Why should punitive action not be taken for violation of orders: CCI to chess body

Chennai, Dec 13 (IANS): Convinced that the All India Chess Federation (AICF) has deliberately not complied with its July 2018 order, the Competition Commission of India (CCI) has ordered the issuance of a notice to the chess body as to why punitive action should not be taken under Section 42 of the Competition Act, said a chess player.

"The CCI has ordered issuance of notice to AICF in a contempt petition filed by three of us," Karun Duggal told IANS on Thursday.

The three chess players who filed the petition in the CCI against the AICF are Duggal, Gurpreet Pal Singh and Devendra Bajpai.

As per Section 42 of Competition Act, a person failing to comply with the orders of the Commission can be punished with a fine of up to Rs.1 lakh per day during which such non-compliance occurs, subject to a maximum of Rs.10 crore.

Further, if a person fails to comply with the order or fails to pay the fine he shall be punished with imprisonment for a term which may extend to three years or with a fine which may extend to Rs.25 crore or both.

On July 12, 2018, the CCI held that the undertaking prescribed by the AICF for players regarding non-participation in events not authorised by it amounts to restraints that are in the nature of exclusive distribution and refusal to deal as defined in Section 3(f) and 3(4)(d) of the Competition Act 2002.

The CCI said the non-compliance of such undertaking will result in banning of players and removal of their Elo rating, create entry barriers, foreclose competition and restrict opportunities available to chess players.

"The said restrictions are likely to have appreciable adverse effect on competition in terms of factors contained in Section 19 (3) of the Act. The Commission is thus, of the view that AICF has contravened Sections 3(4)(c) and 3(4)(d) of the Act read with Section 3(1) of the Act," the order said.

The CCI also imposed a penalty of Rs.692,350 on the AICF for infringing the provisions of Section 4 of the Act and directed the chess body to deposit the penalty within 60 days and file a compliance report.

The complaint against the AICF was filed by four chess players viz Hemant Sharma, Devendra Bajpai, Gurpreet Pal Singh and Karun Duggal alleging contravention of the provisions of Sections 3 and 4 of the Act.

The players had complained to the CCI that their Elo rating points were removed by the AICF without giving any prior notice due to their participation in the chess tournament sponsored by the Chess Association of India (CAI) in 2010 which was not authorised by the AICF.

As per the CCI order, the complainants alleged that the AICF also removed the ratings of 151 chess players on that ground.

According to the CCI order, the investigation has revealed that there were other instances of the AICF restricting players who had participated in events not recognised by the AICF.

In its order the CCI directed the AICF to lay down the process and parameters governing authorisation/sanctioning of chess tournaments. In doing so, the AICF will ensure that they are necessary to serve the interest of the sport and shall be applied in a fair, transparent and equitable manner.

Besides, the AICF shall take all possible measure(s) to ensure that competition is not impeded while preserving the objective of the development of chess in the country.

According to the order, the AICF shall establish the prejudice caused by a chess player before taking any disciplinary action against him. Needless to say, the disciplinary actions taken shall be proportional, fair and transparent.

The disciplinary actions against the four players and other similar players shall be reviewed by the AICF on these lines, the CCI ordered.

On October 4, 2018, the AICF got a stay order from the National Company Law Appellate Tribunal (NCLAT) against the Rs. 692,350 penalty imposed by the CCI vide its July 2018 order.

The CCI in its latest order on the petition filed by the three chess players said there is no stay on directions it had issued to the AICF vide its July 2018 order.

"AICF clearly knew about the requirement of complying with the specific directions of the Commission and that no stay has been granted by Hon'ble NCLAT with respect to the said directions. Thus the onus was on AICF to comply with the aforesaid directions and file a compliance report. However, till date, AICF has not filed a compliance report to this effect," the CCI said in its order of 30.11.2018.

"Thus, the Commission is convinced that AICF deserved to be subjected to proceedings under Section 42 of the Act," the CCI said and ordered notice to show cause to the AICF as to why action should not be taken under the said section.