Competition act 2002

Querist : Anonymous (Querist) 07 September 2011 This query is : Resolved
Dear Experts,

Can a case be filed against Indian Ordnance Factory at Competition Commission of India(for violation of the provisions of Competition Act 2002) against Indian Ordnance Factory, regarding its practices/prices/quality etc. of products(firearms and ammunition) sold to arms license holders who are issued arms licenses as regulated by Arms Act 1959? (as per explanation done in one of the threads at this website (http://www.lawyersclubindia.com/forum/RKBA-guaranteed-under-Articles-19-and-21-of-Constitution-36011.asp) arms are our fundamental right under Articles 19 and 21 of Constitution and Arms Act 1959 is a law to regulate this fundamental right.)

Or the case has to be filed against the Central Government(for violation of the provisions of Competition Act 2002) for allowing the monopoly of Indian Ordnance Factory in this sector? Please note that there is no other legal manufacturer of pistols/revolvers/rifles in India except Indian Ordnance Factory and hence no competition, resulting in subsequent misery to arms license holders.

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Raj Kumar Makkad (Expert) 07 September 2011
Government can make its policies to regulate various important and public utility services and commodities even though it may be a fundamental right of a citizen. Firearm nd ammunition is also one of those fields so you cannot challenge it without challenging the policy before HC or SC.

prabhakar singh (Expert) 07 September 2011
Expert : raj kumar makkad has rightly opined.

Querist : Anonymous (Querist) 07 September 2011
Thank you Raj Sir and Prabhakar Sir for your prompt replies. By the policy do to you mean the following policy available at http://mha.nic.in/pdfs/AaAMPolicy080410.pdf

Devajyoti Barman (Expert) 07 September 2011
The point for consideration is whether the acts in question does fulfill the requirement of 'abuse of dominant position' as provided for in the Act.
Moreover the Ordnance Factory is in something which is still not open to competition. Whether there is monopoly of a governmental organization by default of law there is not a question of applicability of Competition Act.

Querist : Anonymous (Querist) 08 September 2011
Thank you Devajyoti Sir for your contribution to this discussion. Yes I agree that monopoly of a governmental organization cannot be a ground for not applicability of law. As per my understanding the practices/prices/quality by Indian Ordnance Factory does fulfill the requirement of 'abuse of dominant position' as provided for in the Compitetion Act because of following reasons:

1) the prices of products sold by IOF are unreasonably and extremely high, beyond the reach of ordinary arms license holder. Similar products in international market can be purchased at the fraction of the cost(almost one tenth of the cost). Example: IOF is selling revolvers for around1 Lakh but similar or even better quality revolver can be purchased for around $200 in international market.

2) the quality of the products compared with foreign made products is poor, inconsistent which can also makes them unsafe and unreliable for the user of product. If IOF has to sell these products in international competitive market, no consumer will buy such products. Because of this IOF has no track record of selling these products in competitive markets like that in USA, Europe etc.

3) IOF has practically done no R&D and is selling products that are copies(with some useless cosmetic changes) of more than 100 year old designs made by foreign manufacturers around early 1900s. Hence consumers are not able to buy products of mordern designs. Because of this reason as well as since the quality of IOF arms is poor, inconsistent and unreliable, the security agencies responsible for guarding VIPs are not purchasing firearms made by IOF but purchase arms made by manufacturers in foreign countries.

4) the consumers have to wait for months before they are able to buy the product. There is waiting period of from 3 months to 2 years for its products. IOF is making no efforts to increase its production capacity so that there is no waiting period.

5) the consumers are not allowed to select the product from different samples or test fire the product before buying. They have to buy only the one that is allotted to them by the factory.

The products of IOF can be seen at http://ofbindia.nic.in/index.php?wh=Purchase&lang=en

Competition act 2002

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