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BEFORE THE HONOURABLE SUPREME COURT OF SAURASHTRA

(UNDER SECTION 53(T) OF COMPETITION ACT,2002)

IN THE MATTER OF,

CROMS Constructions Ltd.………...………..…………………APPELLANT

VERSUS

Solitaire Owners Association…...………..……………………RESPONDENT

Clubbed With

DMK Constructions……………………………………………. APPELLANT

VERSUS

DMK Owners Association………………………………….…RESPONDENT

BEFORE THE HONOURABLE CHIEF JUSTICE AND OTHER

COMPANION JUDGES OF THE SUPREME COURT OF SAURASHTRA.

[MEMORIAL ON BEHALF OF THE APPELLANT]

MEMORIAL ON BEHALF OF THE APPELLANT

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TABLE OF CONTENTS

LIST OF ABBREVIATIONS….......………………………………………..……………....02

INDEX OF AUTHORITIES…………………………………………………………….….03

STATEMENT OF JURISDICTION…………………………………………..…………...04

STATEMENT OF FACTS………………………………………………………………….05

STATEMENT OF ISSUES…………………………………………………………...…….08

SUMMARY OF ARGUMENTS……………………………………………………………09

ARGUMENTS ADVANCED……………………………………………………………….11

ISSUE I: WHETHER THE APPEAL IS MAINTAINABLE BEFORE THE HON’BLE

SUPREME COURT?.............................................................................................................11

I. There is an existence of statutory provision in the Competition act, 2002

II. Applicants exhausted alternative remedies as they first appealed in the NCLAT and
then to the supreme court under section 53T.

ISSUE II: WHETHER CROMS IS OCCUPYING A DOMINANT POSITION IN THE

ABOVE RELEVANT MARKET?........................................................................................13

I. CROMS did not enjoy a dominant position in the relevant market.

II. CROMS has not abused its dominant position.
III. CROMS was not involved in any practice that result in denial of market access.

ISSUE III: WHETHER THE AGREEMENT BETWEEN CROMS AND DMK IS ANTI
COMPETITIVE AS PER SECTION 3 OF THE COMPETITION ACT,
2002?........................................................................................................................................16

I. There is no existence of agreement between CROMS and DMK under section 2(b)
of the Competition act.
II. No appreciable adverse effect on Competition under section 19(3)of the competition act.
III. There was mere Price Parallelism between the companies.

PRAYER…..……………………………………………………………………………..19

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LIST OF ABBREVIATIONS

Serial No. Full Form Abbreviation

1 All India Reporter AIR
2 Competition Commission of India CCI
3 Under Section U/S
4 Number No.
5 Corporation Corp
6 Competition Appellate Tribunal COMPAT
7 Limited Ltd

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INDEX OF AUTHORITIES

CASE LAWS:

1. Assistant Collector of Central Excise v. Jainson Hosiery Industries, 1979 Air 1889 (SC).
2. D.K. Shrivastava v. Daulat Ram Engg & Services P. Ltd. and Ors., 2017 SCC OnLine
3. HT Media Ltd v. Super Cassettes Ltd (2014), Case No. 40 of 2011 (CCI)
4. Jupiter Gaming Solutions Pvt Ltd v. Finance Secretary, Government of Goa, case no
15/2010 (CCI)
5. M/s Royal Energy Ltd. v. M/s Indian Oil Corporation Ltd. Case no. 1 of 28 (CCI), M/s
Bharat Petroleum Corporation Ltd. and M/s Hindustan Petroleum Corporation Ltd., 2012
Comp LR 563(CCI).
6. Neeraj Malhotra v. Deustche Post Bank Home Financez Case No. 5/2009 (CCI)
7. Sodhi Transport Co. v. State of U.P., AIR 1986 SC 1099.
8. Tesco Stores Limited v. Office of Fair Trading, (2012) CAT 31 (68)

STATUTE:

1. Competition Act,2002

BOOKS:

1. D.P. MITTAL, competition law and practice: a comprehensive section wise commentary
on law relating to the competition act

LEGAL DATABASES:

1. AIR ONLINE
2. SCC ONLINE
3. LIVELAW
4. CCI WEBSITE

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STATEMENT OF JURISDICTION

The Hon’ble Supreme Court of Saurashtra has jurisdiction to hear the instant matter in the case
of CROMS Constructions Ltd & DMK Constructions vs. Solitaire’s Owner Association &
DMK Owner’s Association under Section 53T of the Competition Act, 2002.

