CCI is Indias anti-trust body and will regulate issues relating to anti-competitive behaviour like price rigging, collusive bidding and abuse of significant market presence by dominant business entity. The CCI is being constituted as per the Competition Act 2002.
However, this may take a while. In a severe comment on the selection process, Chief Justice VN Khare said: It is a direct onslaught on the high court. It is a serious matter and we can not permit it to go on. The chief justice wondered how a high court judge can be asked to function under a bureaucrat. At this rate a day would come, may be after 20 years, when the 26 judges of the apex court would be replaced by bureaucrats, he remarked. The remarks were triggered during a public interest litigation hearing petition filed by advocate Brahm Dutt. The petitioner sought quashing of Rule 3 of the CCI Rules 2003 (selection of chairperson and other members) under which the present appointmentsincluding Dipak Chatterjee as chairman and former DCA secretary Vinod Dhall as member-secretaryhave been made.
Attorney general Soli J Sorabjee assured that CCI would not discharge any judicial functions until further orders by the court. In view of the AGs assurance on instructions from the Centre, we do not pass any interim order in the petition for the time being, chief justice V N Khare said. The apex court asked Mr Sorabjee to file a reply to the petition filed by advocate Brahm Dutt within two weeks and directed its listing on November 21.
Subsequently, on November 3, orders were issued cancelling the appointment of Mr Chatterjee as CCI chairperson. Government sources said law minister Arun Jaitley has taken note of the need to have a comprehensive review of the CCI structure. Changes in the rules on the selection and appointment of the CCI chairman will be made as per assurances given by attorney general Soli Sorabjee to the apex court last week. Section 9 of the Competition Act vests the selection process with the government. Using this power, the department of company affairs (DCA) notified the rules for selection of chairperson and other members in April. The government now plans to revert to an earlier plan of involving the judiciary in the selection of the CCI chief and having a chairman from a judicial background.
On whether Section 9 would be amended, a DCA official said, The matter is sub-judice and the government will take an appropriate view. The official pointed out that there is no order as of now cancelling the appointment of Mr Chatterjee as CCI chairperson. But as events have unfolded, Mr Chatterjee has already beaten a hasty retreat on the subject. He has been asked to continue as commerce secretary and his replacement S B Mohapatra told to continue in textiles. Sources said Mr Chatterjee is recalling his request for voluntary retirement from the Indian Administrative Service (IAS). Mr Chatterjee would have superannuated from the IAS in June 2004.
The Competition Act does not specify that a bureaucrat should head the commission. Section 8 of the Act specifies the number of members who will constitute the commission and lists the eligibility criteria. Section 9 of the Act leaves the selection of the members to the Union government. The eligibility criteria listed by the Competition Act includes high court judges, professionals and administrators with 15 years experience in international trade, economics, business, finance, accountancy, management industry and public affairs.
It is just not the CCI chairpersons appointment which is being contested legally. There is a PIL pending in the Chennai High Court against the appointment of member administration, Mr Dhall. The petitioner had contested the appointment on the ground that member administration can be appointed after the constitution of the whole Commission.
According to one expert, the CCI will be a non-starter if members from the judiciary alone are represented. In any case, for the first two years, the CCI will be involved in setting up the administrative structure and advocacy of competition policy. The core activity of regulating anti-competitive behaviour and abuse of dominant market presence will happen only later. The expert who did not wish to be named argued that retired bureaucrats who have been pro-active and associated with progressive policy making are a better bet. Even the SVS Raghavan committee which drafted the Competition Bill noted that the chairperson need not be from the judiciary. It is noteworthy that Mr Raghavan was a career bureaucrat.
Protagonists of a bureaucrat heading the CCI model point out that it is not necessary for a judge to head a quasi-judicial body. The chairman of full-fledged judicial body like the Company Law Board (CLB) Mr Balsubramium is not a judge.