BY TIOL News Service

NEW DELHI, FEB 04, 2016: THE issue is: Whether the exclusive arrangement between Government of India and Air India with respect to all air travelling purposes under the Leave Travel Concession scheme amounts to anti-competitive practices. NO is the answer.

Facts of the case

The informant is an Individual. He was a consultant with different ministries to the Government of India. He filed complaint against Air India (OP 1), the Union of India and other airlines u/s 19(1)(a) of Act. The allegation was that Indian Government, through its policy directives/ office orders, force Government servants to avail the air travel services offered by Air India at a price which was much higher than those offered by its competitors in the market. The Government through its policy initiatives, ensure that OP 1 enjoys the benefits of having a captive customer base comprising of the government employees together with their dependants who undertake air travel under Leave Travel Concession ('LTC') Scheme, the government employees on official tour, and the private individuals traveling on government invitation. According to the Informant, support of the Union of India in the aforesaid manner had placed OP 1 in a dominant position, who engage itself in an unfair and discriminatory practice by charging a higher price for the tickets booked under LTC Scheme. The Informant further alleged that despite being conscious of the above said anti-competitive practices, other airlines remained silent because of the fear of a regulatory backlash from Union of India. It was alleged that compelling the government employees to avail the air travel services provided by OP 1 had been violation of the fundamental rights guaranteed under the Constitution of India.

Reasoning

Similar allegations had been examined by the Commission in the case of Travel Agents Association of India v. Balmer Lawries & Co. Ltd. & Anr., wherein the Commission held that the Government of India was the consumer of air ticketing services and a consumer is free to make a choice as far as selection of goods or services are concerned. Moreover, Ministries of Government of India are not an enterprise under the provisions of section 2(h) of the Act. Going by the same logic, the Commission in the present case held that Government of India is the consumer of air travel services as the tickets purchased under the LTC Scheme are funded by it. As a consumer of air travel services, it enjoys the liberty to exercise its choice even if such exercise of choice causes a favourable treatment for some Airline over the others.

Editor's Note: The reasoning of the Commission appears to be not very convincing and moreover with this order, there is one more addition after the IRCTC order to the list of orders when the Commission has ruled in favour of the Govt. The present practice of exclusive arrangement between Air India and the Govt of India under the Leave Travel Concession scheme certainly gives no option whatsoever to the Govt employees to choose any other airlines for their travel purposes.

(See 2016-TIOL-04-CCI-CACT)