Delhi HC restrains CCI from passing final orders in enquiry against JCB

Questioning the jurisdiction of Competition Commission of India (CCI) to order an inquiry into the allegation that British construction equipment maker JCB was abusing its dominant position to deny market access to a competing Indian firm, Justice Manmohan of Delhi High Court has asked fair trade watchdog CCI not to pass any final order against J C Bamford Excavators Ltd (JCB) till the court decides the question of the commission's jurisdiction. The court passed the order on the plea of JCB, which has challenged the March 11 decision of CCI to investigate the allegation against the British firm on a complaint by Coimbatore-based Bull Machines Pvt. Ltd.

A complaint was filed by Bull Smart Machines Pvt. Ltd before the CCI against JCB, India’s largest manufacturer of construction equipment, alleging that JCB was abusing its dominance by misusing judicial processes in order to exclude competition and deny market access to new candidates. It was thus, held by CCI that JCB was abusing its dominant position as it was misusing judicial processes to control competition. It was the contention of Bull Smart that JCB was abusing its dominant position by indulging in bad faith litigation.

In 2011, Bull Smart participated in ‘Excon 2011 Exhibition’, where it demonstrated its new product ‘Bull Smart’ which was due to be launched in November 2011. At this exhibition, Bull Smart was restrained by JCB from displaying, launching, advertising, selling, offering for sale, its products based on an interim ex parte injunction it had obtained from the Delhi High Court, which was granted to JCB on the allegation that Bull Smart had infringed JCB’s design registration and copyrights of backhoe loaders. It was argued that based on misrepresentation of images, design registration numbers and document, this ex parte interim injunction was obtained by JCB. It was alleged by the Indian firm before CCI, that JCB had later willingly withdrawn the plea for injunction from the high court and the case was filed only to bother Bull Machines.

It has however been observed by Justice Manmohan that CCI does not have jurisdiction to interfere once an interlocutory application (stay application of JCB) has been disposed of. Referring to the withdrawal of the 2011 interim application of JCB, the Court said it was a consent order and added that Bull Machines should have filed a suit for restitution if it had felt aggrieved, instead of moving CCI. The Court was of the view that a significant question of jurisdiction of respondent 1 (CCI) arises in the present petition and therefore ordered that till the next date of hearing while the petitioner (JCB) may give information as called upon by the Director General of CCI, no final order/report shall be passed either by CCI or its Director General. The Court posted the matter for May 26.