Today a two member Bench of the Competition Commission of Pakistan (CCP) comprising of Mr. Khalid A. Mirza, Chairman CCP and Ms. Rahat Kaunain Hassan, Member (Legal), disposed off the show cause notice issued to Bahria University for non-compliance of CCP’s earlier Order passed by Dr. Joseph Wilson, Member CCP on 24 July 2008. CCP took suo motto notice of the news item published in Daily ‘The News’ dated 16 February 2008, according to which the Bahria University had made it mandatory for all incoming students to buy laptops imported by the University. This practice of tying the purchase of laptops with the provision of educational services appeared, prima facie, to violate Section 3 of the Competition Ordinance. The Learned Single Member of CCP disposed off the matter vide his Order dated 24 July, 2008. A lenient view was taken and no penalty was imposed on the University. In the Order following directions were given to Bahria University: “As to the students who purchased laptops on installments and were forced to accept loan on 12.65% interest rate, I find the loan conditions unfair to the students. While educational loans are not easily available in Pakistan, a survey of the regional markets suggests that an educational loan for up to Rs. 100,000/- are available to students at 0 to 5~8 percent. I am therefore inclined to give students a rebate, under section 31 of the Ordinance, of approximately 5% out of the 12.65% interest rate charged by the University. Thus, the University shall pay back to the students, who purchased laptops on installments, an amount totaling Rupees ten million (Rs. 10,000,000/-) pro-rated on the bases of the interest amount paid so far, and to be paid in future by each student. The University had agreed in the hearing to pay back Rupees ten million back to the students who purchased the laptops on installments. The University shall make a re-payment scheme and submit a compliance report to the Commission within one month from the date of this Order.” The University shall desist from making the purchase of laptops compulsory to the students in the future and shall pay to students rebate as mentioned in paragraph 29 above. The University shall also submit a compliance report in terms of paragraph 30 above.” Bahria University through its various letters informed CCP that the Order has been complied. However, upon complaints received from the students of Bahria University, CCP deemed it appropriate to conduct an enquiry as to whether the Order has been complied or not. The enquiry in the matter was concluded vide Enquiry Report dated 1 September 2009. The Enquiry Report concluded that the Order has not been complied in toto, therefore, proceedings for non-compliance be initiated against the University for non-compliance. CCP upon recommendation of the Enquiry Report issued a show cause notice to Bahria University on 2 November 2009 requiring Bahria University to show cause in writing within twenty one (21) days and to avail the opportunity of hearing on 3 December 2009, as to why penalty should not be imposed on Bahria University for non-compliance of the Order. CCP in today’s Order has observed that, “Bahria University did not force its students from Fall Semester 2008 onwards to purchase the laptops from the University under the mandatory scheme, however, Bahria University did make mandatory sale of laptops to its students in Summer Semester 2008, which contradicts the undertaking given by Bahria University vide its letter dated April 11, 2008. Although Bahria University made incorrect statements to the Learned Single Member, however, we note that, after the passing of the Order, the University has not made any mandatory sale of laptops to its students. Moreover, as per the commitment of the University during the hearing before us, it has also settled the account of 11 MBA Maritime student’s account to whom the laptop was sold in the Summer Semester 2008.” After the hearing in the matter two officers of CCP namely Mr. Ikram Ul Haque Qureshi, Director General (Legal) and Ms. Shiasta Bano, Director (Cartels) were authorized to visit Bahria University and verify the compliance of the Order by Bahria University through its letters dated 20-01-2010. The officers submitted their report on 12-07-2010 to CCP stating therein that, “On careful examination of the data and all the relevant documents it appears that the University has now complied with the directions issued in the Order of the Commission and has reimbursed on pro rata basis the excessive amount that was being charged to the students who bought laptops from University on installments. In this process the University has incurred additional expense of Rs.1.2 Million over and above the amount of Rs.10 Million that the University was required to refund to the students in the aforementioned order of the Commission. The mandatory sale of laptops has already been discontinued.” Based on the above, CCP further observed that, “the Order was not complied in toto by Bahria University initially owing to the misunderstanding regarding the mode of payment on pro rata rebate; however, as assured by the representatives of Bahria University, the mistake was rectified immediately and the fact that in doing so, Bahria University has also incurred additional expense of Rs.1.2 Million over and above the amount of Rs.10 Million that Bahria University was required to refund to the students. Therefore, in appreciation of the conciliatory and compliance oriented approach of Bahria University and their full co-operation during the proceedings no penalty was imposed for initial partial non-compliance.
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