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MODULE 1

EVOLUTION OF COMPETITION LAW IN INDIA

The increase in the trade practices made government realized the need of rules and
regulations in competitive market. Gradually, many countries tried for years to stabilize the
prices of the products & services and to support the local productions this leads to the
introduction of Competition Law. Efforts has been made by the Indian and Roman
civilization to control the price fluctuations and various unfair trade practices. The object of
Competition Law is to promote healthy competition in the market and to protect the
consumers interest. According to World’s Bank 1999 – Competition is “A situation in a
market in which firms or sellers independently strive for the buyers’ patronage in order to
achieve a particular business objective for example, profits, sales or market share”.

During nineteenth century, the law and economics has developed theories of competition and
ideological defences as a social good in order to eliminate the poverty and increase
development through industrialization. The planning commission was set up on March 1950,
and India has adopted five-year plans for the development of economy. As independent India
encouraged the Socialism and therefore followed the Soviet style of industrialization this
meant the intervention of the State Government. The Directive Principles of State Policy
(DPSP) under the Indian Constitution upheld the equality before law therefore government
supported industrial development and equal distribution of wealth.

MONOPOLIES INQUIRY COMMISSION, 1964

On April 16, 1964, the Government of India set up the Monopolies Inquiry Commission
(MIC), a Commission for economic development. The objectives of the Commission were:

 to inquire into the extent and effect of concentration of economic power in private
hands and the prevalence of monopolistic' and restrictive practices in important
sectors of economic activity; and

 to suggest such legislative and other measures that might be considered necessary in
the light of such enquiry.

The MIC did not particularly define the term concentration of power, but it did prepare and
submit a report to the Government of India where it was observed that there existed a high
concentration of economic power in over 85 percent of industrial items in India. The MIC
also observed that firms were taking advantage of their dominant position to manipulate the
prices and output of their products and services, and many times even the producers and
distributors were not engaged in restrictive practices. The Government policies were
considered as the main reason of economic concentration because big businesses had an
advantage in securing industrial licences in order to commence and expand their business.
During the period between 1948 - 1956, when concentration of economic power and
monopolies grew in India, the Government under the industrial policy resolution tried to
restrict the scope and the growth of private sector by making rules regarding licensing
procedures and guidelines. Due to this, several large organisations entered into combinations
and eliminated the internal competition. Several other enterprises managed to make artificial
scarcities by restricting their production and created an impression of excessive demand for
their products and services. The enterprises were in a position to influence government
policies to their own advantage and secured tax measures and incentives for the purpose of
export and foreign collaboration agreements. They also influenced public sectors, financial
institutions and banks by mobilising the financial resources of the market. The private sector
enterprises enjoyed economic power and restrictive trade practices in the market.

“When a large number of concerns engaged in the productions or distribution of different
commodities are in the controlling hands of one individual or family or group of persons ….
Concentration of economic power will also be clearly considered to exist”, these were the
observations made by the MIC in the report. The monopolistic practices means the trade of
achieving the dominant position in the industry by regulating the prices of products and
services or by eliminating competition. On the other hand, in restrictive trade practices the
producers and distributors of products who is not having such a dominant position restrain the
competition and deprive the community from all the benefits of competition. In India, the
Industrial Policy Resolution and Industrial Development and Regulation Act has established
a system of licensing by setting up new project and expansion of existing facilities. While
securing maximum benefits the MIC has set out objectives for legislative by recommending
to achieve highest productions with least damage to the people.

The Indian Competition Law tried to ensure competitive market and assure low prices and
high quality products. It is very important to curb the abuses of market power, therefore the

process of competition must be supported by rules and regulations and which preclude any
attempt of subversion of free trade and competition.

MONOPOLISTIC AND RESTRICTIVE TRADE PRACTICES ACT, 1969
(AMENDED IN THE YEAR 1984)

The provisions which lead to the enactment of MRTP Act, 1969 is Constitution of India
which mandates the State under Article 38 and 39 that the Government shall secure and
protect the society where people will get social, economic and political justice and it shall
address all the organizations of the nation, and the State shall direct it’s policy as – There
must be proper distribution of the ownership of material resources and operation of economic
system in order to assist the common good. India has adopted a planned economic
development in consequence of above mentioned in order to avoid the prevention of
concentration of economic power.

