Anda di halaman 1dari 32

7TH RGNUL NATIONAL MOOT COURT COMPETITION

IN THE SUPREME COURT OF INDYCOSIS

AT _________.

Appeal No. _______/2018

(Under §53T of The Competition Act,2002)

___________________________________________________________________________

Arnub and Co. ...Appellant No. 1

RajdipPvt. Ltd. ....Appellant No. 2

Barka Industries …Appellant No. 3

v.

RAT Coffee ...Respondent No. 1

___________________________________________________________________________

And

Appeal No.______/2018

(Under Article 136 of The Constitution of Indycosis ,1950)

___________________________________________________________________________

Arnub ...Appellant No. 1

Rajdip ...Appellant No. 2

Barka …Appellant No. 3

v.

NCLAT ...Respondent No. 1

Most Respectfully Submitted before the Honourable Chief Justice and Other
Judges of Supreme Court of Judicature at Indycosis
MEMORIAL ON BEHALF THE APPELLANTS

[1]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

TABLE OF CONTENTS

1) THE INDEX OF AUTHORITIES..............................................................................3

2) THE LIST OF ABBREVATIONS..............................................................................7

3) THE STATEMENT OF JURISDICTION.................................................................8

4) THE STATEMENT OF FACTS.................................................................................9

5) THE STATEMENT OF ISSUES..............................................................................11

6) THE SUMMARY OF ARGUEMENTS...................................................................12

7) THE ARGUMENTS ADVANCED...........................................................................14

i. WHETHER THE PRESENT APPEAL FILED BEFORE THE HONORABLE


SUPREME COURT IS MAINTAINABLE
ii. WHETHER THE AGREEMENT AMONG THE TRADERS IS IN VIOLATION
OF COMPETITION ACT,2002
iii. WHETHER THE ORDER TAKEN BY NATIONAL COMPANY LAW
APPELLATE TRIBUNAL WAS ULTRA VIRUS
iv. WHETHER THE ORDER PASSED BY NATIONAL COMPANY LAW
APPELLATE TRIBUNAL VIOLATES THE FUNDAMENTAL RIGHTS OF
THE TRADERS

8) THE PRAYER............................................................................................................37

[2]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

INDEX OF AUTHORITIES

CASES CITED

S. CASES CITATION
No.
1. G.K granites v. Tata Hitach construction (2013) 205 D.L.T. 355
machinery company ltd.&ors
2. Sodhi transport co. v. State of U.P A.I.R. 1986 S.C. 1099
3. Manappuram Jewelers pvt. Ltd. v. Stae of U.P 2012 CompL.R.548(CCI)
4. Indian sugar association v. Indian jute mills 2014 CompL.R. 225
association
5. Mcx Stock Exchange ltd. v. National Stock 2011 CompL.R.129(CCI)
Exchange of India ltd.
6. FICCI Multiplex Association of India v. 2011 CompL.R. 74(CCI)
United producers/distributors form
7. Uniglobe mod travels private limited v. 2011 CompL.R. 400 CCI
Travel agents federation of India.
8. Pankal agarwal v. DLF gurgaon home 2015CompL.R.728 (CCI)
developers private limited
9. Reliance big entertainment v. Karnataka film (2012)108C.L.A.116
chamber of commerce. (CCI)
10. Transport and dock workers union v. Mumbai (2011)1MadL.J.755 (766)
port trust S.C.
11. Lakshmi Khandsari v. State of Uttar Pradesh A.I.R. 1981 S.C. 873
12. Competition Commission of India v. Dumper (2016) 127 CC 0427
owners associations and ors.
13. AR Antule v. RS Nayak 1988A.I.R.1531,1988
S.C.R. Supl. (1)1
14. Gujarat Water Supply v. Unique electro A.I.R. 1989 S.C. 973
(Gujarat) (P)
15. State of Madras v. VG Row A.I.R. 1952 S.C. 196
16. Chintaman Rao v. State of Madhya Pradesh A.I.R. 1951 S.C. 118
17. Dharm Dutt v. Union of India (2004) 1 S.C.C. 712

[3]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

18. MRF Ltd. v. Inspecter Kerala govt. A.I.R.1999 S.C. 188, 191
19. Omkar v. Union of India A.I.R. 2000 S.C. 3689
20. Shivani v. State of Maharashtra A.I.R. 1995 S.C. 1770 at
1774
21. Confederation of ex serviceman association v. (2006) 8 S.C.C. 399
union of india
22. Board of trusties of the part of Bombay v. A.I.R. 1983 S.C. 109
Dilip Kumar. R. Nandharni

23. Olga tellis v. Bombay Municipal Corporation A.I.R. 1986 S.C. 180

24. DTC v. DTC mazdoor congress A.I.R. 1991 S.C. 101

BOOKS REFERRED

S. BOOKS
No.
1. Seervai, H.M., Constitution Law of India, Universal Publication
2. Shukla, V.N., Constitutional Law of India, Eastern Book Company
3. Pandey, J.N., Constitutional Law of India, Central Law Agency
4. Jain, M.P., Indian Constitutional Law, Lexis Nexis
5. Basu, D.D., Shorter Constitution of India, Volume I.
6. Abhi Roy, Competition Law In India, Eastern Law House
7. S.M Dugar, Guide To Competition Law, Lexis Nexis
8. Company Law Journal
9. Company Law Report

[4]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

WEBSITES REFERRED

S. WEBSITE
No.
1. www.scconline.com
2. www.maupatra.in
3. https://indiankanoon.org
4. www.legalserviceindia.com
5. www.livelaw.com

STATUTES REFERRED

S. STATUTE
No.
1. The Constitution of India, 1950
2. The Competition Act, 2002
3. The Companies Act, 2013

[5]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

LIST OF ABBREVIATIONS

SR. NO. Abbreviations EXPANSION

1. AAEC Appreciable Adverse Effect on Competition

2. Art. Article

3. CCI Competition Commission of India

4. Co. Company

5. COMPAT Competition Appellate Tribunal

6. DG Director General

7. EC European Commission

8. ECJ European Court of Justice

9. EU European Union

10. Ltd. Limited

11. OECD Organisation for Economic Co-operation and


Development
12. Pvt. Private

13. r/w read with

14. SC Supreme Court of India

15. TFEU Treaty on the Functioning of the European Union

16. The Act The Competition Act,2002

17. & And

20. NCLAT National Company Law Appellate Tribunal

21. Tribunal National Company Law Appellate Tribunal

22. § §

[6]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

STATEMENT OF JURISDICTION
It is humbly submitted before the Honourable Supreme Court of Indycosis that the Appellants
i.e Arnab & Co., RajdipPvt. Ltd. and Barka Industries have approached this Court under
Article 136 of the Constitution of Indycosis and § 53T of the Competition Act, .2002.

