Kiran Raj

The Supreme Court of India, Division Bench comprising Vikram Nath and Justice Prasanna B. Varale delivered its judgment dismissing the findings of the Competition Commission of India (CCI) against Schott Glass India Pvt. Ltd. The Court upheld the decision of the Competition Appellate Tribunal (COMPAT), which had previously set aside the CCI’s orders. Consequently, the penalty of ₹5.66 crore imposed on Schott Glass India Pvt. Ltd. was quashed, and the cease-and-desist directives were set aside.

The proceedings originated from an information filed by Kapoor Glass India Pvt. Ltd. on May 25, 2010, under Section 19 of the Competition Act, 2002. Kapoor Glass alleged that Schott Glass India Pvt. Ltd., then the primary domestic manufacturer of neutral USP-I borosilicate glass tubing, abused its dominant market position by offering exclusionary volume-based discounts, imposing discriminatory contractual terms, and refusing supplies on several occasions. Kapoor Glass also alleged that Schott India’s practices had the effect of foreclosing competition in the upstream market for borosilicate glass tubes and the downstream market for pharmaceutical containers such as ampoules, vials, cartridges, and syringes.

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Acting on the complaint, the CCI directed the Director General (DG) to conduct an investigation under Section 26(1) of the Act. The DG submitted a report on March 14, 2011, concluding that Schott India had contravened Section 4 of the Act by abusing its dominant position. The DG’s report stated that Schott India’s market share in the upstream market exceeded 60% during the investigation period, and the combined effect of its volume-based discounts, functional rebates, and exclusive long-term supply agreements resulted in foreclosure of competition.

On March 29, 2012, the CCI, by a majority order, imposed a penalty equal to 4% of Schott India’s average turnover over three years, amounting to ₹5.66 crore. It also directed Schott India to cease engaging in discriminatory practices immediately. The Economic Member of the Commission dissented, noting that the discount policies were commercially justified and did not result in exclusionary effects.

Schott India filed Appeal No. 91 of 2012 before COMPAT, challenging the CCI’s order. Kapoor Glass filed Appeal No. 92 of 2012, seeking broader relief, including an injunction against Schott India’s alleged refusal to supply. On April 2, 2014, COMPAT allowed Schott India’s appeal, quashed the penalty, and dismissed Kapoor Glass’s appeal with costs of ₹1,00,000, citing lack of concrete evidence and procedural lapses in the CCI’s investigation.

Submissions of the Parties

• Competition Commission of India (CCI):

Represented by Senior Counsel Mr. Amit Sibal, CCI contended that Schott India’s dominance in the upstream market was undisputed, with a market share exceeding 60% and control over key manufacturing capacities. It argued that Schott’s target rebate schemes penalized converters who failed to meet purchase targets, effectively forcing them to remain loyal. It further argued that the functional rebates tied to the use of Schott’s trademark and refusal to supply amounted to violations under Section 4(2)(a), (b), and (d) of the Act. CCI asserted that Schott’s long-term supply agreements created artificial entry barriers and foreclosed competition.

• Kapoor Glass India Pvt. Ltd.:

Senior Counsel Mr. A.N. Haksar argued that Kapoor Glass had faced exclusionary practices since 2000, even before the Competition Act came into force. He submitted that Schott India’s refusal to supply forced Kapoor Glass to rely on inferior imported tubes, affecting its competitiveness in the downstream market. He further alleged that Schott India created an artificial scarcity of tubes to favor Schott Kaisha Pvt. Ltd., a joint venture partially owned by its parent company, which resulted in a competitive disadvantage for independent converters.

• Schott Glass India Pvt. Ltd.:

Represented by Senior Counsel Mr. Percival Billimoria, Schott India argued that its rebate structures were transparent, based solely on volumes purchased, and uniformly applied to all converters. It submitted that the allegations of tying arrangements were unfounded, as converters were free to purchase from other suppliers. Schott India stated that its rebate schemes were designed to achieve economies of scale and improve manufacturing efficiency, which ultimately benefited end consumers. It further argued that the DG’s findings were based on untested statements from rival converters, and no cross-examination was permitted by CCI, violating the principles of natural justice.

The Supreme Court examined the issues raised in the appeals and made the following key observations:

• "The Competition Act prohibits the abuse of dominance, not dominance itself. Market dominance, if achieved through legitimate business practices, does not attract regulatory sanction unless accompanied by abusive conduct."