The primary concerns of the Monopolies and Restrictive Trade Practices (MRTP) Act is to
regulate the trade practices and behaviour with discipline so that there is no concentration of
economic power, to protect the consumers from being exposed to unfair trade practices, and
to prohibit all attempts to stifle competition. As per the Doctrine of Reformist, the provisions
of MRTP Act provides that if on enquiry the MRTP commission found that an errant
undertaking has indulged in either in Restrictive or Unfair Trade Practices then it can direct
such undertaking to discontinue or not to repeat such undesirable activities. The MRTP Act is
inspired by the Directive Principles of State Policy in the Indian Constitution. As the
preamble of the MRTP Act preached a socialistic philosophy intended to ensure that the
operation of the economic system did not led to the concentration of economic power to the
common detriment. This Act has been made for the purpose of prohibition of Monopolistic
and Restrictive Trade Practices. The MRTP Act, 1969 is not meant for all sectors of the
economic system as it apply mainly to the private sector. And did not apply to the public
sector, government undertakings and undertakings by state and central government,
corporation, banks, the State Bank of India and Insurance companies of India which restricted
the scope of this Act. The preamble provided that the MRTP Act is an “Act to provide that
the operation of the economic system does not result in the concentration of the economic
power to the common detriment, for the control of monopolies, for the prohibition of

monopolistic and restrictive trade practices and for matters connected therewith or incidental
thereto.” The main objective of the MRTP Act is –

 Prevention of Concentration of economic power to the common detriment;

 Control of monopolies;

 Prohibition of trade practices (Monopolistic, Restrictive and Unfair).

MRTP AMENDMENT ACT, 1984

On the basis of the Sachar Committee Report, the MRTP Act was amended in 1984. This
report realized the practical aspects of the operation of this law and found that the role
assigned to MRTP Committee was limited in nature and mostly advisory. The Sachar
Committee made some changes in order to make the MRTP Act most effective and
independent. The concept of “interconnected undertaking” was adopted from the Companies
Act 1956 and introduced to the MRTP Act. In order to guard the consumers’ interest the
government control and parliament oversight was recommended to brought under the
preview of MRTP for expansions, mergers or setting up new undertakings.

The Sanchar Committee has also amended the definition of Monopolistic Trade Practices
which was originally framed in 1969. The committee has suggested that if it is possible for a
non-monopolistic undertaking to indulge in any monopolistic trade practices then there is no
need to mention a separate concept for the “monopolistic undertaking” in the Act. Therefore,
the MRTP (Amendment) Act, 1984 omitted the definition of Monopolistic Undertaking under
Section 2(j) of the Act. Due to this, necessary changes made in Section 31 of the Act - This
Section provides for the Investigation by the commission into the monopolistic trade
practices on a reference being made by the Central Government which will thereafter pass an
appropriate order, if the Commission makes a finding that the trade practice operates or is
likely to operate against the public interest. While section 10 (b) gives power to the
Commission to inquire into the monopolistic trade practice on its own knowledge or
information, there is unfortunately no provision for follow-up action in section 31 which only
postulates that the same will be inquired into by the commission only on a reference being
made by the Central Government.

It is difficult to exclude the monopolistic or oligopolistic with substantial market power. For
the purpose of calling a trade practice as a ‘Monopolistic Trade Practices’ then it has to
satisfy the requirements of sub-clause (i) of Section 2 of the Act. It states that – the
“Monopolistic Trade Practice” means a trade practice which has or is likely to have, the
effect of;

i. Maintaining the prices of goods or chargers for the services at an unreasonable level
by limiting, reducing or otherwise controlling the production, supply or distribution of
goods of any description or the supply of any services or in any other manner,

ii. Unreasonably preventing or lessening competition in the production, supply or
distribution of any goods or in the supply of any services,

iii. Limiting technical development or capital investment to the common detriment or
allowing the quality of any goods produced, supplied or distributed, or any services
rendered, in India to deteriorate.