[7]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

STATEMENT OF FACTS
Indycosis is a nation established on the principles of democracy and socialism. Coffee is one
of the major products of indycosis and is sold widely across the nation. Large number of
farmers and their families are dependent upon the coffee business.

Varied type and varieties of coffee beans are grown by the coffee farmers in indycosis. One
of them is Mongre coffee beans. These coffee beans are first bought by the traders who then
send it to the distributor/retailers, who ultimately sell this to the consumer.

Arnub Ahuja, director of Arnub and Co., Rajdip Sharma, director of Rajdip Pvt. Ltd., and
Barka Lal, director of Barka Industries, are three major private companies who buy Mongrè
from the farmers and send it down the chain. These three traders are an important link in the
market as without them, getting Mongrè to the consumers would be very difficult.

Since only few farmers were growing Mongrè, the total quantity of Mongrè available every
season is around 1000 kilograms. After the monsoons when Mongrè was ready, the farmers
invites for prices from the traders. The trader who is willing to buy at the highest price would
generally get all of the Mongrè. As a result of this system Arnub bought all the Mongre in
2016 and 2015 however in 2014 all the Mongre was bought by Barkha.

This setting was not very favorable for the traders and as a result Arnub opined that if all
three of them expressed intention to buy at the same price and demanded only 1/3rd of
Mongrè, all of them can survive in the market.

As a result at the time of quoting the price for the Mongre for season 2017 identical price was
quoted and only 1/3 share was demanded by all the three traders. Some of the farmers
expressed that Rs.500 per kg even though a comparatively low price, was not an unacceptable
price.This arrangement saw that fresh Mongrè was easily available to all the people of
Indycosis

As Mongre for 2018 was ready by the end of 2017 the farmers invited for the prices by the
traders and the prices quoted by the traders were identical just like the last year.

The farmers decided to oppose this pricing and representing themRAT Coffee approached the
Competition Commission of Indycosis (‘CCI’) and in a written complaint stated that the
traders who were buying Mongrè coffee from the farmers had engaged in a cartel-like
behavior. (RAT Coffee was founded in 1980’s by Mr. Ravi Vermma, who started off as an

[8]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

activist working for the masses but ended up as a famous politician. Almost all coffee farmers
in Indycosis paid a onetime membership fee and joined RAT Coffee)

After recording the findings submitted by the DG, the CCI held that the conduct of the
Mongrè traders is anti-competitive and thereby issued the following directions in its order
dated 25 January 2018:

1. The Mongrè traders are directed to pay a penalty of 10% of its average turnover for the last
three preceding financial years. 2. The Mongrè traders are further restrained from buying
Mongrè coffee from the farmers or from accessing the market of Mongrè coffee in any other
manner for the subsequent five years i.e. from 2018-2022.

Aggrieved by the decision of the CCI, the traders filed an appeal before the National
Company Law Appellate Tribunal on 30th January, 2017

NCLAT in its order 20th February, 2018 reduced the period of restraint imposed upon the
Mongrè traders in the order passed by CCI from five years to the current year i.e. 2018-2019.

A separate writ petition was simultaneously filed before the Derry High Court on 1st
February, 2018, alleging that the order of the CCI violates the Fundamental Rights of the
Mongrè traders. However, the High Court on 6th February, 2018, dismissed the plea in
limine.

[9]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

STATEMENT OF ISSUES

1. Whether the present appeal filed before the Honorable SupremeCourt is maintainable?
2. Whether the agreement among the traders is in violation of Competition Act,2002?
3. Whether the decision taken by National Company Law Appellate Tribunal was ultra
virus?
4. Whether the decision passed by National Company Law Appellate Tribunal violates
the fundamental rights of the traders?

[10]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

SUMMARY OF ARGUMENTS

1. THE APPEAL FILED BEFORE THE HONORABLE SUPREME COURT IS


MAINTAINABLE

The appeal filed before the honourable supreme court of Indycosis is maintainable as the
petitioners has approached the honourable high court under § 53T of the Competition Act,
2002. This § gives right to the party aggrieved by the decision of the appellate tribunal to
approach the supreme court, whose decision shall be final in that regard. In the instant case
the petitioners were aggrieved by the decision of the NCLAT, which imposed the penalty
of 10% of the turnover of the last three years on the Mongre traders and also restricted
them form accessing the Mongre market for the period of one year.The simultaneous SLP
filed in the Supreme Court under article 136 is also maintainable as the order restricting
the Mongre traders is a violation of their fundamental rights and the same Derry High
Court failed to recognise, hence there is a gross miscarriage of justice and since coffee
trade effects the entire nation it also become the matter of general public interest.

2. THE AGREEMENT AMONG THE TRADERS IS NOT INVIOLATION OF


COMPETITION ACT,2002

The agreement among the traders is not in violation of § 3 of the Competition Act as there
is no appreciable adverse effect on competition as per the guidelines given in § 19(3) of
the competition act. Neither the agreement created any new entry barriers, nor it drove
existing competitors out of the market. The agreement only proved a blessing for the
Mongre market as it stabilized the Mongre market as now Mongre coffee was easily
available to the people of Indycosis.Also, the agreement among the traders is not of a
cartel as the definition of Cartel given in § 3(c) do not include the word buyer, while
buying Mongre the traders were acting like consumers, and CCI in many cases held that
the decision-making process of a consumer or exercise of consumer’s choice in purchasing
activity of a consumer is not a matter of § 3. The conduct of the traders under § 3(3)(a) is
also justified as it did not cause any appreciable adverse effect on the competition.The
agreement among the traders didn’t violate § 4 i.e. abuse of dominant position as the law
in § 4 caters to a single enterprise or a group, the group mentioned here refers to different
enterprises belonging to the same group in terms of control of management or equity. In

[11]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

the instant case there are three separate entities, hence the question of abusing dominant
position do not arise.

3. THE DECISION OF NATIONAL COMPANY LAW APPELLATE TRIBUNAL


WAS ULTRA VIRUS

In the instant case the Tribunal held the appellants guilty of violation of § 3 of the Act and
accordingly passed an order denying them to buy Mongre coffee from the farmers and to
access Mongre coffee market in any other manner for the current year i,e. 2018-2019. As
per the § 53O of The Act, 2002 NCLAT is bound by the provisions of the Competition
Act while exercising its powers with respect to the Competition Act. In the cases of
violation of § 3 or 4 of The Act, the only penal provision that can be invoked is § 27 and
none of the penal provision under § 27 provides for taking away the rights to simply buy a
commodity or accessing the market as a punishment. They only provides for regulating
and prohibiting an anti-competitive conduct and neither buying a commodity nor
accessing the market is anti-competitive per se but the same does not appears to have been
given enough consideration. An act is considered to be anti-competitive in nature if it is in
violation of any provision of the Competition Act, 2002.

