1. The Commission has received the present information from M/s. Automobile Dealers Association, Uttar Pradesh (hereinafter referred to as the "Informant") on 28.06.2011 under the provisions of Section 19 (1) (a) of the Competition Act, 2002 (hereinafter referred to as "the Act"), against M/s. Global Automobiles Limited (GAL or Opposite Party No. 1), Xentis Group of Companies (Opposite Party No. 2) and Pooja Expo India Private Limited (Opposite Party No. 3 or Pooja Expo for their alleged contravention of the provisions of Section 3 and Section 4 of the Competition Act, 2002.

2. A brief profile of the parties is given below:-

2.1 The Informant is an Association of Automobile Dealers at Hathras, Uttar Pradesh formed by M/s R.K Motors, Banda, Uttar Pradesh; M/s Patliputra Agro Pvt. Ltd, Patna, Bihar and Kashish Automobile, Gorakhpur, Uttar Pradesh and registered under Society Registration Act, 1860.

2.2 The Opposite Party No. 1 is a company incorporated under the provisions of Companies Act, 1956 having its registered office at Hooghly, West Bengal engaged in the business of manufacturing, marketing and sale of two wheelers i.e. Motor Cycles and Scooters in the name of M/s Global Automobiles. Opposite Party No. 3 is a Carrying and Forwarding Agent (C&F) of the Opposite Party No. 1 for the state of Haryana and some part of Uttar Pradesh. Opposite Party No. 2 is a group of Companies namely Xenitis Infotech (Electronics) Private Limited; Xenitis Cycles Private Limited; Aamar PC Computer Private Limited; Xenitis Group Services Private Limited; Xenitis Telecommunications Private Limited & Xenitis Atuomobiles Private Limited duly incorporated under the Companies Act, 1956 and having its registered office at Kolkata. Opposite Party No. 2 is the erstwhile shareholder of the Opposite Party No. 1.

3. The facts as stated in the information, in brief, are as under:

3.1 It has been stated that GAL floated an advertisement in the open market to appoint dealers for the two-wheelers (motorcycles and scooters) manufactured by the Company. Following the advertisement the members of the Automobile Dealers Association were appointed dealers of GAL for marketing and selling of the two wheelers manufactured by it. Subsequently, a Letter of Intent (LoI) was signed between the GAL and each of the dealers across the country.

3.2 As per the Informant, the conditions of LoI are one-sided and heavily loaded in favour of the Opposite Party No. 1. LoI included restrictive clauses such as not to deal with the products of its competitors, restricting the areas of operation etc. It has been pointed out that especially Clauses Nos. 6-17 of the Lol are anti-competitive which run as follows:-

"6. You will establish and maintain a service station of approx 1000 sq. ft. covered area with your proposed showroom exclusively for rendering service to the customers of GLOBAL products. This service station will be as per company specifications and layout and will carry equipment, tool, fixtures etc, as specified by the company and will be completed by 20th, February, 2008. This will include as area of 300 sq. ft. which will be used to stock, display & sell spare parts.

7. You shall also provide close to your showroom adequate covered area to be used for stocking two wheelers, as indicated to you from time to time.

8. You will provide necessary computer hardware and software at your dealership for automation of your entire operations which would include sales, service, spares, inventory etc.

9. Your remuneration for free service to customers as per company's warranty policy will be according to the schedule of labour charges of the company for free service which is application to all dealers. For paid service you will charge as per and not more than the standard labour charge schedule made available to you by us from time to time.

10. After Sales Services as an important element in our business and we attach great importance to the quality of service rendered. Continuous poor af