Debate over CCI closing cases after probe wing finds breaches

Jan 31 2013, 03:47 IST
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SummaryExperts have batted for relief for companies that have virtually lost the ‘right to appeal’ in several cases where the Competition Commission of India has overruled the report filed by its investigation arm, which found the firms violating the Competition Act.

Experts have batted for relief for companies that have virtually lost the ‘right to appeal’ in several cases where the Competition Commission of India (CCI) has overruled the report filed by its investigation arm, which found the firms violating the Competition Act. Terming it as a ‘lacunae’ in the existing Competition Act, legal experts said the government and the CCI should look at providing ‘retrospective’ relief in cases that have already been affected as the proposed amendments to the competition laws may correct the situation only with prospective effect.

The cases include Cine Prekshakula Viniyoga Darula Sangham (a society for the welfare of cine goers) versus Hindustan Coca-Cola Beverages and Inox, a multiplex chain; Jindal Steel and Power (JSPL) versus Steel Authority of India (SAIL) and Indian Railways; and Arshiya Rail versus Indian Railways and Container Corporation of India.

In these cases and a few others, the complaints about companies indulging in cartelisation/abuse of dominance got verified and endorsed by the CCI’s director general (DG) of investigations. However, in its final order, the CCI overruled the DG’s report but did not specify the section of the Competition Act under which the complaints were dismissed.

Although in many cases the complaints approached the Competition Appellate Tribunal (Compat) against the CCI rulings, the appellate panel sought to know under which section of the Act was the CCI order challenged. “Due to a gap in the competition law, the CCI order does not mention under which section the case is being dismissed, the Compat does not admit the appeal,” a senior lawyer representing one of the companies said about the problem. So, the question is whether CCI has the power to close a case where its rulings is contrary to the DG’s findings.

Experts said, the Competition Amendment Bill is making an attempt to solve this problem.

“Clause 11 and 17 of the Amendment Bill, when passed by Parliament, would remedy the current impasse. There may be a defect in legislative drafting but the statutory or quasi-judicial authorities cannot fold its hands and blame the draftsmen, as outlined in an earlier Supreme Court judgment. In doing so, the statutory intent of the law gets defeated and unfortunately the decision of the trial level authority then becomes the law of the land,” says Manas Kumar Chaudhuri, partner in Khaitan & Co, a specialised law firm that deals with cases involving competition laws. While the amendments will apply from a

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