4. THE DECISION TAKEN BY NATIONAL COMPANY LAW APPELLATE


TRIBUNAL VIOLATES THE FUNDAMENTAL RIGHTS OF THE TRADERS
The order passed by the National Company Law Appellate Tribunal is in Violation of Art.
14, 19(1)(g) and 21 of the Constitution of Indycosis.Article 14i.e.A person is treated
unequally when that person is treated worse than others, and those others are similarly
situated. In the instant case unequal treatment was meted out to the appellants as they were
denied the rights to access the market in any manner as a punishment. In the cases of
violation of § 3 of the Competition Act, 2002 it’s only the anti-competitive conduct that
has been either prohibited or regulated before but in the instant case separate rights were
denied to the traders. As a consequence of the violation of the Article 14 another
Fundamental Right which was violated by the order of the NCLAT was Right to Trade
guaranteed under Art. 19(1)(g). The order passed by the NCLAT does not qualify the
criteria set out for the limitations upon the Right to Trade under Article 19(6) i,e.
Reasonable restrictions in the public interest. The restriction imposed is inherently against
the public interest as the Mongre will not be available for the public consumption in the
absence of the Appellants. Another Fundamental Right which is being violated under

[12]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

Article 21.. It has been explicitly mentioned that the appellants did not operate in any other
sector or business except the sale of Mongre coffee beans. Therefore as a result of the
order the appellants were also deprived of their livelihood.

ARGUMENTS ADVANCED
ON MAINTAINABILITY

[ISSUE-1]: - THE APPEAL FILED IN THE PRESENT CASE IS MAINTAINABLE


BEFORE THE SUPREME COURT OF INDYCOSIS.

As per § 53T of the Competition Act, 53T, Appeal to Supreme Court.

The Central Government or any State Government or the Commission or any


statutory authority or any local authority or any enterprise or any person
aggrieved by any decision or order of the Appellate Tribunal may file an
appeal to the Supreme Court within sixty days from the date of communication
of the decision or order of the Appellate Tribunal to them.

1. The appeal under 53T is a matter of right and the same was taken by the petitioners when
they were aggrieved by the decision of the National Company Law Appellate Tribunal.In
the case of G.K. Granites vs. Tata Hitachi Construction Machinery Company Limited
&Ors.1the supreme court held that: -

"A careful perusal of § 53T of the Competition Act would show that an appeal to the
Supreme Court is provided against any order passed by the Appellate Tribunal‟

2. Meaning thereby that the remedy is available against every order of the said Tribunal
irrespective of whether the order is passed under the provisions of the Competition
Act or under the provisions of the MRTP Act, 1969. Had the legislative intent been to
grant right of appeal only against the orders passed under the provisions of
the Competition Act, § 53T would have been framed in a different manner by providing
for an appeal only against an order passed by the Appellate Tribunal under the provisions
of the said Act. No such restriction, however, finds place in § 53T of the Act. Hence an
appeal under 53T can only be granted against the order of the Appellate Tribunal, in the
instant case the petitioners have approached the Supreme Court after the decision of
NCLAT on 20th February. Form the light of precedents set and the evidence on record it

1
(2013) 205 DLT 355.
[13]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

is submitted before the honourable court that the appeal is maintainable before the
honourable Supreme Court,

[ISSUE-2]THE AGREEMENT AMONG THE TRADERS IS NOT IN VIOLATION OF


§ 3 OR 4 OF THE COMPETITION ACT, 2002.

It is humbly submitted before the Honorable Supreme Court that the agreement among the
traders is not in violation of § 3 of the Competition Act, 2002.

2.1.THE AGREEMENT BETWEEN THE TRADERS IS NOT IN VIOLATION OF §


3(1) OF THE COMPETITION ACT.

It is humbly submitted before the Honorable Court that As per the § 3(1)2, if any agreement
between enterprise or association of enterprises or a person or association of persons is
entered into which causes or is likely to cause appreciable adverse effect on competition
within India then it is violation of § 3(1), i.e. anti- competitive in nature.

1. For an agreement to fall under the ambit of § 33 it is important that is causes appreciable
adverse effect on competition within India. The term appreciable adverse effect which is
fundamental to Competition act,2002 itself is not defined anywhere in the act. However,
provisions have been provided under § 19(3)4 to which the commission shall refer while
determining whether an agreement has an appreciable adverse effect or not on
competition under § 3.§ 19(3) states that

The Commission shall, while determining whether an agreement has an appreciable adverse
effect on competition under § 3, have due regard to all or any of the following factors,
namely:—

(a) Creation of barriers to new entrants in the market;


(b) Driving existing competitors out of the market;
(c) Foreclosure of competition by hindering entry into the market;
(d) Accrual of benefits to consumers;
(e) Improvements in production or distribution of goods or provision of services;

(f) Promotion of technical, scientific and economic development by means of production


or distribution of goods or provision of services.

2
The Competition Act, 2002,No. 13,Acts of Parliament,2003(India).
3
Ibid.
4
Ibid.
[14]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

a) Absence of Barriers for new entrants.

The agreement among the traders cannot be conceived to result in any type of barrier
whether it was a structural barrier or a strategic barrier. Technological patents, strong
brand identity, tie in agreement, resale price maintenance etc. falls under the category of
structural and strategic barriers may also prevail owing to government intervention (such
as industry regulation, legislative limitations on new firms, special tax benefits to existing
firms etc). However, the same aspect is absent in the instant case.

b) Lack of existing competitors in the market.

In the instant case it has been explicitly mentioned that the three traders (Arnub, Rajdeep
and Barka)are the three major competing forces against each other in the capacity of a
trader in the Mongre market. Therefore, the question of driving existing competitors out
of the market does not arise in the absence of any competitors.

c) Absence of foreclosure of the competition in the market.

It refers to the ability of the firms to singularly or jointly prevent the entry of other firms
in the market including potential entrants. The agreement between the traders does not
singularly or jointly elevate the ability to prevent the entry of potential entrants in the
Mongre market. The agreement cannot possibly have any detrimental effect upon the
prospects of a new potential entrant into the market.

