BY TIOL News Service

NEW DELHI, FEB 01, 2016: THE issue is: Whether continuation of an interim order is justified merely because it ensure continuous business operations for a person who can be compensated for any loss, in case such person wins the case on merits. NO is the answer.

Facts of the case

The appellant is a Company, engaged in offering business value in the areas of electronic payments and financial transaction processing solutions & services. The respondents No. 2 to 4 were supplying software for electronic payment solutions (ATMs) to several banks in India through a license agreement. The banks were getting the customization of the said software done on their own by engaging the appellant herein on contractual basis with the consent of the respondents No.2 to 4. In 2011, the respondents No.2 to 4 objected to customization by the appellant and informed the banks that the professional services be taken either through the respondents No.2 to 4 or through their authorized third party provider excluding the appellant. Aggrieved appellant filed complaint before CCI. The CCI considering that no inconvenience would be caused to the respondents No.2 to 4 in case the banks continue the customization services with the appellant and accordingly passed interim order restrained the respondents No.2 to 4 from implementing the said condition. Orders were passed for investigation by DG in the matter. After considering investigation report, facts and circumstances, on merits the CCI held that no contravention of Section 3 had been established. Aggrieved appellant filed writ petition in the High Court on the ground that CCI passed order against the findings noted in the investigation report. In the writ petition, High Court decided to discontinue the interim order passed. Aggrieved appellant filed present appeal before the Division Bench of the High Court.

Reasoning

1. The court noted that since the main petition was pending, the scope of the appeal be limited to the extent as to whether it was necessary to continue the interim order till the disposal of the writ petition on merits of case. The law is well settled on the point that on the appeals before the Division Bench it is impermissible to reassess the material and seek to reach a conclusion from the one reached by the Single Bench except where the exercise of discretion by the Single Bench has been shown to have been exercised arbitrarily or perversely or where the settled principles of law regulating grant or refusal of interim protection have been ignored.

2. While passing order that the alleged dominance of the respondents No.2 to 4 in the relevant market had not been established, the CCI had taken into consideration the entire factual matrix of the case and assigned detailed reasons. In the light of the said findings recorded by CCI which is a specialized body, the Single Judge thought it fit that the interim order which enables the banks to take customization and integration services from the appellant qua the software owned by the respondents No.2 to 4 herein could not be continued any longer and accordingly the order under appeal came to be passed. It may be true that the order under appeal would result in financial loss to the appellant, however, it could be compensated in monetary terms in case he succeeds in the writ petition on establishing that there was a contravention of the provisions of the Act.

3. The mere fact that the interim relief ensured continuous business operations for the appellant was not a valid ground for continuing the interim order. The Court did not agree with the plea of the appellant that irreparable damage would be caused in the absence of the interim order.

(See 2016-TIOL-181-HC-DEL-CACT)