iv. Increasing unreasonably;___

 The cost of production of any goods; or

 Chargers for the provision, or maintenance , of any services,

 Maintenance of any services;

v. The prices at which goods are, or may be, sold or re-sold , or the chargers at which
the services are or may be, provided; or

vi. The profits which are, or may be, derived by the production, supply or distribution
( including the sale or purchase of any goods) or in the provision or maintenance of
any goods or by the provision of any services;

vii. Preventing or lessening competition in the production, supply or distribution of any
goods or in the provision or maintenance of any services by the adoption of unfair
methods or unfair or deceptive practices.

Section 32 provides that the monopolistic trade practice was deemed to be prejudicial to the
public benefit and to their interest, except under the following conditions and circumstances
mentioned in the sub-clauses –

a. If the trade practice was authorised by an enactment for the time being in force;

b. If the Central Government is satisfied that the trade practice is necessary only after
that it can permit the owner of any undertaking to carry on such trade practice, by a written
order. Such Trade Practice must be necessary for the purpose;

 To meet the requirement of the defence of India or any part of India or for the security
of the state;

 To ensure the maintenance of supply of goods and services essential to the
community;

 To give effect to the terms of any agreement to which the Central Government was a
party.

In the case of Mahindra and Mahindra vs. Union of India1, the term ‘Restrictive Trade
Practice’ was defined to mean a trade practice which has or may have the actual or probable
effect of restricting, preventing, lessening or destroying competition, it is liable to be
regarded as restrictive trade practice. If a trade practice merely regulates and thereby
promotes competition, it would not fall within the definition of ‘Restrictive Trade Practice’,
eventhough it may be to some extent, in restraint of trade. Therefore, whenever a question
arises as to whether a certain trade practice is restrictive or not, it has to be decided not on
any theoretical or a prior reasoning, but by inquiring into whether the trade practice has or
may have the effect of preventing, distorting or restricting competition.

IMPORTANT RECOMMENDATIONS OF RAGHAVAN COMMITTEE, 1999

In 1999, the Raghavan Committee was set up in India to evolve the need of competition
regime. This Committee prepared a recommendation report in 2000 for the purpose of setting
up modern competition law by phasing out some features of the MRTP Act. Raghavan
Committee was set up under the Chairmanship of Shri SVS Raghavan in 1999. This
Committee raised the opinion of economic reforms that they have found certain provisions of
the MRTP Act obstructive to private investment. This Committee vide its Order No. 1/9/99-
CL. V dated 25th October 1999 observed that the word ‘competition’ has been used sparsely
in the MRTP Act. In Section 29(o) while defining restrictive trade practice the general
definition of competition law is provided in comparison with Section 38(1)(h). This
difference leads to contradictory judicial interpretations. This committee has also observed

1 1979 SCR (2)1038.

that MRTP Commission has tried to fit the offence in the section of the act by way of
interpretations which are not even defined in such act, as the ‘Cartels’ are not defined in any
of the clauses of Section 33(1) of the MRTP Act.

It was also found that MRTP Act was inadequate to deal with the implementation of the
World Trade Organisation (WTO) agreements, plus it doesn’t have any provisions with
regards to mergers and control. The Raghavan Committee recognised that the provisions of
the MRTP Act pertaining to unfair trade practices were quite similar to the Consumers
Protection Act, 1986. In the report of Raghavan Committee it was stated that the MRTP Act,
in comparison with the other Competition Law of many countries, is inadequate or fostering
competition in the market and trade and for reducing, if not eliminating anti –competitive
practices in a country’ s domestic and international trade. Based on this analysis, the
Raghavan Committee found it expedient to have a new competition law. The Committee
desired the focus of the new law to be on preventing anti-competitive practices that affect and
reduce welfare. While free markets produce desired outcomes, they do so only when
protected from the abuses. Therefore, “….. The only legitimate goal of the competition law is
the maximization of economic welfare”.