The existence of the first three factors under § 19(3) would normally indicate AAEC,
while the absence would normally indicate no AAEC (negative factors).5

d) Accrual of the benefits to the consumers.

It is one of the fundamental and indispensable factors entailed under § 19(3) for the
assessment of anti-competitive agreements. At times as, a result of agreements prices of a
commodity may escalate leading to enhancements in profits of the parties to the
agreement.The question under such situation is whether the profit earned is distributed
equally across all the key players in the distribution channel or not.

The objective behind incorporating such provision for the assessment of AAEC is to
determine the intention and motive of the parties to the agreement.In the instant case as
per the report of DG submitted before CCI, from the year 2010 to the year 2016 the profit

5
S.M DUGAR, GUIDE TO COMPETITION LAW 729 (6th ed. 2016).
[15]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

made on the sale of Mongre was kept constant at Rs 1000 per kg. In the year 2017 the
Mongre was procured at a lower price than the preceding yearas a result of the agreement
among the traders. As a result of this agreement they could have sold the Mongre at the
prices it was sold in the preceding year, but instead they chose to equally distribute the
profits down the distribution channel.As a natural consequence of the traders’ action
consumers should have reaped the benefits of the reduction in the prices. However, they
were unable to solely because of the actions of the distributors/retailers who chose to
increase the sale prices as per the market trend from the year 2017 (doubling their
profits) irrespective of reduction in the procurement price of the Mongre.

e) Improved distribution channel.

Another important factor which shall be taken into consideration by the commission is, if
there has been improvement in production or distribution of goods and services.

In the instant case it has been explicitly mentioned in the fact sheet, that as the result of
the arrangement Barka who was based in the northern region, mostly sold her part of
Mongre in the north, Arnub did so in the south and Rajdeep did in the other regions,
unlike earlier (in 2010 all the Mongre was sold to Barka, however she was not able to
cater to the demands of all the consumers mainly because Barka Industries was located in
the northern part of the country and it took a lot of time for goods to reach from the north
to the south. Sometimes the excess time undertaken in transportation led to Mongre being
spoiled, as adequate light was not available) when the single trader was buying all the
Mongre. This arrangement saw that fresh Mongre was easily available to all the people of
Indycosis.

f) Promotion of economic development by distribution of goods.

Coffee is one of the major products of Indycosis and is sold widely across the nation. The
Mongre market conditions immediately preceding the agreement among the traders were
highly volatile and not sustainable in nature as the same is evident very much from the
traders operating in losses in order to sustain in the market. This was not in the interest of
any person connected to the Mongre market in any capacity.

2. However all of this was changed by the agreement for the better interest of all the people.
The actions of the traders are in accordance with the spirit of the preamble of the

[16]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

Competition Act, 2002 which explicitly puts forward that the objective of the act is to
ensure economic development of the country and to protect the interest of the consumers.

2.2.THE AGREEMENT BETWEEN THE TRADERS IS NOT IN VIOLATION OF


§ 3(3) OF THE COMPETITION ACT.

3. It is humbly submitted before the Honourable Supreme Court that the agreement between
the traders is in violation of the rules laid down in § 3(3)6. This sub-§ covers the aspect
of horizontal agreements between the enterprises. Horizontal agreements are agreements
between two or more enterprises that are at the same stage of production chain and in the
same market7.These agreements are presumed to have an appreciable adverse effect on
competition.
However in Sodhi Transport Co. v. State of UP8 it was held that “presumption is not an
evidence in itself. It is merely an indicative of on whom the burden of proof may fall”.
A. Whether there was a formation of a cartel by the traders.
4. The term Cartel has been defined in the § 2(c)9 as
“cartel” includes an association of producers, sellers, distributors, traders or service
providers who, by agreement amongst themselves, limit control or attempt to
control the production, distribution, sale or price of, or, trade in goods or
provision of services.
5. In the instant case, the traders agreed to buy Mongre at a decided price, prima facie it
might look as if the traders acted like a cartel. However, the definition of cartel, gives
mention to every link in the production chain except the buyer, i.e. consumer.
Consumer is defined as:
.. buys any goods for a consideration which has been paid or promised or partly paid
and partly promised, or under any system of deferred payment and includes any
user of such goods other than the person who buys such goods for consideration
paid or promised or partly paid or partly promised, or under any system of
deferred payment when such use is made with the approval of such person,
whether such purchase of goods is for resale or for any commercial purpose or for
personal use.
6. Also, in the case of PandrolRahee10, the CCI noted that

6
Competition Act,supra note 1,at 15 .
7
ABIRROY,COMPETITON LAW IN INDIA 57(2nd ed.2014).
8
AIR 1986 SC 1099.
9
Ibid.
[17]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

“the decision-making process of a consumer or exercise of consumer’s choice in


purchasing activity of a consumer is not a matter of § 3.”
7. Hence from the legal precedents and the facts of the instant case it is quite evident that the
agreement among the traders was not of a cartel. Alternatively, even if it was a cartel then
it was a buyer’s alliance which does not find any relevance as per the anti-trust laws of
the nation of Indycosis.
B. Buying Alliances are not recognised.
8. As per SohailNathani and Ravi sekhar Nair, who were counsels to CCI in its early
days,“on this point of law - buyer cartels - the CCI is yet to make a mark. No singular
decision of the CCI looks at buyer cartels definitively…” “The CCI has in the past
expressed its reservation in looking at the purchasing activities of enterprises.11”
In NLS symposium on Competition Law, on the question of buyer’s cartel, Prof KD
Singh was of the opinion that definition of cartel in § 2(c)12 does exclude a buyer.
9. The language of the §(3)(3)(a) is quite ambiguous. In that scenario as well, the traders did
not violate the provisions of § 3(3)(a) as
“the presumption stated in § 3(3) of the act is rebuttable one, and in instances
where an inquiry is conducted by the CCI, the burden of proof to show AAEC
lies with the parties to the agreement. Therefore, although the plain reading
would suggest that it is a per se violation, the decisional practice of CCI
suggests that the cartel arrangement should also result in AAEC. Such
decisional practice show maturity because ultimately conduct which violated
the basic tenets of competition law must be caught which can be only analyzed
under the rule of reason and not plain vanilla use of per se rule13”
10. This shows that NCLAT reads § 3(3) with AAEC guidelines given in 19(3). How the
agreement among the traders do not cause AAEC has already been submitted in detail in
sub-issue 1. Hence the arrangement does not violate § (3)(3)(a) of the act. Also, as per
Article 101 of Treaty of the Functioning of the European Union, the exemption provision
is given under 3rd para states that,
the prohibition to the anti-competitive agreements is inapplicable in the case
of any agreements or category of agreements between undertakings or any

10
PandrolRahee V DMRC &ors, [2011] CCI 65.
11
(March 01,2018,10:00 AM)https://www.legallyindia.com/home/has-the-competition-commission-of-india-cci-
been-an-effective-regulator-20170718-8664.
12
Competition Act, supra note 1,at 15
13
ABIRROY,COMPETITION LAW IN INDIA 101(2nd ed. 2014).
[18]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

decision or category of decisions by the association of undertaking or any


concerted practice or category of concerted practices which contribute to
improving the production or distribution of goods or to promoting technical or
economic progress, while allowing consumers a fair share of the resulting
benefits.
11. The spirit of these laws reflects in § 19(3) (d), (e), (f)14. The submissions about these
sub§s have already been given in detail in 1st sub-issue. Hence the agreement among the
traders was not in violation of § 3 of the Competition Act.

