Competition Commission of India finds no violation of Sections 3(4) and 4 of the Competition Act in warranty dispute involving use of non-authorised engine oil
In a recent order dated September 9, 2026, the Competition Commission of India (CCI), New Delhi bench, dismissed the complaint filed by Mrs. Bharti Sharma against Mahindra & Mahindra Ltd. and its authorised dealer Sri Durga Automobiles. The Informant had alleged that the automobile manufacturer and its authorised dealer imposed anti-competitive conditions on warranty coverage by making it contingent upon the use of Mahindra-approved consumables, specifically engine oil. The complaint raised concerns under Sections 3(4) and 4 of the Competition Act, 2002, which deal with anti-competitive agreements and abuse of dominant position respectively.
Mrs. Sharma, the owner of a Mahindra XUV700 vehicle, had purchased an extended warranty and maintained her vehicle through authorised service centres. She claimed that on two occasions she supplied Pakelo Krypton XT LA-V SAE 5W-30 engine oil—which conformed to technical specifications—and that this oil was accepted by the authorised service centre without objection. However, when a turbocharger defect arose, the authorised dealer refused warranty coverage for the repair, attributing the issue to the use of externally sourced engine oil.
The Informant argued that this refusal effectively forced consumers to purchase lubricants exclusively from Mahindra’s network, thereby restricting competition and consumer choice. She sought directions from the CCI to investigate and restrain Mahindra & Mahindra from imposing such warranty conditions.
After thorough examination, the CCI noted that the alleged agreement concerning warranty terms was between an enterprise and an end consumer. The proviso to Section 3(4) exempts such agreements from its scope, thereby excluding the Informant’s grievance from the purview of anti-competitive vertical restraints. Regarding the abuse of dominance claim under Section 4, the Commission observed the Informant failed to provide material evidence related to market dominance or abuse thereof. The dispute was characterized as an individual contractual disagreement rather than a competition law issue.
The Commission further acknowledged that automobile manufacturers can prescribe technical specifications and maintenance conditions to ensure vehicle safety, performance, and reliability. Such warranty conditions are valid if reasonably connected to these objectives and are properly disclosed. In this case, no evidence indicated that the warranty conditions were undisclosed, unreasonable, or unrelated to vehicle functioning.
Consequently, the CCI held that no prima facie case of contravention under Sections 3(4) or 4 of the Competition Act was established and ordered closure of the information under Section 26(2) of the Act.
This decision clarifies that warranty conditions requiring use of specific consumables do not automatically amount to anti-competitive conduct if they are justified on technical grounds and form part of the contractual agreement with the consumer. It underscores the importance of evidence relating to market dominance and anti-competitive effects for invoking competition law provisions.
Bottom Line:
Competition Law - Complaint alleging anti-competitive practices and abuse of dominance by automobile manufacturer and its authorised dealer - No contravention of Sections 3(4) and 4 of the Competition Act, 2002, found as the alleged conduct pertains to an agreement between an enterprise and an end consumer, which falls outside the purview of Section 3(4) of the Act.
Statutory provision(s):
Competition Act, 2002 Sections 3(4), 4, 19(1)(a), 26(2), 27
Mrs. Bharti Sharma v. Mahindra & Mahindra Ltd., (CCI)(New Delhi) : Law Finder Doc Id # 2976020