This Committee has raised their point that if there is a law for competition then it must be
regulated by a competition authority with established competition law principles. It was also
suggested that there must be a balance between over-intervention and exemption from
sanction, in the name of public interest. This Committee has also sought to made new
provisions of mergers control by making distinction between horizontal mergers, vertical
mergers and conglomerate mergers on the basis of their impact in the competition. It was the
initiative of the Raghavan Committee to bring the Government enterprises as well as
departments under the preview of competition law, except for the sovereign function of the
Government like Defence.

Raghavan Committee opined against any kind of discrimination or benefits to be provided to
the Government enterprises, by recommending discontinuing the policy of price preference to
Government owned enterprises. Despite the fact that many foreign countries also exempt
Government enterprises from the provisions of the competition law, it was suggested that
there should not be any discrimination between the immediate consumer and ultimate
consumer.

This Committee had an opinion with regards to the jurisdiction of competition law and it
suggested that there must be specialized agency to deal with such cases, even though in many
other countries such cases are decided by regular courts. The Committee further observed the
fact that the Indian judiciary is inexperienced in free market problems. Therefore, the
Committee prepared a detailed description on setting up competitive authority for
administration of such matters with the objective of setting up “proactively in Governmental
Policy Formulation”. It is suggested by the Committee that the appointed administrative
authority should be independent and autonomous body vested with the powers to investigate,
prosecute and should have transparent and separate proceedings with the power to impose
fines and punish the guilty. Raghavan Committee observed and initiated the role of the
advocates to bring awareness among stakeholders and the Government to be familiar with the
competitive rules and laws of the country.

Due to the above-mentioned flaws and new recommendations made by the Raghavan
Committee, the scope of MRTP Act seemed to be limited, therefore, the Parliament of India
proposed and enacted the Competition Act, 2002. the MRTP Act, 1969 was repealed and
replaced by the Competition Act, 2002.

THE COMPETITION ACT, 2002 (AMENDED IN THE YEAR 2007)

This Act was been passed by the Lok Sabha on 16th December 2002 in order to replace the
MRTP Act, 1969. This Act is called as Competition Act, 2002.

The basis of the enactment of this Act is due to the recommendations made by the Raghavan
Committee in 2000. As mentioned above, a committee was appointed by the Government of
India on ‘Competition Policy and Law’ and on the basis of the suggestions made under the
report of this committee that the Competition Act, 2002 came into existence.

The Competition Act, 2002 came into enforcement on 13th January 2003. This Act is
extended to whole of India except the State of Jammu and Kashmir. Later, the Government of
India made certain amendments in this Act by passing the Competition (Amendment) Bill,
2007. Hence, this Act has was amended in the year 2007 for the first time after which the
next amendment came 10 years later in 2017 under the Finance Act, 2017.

The Competition Commission of India (CCI) formed under this Act is a regulator with quasi-
judicial powers. There is a provision for appeal before the National Company Law Appellate

Tribunal (NCLAT) against the orders of the CCI. All the members of CCI shall be appointed
by the Government of India, and the Commission shall be headed by a Chairman.

The CCI replaced the MRTP Commission. After the formation of CCI, the MRTP
Commission was directed to either decide and dispose all the pending cases of MRTPC
within a year or to transfer all such cases to the CCI. On the other hand, all the pending cases
pertaining to Unfair Trade Practices were transferred to the Consumer Courts, under the
provisions of the Consumer Protection Act, 1986.

This Act has been formulated with the objective to prevent those such agreements which have
or likely to have an adverse effect on competition and to promote healthy competition in the
market. The Act also aims to prevent the abuse of dominant position in the society and to
regulate the activities of amalgamation, mergers and acquisitions.

The Competition Act, 2002 includes total 66 sections. And this Act restricts those agreements
which had adverse effect on competition in India. This Civil Courts have no jurisdiction to
address competition law cases under the purview of this Act.

This Act is not applicable on Public Financial Institutions, Foreign Institutional Investors, in
Banks, Venture Capital Funds and on such agreements, which are related to IPR such as
trademarks, patents and copyright, etc. The Central Government has the authority to exempt
any class of enterprise from the provisions of this Act, if such act is in common interest of
national security or public interest.