2.3 ABSENCE OF DOMINANT POSITION

It is humbly submitted before the honorable Supreme Court of indycosis that the
agreement among the traders does not amount to violation of § 4 of Competition
Act,2002.§ 4 of the competition Act reads as No enterprise or group shall abuse its
dominant position.

12. The intricate detail which is needs to be understood is that the ambit of § 4 extends to a
single enterprise or a group defined under the § 2 of the act. The word “group” referred to
in § 4 of the act does not refer to a group of different and completely independent
corporate entities or enterprises. It refers to different enterprises belonging to the same
group in terms of control of management or equity.
13. In the instant case it is neither a single enterprise nor a group which has been alleged to
indulge in anti-competitive act but rather an association of enterprise and Indian law does
not recognize collective abuse of dominance15. Therefore in the instant case the act of the
traders amounting to violation of § 4 does not arise as they do not fall under the ambit of
§ 4.
14. In the case of ManappuramJewellers Pvt. Ltd.16, information was field against Kerala
Gold & Silver Dealers Association for abusing its dominant position. The commission
noted that from the DG’s report that there were approximately 650 jewelers in the
Thrissur district out of which only 242 jewellers were the members of KGSDA
constituting only 37% of the total jewelers in the district. The Commission held that since
none of the individual members of KGSDA was in a dominant position in the relevant

14
Ibid.
15
S.M DUGAR,GUIDE TO COMPETITIOIN LAW 449 ( 6th ed. 2016).
16
Manappuram Jewellers Pvt. Ltd. v. Kerala Gold & Silver Dealers Association,2012CompLR 548 (CCI).
[19]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

market, the question of abuse of dominant position did not arise. Also, the argument
around collective dominance under § 4 of the act was held to be not tenable.
15. Again the commission in Indian Sugar Association v. Indian Jute Mills Association
(IJMA)17, noted that no single enterprise of jute manufacturer was in the position to
dominate the market within the meaning of explanation to § 4 of the Act. There was no
provision for collective dominance in the Act, the abusive act/conduct of the membersof
IJMA and Gunny Trade Association(GTA) jointly was not held to be hit by the provisions
of § 4(2) of the Act.

17
2014 CompLR 225 (CCI)[hereinafter Indian Sugar Mills Association] .
[20]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

[ISSUE-3] WHETHER THE DECISION TAKEN BY NCLAT IS ULTRA VIRES?

It is humbly submitted before the honorable Supreme Court of Indycosis that the order passed
by the National Company Law Appellate Tribunal of Indycosis is partly ultra vires to the
Competition Act,2002. As with respect to penal powers of the NCLAT,the §s that can be
invoked in cases of violation of the §s 3 or 4 of The Act is § 27 of The Act.

§ 53O of the competition Act reads as: Procedure and Powers of Appellate Tribunal: (1) The
Appellate Tribunal shall be bound by the provision of this Act (Competition Act, 2002)

3.1 POWER OF THE TRIBUNAL TO IMPOSE PENALTY

1. None of the penal provisions provided under § 27 in the Competition Act,2002 for the
violation of §s 3&4provides for completely denying access to the market in any manner.
However the same was grossly ignored by the National Company Law Appellate Tribunal
in an appeal for the same.
 As per the § 27(a) the Tribunalcan only direct any enterprise or association of enterprises
or persons or association of persons not to operate in a manner which would be in
contravention of § 3&4. In no circumstances it can deny the access to the market under the
respective clause.The Tribunal may pass ‘cease and desist’ order to discontinue and not to
enter such an agreement again or discontinue such abuse of dominant position.
 As per the § 27(b) the Tribunal may impose penalty up to 10% of the average of the
turnover for the last preceding years.
Under no circumstances it provides for denying complete or partial access to the market.
 Under 27(d) the Tribunal has the power to modify only those agreements which are
violation either § 3 or § 4 or both and only to the extent that it is not in violation of any §
of Competition Act,2002.
 The § 27(e) provides power to the NCLAT for the enforcement of any order passed by it
in the cases of non-compliance, including payment of cost if any.
 Under § 27(g) power has been granted to issue an order with the purpose of delivering the
justice in the cases with unusual circumstances.

[21]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

2. Consent orders & Warnings are given under this §. The nature of 27(g) can be
understood with reference to the case of MCX Stock Exchange LtD.18In the case of MCX
Stock Exchange Ltd., the Commission passed the following orders:
a) In exercise of powers under § 27(G) of the Act, NSE is directed to maintain separate
accounts for each segment with effect from 01-04-2012 .
b) In exercise of powers under § 27(G) of the Act, NSE is directed to modify its zero price
policy in the relevant market and ensure that the appropriate transaction costs are levied.
c) In exercise of powers under § 27(G) of the Act, NSE is directed to put in place a system
that would allow NSE members free choice to select NO ODIN any other market watch
software for trading on the C.D. segment of NSE.
3. In FICCI Multiplex Association of India v. United Producers/Distributors form19, the
commission after considering the cumulative effect of all the mitigating factors in the
context of peculiar facts and circumstances of the instant case, wasof the opinion that
ends of justice would be met if a penalty of Rs.100000/- was imposed upon each of the
opposite parties under § 27(b) of the act in addition to cease and desist order under §
27(a) of the act.
4. In Uniglobe Mod Travels Pvt. Ltd. v. Travel Agents Federation of India20, the
Commission was of the opinion that all the opposite parties may be directed to refrain
from indulging in anti-competitive conduct.
5. In Pankaj Aggarwal v. DLF Gurgaon Home Developers Private Limited21., in exercise
of powers under § 27(a) of the act, the Commission directed the opposite party and its
group companies operating in the relevant market to cease and desist from indulging in
the conduct which was found to be unfair and abusive in terms of the provisions of § 4 of
the act in the preceding paras of the order.
6. With respect to above mentioned cases, the Commission even after considering
mitigating factors and the peculiar facts was of the opinion that the justice could be
delivered only by penalising under § 27(a) of The Act and the access to the market was
not compromised in any manner.
7. Earlier the Commission has directed to refrain the parties from indulging only in anti-
competitive conduct and accessing the market is not anti-competitive as per any
provision of Competition Act,2002.In the case of Indian Sugar Mills Association

