UNDER SECTION 26(2) OF COMPETITION ACT, 2002

1. This information was filed on 24.12.2009 under Section 19 of the Competition Act, 2002. The informant no. 1 is an Association of Manufacturers and Processors of Textile Goods carrying on business at various places in and around Mumbai. The informant no.2 is a director of informant no. 1 i.e. the Association.

2. As per the information, Maharashtra Industrial Development Corporation (MIDC) has been incorporated by an Act of State Government of Maharashtra and is responsible for the smooth development of industrial growth in the State of Maharashtra. In this capacity, the respondent is also engaged in various developmental activities in the industrial sector including the allotment of land, supply of water and electricity etc.

3. The main grievance of the informants is that in relation to supply of water to industrial sector, MTDC is having a monopoly as the members of the informant Association have no alternative but to get water supply only from the respondent. It is stated that the respondent is supplying water to the industries and used to determine rates for such supply on 'per cubic meter bases. According to the informants, this policy was followed in the past and the rates of water supply were determined and revised on the basis of Consumer Price Index. This was also done after holding consultations with various industrial associations in the state of Maharashtra.

4. It is alleged that vide letter dated 28 April, 1999, the respondent Corporation revised its water rates w.e.f. 1.6.1999 from Rs.9.50 per cubic meter to Rs.10.25 per cubic meter and subsequently vide letter dated 8th March, 2000, the said rate was again revised w.e.f. 1.4.2000 from Rs.10.25 per cubic meter to Rs.11.00 per cu. meter. It is stated that up to 30.10.2001, the water was supplied at the rate of Rs.11.75 per cu.mtr. but the respondent unilaterally revised the water charges from Rs.11.75 per cu.mtr. to an exorbitant rate of Rs.18.25 per cu.mtr. and this was done without adhering to Consumer Price Index norms It is pointed out that subsequently the respondent suo motu reduced this rate from Rs.18.25 per cu.mtr. to Rs.16.50 per cu.mtr. However, the members of the informant Association continued to pay water charges @ Rs.11.75 per cu.mtr. only. The respondents continued to issue bills applying the rate of Rs.16.50 per cu.mts. and demanded arrears calculated @ Rs.4.75 per cu.mtr. in the subsequent bills. It is alleged that the demand for arrears for the period from 1.11.2001 to 30.11.2002 was excluded in the subsequent bills which were issued after November, 2003 but after a lapse of 4 years the demand for recovery of the old arrears was again raised.

5. In para 15 of the information, it is pointed out that vide letter dated 11.5.2007 the respondents justified the increase of water rates on the ground that there was 36% increase in the royalty rates by the Irrigation Department and consequently water tariff was raised by 40%. Through this letter, it was informed that w.e.f. .1.6.2007, the rates would further be revised from Rs.16.50 per cu.mtr. to Rs.20 per cu.mts.

6. It is pointed out that MIDC vide letter dated 16.8.2007 addressed to M/s. Narang Dying P. Ltd., one of the members of the Association again demanded the arrears for the period from 1.11.2001 to 30.11.2002. As per the informants, the recovery of the aforesaid demand was again insisted on vide letter dated 30.4.2008,

7. The main allegation of the informants is that by revising the water rates exorbitantly, the respondent has indulged in monopolistic and unfair trade practice and is abusing its dominant position and, therefore, the action of the respondent falls within the purview of the provisions of Sections 4, 18, 19 and 27 of the Competition Act, 2002.

8. The informants have prayed for the following :

(i)To conduct an inquiry into monopolistic and/or unfair trade practice adopted by MIDC and to pass appropriate orders under Section 27 of the Act.

(i