Competition Appellate Tribunal Dissuades Litigants From Resorting To “Forum Shopping”

Posted on September 17, 2020

Authored by Preethika Nannapaneni*

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What is ‘Forum Shopping’?

In lay-man terms, forum shopping is an act of “choosing” (amongst the possible options) which court to file your case before; to get a favourable outcome. While the Indian legal statutes do not specifically address ‘forum shopping’, it is a settled judicial principle that the litigants are to file their matters before the “relevant authorities”. The Indian law, across various statutes, lays down specifically who these relevant authorities are and defines the scope of jurisdiction for each court. However, owing to the various issues that might come up in a particular case, the jurisdiction may tend to overlap or go beyond one court. Litigants taking an advantage of this overlap for desired adjudication in some cases constitutes “forum shopping”. The Apex Court in M/s Chetak Construction Ltd. v. Om Prakash & Ors. held that “A litigant cannot be permitted choice ‘of the ‘forum’ and every attempt at “forum shopping” must be crushed with a heavy hand”[1].

For anti-trust claims, there have been tussles where litigants approach the High Court instead of the Competition Commission of India (“CCI”) or the appellate tribunal, i.e., NCLAT. In this article, the author would be analyzing a recent judgment passed by the (Competition) Appellate Tribunal, NCLAT: Maj Pankaj Raj vs Secretary[2] on 29th May 2020 wherein the competition appellant tribunal discusses an example of forum shopping and dismisses the case without going into its merits for being barred by limitation. 

Factual Scenario

The applicants in the present case (franchisees of NIIT) raised competition concerns against NIIT limited for abusing its dominant position in the market by involving in anti-competitive agreements, differential pricing, reducing shareholding and poaching clients etc., before the competition commission. CCI held that there were a lot of competitors in the Indian market offering the same courses in the computer education sector and that all these acts committed were in lieu of them operating in a competitive environment and were not arbitrary in nature. Accordingly, no abuse of dominant position was established in the present case and the case was dismissed.

Instead of filing an appeal before the NCLAT, which is a specialized forum for competition related cases, the applicants filed a writ petition before the Hon’ble High Court of Telangana. The court, via an order, directed the applicants to file an appeal before the NCLAT as prescribed under the Competition Act, 2002 (“the Act”). Dissatisfied, the applicants then filed writ appeals before the division bench of the Hon’ble High Court which was also dismissed with the observation that the discretion exercised by the learned Single Judge by relegating the applicants to the statutory appellate jurisdiction was not unfounded on fundamental principles of law. Thus, the Hon’ble High Court declined to interfere with the order passed concerning the writ jurisdiction by the Hon’ble High Court. Not being able to succeed anywhere else, the informants resorted to filing an appeal before the NCLAT. However, all of this led to a delay in filing of 708 days.  

Submissions by Applicants:

The applicants argued that the Act lays down that an appeal has to be filed within 60 days of the order being passed; which is extendable if there was a “sufficient cause” for this delay. They justified this delay on the basis of time spent in litigation before the Hon’ble High Court. The reason they gave for not following the prescribed appeal mechanism was because they claimed the judgment passed by the commission to be non-est and against the principles of natural justice and that it was obtained fraudulently.[3]

NCLAT’s Final Decision

The question that arose was whether this was “sufficient cause” to prevent the informants from filing an appeal as prescribed. The applicants sought relief under the Limitation Act, 1963 to justify the delay of 708 days. However, NCLAT dismissed the submissions made by the applicants and held that any aggrieved person mustn’t be allowed to bypass a statutory remedy available in form of an appeal and invoke writ jurisdiction of the High Court. The purpose of prescribing a different period of limitation under the Act would be frustrated if the ratio of judgments involving the interpretation of the term ‘sufficient cause’ appearing in Section 5 of the Limitation Act, 1963 is applied for interpreting proviso to Section 53B (2) of the Act. Litigants must not be allowed to invoke writ jurisdiction of the high court under the pretext of the judgment passed being non est and against the principles of natural justice. If such happenings were encouraged it would result in a huge number of litigants to indulge in forum shopping. The appeal was therefore dismissed as being barred for limitation.[4]

The NCLAT deemed the conduct of the applicants to be disrespectful towards the judicial institutions as a whole. Adamantly finding a recourse elsewhere when there is a specialized institution to cater for exactly that, is uncalled for. The tone and language employed by the franchisees to question the decision-making process of the commission was found to be disrespectful and arrogant.

