AL GHAZI TRACTORS LIMITED Versus COMPETITION COMMISSION OF PAKISTAN

JUSTICE (RETD.) MUHAMMAD JUNAID GHAFFAR, (CHAIRPERSON).--- Through this Appeal, the Appellant has impugned order dated 13.05.2025, passed by two Members of the Competition Commission of Pakistan ("Commission") , through which a cumulative penalty of Rs. 40 million has been imposed under section 10(1) read with Section 10 (2) (b) and (c) of the Competition Act, 2010 ("Act") with further directions to seize and desist from carrying out deceptive marketing practices and to file compliance report thereof.

2. Heard learned counsel for the Appellant as well as the Commission and perused the record.

3. Though the Appellant's counsel has made substantive arguments as to the very merits of the case, however, after briefly hearing the counsel and on perusal of the record, it appears to us that the impugned order could not be sustained and must be remanded to the Commission. Record reflects that a show cause notice was issued alleging that the Appellant has made a high sounded claim i.e. "with 30% extra diesel saving as compared to other Tractors", which amounts to misleading and deceptive marketing. The Appellant's case is that such claim was premised on a Report / exercise carried out by the Agriculture Mechanization and Research Institute ("AMRI") , Multan, Government of Punjab, whereas it is the case of the Commission that when (AMRI) was approached via email, they stated that they have not issued any document or certificate to the Appellant which shows that the Products are 30% fuel efficient as compared to other Tractors. During hearing we have perused the original record of the Commission including the said email, perusal whereof reflects that the said email was not a proper response; firstly, to the claim of the Appellant; and secondly as to the query of the Commission regarding veracity of the report in question. It would be advantageous to refer to the email of AMRI 08.02.2022 which reads as under:-

"Dear Mr. Riaz Hussain,

In response to your email dated 07.08.2022, your worthy office is informed that the institute has not issued any document or certificate to Al-Ghazi Tractor Ltd which shows / indicates that New Holland Tractors are 30% fuel efficient as compared to the other make of Tractors.

In response to the DGA (F) office letter No. 5755-56/Mech. Dated 16.07.2022, a team of field officers was nominated for training of Master trainers on energy conservation by Tractor operations organized by the Field Team of Al-Ghazi Tractors Ltd. (copy of the letter enclosed, in pdf). The purpose of this training was purely to get the expertise for advisory services only. The training was provided to the Engineers at a farmer field by using the available resources of the farmers i.e., Secondhand tractors and implements with limited field size for training. The main purpose of this training was familiarized and educate the participants regarding effective and efficient use of the Tractor with different agricultural implements. The internship students of AI-Ghazi Tractors Ltd and AMRI Multan also participated in the training session for learning purposes. The secondhand used tractors and implements were hired from the different farmers. The test procedure and protocols of the training were designed by the Trainers of Al-Ghazi Tractor Ltd. After completion of the training assignment, a report was prepared (copy enclosed) and submitted to the higher office for compliance. The Institute has not issued any accredited certificate / document in favor of Al-Ghazi Tractor Ltd for claiming and advertisement purposes. Further, it is stated that the report is without any signature of the field and AMRI Engineers and has no authenticity. The institute has already directed Al-Ghazi Tractor Ltd to refrain from such activity in further (copy of the letter enclosed, in pdf) .

Regards,"

4. From perusal of aforesaid response, it reflects that the said email refers to an altogether different situation regarding some training of Master Trainers on energy conservation and does not say that (AMRI) has not issued the said report; or no such exercise was carried out for comparison purpose. The said Report is a matter of record before us wherein 4 different Annexures show the comparison as claimed by the Appellant. It is nobody's case that the said Report is fake. In our considered view, the proceedings initiated by the Commission under Section 30 of the Act by way of a show-cause notice and showing its intention to impose penalty could not have been finalized without a proper notice to AMRI asking them to file detailed reply with specific response to the claim of the Appellant specially in respect of Annexures 1 to 4 of said report available at pages 111 onwards of the paper book. The said Report clearly mentions the name of the Engineers and responsible officers of AMRI; hence, it was incumbent upon the Commission to take proper input from AMRI as observed hereinabove. It is a matter of record that the Appellant has relied upon this report in its advertisement and has never claimed that AMRI has issued any accredited certificate in its favor. We may observe that there is a marked difference in certification and issuing a Report based on some survey or exercise. In these circumstances, we are of the view that response of AMRI to this effect is not relevant and perhaps has been misunderstood. The advertisement is qualified and is based on the report which has not been denied before us. Therefore, before imposition of such heavy penalty, the Commission ought to have issued a specific notice to AMRI for proper assistance, and the Appellant should also have been confronted with such response of AMRI as the entire crux of the matter is dependent on the Report in question. Lastly, the Commission also failed to take note that the comparison exercise in question refers to other brands of tractors as well, however, no further investigation was made in this regard.

5. In view of hereinabove facts and circumstances of the case by means of a short order dated 05.11.2025, this Appeal was allowed by us in the following terms, and the above are the reasons thereof:- i) The Commission shall conduct its proceedings from the stage of Show cause Notice afresh; however, before proceedings further, the Commission shall issue Notice to the Agricultural Mechanization Research Institute of Punjab.

(ii) M/s AMRI shall be confronted as to the Report available at page 81 onwards of the Paper book and relied upon by the Appellant in their defence. They shall be confronted with their determination available at Annexure(s) 1 to 4 of the Report at pages 111 onwards based on which the Appellant had made certain claims. iii) The Commission, if so desired, may also seek input from other manufacturers of the Tractors whose products have been compared in the said report including its Annexure(s) 1 to 4. iv) Let such exercise proceedings be finalized preferably within a period ninety (90) days from the date of this Order. v) The security of Rs. 10 Million furnished before the Commission pursuant to order 24.06.2025 passed by this Tribunal stands discharged in favour of the Appellant. The Commission shall act accordingly.

MQ/2/CAT Order accordingly.