The Supreme Court has set aside a 2020 order of the National Company Law Appellate Tribunal (NCLAT) that had directed the Director General of the Competition Commission of India (CCI) to investigate alleged violations of competition law by e-commerce major Flipkart. The matter has been remanded to the NCLAT for fresh consideration.
A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi held that the appellate tribunal must re-examine the case after considering Flipkart’s argument that the NCLAT had relied on observations made by an assessing officer during income tax proceedings. Those observations, the court noted, had subsequently been set aside by the Income Tax Appellate Tribunal (ITAT).
The Supreme Court clarified that all issues remain open and are to be reconsidered by the NCLAT. It directed the tribunal to decide the appeal afresh in line with established principles laid down by the apex court in a series of judgments, including the Coal India Ltd case. The court further stated that both parties would be free to raise their respective submissions on whether a prima facie case is made out and, if so, whether a further remand to the CCI is warranted.
Appearing on behalf of Flipkart Internet Pvt Ltd, senior advocate Abhishek Singhvi submitted that there was no finding that Flipkart was a dominant player in the relevant market, nor any conclusion that it had abused a dominant position. He argued that the NCLAT’s earlier order was largely founded on remarks made by an income tax assessing officer, which had later been overturned by the ITAT.
Singhvi also pointed out that the CCI itself had concluded that Flipkart was not a dominant entity in the market. He maintained that Amazon, rather than Flipkart, was the dominant player in the online marketplace and relied on the tests laid down by the Supreme Court in the Coal India judgment to argue that none of the criteria for establishing abuse of dominance were met in Flipkart’s case.
During the hearing, the bench indicated that the matter should be sent back to the NCLAT so that it could independently assess factors beyond the income tax authorities’ findings.
The dispute dates back to 4th March 2020, when the NCLAT overturned an earlier CCI order that had closed a complaint filed by the All India Online Vendors Association (AIOVA), which had sought an investigation into Flipkart’s business practices. At the time, the appellate tribunal had held that a prima facie case existed against Flipkart for contravention of Section 4 of the Competition Act, 2002, which addresses abuse of dominant position, including allegations of predatory pricing, and had accordingly ordered a probe by the CCI’s Director General.