18
MCX Stock Exchange Ltd. v. National Stock Exchange of India Ltd.,.,2011CompLR 129(CCI)).
19
2011 Comp LR 79(CCI),[hereinafter FICCI Multiplex Association of India].
20
2011 CompLR 400(CCI),[hereinafter Uniglobe Mod Travels Pvt. Ltd.].
21
2015 CompLR 728 (CCI),[hereinafter Pankaj Aggarwal].
[22]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

v.IndianJute Mills Association22,after considering the peculiar nature of the case the
Commission decided to impose penalty on the Indian Gunny Trade Association at 5% of
the average turnover of the last three years.
8. In the case of Reliance Big Entertainment Ltd.23 in addition to penalty, the commission
also directed all the associations to cease and desist from the following practices and take
suitable measures to modify or remove them from their articles of association, rules and
regulations as has been discussed in this order since they are anti-competitive.
9. In the cases of anti-competitive agreement before the Commission it has either directed
the parties to desist the agreement or has modified or has directed the parties to modify
the agreement themselves to the extent it ceases to be anti-competitive but has not
infringed upon the rights of the parties to access the market.

[ISSUE-4] THE DECISION PASSED BY THE NATIONAL COMPANY LAW


APPELLEATE TRIBUNAL VIOLATES THE FUNDAMENTAL RIGHTS.

22
Indian Sugar Mills Association, supra note 17, at 21.
23
Reliance Big Entertainment Limited v. Karnataka Film Chamber of Commerce, [2012] 108 CLA 116(CCI).
[23]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

It is humbly submitted before the honourable Supreme Court of Indycosis that the present
order passed by the NCLAT on the face of it violates the fundamental rights of traders. These
rights are indispensable part of their lives as the citizens of Indycosiswhich is a democratic
state.

4.1 VIOLATION OF ARTICLE 14 OF THE CONSTITUTION

It is humbly submitted before the honorable Supreme Court of Indycosis that the order passed
by the NCLAT i,e. Denying Mongre coffee traders to buy Mongre from the farmers and the
access to the market in any other manner, is in violation of Article 14 i,e.

Equality before law – The State shall not deny to any person equality before
the law or the equal protection of the laws within the territory of Indycosis, of
the Constitution of Indycosis.
1. Article 14 forbids class legislation. The limitation upon the exercise Art 14 can be
understood with respect to the fact Art. 14 does not forbid reasonable classification of
persons, objects and transactions for the purpose of achieving specific
ends24.However,criteria for valid limitations under Art. 14 with respect to classification
are:

1. It should not be arbitrary, artificial or evasive. It should be based on an intelligible


differentia, some real and substantial distinction which distinguishes persons or things
group together in the class from others left out of it.

2. The differentia adopted as the basis of classification must have a rational or


reasonable nexus with the object sought to be achieved by the statute in motion.25

3. What is necessary is that there must be substantial basis for making the classification and
that there should be nexus between the basis of classification and the object of the statute
under consideration. In the instant case there appears to be no reasonable basis of
classification between the appellants (traders) being the citizens of the nation Indycosis
and other citizens of Indycosis and the parties accused of violating § 3 of the Act in other
cases.
4. Secondly there is no nexus between the distinction made and the objective sought to be
achieved by The Act as the same is evident from a plain reading of the preamble of The

24
Transport & Dock Workers Union v. Mumbai Port Trust, (2011) 1 Mad LJ 755(766) (SC).
25
Lakshmi khandsari v state of uttar Pradesh, AIR 1981 SC 873.
[24]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

Act. The objective of The Act is to protect the interest of the consumers and protect the
trade, and the order passed (denying market access and depriving of right to trade) in the
instant case does not share reasonable or rationale nexus with the object as it hinders the
objective sought by The Act and does not advocate it.A person is treated unequally when
that person is treated worse than others, and those others (the comparison group) must be
those who are “similarly situated” to the complainant26.
5. In the case Dumper owner’s association and others27 it was noted by the DG that there
was a similar pattern in the bids for the LPG Cylinders by all the 50 bidders who
submitted price bids for various States. The DG had observed that there were strong
indications of some sort of agreement and understanding amongst the bidders to
manipulate the process of bidding. The Commission held that there was contravention of
the provisions of § 3(3)(d) of the Competition Act, 2002 ('the Act'). It was also held by the
Commission that the said parties were liable to pay penalty on the basis of their average
turnover.
6. In the case Union of India and others28 it was held that the opposite Parties had submitted
identical/ similar price bids in response to tenders floated by the three ordinance factories
from 2008 onwards. The bids submitted by the Opposite Parties demonstrated a peculiar
bidding pattern and from further findings it was subsequently held that the actions
amounted to violation of § 3 of the Act. Having regard to all the aggravating and the
mitigating factors that may be available to the parties, it was noted that the quantum of
penalties should commensurate with the extent of violations and a penalty on the Opposite
Parties @ 3% of their turnover, starting from financial year 2010-11 was imposed.
7. In the case of Builders Association Of India vs Cement Manufacturers29it was alleged
that the cement manufacturers came under one umbrella and indulged in directly and
indirectly into monopolistic and restrictive trade practices, in an effort to control the
price of cement by limiting and restricting the production and supply of cement and
further indulged in collusive price fixing' and also divided the territory of India into five
zones. The Commission had found the Opposite Parties in contravention of § 3(3) (a) and
3(3)(b) read with § 3(1) of the Act. The Commission decided to impose a penalty of 0.5
times on the profits from 2009-2011 and also passed a cease and decist order from
indulging in anti-competitive actions.

