el i s at i onbehav i ouri sc ol l us i v emani pul at i onofpr i c es
b yt h e c o mp e t i t o r s . A me r e s i mu l t a ne ou s mo v e me nt o fp r i c e s ,e s p ec i a l l yf o r homogeneouspr oduc t s ,i snotbyi t s el fs uffic i entt opr o v eac ar t el . [ 2 4 ] Thec ondi t i onsi nac ompet i t i ont hatmak ei tc onduc i v ef orc ar t el i z at i onar eol i gopol i s t i c mar k et ,s t r uc t ur alf ac t or s ,hi ghl yc onc ent r at edmar k et ,demandands uppl yc ondi t i ons , dependence of cust omer s, homogeneous pr oduct , ent r y bar r i er s, exc hange of i nf or mat i on,ac t i v et r adeas soc i at i on. A“ h ar d c o r e ”c a r t e la sd efi n edi nt h e OECD Re c omme nd at i o ni sa na nt i c o mp et i t i v e agr eement ,ant i c ompe t i t i v ec onc er t ed pr ac t i c e,orant i c ompe t i t i v ea r r angementb y c ompet i t or st ofi x pr i c es ,mak er i gged bi ds ( c ol l us i v et ender s ) ,es t ab l i s h out put r es t r i c t i onsorq uot as ,ors har eord i v i demar k et sbyal l oc at i ngc us t omer s ,s uppl i er s , t er r i t or i esorl i nesofc ommer c e. [ 2 5 ]Ad am Smi t h ,o f t e nr e c og ni z e da st h ef a t h ero f mod er ne c on omi c s ,wr o t ei n1 77 6i nTh eWe al t hofNa t i on s ,“ Pe op l eoft h es amet r a de s el dom meett oget her ,ev enf ormer r i mentanddi v er s i on,butt hec onv er s at i onendsi na c ons pi r ac yagai ns tt hepubl i c ,ori ns omec ont r i v anc et or ai s epr i c es . ” [ 2 6 ] Car t el sar enoteas yt odet ec ts i nc et hec ol l udi ngpar t i esgot ogr eatl engt hst oc ov er t hei rt r ac ks .Ther ef or e,c ompet i t i onagenc i eshav ebeenr es or t i ngt oands eek i nggr eat er i n v es t i gat i v epo wer sf orun ear t hi nge vi denc e.Sot odos ot hes amev a r i ousme t hodsar e adapt edal l ov ert hewor l ds uc has : 1. DawnRai ds : Up onr eq ue stb yt h eFe de r a lCompe t i t i o nAge nc y ,t heAu s t r i a nCar t e lCo ur ti s s u esa s ear c hwar r ant( pr ov i dedt her ei sr eas onabl es us pi c i onofac ar t eli nf r i ngement ) .Wi t ha s e ar c hwa r r a nt ,t heFe der alCo mpe t i t i o n Age nc yca n,s i mi l a rt ot h e EU Co mmi s s i o n, ent erpr emi s es ,s ear c hdoc ument sandc omput er s ,et c .Not abl y ,t hei ns pec t i oncans t ar t wi t houtt hes ear c hwar r antb ei ngs er v e dont heunder t ak i ngsc onc er ned;t hel a w onl y pr o vi dest hati tmus tbes er v edwi t hi n24hour s . [ 2 7 ] 2.I ncent i vesandRewar ds UnderUSl aw,t heCi v i lFal s eCl ai msAc tenabl esapr i v at ec i t i z ent obr i nganac t i oni n t h en ameo ft h eUS Go v e r n me ntc l a i mi n gf r a udb yg ov e r n me ntc o nt r a c t o r san do t h er ent i t i est hatus ego v er nmentf unds ,andt hel i t i ganti st henabl et os har ei nan ymoney r ec ei v ed.Thi sl egi s l at i onwasus edi nt hec as e ofabi dr i ggi ngc ar t elofwas t ewat er