• On the volume-based rebate structures, the Court recorded: "Differential outcomes in discounts are a function of purchase volumes and do not constitute discrimination when offered uniformly to all customers based on objective criteria."

• The Court noted that the functional rebates tied to the use of Schott’s trademark were not exclusionary. "Such rebates were available to any converter willing to meet the quality and traceability obligations required under the trademark licensing arrangement."

• Addressing the refusal-to-supply allegations, the Court observed: "There is no documentary evidence to establish that any converter, including Kapoor Glass, who met the same purchase volumes as Schott Kaisha, was refused equivalent rebates or supply."

• Regarding the denial of cross-examination during the CCI proceedings, the Court held: "The refusal to allow cross-examination of key witnesses undermines procedural fairness and materially weakens the evidentiary value of statements relied upon by CCI."

• The Court also noted the lack of evidence demonstrating an appreciable adverse effect on competition. "No converter exited the market during the relevant period; imports increased; and independent converters recorded positive financial results. These factors do not support a finding of foreclosure or competitive harm."

• On the issue of tying and bundling, the Court stated: "The aggregation of purchases for rebate calculation does not constitute coercive tying. Converters remained free to purchase any quantity of either product without compulsion."

• Finally, the Court cited the importance of an effects-based analysis under Section 4 of the Act. "The statute requires a demonstrable adverse effect on competition before a finding of abuse can be sustained. Such analysis was absent in the CCI’s order."

In conclusion, the Supreme Court dismissed Civil Appeal No. 5843 of 2014 (Competition Commission of India v. Schott Glass India Pvt. Ltd.) and Civil Appeal No. 9998 of 2014 (Kapoor Glass India Pvt. Ltd. v. Schott Glass India Pvt. Ltd.). The Court upheld the order of the Competition Appellate Tribunal dated April 2, 2014.

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Having regard to the wholly unsubstantiated nature of the allegations and the prolonged litigation they have occasioned, the Court directed Kapoor Glass India Pvt. Ltd. to pay costs of ₹5,00,000 (Rupees five lakhs only) to Schott Glass India Pvt. Ltd. within eight weeks from the date of the judgment.

All pending applications, if any, were also disposed of by the Court.

Advocates Representing the Parties:

For the Petitioners: Mr. A. N. Haksar (Senior Advocate), Mr. Saurabh S. Sinha (Advocate), Ms. Chitra Y. Parande (Advocate), Mr. Gautam Prabhakar (Advocate), Mr. Mrigank Prabhakar (Advocate-on-Record), Mr. Amit Sibal (Senior Advocate), Mr. Arjun Krishnan (Advocate-on-Record), Mr. Anand S. Pathak (Advocate), Mr. Shashank Gautam (Advocate), Ms. Sreemoyee Deb (Advocate), Ms. Anubhuti Mishra (Advocate), Mr. Soham Goswami (Advocate), Ms. Nandini Sharma (Advocate), Ms. Anisha Bothra (Advocate), Ms. Aashana Manocha (Advocate), Mr. Abhijeet Singh (Advocate), Mr. Saksham Dhingra (Advocate), Mr. Rishabh Sharma (Advocate)

For the Respondents: Mr. Percival Billimoria (Senior Advocate), Mr. Mahesh Agarwal (Advocate), Mr. Rahul Goel (Advocate), Ms. Anu Monga (Advocate), Mr. Rishi Agrawala (Advocate), Mr. Ankur Saigal (Advocate), Mr. Victor Das (Advocate), Mr. Himanshu Saraswat (Advocate), Mr. Yash Jain (Advocate), Ms. Aditi Sharma (Advocate), Ms. Kriti Khatri (Advocate), Ms. Rachita Sood (Advocate), Mr. Tushar Bathija (Advocate), Mr. E. C. Agrawala (Advocate-on-Record), Mr. Arjun Krishnan (Advocate-on-Record), Mr. A. N. Haksar (Senior Advocate), Mr. Saurabh Sinha (Advocate), Ms. Chitra Y. Parande (Advocate), Mr. Gautam Prabhakar (Advocate), Mr. Mrigank Prabhakar (Advocate-on-Record)

Case Title: Competition Commission of India vs. Schott Glass India Pvt. Ltd. & Anr.

Neutral Citation: 2025 INSC 668

Case Number: Civil Appeal No. 5843 of 2014 & Civil Appeal No. 9998 of 2014

Bench: Justice Vikram Nath and Justice Prasanna B. Varale

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