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STATEMENT OF FACTS

1. CROMS is an established company under the jurisdiction of Saurashtra and is one of

the most prominent players in this field. Its primary focus is on residential
construction, commercial development and infrastructure projects. Saurashtra is a
developing country with metropolitan cities spread out across its territories.

2. New Nagari, a metropolitan city, is recognized by the Indian population as being the
commercial hub of Saurashtra. New Nagari's extensive commercial and employment
opportunities, coupled with significant international migration, resulted in a severe
housing shortage. The village of Villa, an agricultural-focused revenue center on rural
land, is relatively small in comparison to Newnagari. CROMS viewed Villa as an
emerging market to accommodate the growing population in New Nagari, which was
only a 30-minute train ride from the city. Therefore, migrants settling in New Nagari
would view living in Villa as a more affordable option than those in the more
expensive housing units. Therefore, CROMS procured substantial tracts of land in
the region of Villa that was no more accessible to New Nagari. Other prominent real
estate firms seized the opportunity and bought a large tract of land in Villa, but not
as close to New Nagari as in CROMS. Land in Villa, situated approximately 3 kms
from CROMS, was also purchased by DMK Builders, who are among the major
builders.

3. CROMS launched a housing estate called 'Solitaire' in the end, which was initially
planned to consist of 368 apartments spread across 5 multi-storied residential
buildings with 19 floors each, located in CROMS City, near New Nagari. The
payments schedule was linked to projected stage wise competition of the project with
some amount to be paid at the time of booking of the flat, 2 months after the booking
date and remaining as per scheduled stage-wise compeletion of the project. The
advertisements of the builder also guaranteed additional facilities such as clubhouse,
gymnasium, sports grounds, clubhouse etc., and ensured completion of the buildings
within 36 months from the launch of the project.

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4. The housing estate was built by CROMS on a very small land area, which is
interesting in comparison to the vast areas it has acquired. CROMS declined to
construct the remaining land and did not initiate any ventures related to it, instead
concentrating solely on Solitaire. The construction commenced with 5 buildings, but
the number of flats in each building increased from 19 to 29. Also, due to a lack of
space, the builders' promised facilities were reduced, and the delivery of apartments
was two years delayed for the owners, despite their timely payment.

5. Meanwhile, DMK Builders has constructed 25 floors even though the approved plan
has only 17 floors. Also, the amenities previously promised by DMK Builders have
been reduced. Previously they had promised to provide a club, sports arena, gym and
theatre, but they failed to deliver. CROMS and DMK have entered into an oral
agreement to reduce facilities due to increased construction costs.

6. The number of facilities will be reduced to cover the additional costs associated with
construction. The Solitaire Owners Association (SOA) has taken legal action against
CROMS Constructions Ltd. The Competition Commission of India (CCI) accused
the company of abusing its dominant position by taking advantage of its agreements
with apartment owners. It further alleged that CROMS and DMK Builders entered
into an anti-competition agreement.

7. The DMK Owner’s Association (DOA) has also filed the case against the DMK
builders with similar issue. Therefore, the CCI has clubbed both the cases. CCI
analysed this information and held that it is a prima facie case of abuse of dominance
and Anti- Competitive Agreement and requested the Director General (DG) to
conduct further investigation. CROMS immediately challenged the CCI’s
jurisdiction but dropped the matter subsequently. The DG conducted an indepth
investigation and discovered that the conditions imposed by CROMS and DMK did
violate certain provisions of the Competition Act.

