NCLT relief to state corporation

In its first substantive order on competition appeals, the National Company Law Appellate Tribunal (NCLAT) has modified a Competition Commission of India (CCI) order against Karnataka State Road Transport Corporation (KSRTC).

NCLAT says as the competition watchdog did not find any abuse of dominance, it could not impose any modifications on a KSRTC flexi scheme in question. The CCI had asked the Karnataka government to take a “fresh view” on flexi rates charged on certain bus routes by KSRTC, even as it rejected a complaint of abuse of dominance filed against the transporter. It had said there was nothing unfair on the part of KSRTC in charging fares through a ‘flexi rate’ scheme, which are less than the maximum fares fixed by the state government.

However, citing the larger public interest, CCI also said the “Government of Karnataka should take a fresh view regarding the aforesaid schemes/decisions, after inviting suggestions from various stakeholders.”

Now, the appellate body says, “If the flexi rate scheme has not been held to be operative, the commission has no authority to express its view as to what the state government is required to do in larger public interest”. The initial complaint was filed against KSRTC by two other transporters, Sree Gajanana Motor Transport and North West Karnataka Road Transport Corporation. They had alleged KSRTC was not allowing them to operate in routes where the latter had a monopoly. Separately, CCI ordered that though Cochin Port Trust was guilty of anti-competitive activity, there would be no penalty on it.