ANTITRUST INVESTIGATION AND EXTENT OF JUDICIAL INTERPOSITION: CRITICAL ANALYSIS IN LIGHT OF ARTICLE

This article has been authored by Ayush Akar and Gaurav Gupta, third year students at NLU, Odhisa and Amity Law School, Noida respectively.

Introduction

Antitrust Investigation is the concept which is followed in Indian legal system working under the rules and regulations of the Competition Act, 2002 and is governed by the Competition Commission of India (‘CCI’), a statutory body formed to keep a check on practices which have negative effect on competition in Indian markets. But in past few years, various orders of the CCI to investigate accused parties for unfair trade practices or cases of breach of trust have been stayed or set aside by different High Courts using the extraordinary powers which the High Courts have derived from Article 226 of the Constitution of India.

The powers of CCI have been restricted as an order by CCI to conduct an investigation has been removed in the legislature from the scope of orders of CCI using powers derived from Section 53A of the Competition Act. To resolve this situation, the Supreme Court had faced a lot of complicated cases like CCI v. Bharti Airtel Limited, Monsanto Holdings Pvt. Ltd. v. Competition Commission of India and Samir Agrawal v. CCI being the major landmark cases by the Supreme Court and Delhi High Court. Such cases were addressed for bring changes in judicial system and put a restriction on the exercise of High Court’s power under- Articles 226 and 227 of the Constitution. Various legislations such as, Section 19, Section 21A, Section 45, Section 53A and Section 62 of competition Act were challenged in Courts for addressing to the issues emerged.

Scope of Articles 226 And 227 in Indian Legal System

In various landmark judgements the Supreme Court has defined the scope and powers of High Courts with respect to the Article 226 and 227. The difference between the two articles is that Proceedings under Article 226 fall under the original jurisdiction of the High Courts while those under Article 227 are only supervisory. Though the power under Article 227 is corresponding to that of an ordinary Court of appeal, still it is intended to be used meagrely and should be exercised only in appropriate cases to keep a check on the subordinate Courts and tribunals and put them within the bounds of their authority and not to correct mere errors.

The jurisdiction of Articles 226 and 227 is vast and has to be exercised in accordance to the circumstances. The powers can be exercised for the correction of the error of jurisdiction, but not to upset pure findings of the fact, which is within the power of an appropriate Court or tribunal. The purpose of revision is to allow the Courts to satisfy itself as to the legality, correctness or propriety of any sentence, finding, or any order passed by regularity body of any proceedings of the inferior Court. The powers granted by Article 226 cannot be exercised as a revision or appeal as any rejection of the order by any subordinate Court cannot be considered as violation of fundamental right as the aggrieved is provided with the alternate remedy of appeal. The restricted appealing powers of the CCI granted by section 53A of competition Act according to which the Government can establish an Appellate Tribunal.

Judicial Intervention for Putting Restrictions on Putting Restrictions on Power of High Courts with respect to Articles 226 and 227 of the Constitution

The Supreme Court, in a writ petition filed under Article 226 in the case of Competition Commission of India (CCI) v. Bharti Airtel Limited held that impugning a CCI order of investigation may be considered as ‘maintainable’ as, prima facie case cannot be made out from mere allegations or where the allegations made are improbable or the information or allegation made is done with a mala fide intent. The Court concluded that this judgement should not be interpreted in a way where a sectoral regulator is in power to rule a case, Hence, it should not result in a situation where the jurisdiction of the CCI will not be given importance or recognition due to the reason of having lower jurisdiction and lesser powers as compared to the High Courts. In another Landmark Judgement, the Supreme Court held that Section 45 of the Competition Act is a satisfactory deterrent for the people filing information with undisclosed motives as it talks about imposing penalty on people who are accused of furnishing information of their competitor. Hence, the High Courts should decline to interfere with any order of investigation by the CCI as an efficacious remedy for the opposite party already exists, as decided by the Supreme Court in the case of Samir Agrawal v. Competition Commission of India.

The Delhi High Court held that the legislative intent brought in notice of the Court with respect to Section 62 of the Competition Act, according to which the Act is in addition to other laws enforceable in India and is not to be used as substitution of any other law, as decided by the Court in the case of in Monsanto Holdings Pvt. Ltd. v. Competition Commission of India. As a result, because of this judgement the Karnataka High Court decision to stop the investigation initiated by the CCI with respect to the case of Amazon Seller Services Private Limited v. CCI requires re-examination as High Court made a mistake as it did not notice Section 62 of the Competition Act.

Interpretation and Suggestions related to Current Scenario

Experts agree with the various grounds for the challenging the petition filed with respect to the Article 226, that it may not lie on the ground of mala fide allegations in competition law cases because the CCI has been vested with the power which it is free to exercise to conduct a Suo moto investigation with respect to Section 19 of the Competition Act according to which The Commission is authorized to inquire into any alleged contravention of various provisions of the Act. This means that the CCI is empowered to disregard the alleged mala fide information to conduct investigation on its own motion. The powers conferred to the High Court according to Article 226 and 227 should only be exercised when necessary and not in every circumstance.

Although with so many changes and amendments brought forward by the Judiciary, the system still needs to keep in mind few things like;- even if lower Courts are not recognized as necessary party, they are proper party when the authority in question is the one which must necessarily defend its order, it becomes the necessary party and when the order which is being revoked has been rendered on the basis of factors like bias, mala fide, etc., the Court which passes the order in such circumstances must necessarily defend the mens rea being alleged, if such points are considered while making changes related to Articles 226 and 227 will prove to be of great benefit.

Conclusion

Indian Economy being a market with infinite number of opportunities creates a lot of competition within it, which if remains healthy and controlled, will prove to be beneficial for masses. Elimination of unfair trade practices from the market has proven to be of great importance for the growth of a healthy economy. Legislative motive is more important from a bare reading of the written laws like Competition Act, as it will result in speedy disposal of matters as prolonged litigation on every case would eventually harm the Indian market and the economy. Therefore, judicial intervention by the High Courts in investigations initiated by CCI should be exercised only where they are absolutely necessary, as delay in investigation may result in irreparable harm to the market. It will be appropriate for the CCI to exercise its powers according to Section 21A of the Competition Act which empowers CCI to take opinion of other authorities in case of overlapping jurisdiction before passing an order of investigation and keeping powers of High Courts granted by Articles 226 and 227 in check. This will prove to be beneficial because it will allow specialized tribunals to work in ease, take unnecessary load off the High Courts, result into speedy remedies, and allow Courts to work on more important cases which needs to be addressed.