8. The CCI on the basis of DG’s in- depth investigation held that the Act is applicable
in the instant case. Subsequently CCI ordered that the Competition Act is applicable
to this dispute. CCI ordered that CROMS has abused the dominant position in the
real estate market through their unilateral powers to alter the provisions in the buyer’s

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agreement without giving any rights to the buyers, CROMS’s discretion to change
inter se areas for different uses such as residential commercial etc., without informing
the buyers and CROMS’s sole discretion to determine ownership rights. CCI also
held that the agreement between CROMS and DMK Builders is anti-competitive as
they by mutual consent (informal) have limited the amenities as they have not
provided sports arena and gymnasium and increased the number of flats as well.

9. However, CROMS appealed against this order before National Company Law
Appellate Tribunal (NCLAT). NCLAT has withheld the order passed by CCI and
stated that it was a clear abuse of dominant position by CROMS and Anti-
Competitive Agreement by CROMS and DMK in the real estate market, as per the
CCI order, the National Company Law Appellate Tribunal (NCLAT) imposed a
penalty of INR 6,300 million on CROMS which was 7% turnover of CROMS and
penalty of 50 million on DMK which was 0.3% of the Total Turnover of DMK
Builders. Aggrieved by the decision of NCLAT, CROMS Constructions Ltd and
DMK constructions has approached the Honourable Supreme Court.

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STATEMENT OF ISSUES

ISSUE I: WHETHER THE APPEAL IS MAINTAINABLE BEFORE THE HON’BLE

SUPREME COURT?

ISSUE II: WHETHER CROMS IS OCCUPYING A DOMINANT POSITION IN THE

ABOVE RELEVANT MARKET?

ISSUE III: WHETHER THE AGREEMENT BETWEEN CROMS AND DMK IS ANTI
COMPETITIVE AS PER SECTION 3 OF THE COMPETITION ACT, 2002?

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SUMMARY OF ARGUMENTS

ISSUE I: WHETHER THE APPEAL IS MAINTAINABLE BEFORE THE HON’BLE

SUPREME COURT?

The Appeal is maintainable before the hon'ble Supreme Court because there is an existence of
statutory provision in the competition Act, 2002, and alternative remedies were exhausted by
the Applicant as the Applicants first appealed before the NCLAT and then to the Supreme Court
under section 53T. There is also no applicability of principle of natural justice.

ISSUE II: WHETHER CROMS IS OCCUPYING A DOMINANT POSITION IN THE

ABOVE RELEVANT MARKET?

The Counsel most respectfully submits before this Hon’ble Supreme Court that CROMS does
not enjoy a dominant position in the relevant market and has not violated provisions of section
4 of the Competition Act. The contentions are dealt in three folded manner. Firstly, the relevant
market identified by DG is incorrect and that it is “residential buildings in New Nagari” in the
instant case. Secondly, CROMS does not enjoy a dominant position as there exist close
competitors in the market including DMK in the same vicinity. Also, there cannot be two
dominant player or collective dominance in the same market. Lastly, CROMS has not abused
its dominant position.

ISSUE III: WHETHER THE AGREEMENT BETWEEN CROMS AND DMK IS ANTI
COMPETITIVE AS PER SECTION 3 OF THE COMPETITION ACT, 2002?

The actions of the Real Estate Companies have not violated Section 3(3) of the Competition
Act, 2002 because there is no existence of agreement between PLF and DMK under section
2(b) of the competition act. The parallel conduct of PLF and DMK is not indicative of any
collusion because there was mere price parallelism between the companies and there is Absence
of any strong Plus Factors. The following Plus Factors are elaborated- No evidence of regular

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communication and Oligopolistic Market Structure. No Appreciable adverse effect on

Competition in India as under section 19(3) of the Competition Act

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ARGUMENTS ADVANCED

ISSUE I: WHETHER THE APPEAL IS MAINTAINABLE BEFORE THE HON’BLE

SUPREME COURT?

I. There is an existence of statutory provision in the Competition act, 2002

1. The Competition Act of 2002 contains a statutory mechanism that allows an aggrieved
party to seek the Apex court's jurisdiction. The appellants approached the Supreme
Court using such a statutory provision, and thus there is no discretion to dismiss the
appeal in the presence of such a statutory provision.

