CCI Closes Information Against Hensel Electric, Finds No Prima Facie Contravention Of Competition Act

On 5 August, the Competition Commission of India (CCI) held that no prima facie case of contravention of Sections 3 or 4 of the Competition Act, 2002 (which prohibit anti competitive agreements and abuse of dominant position) was made out against Hensel Electric India Private Limited and closed the information filed against the company.

A Bench comprising Chairperson Ravneet Kaur with Members Sweta Kakkad and Deepak Anurag held that Hensel neither appeared to enjoy a dominant position in the relevant market nor had the distribution agreement imposed anti competitive restraints. They noted:

“... the Commission is of the view that no prima facie case of contravention of the provisions of Section 3 and/or Section 4 of the Act is made out against the OP.”

The information was filed by a distributor of Hensel, alleging that certain clauses in a distribution agreement executed in January 2025 amounted to anti competitive restraints under the Competition Act. The informant had been distributing Hensel's industrial grade cable junction boxes in Rajahmundry for 15 years.

The informant contended that although the agreement permitted distributors to determine resale prices, Hensel effectively controlled margins through discounts. It further alleged that the company bypassed the distributor by directly supplying products to a customer at a 48 per cent discount despite the distributor having quoted a 38 per cent discount. Further, that the transaction amounted to predatory pricing and abuse of dominant position, and it sought compensation for the losses allegedly suffered.

Examining the allegations, the Commission noted that the market for industrial grade cable junction boxes in India comprised several domestic and international players, including Polycab, Pyrotech and Havells. It found that no single player appeared to possess sufficient market power to dictate market trends. It held:

“Therefore, the Commission is of the view that the 'market of industrial grade cable junction boxes' in India appears to be competitive, featuring a mix of established international brands and specialized Indian manufacturers, with apparently no single entity holding enough influence to dictate market trends. Accordingly, the Commission observes that the OP neither seems to enjoy dominance nor position of strength in the relevant product segment identified by the Informant.”

With regard to the allegation of resale price maintenance, the Commission observed that although Clause 7.1 prohibited distributors from selling above the maximum retail price, Clause 20.3 expressly permitted them to determine their own resale prices and commercial terms. It also rejected the challenge to Clause 7.4, which prohibited the distributor from selling competing products. Observing that the informant was an exclusive distributor of Hensel, it observed:

“....the Commission is of the view that a manufacturer can generally require its exclusive distributor to not sell the products of competitors to encourage distributors to specialize in their brand in order to provide better marketing and support services. It is also common that an exclusive dealer is restricted by contract from selling competing brands or granted sole rights to sell a specific brand within a defined geographic territory.”

Accordingly, the CCI closed the information.