Oct 31, 2021

CCI Dismisses Allegations against Orbit Aviation Private Limited for Enforcing Non-Compete Obligations

Mr. Anand Moudgil (‘Informant’) had filed an Information under Section 19(1)(a) of the Act alleging a contravention of Sections 3 and 4 by Orbit Aviation Private Limited (‘Orbit’).[1]

The Informant was the proprietor of M/s Hermes International and was engaged in the business of running buses between the IGI Airport, Delhi and certain cities of Punjab since November 30, 2016. During this operation, the Informant alleged started receiving threats from M/s Indo-Canadian Transport Company (‘ICTC’), a sister concern of Orbit. The Informant alleged that Orbit filed a complaint before the State Transport Commissioner, Punjab (‘STC’) and Delhi Airport Parking Services (‘DAPS’) stating that the Informant’s permits were obtained falsely.

Taking cognizance of complaint, STC issued a show cause notice and suspended the permits temporarily exparte vide its order dated December 8, 2016. Due to the temporary suspension of permits, the Informant was forced to halt the operations. The Informant challenged this order before the Hon’ble High Court of Punjab and Haryana, which decided that if any adverse order is issued against the Informant by STC, it will be kept in abeyance for a period of 30 days to allow the Informant to file an appeal. On December 26, 2016, the STC issued a final cancellation of permits. Upon another challenge to the final STC order, the Hon’ble High Court of Punjab and Haryana stayed the suspension.

Later on February 2, 2017, in the background of continued alleged threats, the Informant sold the buses to Orbit under a sale agreement. The Informant alleged that it was forced to accept a non-compete clause by Orbit under the sale agreement that restricted it from re-entering into business of running of buses between IGI Airport, Delhi and certain cities of Punjab. In 2019, when the Informant obtained permits for All India Tourist vehicles and was going to commerce the operation of buses between Punjab and IGI Airport, Delhi, Orbit sought and obtained an injunction from the Ld. Trial Court, Ludhiana restraining the Informant from operating buses on that route based on the non-compete clause. This was upheld by the Appellate Court of the Additional District Judge also.

Before CCI, the Informant alleged that the non-compete clause violates Sections 3 and 4 of the Act and sought interim relief under Section 33 to restrain the execution/ operation of the non-compete clause. In its assessment, CCI found that the Informant did not place any evidence before CCI to demonstrate any entry barrier. CCI found that the Informant was able to re-enter into the same business without any difficulty. Admittedly, the Informant obtained the registrations and permissions from the STC twice within a short span of time. Regarding the purported non-compete clause, CCI believed that it is the Informant only, who appears to have been restricted to enter the said market and this clause does not create entry barriers for any other person or enterprise to enter a similar business.

Based on these reasons, CCI was of the opinion that in the absence of any foreclosure or entry barrier in the market due to the alleged non-compete clause, the Informant had failed to make out a case of contravention of the Act. Therefore, it decided to dismiss the matter under Section 26(2) of the Act.


[1] Mr. Anand Moudgil v. Orbit Aviation Private Limited, Case No. 27 of 2021, Order dated October 12, 2021.




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