26
The Competition Act, 2002, No. 13, Acts of Parliament, 2003 (India).
27
(2016) 127 CC 0427.
28
Suo Moto Case No. 03 of 2011.
29
COMPETITION COMMISSION OF INDIA Case No. 29 of 2010
[25]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

8. In the case of Jute Mills Association and othrs30. It was alleged that that the member of
the opposite party were raising the prices of jute bags unreasonably over the years,
imposing unfair and excessive price limiting the technical development of the market
which is anti-competitive as per the provisions of the Act. After considering the totality
of the facts of the case and the importance of jute to farmers, it was decided to impose
penalty @ 5% of the average turnover of the last three years.
9. Under the Competition Act since its enactment in 2002 in the cases of alleged violation
of § 3 of the Act, the rights of the accused has not been taken away as a form of penalty
as has been in the instant case by taking away the rights to simply buy a commodity and
to access the market. However, in the instant case it appears that the same was not given
enough weightage.

4.2 VIOLATION OF ARTICLE 19(1)(G) OF THE CONSTITUTION

It is humbly submitted before the honourable court of Indycosis that the present order passed
by NCLAT is wholly in violation of article 19(1)(g) i.e guarantee to all the citizens the right
to practice any profession, or to carry on any occupation, trade or business, which in itself is
the part of the more broader aspect of fundamental right to freedom.

10. Article 19(1)(g) uses four different expressions so as to make the guarantee in Art.
19(1)(g) as comprehensive as possible and to include all avenues and modes through
which a person earns his livelihood. Article 19(1)(g) protect all those activities which are
of commercial or a trading in nature31. It has been held that the state cannot travel
beyond the contours of Clause (2) to (6) of Article 19 of the constitution in curbing the
fundamental rights guaranteed by Clause (1)32.
11. For the purpose of Fundamental Rights given under part III of the constitution Art. 12 of
the constitution provides definition of the state i.e, the State includes the Government
and Parliament of Indycosis and the Government and the Legislature of each of the
States and all local or other authorities within the territory of Indycosis or under the
control of the Government of Indycosis.

30
Indian Sugar Mills Association, supra note 17, at 21.
31
M.P JAIN,INDIAN CONSTITUTIONAL LAW 1028(7th ed.2014).
32
Ibid at 1013.
[26]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

12. In A. R. Antulay v. R.S. Nayak33, it was held that the court could not pass an order or
issue a direction which would be in violation of the fundamental rights, thus, it can be
said that the expression ‘state’ includes judiciary also.
13. It is submitted that the judiciary, though not expressly mentioned in Art. 12, it should
be included so, since the courts are set up by statute and exercise power conferred by
law. It is so suggested that discrimination may be brought about… even (by)
judiciary. The courts, like any other organ of the state, are limited by the mandatory
provisions of the Constitution.
14. Three significant characteristicof clauses 19(2) to 19(6) are:
 The restriction under them can be imposed only by or under the authority of a law;
no restriction can be imposed by executive action alone without there being a law
to back it up.
 Each restriction must be reasonable.
 A restriction must be related to the purposes mentioned in the clauses 19(2) to
19(6).

4.2.2 HOW THE RESTRICTION IMPOSED IS NOT REASONABLE

15. It is difficult to give an exact definition of the word “reasonable”34.


16. The Supreme Court in the case of State of Madras v. V.G. Row35held “It is important
in this context to bear in mind that the test of reasonableness, wherever prescribed,
should be applied to each individual statute impugned, and no abstract standard or
general pattern, of reasonableness can be laid down as applicable to all cases.”
17. From the above mentioned cases it is evident that there is no hard and fast definition
of the word ‘reasonable’ and whether a restriction is reasonable or not needs to be
looked at and adjudicated as per the facts of the each particular case.
18. For adjudging reasonableness of a restriction, the Courts consider such factors as: the
duration and the extent of the restrictions, the nature of the right infringed, the
underlying purpose of the restrictions imposed, the urgency of the evil sought to be
remedied thereby, all these considerations enter into the judicial verdict36.

33
1988 AIR 1531,1988 SCR Supl. (1) 1.
34
Gujarat Water Supply v. Unique Electro (Gujarat) (P), AIR 1989 SC 973.
35
AIR 1952 SC 196.
36
Chintaman Rao v. State of Madhya Pradesh, AIR 1951 SC 118.
[27]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

19. The questions: (i) whether the right claimed is a Fundamental Right, (ii) whether the
restriction is one contemplated by any of clauses (2) to (6) of Article 19, and (iii)
whether the restriction is reasonable or unreasonable37
20. In the instant case the restriction imposed on the traders by the NCLAT cannot be said
to be reasonable as per the factors which needs to be taken into account while
deciding the question of reasonableness. The ‘extent of the restriction appears to be
extraordinarily excessive’ as it restrains the traders from accessing the market of
Mongre in any manner for the stipulated time period. Further the nature of the right
infringed from such restriction is one of the Fundamental Rightsi,e. Right to practice
any profession, or to carry on any occupation, trade or business, guaranteed by the
constitution of Indycosis.

4.2.3 HOW IT IS AGAINST THE PUBLIC INTEREST

21. The limitation imposed on a freedom should not be arbitrary or excessive, or beyond
what is required in the situation in the interest of the public38. In the case of Chitaman
Rao the Supreme Court laid down the test for reasonable restriction as follows:

“The phrase reasonable restriction connotes that the limitation imposed on a


person in enjoyment of the right should not be arbitrary or of an
excessive nature beyond what is required in the interest of the public”39.

22. In the instant case the restrictions (complete denial to access the Mongre coffee beans
market) imposed on the traders goes inherently against the rights of the general
public. This is so because the appellant are the only link between the plaintiff
(Farmers) and the final consumers of Mongre (general public). In the absence of the
appellants from the market neither the Farmers growing Mongrewill be able to sell
their produce nor would the publicbe able to consume the Mongre coffee beans.
Therefore the restriction imposed is beyond what is required in the situation in the
interest of the public.
23. A restriction should strike a proper balance between the freedom guaranteed by any of
the clauses and the social control, so that the freedom is limited only to the extent
necessary to protect society of which a citizen is only a part 40. This means that the court

