Indian Railways and IRCTC are not guilty of abuse of dominance but service charges on e-ticking ought to be done away

Competition Commission of India: In its majority order, the competition
watchdog ruled that allegations of abuse of dominant position in the relevant
market of “transportation of passengers through railways across India including
the ancillary segments like ticketing, catering on board, platform facilities
etc. provided by Indian Railways” are misconceived and baseless. In the present
case various informants alleged inter
alia unfair, discriminatory and arbitrary practice by the Railway and IRCTC
in Passenger
Reservation System (PRS) by imposing service-charges on e-ticketing and not
refunding it on cancellation, by charging additionally on booking through
agents, by making the passengers pay gateway transactions charge, by charging
higher price on tatkal and premium
quota etc. The Commission observed that, it is not compulsory for passengers to
book tickets via internet; the option of manual PRS counters for booking. E-ticking
is an addition facility offered by IRCTC which is a value added service.  As a condition precedent to using its
services, IRCTC requires prospective customers to agree to  pay this service charge before registering
with IRCTC. Therefore, any customer wishing to avoid the payment of service
charges may not register himself with IRCTC, thereby, making it amply clear
that a customer does have the option to book tickets (through manual PRS
counters) without paying any service charges. The additional charge on booking
through agents may be avoided in the same manner. The Commission further
observed that service charge on e-tickets and agents’ ticket is not unfair inasmuch
as the same are realized to meet administrative costs and other logistic and
development costs incurred to the IRCTC and agents.

The Commission ruled that charge
on gateway transaction is not levied by the Railway but by the banks of the
passengers as per the RBI guidelines, thus is not abusive. CCI declared
non-refund of service charge justified for operational cost incurred by IRCTC. Tatkal
scheme and charges are not unfair as they are part of Railway budget approved
by the Parliament. Tatkal charge is found justified for compensating huge lose
incurred by the Railways.

The Commission amongst other
rejected the allegation of abuse by tying in compulsory provision of food in the
premium trains. The Commission also rejected the allegation of creating
monopoly of food courts at the large railway stations. Not allowing private
players providing meals through e-catering is justifiable action under the provisions
of the Railways Act, 1989.

The majority order of 4 out of
5 members of CCI opined that no case of contravention of the provisions of
section 4 of the Act is established against the Indian Railways and IRCTC. However,
the majority viewed that charging of service charge for the use of e-ticking
may affect the consumers’ interests, and efficiency and promotion of
technologically advanced e-ticketing there the concerned authority may do away
with service charges and other unnecessary restrictions on booking of e-tickets
which may not affect its revenues in any significant manner.

In his sole minority opinion, M.
S. Sahoo, Member, was of opinion that that Railways have imposed unfair price
in sale of tickets in electronic mode compared to that in brick-mortar mode
(manual PRS) , while the former mode is cheaper and conserves resources, and
thereby violated the provisions of section 4(2)(a)(ii) of the Competition Act,
2002. In his opinion the Railways and IRCTC have also restricted the use of
technology in rendering services relating to sale of passenger tickets to the
prejudice of customers, and thereby violated the provisions of section
4(2)(b)(ii) of the Act. [Sharad Kumar Jhunjunwala v. Union of India,
Ministry of Railways, decided on 10.08.2015]
Source: Legal news India

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