2. Section 53T of Competition Act,2002 states that- “The Central Government or any State
Government or the Commission or any statutory authority or any local authority or any
enterprise or any person aggrieved by any decision or order of the Appellate Tribunal
may file an appeal to the Supreme”. It is argued that the Appellants have not sought any
other jurisdiction of the Hon'ble court because the appeal provision is included in the
Act itself. As a result, CROMS has approached the court in confidence about Section
53-T.

II. Applicants exhausted alternative remedies as they first appealed in the NCLAT and
then to the supreme court under section 53T.

1. Alternative remedy is a bar unless there was complete lack of jurisdiction in the officer
or authority to take action impugned. However, the existence of a competent body to
hear this particular case questions the maintainability of the Appeal. It was held by the
Hon’ble apex court in Asstt. Collector of Central Excise v. Jainson Hosiery 1 where there
is an alternative statutory remedy, court should not interfere unless the alternative
remedy is too dilatory or cannot grant quick relief. Thus, the respondents humbly
submit that the present appeal is maintainable on the ground that alternative remedy has
been exhausted. Here in this present case at the very first instance CROMS and DMK

1
Assistant Collector of Central Excise v. Jainson Hosiery Industries, 1979 Air 1889 (SC).

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appealed against the order given by the Competition Commission of India (CCI) before
the National Company Tribunal (NCALT). The applicants have appealed before the
Supreme Court order as NCLAT has passed an order imposing unjustified penalty. As
there are no other alternative remedies available to the Applicants other than
approaching the Supreme Court, the present appeal stands maintainable.

It is humbly submitted before this Hon'ble court that the appeal in question is maintainable.

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ISSUE II: WHETHER CROMS IS OCCUPYING A DOMINANT POSITION IN THE

ABOVE RELEVANT MARKET?

I. CROMS did not enjoy a dominant position in the relevant market.

1. Dominant position means a position of strength, enjoyed by an enterprise which enables

it to operate independently of competitive forces prevailing in the relevant market or
affect its competitors or consumers in its favor. It ought to be assessed in light of all
relevant circumstances and the factors enlisted undersection19(4) of the Act by the
commission whether any enterprise enjoys dominant position. 2

2. The counsel submits that the findings of DG that there was abuse of dominant position
by both the players (CROMS and DMK) is incorrect. As per section 4 of competition
act dominant position, therein means a position of strength, enjoyed by an enterprise in
the relevant market to: (a) operate independently of competitive forces or (b) affect its
competitors or consumers or the relevant market in its favour. The term “an enterprise”
is in reference to single entity as per the statute. There is nothing in the definition of
enterprise undersection 2(h) or in the provisions of section 4 of the Act to suggest that
two or more independent entities are capable of holding a position of joint or collective
dominance.

3. Moreover, courts in various occasions have identified that there cannot be more than one
dominant enterprise in the same market. Over several orders, adjudicating bodies such
as the CCI have categorically denied the applicability of joint dominance. The only
reading of plurality that was allowed into section 4 is one where the dominant firms were
legally or structurally linked. In Royal Energy v. IOCL, BPCL and HPCL, in
determining whether the actions of three oil marketing companies amounted to an
infringement of the Act, the CCI explicitly held that the concept of collective dominance
was not envisaged under the provisions of section 4 of the Act. 3 Therefore, it can safely
be concluded that there cannot be two dominant position in the market.

2
D.P. MITTAL, competition law and practice: a comprehensive section wise commentary on law
relating to the competition act
3
M/s Royal Energy Ltd. v. M/s Indian Oil Corporation Ltd. Case no. 1 of 28 (CCI), M/s Bharat
Petroleum Corporation Ltd. and M/s Hindustan Petroleum Corporation Ltd., 2012 Comp LR 563(CCI).

MEMORIAL ON BEHALF OF THE APPELLANT

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4. The counsel submits that there cannot be two dominant players in the market which has
been established above, nevertheless such findings by DG distinctly indicates that real
estate companies i.e. CROMS and DMK were actually close competitors of each other.
there does not exist much difference between the two and therefore, it clearly indicates
that they were close competitors in the relevant market.