Brahm Dutt vs. Union of India2

In this case, an Advocate filed a writ petition to seek an order to strike down Rule 3 of the
Competition Commission of India. As the Competition Act, 2002 received assent of the
President of India on 13th January, 2003 and was published in the Gazette of India dated 14th
January, 2003. For the appointment of a Chairman and the members as composing the
Commission in terms of Section 9 of the Act, the Central Government had to enforce Section
7 and 8 of this Act. According to Rule 3 of CCI, the Central Government was to constitute a
Committee which consisting of a person who has been retired Judge of the Supreme Court or
a High Court or a retired Chairperson of a Tribunal established under an Act of Parliament or
a distinguished jurist or a Senior Advocate for five years or more, a person who had special

2 AIR 2005 SC 730.

knowledge of and professional experience of 25 years or more in international trade,
economics, business, commerce or industry, a person who had special knowledge of and
professional experience of 25 years or more in accountancy, management, finance, public
affairs or administration to be nominated by the Central Government. The Central
Government can also nominate one of the members of the Committee to act as the
Chairperson of the Committee. The function of the Committee was to fill up the vacancies as
and when vacancies of Chairperson or a member of the Commission exits or arises or is
likely to arise and the reference in that behalf had been made to the Committee by the Central
Government. It is said that the Committee so constituted made a recommendation in terms of
Rule 4(3) of ‘the Rules’ and a Chairman and a member were appointed. Though, the member
claims to have taken charge immediately after being appointed, the person who appointed as
Chairman, has taken the stand that he had not taken charge since he was content to await the
orders of this Court in view of the filing of this Writ Petition.

Therefore the present Writ Petition of Mandamus was filed in this Court by a practicing
Advocate essentially praying for reliefs including the issue of directing the Union of India to
appoint a person who is or has been a Chief Justice of a High Court or a senior Judge of a
High Court in India in terms of the directions contained in the decision in Sampath Kumar v.
Union of India3, the essential challenge was on the basis that the Competition Commission
envisaged by the Act was more of a judicial body having adjudicatory powers on questions of
importance and legalistic in nature and in the background of the doctrine of separation of
powers recognized by the Indian Constitution, the right to appoint the judicial members of the
Commission should rest with the Chief Justice of India or his nominee and further the
Chairman of the Commission had necessarily to be a retired Chief Justice or Judge of the
Supreme Court or of the High Court, to be nominated by the Chief Justice of India or by a
Committee presided over by the Chief Justice of India.

It means that, the Chairman of the Commission must be a person who connected with the
judiciary and selected for the job by the head of the judiciary and that person should not be a
bureaucrat or other person appointed by the executive without reference to the head of the
judiciary. The arguments made in this behalf were that the Competition Commission was a
regulatory body and it requires expertise in the field. It is also contended that the power of
judicial review of the High Courts and the Supreme Court is not taken away or impeded, the
right of the Government to appoint the Commission in terms of the statute could not be

3 1987 SCR (3) 233.

successfully challenged on the principle of separation of powers recognized by the
Constitution.

During the pendency of the Writ Petition, two additional counter affidavits were filed on
behalf of the Union of India, in which it was submitted that the Government was proposing to
make certain amendments to the Act and also Rule 3 is made to enable the Chairman and the
members to be selected by a Committee presided over by the Chief Justice of India or his
nominee. This position was reiterated at the time of arguments. Of course, it was also pointed
out that the question of amendment had ultimately to rest with the Parliament and the
Government was only in a position to propose the amendments as indicated in the additional
affidavits. But it was reiterated that the Chairman of the Commission should be an expert in
the field and need not necessarily be a Judge or a retired Judge of the High Court or the
Supreme Court.

