Flipkart’s Competition Case Sent Back to NCLAT by Supreme Court for Fresh Review

The Supreme Court of India on Tuesday set aside a 2020 order of the National Company Law Appellate Tribunal that had called for a competition law investigation into Flipkart, as per news report. The matter has been sent back to the appellate body for reconsideration. 

The court said the tribunal must examine the case afresh and decide whether a prima facie case exists. It added that all legal and factual questions remain open and have not been settled by the Supreme Court. 

Focus on Basis of Earlier Findings 

The ruling followed arguments that the NCLAT’s earlier decision relied on findings from income tax proceedings. Flipkart submitted that those findings were later overturned by the Income Tax Appellate Tribunal (ITAT). 

The Supreme Court noted that since the tax assessment no longer survives, the appellate tribunal must reassess the competition case without drawing support from those observations. 

Directions to Reassess Independently 

A Bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul Pancholi said the NCLAT must independently assess whether further examination by the Competition Commission of India is required. 

The court said the tribunal should follow established principles laid down in earlier competition law rulings while considering the matter again. 

Flipkart’s Submissions  

Senior advocate Abhishek Manu Singhvi, appearing for Flipkart Internet, argued that neither market dominance nor abuse of dominance had been established against the company. He also pointed out that the CCI had earlier found Flipkart was not dominant in the relevant market. 

According to the regulator’s 2018 order, neither Flipkart nor Amazon was considered dominant in India’s online marketplace segment. 

Stand of the Vendors’ Association 

The All India Online Vendors’ Association, which filed the original complaint, argued that while the ITAT overturned the tax assessment on legal grounds, factual observations on the business model were not fully disturbed. 

AIOVA represents more than 2,000 online sellers and has alleged that preferential arrangements with large sellers on e-commerce platforms harm smaller vendors. 

Background to the Dispute 

The case dates back to March 2020, when the NCLAT set aside a CCI order that had closed AIOVA’s complaint. The tribunal had then directed a probe under Section 4 of the Competition Act, citing concerns around abuse of dominance and predatory pricing. 

Read More: IPO Bound Flipkart Appoints 2 Senior Executives! 

Conclusion 

Following the Supreme Court’s order, the NCLAT will now re-examine the complaint without relying on overturned income tax findings and decide whether further action under competition law is required. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.