II. CROMS has not abused its dominant position.

1. The CCI allows an enterprise to be in a dominant position, but abuse of such a position
is prohibited. 4 It is contended that CROMS could infringe section 4 of the Act, only if
enjoys a dominant position in the relevant market, which it does not, as has been
previously established, it is averred that there arises no question to discriminatory
condition or denial of any kind.

2. A plain reading of s 4(2)(a) of the Act makes it clear that it requires the imposition of a n
unfair or discriminatory “condition in purchase or sale of goods or service” to violate
the Act. It is humbly submitted before this Hon’ble SC that CROMS has not put any
unfair or discriminatory conditions in sale of goods of services as mentioned in s 4(2)(a)
of CCI.

3. It is contended that a contract cannot be valid or legally binding unless ‘consent’ is given.
Consent essentially occurs when two parties mutually agree to form a contract with each
other. The counsels submit before this Hon’ble SC that the parties have given their
consent to enter into a contract and by giving assent to all the conditions that prevail in
the apartment buyer’s agreement. It is held by CCI that CROMS was having unilateral
power to alter the provisions in the buyer’s agreement which implies that there exist
clauses in the agreement which gave such powers to the builders. It is contended that the
same has been agreed by the buyers and that they have given their due consent while
they signed the builder-buyer agreement.

4
Jupiter Gaming Solutions Pvt Ltd v. Finance Secretary, Government of Goa, case no 15/2010 (CCI)

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4. It is contended that CROMS is not dominant in the relevant market and thus cannot be
said to be in contravention of s 4(2) (b) of the Act. CROMS did not limit or restrict the
provision of services. With high demand, the price of the building increases. CROMS
increased the number of flats from 368 to 564 to meet the rising demand in the market
to accommodate the ever-increasing population. Additionally, the counsel submits that
there is generally an escalation clause in builder buyer agreement which allows them to
increase the price of the building. But, instead of imposing escalation clause to cover
increased construction cost, CROMS in ‘doctrine of good faith’ reduced the amenities
for the time-being to meet with the market demand of increased population in the market.

III. CROMS was not involved in any practice that result in denial of market access.

1. It is contended that ‘denial of market access under s 4(2)(c) encompasses acts done by
a dominant undertaking resulting in market foreclosure for the competitors in the same
market or even upstream/downstream market by exclusionary or exploitative practices.
The concept of Whether a practice is Exploitative, Exclusionary or both, was observed
in HT Media Ltd v Super Cassettes Ltd 5.In light of the facts of the instant matter,
CROMS’s conduct could neither be said to be exclusive nor exclusionary. It is averred
that CROMS neither imposed any unfair selling price which would in turn affect its
competitors nor did CROMS indulged in any practice that led to denial of market
access. The fact that other real estate enterprises also acquired vast area of land indicates
there is no denial of market access by any player and there will be other players who
will be entering this market. Thus, it cannot be said that there is an impediment for new
entrants by CROMS. In such a situation the condition prescribed in s 4(2)(c), cannot
be satisfied.

Therefore, it is most humbly submitted that CROMS is not occupying dominant position
in the market.

5
HT Media Ltd v. Super Cassettes Ltd (2014), Case No. 40 of 2011 (CCI)

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ISSUE III: WHETHER THE AGREEMENT BETWEEN CROMS AND DMK IS ANTI
COMPETITIVE AS PER SECTION 3 OF THE COMPETITION ACT, 2002?