Scope of NCLAT’s Jurisdiction & Competition Law

A plain look at the preamble of the Act is enough to understand that it was established in order to curb anti-competitive practices and protect the interests of the consumers while making sure that trade practices enhancing the economy of the country run smoothly. The Act has prescribed a robust statutory mechanism and an appeal mechanism in order to specifically deal with cases prescribed under the Act. It is quasi-judicial body with powers to pass orders, render decisions and give directions envisaged by the legal framework.[5] The Act gives the commission the power to enquire into matters related to anti-competitive agreements, abuse of dominant position, regulate combinations and undertake competition advocacy.[6]  The Supreme Court in State Of Andhra Pradesh vs P.V. Hanumantha Rao (D) Thr. Lrs discusses the scope of jurisdiction of the High court under Article 226 which is invoked only when there is a manifest error in the judgment passed or there is a gross failure of justice.[7] As held in Telefonaktiebolaget Lm Ericsson vs Competition Commission Of India,the High Court does not sit as an appellate authority for all matters to correct errors, but it would interfere only if the authority acts beyond its jurisdiction.[8]  Keeping the above mentioned in mind, there is no question of NCLAT acting beyond its jurisdiction in the present case.

Conclusion

The author opines that the present case is a perfect example of how litigants overlook the prescribed statutes to suit their desired outcome. There was no question of whether the applicants had a “sufficient cause” that prevented them from filing an appeal as they chose to file their matter before the High Court and go against the very clearly prescribed appeal mechanism in the act.  Litigants going against law and indulging in forum shopping must be dissuaded. High courts usually do not interfere in these matters unless there is a fundamental question of law being discussed. However, not every case of choosing how to proceed with your litigation constitutes forum shopping. There is no definite answer for what constitutes or makes you liable for the same. However, with time, the courts with various judgments have given some sort of bracket to define what it is. The Apex Court in Union of India & Ors. v. Cipla Ltd. & Ors[9] discussed the concept of forum shopping in detail and also listed out various scenarios that could be indicative of the same. Some of them are mentioned below:

  1. Moving to a different court for a same relief in order to get the desired outcome.[10]
  2. Intentionally creating a situation that causes the litigant to forum shop.[11]
  3. Choosing one court over the other because of the views held by that court in a previous judgment that is in contrast with the view of the other court.[12]
  4. Continuously filing bail applications till the desired outcome is obtained.[13]
  5. Making false allegations against conflict of interest with the judge in order to either change the judge or the court.[14]

One thing that remains unanswered is whether the disrespect shown by the appellants towards the court was due to lack of proper legal representation. It is inherent human tendency to look for an option that favours your desired outcome. However, to go beyond what is very carefully laid down in the statutes and the mechanisms set in place to further justice, is a clear disrespect to the law, and an abuse thereof and must be frowned upon.


*Preethika Nannapaneni completed her B.B.A. LL.B (Hons) degree from Jindal Global Law School and is currently working as a Legal Trainee at Sapphire & Sage Law Offices.

[1] Chetak Construction Ltd. vs. Om Prakash and Ors. (20.04.1998 – SC) : MANU/SC/0294/1998

[2] Maj Pankaj Raj vs Secretary, Competition Commission of India and Ors. (Competition Appeal (AT) No 01/2020) of 29 May 2020

[3] Reference was made to involvement of Mr. Vinod Dhall in the affairs of the firm ‘Advocates & Solicitors’ appearing for one of the Respondents before the Commission to show that the decision of the Commission was engineered through the intervention of Mr. Vinod Dhall who earlier served as the Chairperson of the Commission. Obviously, this was done to demonstrate that decision making process of the Commission was obliquely influenced.

[4] Supra

[5] Supra

[6]https://www.cci.gov.in/sites/default/files/presentation_document/5ahmed_20sep04_20080410185941.pdf?download=1. Accessed 17 Sept 2020.

[7]  State of Andhra Pradesh v/s PV Hanmantha Rao (Supreme Court of India) of 14th October 2003

[8] Ericcson v/s Competition Comission of India (High Court of Delhi)

[9] Union of India & Ors. v. Cipla Ltd. & Ors (Supreme Court of India) of 21st October 2016

[10] Rajiv Bhatia v. Govt. of NCT of Delhi; (1999)8 SCC 525

[11] World Tanker Carrier Corporation v. SNP Shipping Services Pvt. Ltd. & Ors.; (1998)5 SCC 310

[12] Ambica Industries v. Commissioner of Central Excise, (2007) 6 SCC 769

[13] Jagmohan Bahl and Another v. State (NCT of Delhi) and Anr., 2014) 16 SCC 501

[14] Supreme Court Advocates on Record Association v. UOI (Recusal Matter), (2016) 5 SCC 808

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