The amendments which the Union of India proposes to introduce in Parliament would have a
clear bearing on the question raised for decision in the Writ Petition essentially based on the
separation of powers recognized by the Constitution. The challenge that there is usurpation of
judicial power and conferment of the same on a non- judicial body is sought to be met by
taking the stand that an Appellate Authority would be constituted and that body would
essentially be a judicial body conforming to the concept of separation of judicial powers as
recognized by this Court. In the Writ Petition the challenge is essentially general in nature
and how far that general challenge would be met by the proposed amendments is a question
that has to be considered later, if and when, the amendments are made to the enactment. In,
what is contended by learned counsel for the petitioner is that the prospect of an amendment
or the proposal for an amendment cannot be taken note of at this stage. It will be appropriate
to consider the validity of the relevant provisions of the Act with particular reference to Rule
3 of the Rules and Section 8(2) of the Act, after the enactment is amended as sought to be
held out by the Union of India in its counter affidavits, we are satisfied that it will not be
proper to pronounce on the question at this stage. On the whole, we feel that it will be
appropriate to postpone a decision on the question after the amendments, if any, to the Act
are carried out and without prejudice to the rights of the petitioner to approach this Court
again with specific averments in support of the challenge with reference to the various
sections of the Act on the basis of the arguments that were raised before us at the time of
hearing. Therefore, the challenge raised by the petitioner and leave open all questions to be
decided in an appropriate Writ Petition, in the context of the submission in the counter

affidavits filed on behalf of the Union of India that certain amendments to the enactment are
proposed and a bill in that behalf would be introduced in Parliament.

If an expert body is to be created as submitted on behalf of the Union of India consistent with
what is said to be the international practice, it might be appropriate for the respondents to
consider the creation of two separate bodies, one with expertise that is advisory and
regulatory and the other adjudicatory. This followed up by an appellate body as contemplated
by the proposed amendment, can go a long way, in meeting the challenge sought to be raised
in this Writ Petition based on the doctrine of separation of powers recognized by the
Constitution. Any way, it is for those who are concerned with the process of amendment to
consider that aspect. It cannot be gainsaid that the Commission as now contemplated, has a
number of adjudicatory functions as well.

Thus, leaving open all questions regarding the validity of the enactment including the validity
of Rule 3 of the Rules to be decided after the amendment of the Act as held out is made or
attempted, we close this Writ Petition declining to pronounce on the matters argued before us
in a theoretical context and based only on general pleadings on the effect of the various
provisions to support the challenge based on the doctrine of separation of powers. The Writ
Petition is thus disposed of leaving open all the relevant questions.

CCI vs. SAIL4

In the landmark judgment of CCI vs. SAIL, the apex court held that ― “No appeal can be
filed against an order of Competition Commission of India (CCI), directing an investigation
into a complaint received by it”. Thus, this judgment played a prominent role in ensuring the
distribution of power of COMPAT and CCI, such that they do not disturb the each other in
proceeding. It provided effective boundary.

In this matter, it initiated when Jindal Steel and Power Limited (JSPL) filed a complaint
before the Competition Commission of India alleging that SAIL had an exclusive supply
agreement with Indian Railways. SAIL was the biggest player in market of manufacture of
rail tracks thus had dominant position in market. It had created its monopoly. This was anti-
competitive and abusive behavior. Thus, as Indian railway is largest buyer of rail tracks,

4 2010 10 SC 744.

JSPL by necessary implications couldn’t supply rails to them. SAIL used its position to keep
other player out of market and thus deprive others from fair competition.

The CCI on receiving application, began the process, and issued notice to SAIL to submit
documents with certain information within 2 weeks from date of receipt. But SAIL instead of
complying asked for extension of time for upto 6 weeks. CCI did not accepted the same in its
meeting and also formed a prima facie opinion that there exist a case and asked DG to go
ahead with inquiry under Section 26 of the Act. This was challenged by SAIL as no hearing
was provided to them. Further, no reasons were recorded for such decision and the time given
to them was inadequate from beginning. The COMPAT didn’t let the CCI implead as either
necessary party nor as a proper party and finally held that under Section 53A(1) of the Act, it
had power to listen to appeal even on the CCI’s order of investigation where no fair hearing
was given and it can grant a stay order. Thus, CCI appealed to the Supreme Court.

