Ramco’s SC appeal could reopen 78 COMPAT cases
A recent appeal in the Supreme Court by Ramco Cements against the functioning of the Competition Appellate Tribunal (COMPAT) without a judicial member has stirred the pot over the sustainability of Indian tribunals, yet again. The timing of the cement manufacturer’s approach coincides with the ongoing debate over the efficacy of the central government’s decision to disband the COMPAT and merge its functions with that of the National Company Law Appellate Tribunal (NCLAT). If entertained by the apex court, Ramco’s move could prove to be the last nail in the coffin for the reputation of the soonto-be wound up antitrust appellate body.
The cement manufacturer’s challenge, which may at first seem like a one-off corporate grievance, has the potential of affecting several other actions of the COMPAT since the retirement of its erstwhile chairperson, Justice GS Singhvi on December 11, 2016. Ramco’s discontentment with the actions of the COMPAT stems from the adjudication of the Rs 6,500 crore penalty imposed by the Competition Commission of India (CCI) on a number of cement manufacturers in August 2016. Dissatisfied with the CCI order, Ramco approached the COMPAT in November 2016 seeking an appropriate remedy.
What was pitted to be a regular judicial affair took an interesting turn after the retirement of Justice Singhvi in the following month. Ramco sought an adjournment of the proceedings till the appointment of another full-time chairperson.
According to Section 53D of the Competition Act, 2002, a chairperson of the COMPAT shall be a person who is (or has been) a judge of the Supreme Court or a chief justice of a high court. Using this reasoning, Ramco sought the suspension of the appellate proceedings, as the twomember bench of the tribunal did not have a judicial member after Singhvi’s retirement.
To Ramco’s disappointment, the bench rejected its plea citing Section 53J of the Act, which says that the senior-most member of the bench is to act as chairperson upon the death or resignation of the chairperson. The provision, however, does not expressly include a situation of retirement, a fact that Ramco has highlighted in its appeal to the Supreme Court. Ramco has also taken the view that this provision is only transitory and temporary in nature and cannot have an adverse impact on the quality of adjudication. Currently, the COMPAT is headed by acting Chairperson Rajeev Kher, former commerce secretary and India’s chief negotiator in the WTO. Anita Kapur, the tribunal’s other member, is a retired Indian Revenue Service officer and former chairperson of the Central Board of Direct Taxes. To further support the bench’s stance, Section 53R of the Act says no act or proceeding of the appellate tribunal shall be questioned or rendered invalid merely due to the existence of any vacancy or defect in its constitution. However, since the law does not specifically refer to orders, the issue is still open to interpretation. Similar provisions exist to defend actions of the CCI as well, but only when such vacancies or defects do not affect the merits of a case.
Legal opinion is divided on the matter. Some feel the Ramco challenge will not affect other judgments delivered by the tribunal after Justice Singhvi’s retirement. However, Amitabh Kumar, partner, J Sagar Associates, disagrees with this view. According to him, if the apex court rules in favour of Ramco, the other judgments of the COMPAT in the affected period will also become bad in law and unenforceable. “The aggrieved parties will have to approach the appropriate appellate body (COMPAT/NCLAT) again for rehearing,” adds Gautam Shahi, counsel, Trilegal.
In earlier cases involving other tribunals, the Supreme Court has held that the functions of these bodies are akin to judicial proceedings and can only be performed in the presence of one or more judicial members. A 2013 verdict on the central and state information commissions and the 2014 decision on the role of the electricity regulatory commission are some such examples.
The decision of the apex court will have a direct impact on public interest, as COMPAT decisions substantially affect the performance of markets and, in turn, the economy.