37
Dharam Dutt v. Union of India, (2004) 1 SCC 712.
38
M.R.F Ltd. v. Inspector Kerala Govt., AIR 1999 SC 188, 191.
39
ChintamanRao ,supra note 36, at p. 28.
40
Om Kar v. Union of India, AIR 2000 SC 3689.
[28]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

would consider whether the restriction imposed on the Fundamental Rights are
disproportionate to the situation and are “not the least restrictive of the choices”41.
24. Whenever the freedoms guaranteed as the fundamental rights are curtailed under any
given circumstances it needs to be done very carefully and ‘only to the extent it is
necessary’and not beyond. However, in the instant case there appears to be no necessity
for denying the traders complete access to the market. Interest of the consumer runs like
a fine thread throughout the provisions of the Competition Act 2002 and one of the
objective sought to be achieved through imposing penalty through is to protect the
interest of the consumers. However, the order by the CCI prima facie runs contrary to
the interest of the consumers as in the absence of the appellants (Traders) there will be
no other possible way of getting Mongre coffee beans to the consumer market.
25. In Sivani42, the Supreme Court has laid downthe criteria to evaluate the reasonableness
of a restriction under Art. 19(6). The Court must take into account whether the law has
struck a proper balance between social control, on the one hand, and the right of the
individual on the other. The validity of a restriction imposed on the fundamental rights
needs to be evaluated in the context of the balance between social control and
individual right as well as from the aspect of public interest. However, the restriction
imposed does not appear to be able to strike a fine balance between social control and
individual right. There neither appears to be any requirement of such stringent social
control so as to deny the access to the market nor does enough consideration appear to
be has been given to the fundamental rights of the traders before taking it away from
them. As to the public interest, the orders appears to be prima facie against the interest
of the general public

4.3 VIOLATION OF ARTICLE 21 OF THE CONSTITUTION

It is submitted before the honourable Supreme Court that there has been a violation of
Article 21 i.e No person shall be deprived of his life or personal liberty except according
to ‘procedure established by law’. Post ManekaGnadhi case there has been a phenomenal
development in the Indycosis Constitutional jurisprudence in terms of extended dimension
given to Art. 21 by the Supreme Court.

41
M.P JAIN, INDIAN CONSTITUTIONAL LAW (7th ed. 2014).
42
Sivani v. State of Maharashtra , AIR 1995 SC 1770, at 1774.
[29]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

4.3.1EXTENDED DIMENSIONS GIVEN TO ART. 21

After ManekaGandhi the terms ‘life’ and ‘personal liberty’ has been given very expansive
meaning and it has been established that the ‘procedure’ for purposes of Art. 21 has to be
reasonable, fair and just.The right to life guaranteed under Article 21embraces within its
sweep not only physical existence but the quality of life. If any statutory provisions run
counter to such a right, it must be held unconstitutional43.

26. The right to life enshrined in Art. 21has been liberally interpreted so as to mean
something more than mere survival and mere existence or animal existence. It therefore
includes all those aspects of life which go to make a man’s life meaningful, complete
and worth living44.

4.3.2 RIGHT TO LIFE INCLUDES RIGHT TO LIVELIHOOD

27. With the defining of the word ‘life’ in Art. 21 in a broad and expansive manner, the
Court came to hold that ‘the right to life’ guaranteed by Art. 21 includes the ‘right to
livelihood’45. The Supreme Court has now implied the ‘right to livelihood’ out of the
‘right to life’ in Art. 21.
28. The Court has argued in OlgaTellis46, a case which was brought by pavement dwellers
to resist eviction from their habitat by the Bombay Municipal Corporation that the right
to livelihood is born out of the right to life, as no person can live without the means of
living, that is, the means of livelihood.
29. The Court observed in this connection47 “…the question which we have to consider is
whether the right to life includes right to livelihood. We see only one answer to that
question, namely, that it does.If the right to livelihood is not treated as a part and parcel
of the constitutional right to life, the easiest way of depriving a person of his right to
life would be to deprive him of his means of livelihood to the point of
abrogation48.Emphasizing upon the close relationship between ‘life’ and ‘livelihood’,
the Court stated: “That which alone makes it possible to live, leave aside what makes
life liveable, must be deemed to been integral component of the right to life. Deprive a
person of his right to livelihood and you shall have deprived him of his life.”

43
Confederation of Ex-serviceman Associaton v. Union of India, (2006) 8 SCC 399.
44
M.P JAIN, supra note 53.
45
Board of Trustees of the Part of Bombay v. Dilipkumar R. Nandkarni, AIR 1983 SC 109.
46
Olga Tellis v. Bombay Municpal Corp., AIR 1986 SC 180.
47
AIR 1986 SC at 193.
48
Olga Tellis, supra note 49.
[30]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

30. In the case noted below, the Supreme Court has stated: There is no doubt that broadly
interpreted and as a necessary logical corollary, right to life would include the right to
livelihood and, therefore, right to work. Income is the foundation of many Fundamental
Rights and when work is the sole source of income, the right to work becomes
fundamental right49.
31. Art. 21 of the constitution has been one of those article interpretation of which has
directly reflected the growth and the direction of the Indycosis Constitutional
jurisprudence. With the passage of time the ambit of right to life guaranteed under Art.
21 has only increased with particular emphasis on the quality of life. The quality of life
flowing from the Art. 21 is considered to include all those things which elevates living
from mere animal existence. It includes clothing, food, shelter and all those things
which makes a life complete and worth living. However, much of it cannot be procured
in the absence of livelihood. Therefore Right to Livelihood can be construed as an
incidental fundamental right as in the absence of it the Art. 21 would not be able to
achieve its intended purpose and meaning.
32. In the instant case the appellant were completely deprived of their livelihood50 as they
were restrained from buying Mongre coffee from the farmers or from accessing the
market of Mongre coffee in any other manner for a year. Appellant’s right to buy
Mongre coffee beans and to access the market were absolutely taken away even if it
does not involve any anti-competitive element.
33. Article 21 reads as - No person shall be deprived of his life or personal liberty except
according to procedure established by law. In the Maneka Gandhicaseit was
established that the ‘procedure’ for purposes of Art. 21 has to be reasonable, fair and
just. However, even when no provision of the Competition Act 2002 contemplates
simply denying the rights to purchase a commodity or access the market such restrains
were unjustifiably imposed on the appellants, depriving them of their fundamental
rights as guaranteed by the Constitution of Indycosis.

49
D.T.C v. D.T.C Mazdoor Congress, AIR 1991 SC 101.
50
Clarification No.1.

[31]
MEMORIAL ON BEHALF OF THE APPELLANTS
7TH RGNUL NATIONAL MOOT COURT COMPETITION

PRAYER

Wherefore in light of the issues raised, arguments advanced and authorities cited, it is humbly
prayed that this Honourable Court may be pleased to adjudge and declare that:
1. The Appeal filed before the Honourable Supreme Court is maintainable.
2. The penalty imposed on the traders which is 10% of their annual turnover of past
three financial years should be struck down.
3. The order imposing complete restrain upon the Mongre traders from accessing the
mongre market in any manner and particularly buying the Mongre coffee beans from
the farmers should be struck down.
4. And pass any other order that this Honourable Court may deem fit in the interests of
justice, equity and good conscience.

[32]
MEMORIAL ON BEHALF OF THE APPELLANTS