SC stays NCLAT order for CCI probe against Flipkart

Senior advocate Harish Salve, appearing for Flipkart, said that CCI doesn't look at the findings of the Government and relied on the tax department findings and misread the findings of the tax tribunal

New Delhi: The Supreme Court on Wednesday stayed the March 4 order of National Company Law Appellate Tribunal (NCLAT) asking fair trade regulator CCI to again initiate the probe against e-commerce major Flipkart for an alleged use of its dominant position.

A bench of Chief Justice S A Bobde and Justices A S Bopanna and V Ramasubramanian, which initially was of the view to send back the matter to NCLAT after setting aside March 4 order and decision on all aspects including the issue of dominant position being enjoyed by Flipkart, later stayed appellate tribunal’s decision.

The top court issued notice to All India Online Vendors Association (sellers association) and Competition Commission of India (CCI). Senior advocate Harish Salve, appearing for Flipkart, said that CCI doesn’t look at the findings of the Government and relied on the tax department findings and misread the findings of the tax tribunal.

He said that the other e-commerce major Amazon is against his client company and if he is not a dominant player then the allegations of predatory pricing does not apply on Flipkart. Salve submitted that the predatory pricing is an issue to be considered against the dominant player as a case of abuse of power but his client has not been held as a dominant player.

The bench said that the CCI has rendered a categorical finding that Flipkart does not have the dominant position and the NCLAT has not reversed the findings on the dominant position. It told the counsel for vendors association that if they are agreed that the NCLAT should have considered the issues of dominant position then it can remand back the matter. To which counsel appearing for All India Online Vendors Association (sellers association) said that they would like to argue the matter.

The bench then issued notice and stayed the March 4 order of NCLAT and listed the matter for further hearing. On March 4, the NCLAT has set aside the earlier order passed by the CCI absolving Flipkart of unfair practices using its dominant position and directed it to ask its probe arm Director General (DG) to investigate into the allegations.

The NCLAT said that the All India Online Vendors Association (AIOVA) had successfully made its case here. In November 2018, the AIOVA had approached the CCI alleging abuse of market dominance by e-commerce major.