t r e at men tpr oj e c t si n Egy p tf u nd ed b y USAI D,r e pr e s en t i ng t h efi r s tt i me t ha tt h e l egi s l at i onhadbeenus edt oex pos eal ar gemul t i nat i onalc ar t el . [ 2 8 ] I nSout hKor ea,t he Kor e anFa i rT r ad eCo mmi s s i o nh ases t a bl i s he dar e wa r ds y s t e mf o rt h os ewh or ep or to r gi v ei nf or mat i onaboutc ompet i t i onl awv i ol at i ons . [ 2 9 ] Ar e war dof6 6. 8 7mi l l i onwo nwa s pai di nJ une,2005t oaper s onwh opr o vi deddec i s i v ee vi d enc ei nawe l di ngr odc ar t el case. [ 3 0 ] 3 .Wh i s t l e bl o wi n gan dLe ni e nc y Ac r uc i alt ooli nt hedet ec t i onofc ar t el shaspr ov edt obet hepol i c yofenc our agi ng whi s t l ebl ower st oappr oac ht hec ompet i t i onaut hor i t i eswi t hi nf or mat i onaboutac ar t el . Subj ec tt oas er i esofc ondi t i ons ,s uc hast hatt hewhi s t l ebl owerwi l lc ooper at ewi t ht he i nv es t i gat i onoft heaut hor i t yi nques t i onandt hati twasnotar i ngl eaderoft hec ar t el , c ompl et ei mmuni t ywi l lbea v ai l abl ef r om an ypen al t yt hatmi ghto t her wi s eha v ebee n i mp os e d.Amn es t ypr o gr a msha v eb ee ni mp l e me nt e di nma nyj u r i s d i c t i o ns ,a ndh av e p r o v edt obehi g hl ys u c c es s f ul .Fo rEx a mpl e200t heEu r o pe anCo mmi s s i o nr e ce i v e d4 9 appl i c at i onsf ori mmuni t yandl eni enc yi n25di ffer entc as esi n2004. [ 3 1 ] Th e Co mp et i t i o n Co mmi s s i o no fI n di ah ad g i v e nv a r i o us l a nd ma r kj u dg eme nt so n v ar i ousal l egat i onsofc ar t el f or mat i on.Someoft hes i gni fi cantj udgment swer e: 1. Al l I nd i aT y r eDeal er sFeder at i onv .T y r emanuf ac t ur er s[ 3 2 ] Th eAI TDFa l l e ge dt h ats i n cei n de pe nd en c e,t heb eh av i o urofd ome s t i ct y r ema j or sha s beenant i c ompet i t i v e,ant i c ons umera ndt he yha v e beeni ndul gi ngi nv ar i ouspr i c i ng a nd t r a de ma l p r a c t i c e s ,wh i c hh ad d i r e c tbe ar i n go nt h er e v e nu eo ft h es t a t e e x chequer .CCIunder t ookdet ai l edi nv es t i gat i ononv ar i ousgr oundsaf t ert her epor tof DG wa sp r ep ar eda ndf o undt h att h er ei sno ts u ffic i en te v i d en cet oh ol dav i o l a t i o nb y t het y r ec omp an i e sApo l l o ,MRF ,J . K.T y r e,Bi r l a,Ce ata ndATMA o ft h epr o v i s i o nso f Sec t i on3( 3) ( a)and3( 3) ( b)r eadwi t hSec t i on3( 1)oft heAc t . 2.Bui l der sas s oc i at i onofI ndi av . Cementmanuf ac t ur er sas s oc i at i ona ndot her [ 3 3 ] I nafi r s t of i t s k i ndor der ,t heCCIhasi mpos edapenal t yofo v erRs6, 000c r or eon11 l eadi ngc ementpr oduc er saf t erfi ndi ngt hem gui l t yoff or mi ngc ar t el st oc ont r ol“ pr i c es , pr oduc t i onands uppl y ”o fc eme nti nt hemar k e t .Ac c or di ngt ot heCCIor der ,i tf ound c ementmanuf ac t ur er sv i ol at i ngt hepr o vi s i onsoft heCompe t i t i onAc t .TheCCIi s s ued
t heor deraf t er“ i nv es t i gat i onbyt heDi r ec t orGener al( CCI )uponi nf or mat i onfi l edbyt he Bui l der s ’As soc i at i onofI ndi a” . Whi l ei mpos i ngt hepenal t y ,t hec ommi s s i onc ons i der edt he“ par al l e landc oor di nat ed b eha v i o uro fc eme ntc omp an i e so n pr i c e ,d i s pa t c ha nds u pp l i esi nt h e mar k e t ” .Th e c ommi s s i onobs er v edt hatt heac toft hes ec ementc ompani esi n“ l i mi t i ngandc ont r ol l i ng s upp l i esi nt hemar k e tanddet er mi ni ngpr i c est hr ou ghanant i c ompe t i t i v eagr eement ” wasdet r i ment al t ot heent i r eec onomy . 3 .I nr e :Su oMo t uCa s ea ga i n s tL PG Cy l i n de rMa nu f a c t u r e r s[ 3 4 ] TheCommi s s i onhadhel dt hemanuf ac t ur er sofLPG c y l i nder sgui l t yofbi dr i ggi ngf or quot i ngi dent i c alpr i c esi nt het enderi s s uedbyI ndi anOi lCor por at i onLi mi t ed.Al lLPG manuf ac t ur er swer epenal i z edatt her at eof7% oft hei rav er aget ur no v er . I nal lt hes ec as est heCCIpr es umest hatt her ei sanappr ec i abl eadv er s ee ffec ti nt he mar k et .Thepr es umpt i onandi t si mpl i c at i onha v ebeendi s c us s edi nt hene xtc hapt er . PRESUMPTI ONRULE