I. There is no existence of agreement between CROMS and DMK under section 2(b)
of the Competition act.

1. It is humbly contended before this hon'ble Court that for a case concerning to violation
of s 3(3) of the Competition Act, the existence of an agreement is of utmost importance
and the existence of an anti-competitive agreement must be unequivocally established.
Further there must be conclusive evidence of meeting of minds and merely two or more
persons doing similar acts, would not amount to the presence of an agreement. An
agreement should not be adduced, assumed or arrived at through eliminative or wishful
reasoning but must be concluded through amassment of indisputable evidence. 6

2. Moreover, the question whether there exists a concerted action in a given case
could only be determined if the evidence upon which the decision was based was
considered as a whole, taking account of the specific characteristics of the
market. In the absence of any evidence to prove an understanding amongst the
parties, there can be no case of violation of s 3 of the Act. 7

3. There is immense international migration which causes extreme shortage of

housing in the market 8 and a similar kind of conduct was taken by both of the
companies in order to provide housing to the migrants at the earliest.
Nevertheless, there is no instance of communication for the formation of an
agreement which is anti-competitive in nature within the market. Moreover, there
is no such evidence of presence of an agreement which is unequivocally
established in the present matter.

II. No appreciable adverse effect on Competition under section 19(3)of the

competition act.

6
Neeraj Malhotra v. Deustche Post Bank Home Financez Case No. 5/2009 (CCI)
7
Tesco Stores Limited v. Office of Fair Trading, (2012) CAT 31 (68)
8
Moot problem

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1. In order to establish a contravention under Section 3 of the Competition Act, it is

quintessential to establish that the alleged anti-competitive agreement had an
adverse effect in Saurashtra.9 The presumption of adverse effect generates once
the existence of a price fixing agreement is established; however, such a
presumption is rebuttable.88 In addition, the principle of ‘shall presume’, used in
s 3(3) of the Competition Act, is a mere presumption and not evidence in itself
and is merely indicative of the fact that, on whom, would the burden of proof
fall.10

III. There was mere Price Parallelism between the companies.

1. It is contended that mere price parallelism alone cannot indicate collusion since it is a
consequence of interdependence in the market. Also, mere similarity in prices or other
features due to unilateral decision making alone cannot be considered as a proof of an
anti-competitive agreement between the companies in the absence of substantially
compelling reasons. Moreover, both of the predominant companies have similar kinds
of facilities provided to the owners such as club, gymnasium, sports arena and almost
around the same location, which distinctly indicates that they have almost alike pricing
for the housing. Therefore, it can be concluded that since both of the companies are in
the same oligopolistic market and giving homogenous services, the same approach can
be taken in all probabilities in order to meet the requirements of the market.
Nevertheless, this cannot be regarded as a concerted practice which is violative of
Section 3 (3) of the Competition Act.

2. Price Parallelism is not anti-competitive per se unless coupled with some plus
factors showing the existence of an agreement to determine sale prices. Absence
of such plus factors will render the price Parallelism as perfectly legitimate
market behavior 11. There is no evidence of regular communication and while
proving conspiracy among the competitors, evidence of communication between

9
Section 3(1) Competition Act
10
Sodhi Transport Co. v. State of U.P., AIR 1986 SC 1099.
11
D.K. Shrivastava v. Daulat Ram Engg & Services P. Ltd. and Ors., 2017 SCC OnLine

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the parties alleged of contravention is very important. It must be proven that the
exchange of information is being done with the purpose to facilitate the
conspirators to act upon the common scheme of illegal conduct. However, in
the present matter there exists no conclusive evidence, neither circumstantial nor
direct, to substantiate any communication between CROMS and DMK and
therefore there exists no concerted collusion.

Therefore, it is most humbly submitted that there is no anti-competitive agreement between

CROMS and DMK.

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PRAYER

WHEREFORE, IN THE LIGHT OF THE ISSUES RAISED, ARGUEMTS ADVANCED

AND AUTHORITIES CITED, IT IS HUMBLY PRAYED THAT THIS HONOURABLE
COURT BE PLEASED TO:

1. Allow the appeal.

2. CROMS does not occupy a dominant position in the relevant market
3. Agreement between CROMS and DMK is not Anti-Competitive as per section 3 of the
Competition Act, 2002.

ANY OTHER ORDER BE PASSED IN THE INTEREST OF JUSTICE, EQUITY AND

GOOD CONSCIENCE.

COUNSEL FOR THE APPELLANT.

MEMORIAL ON BEHALF OF THE APPELLANT