UNDER SECTION 26(2) OF THE ACT

1. The applicant in this case is a Distributor and supplier of 'Note Sorting Machines.' He claims to have a 'Distributorship Agreement' for such machines with M/s LIAONING JULONG FINANCIAL EQUIPMENT CORPORATION (LJFEC) for India. He submitted that the 'Note Sorting Machines' of which he was Authorized Distributor, had been specially developed and designed for Indian Rupee. His machines have been successfully tested by authorized banks and institutions and he has been given certificate by these institutions about the excellent performance and accuracy of the machines. His grievance is that the Opposite Parties namely United Bank of India, Bank of Maharashtra, Syndicate Bank and Bank of Baroda, in recent past, had taken out tenders for supply of 'Note Sorting Machines' and in the tenders the aforesaid banks provided an eligibility criteria for the tenderers and this eligibility criteria was violative of provision of Section 3 and 4 of the Competition Act, 2002. It is submitted that aforesaid 4 banks were larger banks and have dominant position and they have abused their dominant position by providing such eligibility criteria (as mentioned in the Tenders) due to which the applicant was not in a position to fill the tender.

2. The eligibility criteria given by each bank has been reproduced in the application. All the banks have provided that the tenderers should have past experience of similar work of supply of 'Note Sorting Machines' to RBI/Public Sector/Commercial Banks and other financial institutions. Each of the Banks has specified eligibility requirement of 3 years to 5 years experience. Except United Bank of India, other banks have also specified that the Firm should have made profits during last 3 financial years. All the banks have required that the tenderers must have supplied a minimum number of 'Note Sorting Machines' during last 3 years. This minimum number varies from Bank to Bank.

3. We have to examine whether providing of eligibility criteria in tender document amounts to violation of provisions of Competition Commission Act. Section 3 of the Competition Act is attracted only where certain agreement between the applicant and the opposite parties is in existence and it is alleged that the agreement was anti-competitive. Section 3 is not attracted in this Case since there is no agreement between the applicant and the respondent.

4. Section 4 of the Competition Act is about abuse of dominant position by an enterprise. Presuming, though not believing that the aforesaid 4 banks were having dominant position, what is to be seen is whether providing a condition in the tender of 'Minimum Eligibility Criteria violates Section 4 of the Competition Act? The relevant provision of Section 4 of the Competition Act, Sections 4(1) and 4(2)(a) reproduced hereunder.

4. "Abuse of dominant position -

4.1 No enterprise or group shall abuse its dominant position.

4.2 There shall be an abuse of dominant position under subsection (1), if an enterprise or a group

(a) directly or indirectly, imposes unfair or discriminatory-