T oi de nt i f ya na gr ee me nta ndt he nr e pr o v i ngi ta sa na nt i c o mp et i t i v ea gr ee me nth as a l wa y sb ee n ag r e ya r e ai na nt i t r u s tc a s es .Due t o wh i c ht h ec ou r t sha v ed ev i s e d appar at usofi nv es t i gat i oni nor dert oex pedi t i ous l ycomet oar at i onalc onc l us i on.Oft he numer ousl egalpr i nc i pl est hatha v eb ec omet hec or ner s t oneofant i t r us tc ommonl a w noneha v eat t r ac t edmor eat t ent i ont hent her ul esof“ pers e”andt he“ r ul eofr eas on” . Thes et wo r ul esha v e bee n hel pf uli n as c er t ai ni ng t hatwhet hero rn ota par t i c ul ar agr eementi sant i c ompet i t i v e. Th er ei sapr e s ume da pp r e ci ab l ea dv e r s ee ffe c to nc o mp et i t i oni ft h es a i da gr ee me nt f al l sunderSec t i on3( 3)oft heCompet i t i onAc t ,2002.I nor dert ot r ul ydi s cer nt hes pi r i t o fs u bs e ct i o n( 3)o fs ec t i o n 3t h el a ng uag eo ft h ep r o v i s i on mu s tb eg i v e n ut mo s t s upr emac y .I nor dert ounl oc kt hemy s t er ysur r oundi ngs ec t i on3( 3)t hewor ds“ s hal lbe p r e s ume d”mu s tb eg i v e nu t mo s ti mp or t a nc e .“ Pr e s ump t i o nso pe r a t e wh er ec e r t a i n f ac t sma ybepr es umedt oe x i s te v eni nt heabs enc eofc omp l et epr oof . ” [ 3 5 ] Thec our ti s boundt ot ak et hef ac taspr ov edunt i lev i denc edi sgi v ent odi s pr o v ei t .I nt hi ss ens e s uc hpr es umpt i oni sal s or ebut t abl e.
Thepr es umpt i onr ai s edunderSec t i on3( 3)i st hatof“ AAEC” .I ft her ei ssuffic i entpr oof t oes t abl i s ht hatt heoppos i t epar t i esar eengagedi nanyoft her es t r i c t edac t i v i t i esl ai d d owni nt h es u bs e c t i o nt h ent h ec o mmi s s i o ns h al lp r es u met h att h er ei s“ AAEC” .T wo p os s i b l es c e na r i o sa pp ea ro nc e“ AAEC”i sp r e s ume d.Th efi r s tb ei n gt h ato pp os i t e par t i esmayr ebutt hepr es umpt i onbys howi ngt hatt hei rac t i onsdon’ tf al lt ai nt edwi t h anyoft hec l aus es[ ( a)t o( d) ]oft hes ubs ec t i on.Theot herbei ngwhent hepar t i esr ebut t hepr es umpt i onbyav ai l i ngt hegr oundsl ai di ns ec t i on19( 3)oft heac t . Thefi r s ts c enar i oappear st ober eas onabl eandt oac er t ai ne xt entec hoest hes pi r i tof t he“ pers e”r ul e.Theoppos i t epar t y ,i ft hi ss cenar i ower et opr ev ai l ,wi l lnotbeal l owed t os how t hepr oc ompet i t i v enes soft hei rac t i ons .Thust heonl ygr oundsa v ai l abl ef or r ebut t alar et hos el ai d do wn i nc l aus es( a)t o( d)o fs ec t i on 3( 3) .Ho we v ers u c ha s i t uat i on wi l lnotar i s e bec aus e oft he l anguageoft hes ubs ec t i on.The s ubs ec t i on r ai s esapr es umpt i onof“ AAEC”a ndt her ef or er at i onal l yt hegr oundsf ord et er mi ni ng “ AAEC”s houl dal s obet hegr ou ndf orr ebut t i ng“ AAEC” . I nt hes ec onds cenar i oi ft heoppos i ngpar t i esar eper mi t t edt obut t r es st hei rdef enc eby s e ek i n ga i d of19 ( 3 )t h en t h e who l