Jan 13, 2023

NCLAT Dismisses Appeal Filed by Sun Electronics Pvt. Ltd. Against Electek Solutions Pvt Ltd & Others

On August 29, 2022, the National Company Law Appellate Tribunal (‘NCLAT’) dismissed the appeal filed by Sun Electronics Pvt. Ltd. (‘Informant/Appellant’) against the CCI Order dated April 22, 2019, in Case No. 2 of 2019, where the CCI had concluded that no case of contravention of the provisions of Section 3 or Section 4 of Competition Act was made out.[1]

By way of background, the Informant on May 6, 2017, issued a work order to Electek Solutions Pvt. Ltd. (‘Electek Solutions/Respondent’) through purchase order No. 4500015629 amounting to ₹66,31,363, for installation and commission of home automation solution. The Informant had arrayed M/s Electek Solutions Pvt Ltd, Miantic AV Distribution Pvt Ltd, M/s RTI India Pvt Ltd and one Remote Technologies Incorporate, Minnesota in the United States (collectively, ‘OPs/Respondents‘). before the CCI and had alleged contravention of provisions under Section 3 and 4 of the Competition Act against the OPs. It was alleged in the information application that even after receipt of the payment as per work order, installation, programming and commissioning of the project was not done within the stipulated time. Instead, Electek Solutions started demanding that the Informant should purchase additional equipment, otherwise Electek Solutions would not be able to install or commission the project.

The NCLAT on perusal of the facts present in its impugned order, opined that prima facie it appears that it was a consumers’ dispute without application of provisions contained either in Section 3 or Section 4 of the Competition Act. The CCI, therefore, has rightly observed that Informant/Appellant itself had admitted in letter dated August 23, 2018, sent to Electek Solutions with the subject “Deficiency in services and incomplete work as per the order No.4500015629 dated 06.105.2017”.

Besides this, it has been noticed by the CCI that there were number of players providing Smart Home Solutions in India and in such a situation there cannot be an element of dominance in the relevant market. So far as argument advanced by the Appellant relating to the Respondents belonging to a “group” under Explanation (c) of Section 4 or Explanation relating to “Group” in Section 5 of the Competition Act, the NCLAT noted that the Appellant has not brought on record any material to show as to how either of the Respondents (i) exercised twenty six percent of the voting rights in the other enterprise; (ii) had the ability to appoint more than fifty percent of the members of the Board of Directors; or (iii) control the management of the other enterprise as per  Explanation (b) of Section 5 of the Competition Act.

Accordingly, the appeal was dismissed.


[1] Competition Appeal (AT) No.23 of 2019.




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