Report finds CCI procedures lacking
A report by a legal policy advisory group suggests the Competition Commission of India should be more sensitive to complying with natural justice, pronouncing oral orders, and being selective in taking up investigations.
“From a total of 277 investigations ordered with regard to violation of Section 3 (anticompetitive agreements) and Section 4 (abuse of dominant position) of the Competition Act, up to March 31, 2016, investigation reports are yet to be submitted by the director-general in 52 cases,” states the report by Vidhi Centre for Legal Policy.
It adds that on average 46 per cent of appeals pending before the appellate tribunal at the beginning of a given year remain unresolved for over 12 months.
The report argues that the CCI needs to follow the principles of natural justice while writing orders so that they are not quashed by the appellate body, but competition lawyers claim this trend is changing.
“Pushing on grounds of natural justice means the case could be referred back to the same set of members in the commission for re-investigation, which might not serve the purpose,” says a lawyer.
Many orders of the commission have also been quashed because the commission did not follow procedures and hear the parties being accused of contravening the law.
In the case of the Board of Control for Cricket in India, the Competition Appellate Tribunal set aside a penalty imposed on the board for abuse of its dominant position on the grounds that the CCI failed to give the board an opportunity of being heard.
Further, it has become a common practice that the CCI quorum that hears oral arguments of the parties is different from the quorum that passes the final order, the Vidhi report states.
In the cement cartel case, the chairperson of the CCI became a party to the final order that imposed penalties of hefty amounts on cement companies without being part of the quorum that heard the arguments.
In another case, the final order of the CCI was signed by members who had not joined the commission on the date of the oral hearing.
The appellate tribunal has also set aside orders on the grounds that the CCI failed to consider the investigation conducted by the directorgeneral relied on forged and fabricated documents and the appellants were not provided an opportunity to cross-examine.
The report talks about merger control drawing a comparison with Singapore. Competition experts say it would be wrong to compare the Singapore law on mergers with the Indian one. The Indian law makes it mandatory for companies to seek CCI approval for mergers while in Singapore the process is voluntary.
The concept of monitoring trustee that the CCI has adopted is in line with international competition jurisprudence. However, most competition regulators do not block their bandwidth by monitoring commitments themselves as all agencies have scarce resources, the report points out.
On average 46% of appeals pending before the appellate tribunal at the beginning of a given year remain unresolved for over 12 months