ep r o c es swi l lbe r ed uc e dt oa“ r u l eo fr ea s on” anal y s i sandnota“ pers e”r ul e.The“ r ul eofr eas on”ev i dent l ymandat esanel abor at e anal y s i si nt ot her eas onabl enes sofanagr eementands ubs ec t i on( 3)ofs ec t i on19 enabl est heoppos i t epar t i est od ot hes amebutt hel anguageoft heAc ti nadv e r t ent l y negat est het r ues pi r i toft he“ pers e”r ul e. Th eu s eo ft h e wor d s“ s h al lb ep r e su me d”g i v e sr i s et o a“ p r e s ump t i o n”ag ai n s tt h e oppos i ng par t i es .The pr i nc i pl e of‘ s hal lpr es ume ’ ,us ed i ns ec t i on 3( 3)h as been e x pl ai n edb yc our t si nI ndi ai nnumer ousc as ess uc hasi nSo dh iT r a ns p or tCo.v .St at e [ [ ofUt t arPr ades h36]andR. S.Nay akv A .. R.Ant ul a y37] .I nSodh iT r ans por tCo. ,t he c our tobs er v edt hat : ‘ Thewor ds“ s hal lpr es ume”ha v ebeenus edi nt heI ndi anj udi c i all or ef orov erac ent ur y t oc o nv e yt h att he yl a yd own a r eb ut t a bl ep r e su mp t i o ni nr e s pe c tofmat t er s wi t h r ef er enc et owhi c ht he yar eus ed…andnotl y i ngdownar ul eofc onc l us i v epr oof . ’ Thec our tal s oobs er v edt hat
‘ Apr es umpt i oni snoti t s el fev i denc ebutonl ymak esapr i maf ac i ec as ef ort hepar t yi n wh os ef a v ouri te x i s t s .I ti ndi c at est heper s ononwhom t heb ur denofpr oofl i es .But whent hepr es umpt i oni sc onc l us i v e,i tob vi at est hepr oduc t i onofan yot here vi denc e. Butwhen i ti sr ebut t abl e,i tonl ypoi nt si tt he par t yon whi c hl i est he dut yofgoi ng f o r wa r do nt h ee v i d en c eo nt h ef a c tp r e s u me d,a nd wh en t h atp ar t yh a sp r o du c e d ev i denc ef ai r l yandr eas onabl yt endi ngt os howt hatt her eal f ac ti snotaspr es umed,t he pur pos eofpr es umpt i oni sov er ’ . [ 3 8 ] I ti sper c ept i bl et hatt he l anguage us ed i ns ec t i on 3( 3)i mpos esa l i mi t at i on on t he c ompet i t i onaut hor i t i est oappl yt hepers er ul ei ni t st r ues pi r i t .I ndi anCompet i t i onl aw v i deSec t i on3doesnotpr ov i def orac as eby c as eappl i c at i onoft hepers er ul e.I ft he “ pers e”r ul ehast obeappl i edi ni t st r ues pi r i tt hent hel egi s l at ur ehast or ephr as et he l a nguageoft hes ec t i on.Thewor ds ,“ s ha l lbepr es umed”c r eat esc ons i d er abl edoubti n t hemi ndsofl egal pr ac t i t i oner s .Ther ei sanabs ol ut eneedt ohav ea‘ pers e’ r ul ei nI ndi a es pec i al l ywhi l edeal i ngwi t hs er i ousoff enc esl i k ebi dr i ggi ng.Howev erp ol i c ymak er s mus tal s oc onc ei v eofa“ pers e”r ul et hats ui t sI ndi anc ondi t i ons . Edi t edbyAmool yaKhur ana
[ 1] Sec t i on3( 1) ,Compet i t i onAc t ,2002. [ 2] I bi d. [ 3] Sec t i on3( 2) ,Compet i t i onAc t ,2002. [ 4] Sec t i on2( b) ,Compet i t i onAc t ,2002. [ 5]Regi s t r aro fRes t r i c t i v eT r adeAgr eement sv .W.H.Smi t handSons ( 1968)3Al lER 721. [ 6] Bundesv er band der Ar znei mi t t el -I mpor t eur e and Commi ss i on of Eur opean Co mmu ni t i e sv . Ba y e rAG,C2 / 0 1Pa ndC-3 / 0 1P . [ 7] Eu r o pe anCo mmi s s i o nv . Vo l k s wa ge n,Ca s eNo .C7 4/ 0 4P .
[ 8] T . Rama ppa,Compe t i t i onLa wI nI ndi a-Pol i c y ,I s s uesandDe v el o pment ,Ox f or dI ndi a Pa pe r b ac k s ,2 ndEd( 2 00 9) . [ 9] Vi n odDhal l ,Compe t i t i onLa wT oda y ,Ox f or d
