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HindustanTimes Sat,19 Apr 2014

CCI dismisses case against AP Hire Purchase Association

PTI  New Delhi, February 08, 2013
First Published: 19:01 IST(8/2/2013) | Last Updated: 19:08 IST(8/2/2013)

Competition Commission of India has dismissed a complaint of alleged anti-competitive practices by Andhra Pradesh Hire Purchase Association, a large grouping of auto financiers.

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Allegations of cartelisation and abuse of dominant market positions were raised against the association and its 162 members.

"In view of the foregoing, the Commission is of the view that prima facie no contravention of provisions of(Competition Act) ... is made out in this matter and facts of the case do not raise any competition concern," CCI said in its order issued on Thursday.

According to the complaint, the members -- which controlled at least 60% of the auto finance market in the cities of Hyderabad and Secunderabad -- were charging high interest in violations of certain norms.

However, CCI said that the complainants had not brought on record anything to show that "there was an agreement among the auto finance entities to charge exorbitant rates of interest for providing automobile finance services".

"On the basis of the information, it cannot be said that the members of the association had engaged in an agreement in violation...of the Competition Act," CCI said.

"As regards abuse of dominance...the Commission finds that there was no concept of collective dominance in the Act, which is the case of informant," it added.

According to the complaint, the association and its members had created a "flimsy smoke screen by falsely describing their auto finance business as a Hire Purchase transaction".

It was also alleged that in case of seizure of the vehicle of the defaulter, the entities unilaterally calculated the outstanding amount due and the financiers goons proceeded to seize the vehicle from the loanee without a court order and without rendering a statement of account to the loanee.

Further, the entities allegedly sold the hypothecated vehicles without a court decree by adopting a uniform business practice of obtaining various blank signed documents including signed blank cheques from the loanee at the time of execution of the documents and disbursing the loan amount.

These documents were subsequently misused by the entities to sell the vehicle in the market, the complaint said.

The complaint was filed by N Sanjeev Rao and Fatima Tahir.

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