Mr. Rajesh George and Honda Motorcycle & Scooter India Pvt. Ltd.

Case No. 16 of 2024 Page 1 of 6 COMPETITION COMMISSION OF INDIA Case No. 16 of 2024 In Re: Mr. Rajesh George Marokey (H), Cherumukku Central Avenue, Chembukavu, Thrissur City, P.O., Kerala Informant And Honda Motorcycle & Scooter India Pvt. Ltd. Plot No.1, Sector-03, IMT Manesar, Distt. Gurugram, Haryana - 122050 Opposite Party CORAM Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 26(2) of the Competition Act, 2002 1. The present Information has been filed under Section 19(1)(a) of the Competition Act, 2002 (“Act”) by Mr. Rajesh George (“Informant”) against Honda Motorcycle & Scooter India Private Limited (“Opposite Party”/ “OP”/ “HMSI”) alleging contravention of the provisions of Section 4 of the Act. Case No. 16 of 2024 Page 2 of 6 2. The Informant is the Managing Director of Classic Omega Auto Private Limited having its registered office at Thrissur, Kerala. OP is the manufacturer and distributor of two wheelers and is a wholly-owned subsidiary of Honda Motor Company, Japan. 3. The Informant was a dealer of Suzuki Motorcycle India Private Limited (“Suzuki”) since 30.03.2007 with a showroom at Puzhakkal, Thrissur, Kerala. Around the year 2016, the Informant considered expanding his business by obtaining the dealership of one more reputed two-wheeler manufacturer. In pursuance of the same, in the month of February 2016, he responded to an advertisement published by HMSI in Malayalam Daily, inviting applications for dealership of Honda two-wheeler automobiles. 4. As per the Information, at the very outset of discussions, the OP stated that it will not appoint the Informant as their dealer until the Informant terminates his existing dealership with Suzuki. The Informant requested the OP to allow him to continue with the dealership of Suzuki, however, the OP categorically refused to do so. Pursuant to the discussions, Mr. Shivendra N., an officer of the OP, directed the Informant vide an email dated 03.04.2017, to send documents and photographs to prove that he has abandoned the dealership of Suzuki. 5. The Informant has stated that so as not to miss the opportunity to be appointed as the dealer of two-wheeler automobiles of the OP, he reluctantly terminated his dealership of Suzuki. It has been stated that the act of OP pressurizing the Informant to give up the dealership of their competitor i.e., Suzuki amounts to abuse of its dominant position in the market, which is prohibited under the Act. 6. The Informant sent the termination details regarding dealership of Suzuki as requested by the OP, through an email dated 03.04.2017. Pursuant thereto, the Informant and the OP signed the dealership agreement on 19.08.2017 and the Informant was appointed as the OP’s authorised dealer at Koorkenchery, Thrissur, Kerala. The Informant accordingly relocated his showroom to Koorkenchery. Case No. 16 of 2024 Page 3 of 6 7. The Informant alleged that there were several instances of the OP abusing its dominant position in the market. One of such instance is the dumping of offbeat and unpopular models of two-wheelers to the showroom of Informant without the Informant placing an order for them. In spite of the Informant’s complaint to the OP about the aforesaid conduct, the OP continued this coercive practice. It has been alleged that to prevent piling of dead stock of such vehicles in the yard, the Informant was compelled by the OP to sell products to the customers. 8. As per the Information, the pressure tactics employed by the OP affected the business of the Informant and the adverse effect brought in by Covid-19 further resulted into serious losses. The Informant’s bona fide attempt to salvage the business by induction of a new Director who infused Rs. 2 crores into the business, failed because the OP unilaterally declined to permit the move. 9. The Informant alleged that the OP unilaterally terminated the dealership agreement vide email dated 22.01.2024, citing untrue allegations. It has been further stated that the Informant could not inform the Commission of the aforesaid illegal practices perpetuated by the OP until this point of time (time of filing of Information), because the Informant continued to be a dealer of the OP until 22.01.2024. 10. The Informant has prayed to initiate an investigation into the abovementioned facts in particular and similar practices being adopted by the OP in general and impose remedial and punitive measures as prescribed under the Act. The Informant has also prayed for a direction against the OP to restore its dealership. 11. The Informant has stated that substantial funds have been invested by him to run the business and the abrupt, unilateral and arbitrary termination of dealership agreement has caused substantial business losses, prejudice and hardships. Based on the above, the Informant has sought interim relief under Section 33 of the Act by way of a direction against the OP to restore the dealership of the Informant with immediate effect. Case No. 16 of 2024 Page 4 of 6 12. The Commission considered the Information in the ordinary meeting held on 20.11.2024 and decided to pass an appropriate order. 13. The Commission has perused the Information filed by the Informant and notes that the Informant has raised allegations against the OP, which are: (i) coercing the Informant to abandon dealership of Suzuki with an intention to drive out competitors and foreclose competition, (ii) dumping of offbeat and unpopular models of two-wheelers by the OP without any order placed by the Informant, and (iii) unilateral and arbitrary termination of dealership by the OP. These conducts have been alleged to be in the nature of abuse of dominant position as provided under Section 4 of the Act. 14. At the outset, the Commission would examine the maintainability of filing of Information under Section 19 of the Act from the view point of limitation period. The Commission notes that the Act was amended in 2023, wherein limitation period of 3 years has been introduced for entertaining an Information under Section 19 of the Act. Two provisos have been added in Section 19, which are as under: “Section 19 (1).………… …………………………… Provided that the Commission shall not entertain an information or a reference unless it is filed within three years from the date on which the cause of action has arisen: Provided further that an information or a reference may be entertained after the period specified in the first proviso if the Commission is satisfied that there had been sufficient cause for not filing the information or the reference within such period after recording its reasons for condoning such delay.” 15. The Commission has perused the reasons provided by the Informant that he did not approach the Commission earlier because as per his existing agreement he was continuing as a dealer of the OP till 22.01.2024. The other reason provided by the Informant was that he did not want to miss the opportunity to be appointed as the dealer of the OP as its products enjoyed greater market dominance than that of two wheelers manufactured by Suzuki. The Commission notes that the dealership agreement between the Informant and the OP was entered into the year 2017 after termination of his Case No. 16 of 2024 Page 5 of 6 dealership agreement with Suzuki. The Informant started encountering problems with the OP from the year 2018 itself as evidenced through letter dated 14.04.2018 addressed to the OP by the Informant. The Commission also notes that the dealership agreement between the parties was revised in the year 2021.