Issues

1. Whether the directions passed by the CCI in exercise of its powers under Section 26(1)
of the Act forming a prima facie opinion would be appealable in terms of Section
53A(1) of the Act?

2. What is the ambit and scope of power vested with the CCI under Section 26(1) of the
Act and whether the parties, including the Informant or the affected party, are entitled
to notice or hearing, as a matter of right, at the preliminary stage of formulating an
opinion as to the existence of the prima facie case?

3. Whether the CCI would be a necessary, or at least a proper, party in the proceedings
before the Tribunal in an appeal preferred by any party?

4. At what stage and in what manner the CCI can exercise powers vested in it under
Section 33 of the Act to pass temporary restraint orders?

5. Whether it is obligatory for the CCI to record reasons for formation of a prima facie
opinion in terms of Section 26(1) of the Act?

6. What directions, if any, need to be issued by the Court to ensure proper compliance in
regard to procedural requirements while keeping in mind the scheme of the Act and
the legislative intent?

Analysis

The Apex court in Issue 1 expressed that the direction of the CCI to DG to conduct an
investigation under Section 26(1) of the Act is not appealable under Section 53A(1) of the
Act, because the order under section 26(1) does not determine any rights or obligations of the
party to the case. The court reached this after analyzing the provision under Act and rules of
interpretation, to note the difference between “and” & “or”. It followed the principle of
Expressum facit cessare tacitum. They referred to Indian and other country legislation like
European and case laws and finally reached to conclusion that Section 53(1) provides right of
appeal which is a substantive right and this section allows appeal only in things provided in
section.

Further in regard to Issue 2, it was highlighted that the legislature is competent to enact such
laws which exclude the principle of natural justice. Each matter i.e. facts of each case have to
analyzed in the context of rules and regulation and provision of Act. If the same are vitiated
then the whole proceeding could be nullified on ground of non application of principles of
natural justice. The power under Section 26(1) of the Act is regulatory and inquisitorial, i.e.
the its administrative power and not adjudicatory power of commission. It is only a step taken
by commission to prepare for future case i.e. collection of data and hence at this stage right of
notice of hearing is not required to be issued.

Apex court in Issue 3 held that in matter where CCI initiated matter suo moto, it will be
proper party and in every other it will be necessary party.

Further with respect to Issue 4, the power under Section 33 is given to the CCI, which is to be
used in rare situation and only at time of inquiry to pass temporary order, to stop party from
carrying on such act which is according to the CCI contravening the provision. This order is
limited to the period till other order is passed or till end of inquiry. While passing such order,
it must be supported by reasoning.

The CCI has responsibility to base its prima facie opinion as per Issue 5, whose terms must
be unambiguous, on basis of records furnished by parties and obtained through complainant

and other sources. The Act does not mandate any detailed reasoning but there must be
“minimum reason” to substantiate the claim of forming prima facie opinion.

Finally, to ensure proper compliance in regard to procedural requirements the following
directions were given so that the matter could be disposed expeditiously and the same would
be in larger interest of justice. The directions are as followed –

 The CCI should hold its meeting and record its opinion much before 15 days (the
maximum time provided in regulation) about its prima facie opinion about complaint.

 The objectives of act must be strictly followed while inquiry and investigation
conducted by DG and the CCI.

 If temporary order is passed, the final order must also be passed in short duration (not
later than 60 days).

 The Director General must submit its report within the period as stated by the CCI
(and not more than 45 days after the direction passed under Section 26(1))

 The confidentiality must be maintained by the CCI and its delegate.

Conclusion

The judgment played an important role in development of Competition Law in India, which
was at very native stage in year 2009. The issues raised in the matter highlight the ambiguity
among people which was clarified by the court. And this kind of judgment is the first step
toward building of Antitrust jurisprudence in India. The Apex court has very well explained
the intent of legislature while ruling. The interest of consumer has to be protected along with
freedom of trade. Thus, overall judgment ensured proper distribution of power between the
CCI and COMPAT.

AMENDMENT TO COMPETITION ACT, 2002 BY FINANCE ACT, 2017

The Competition Appellate Tribunal (COMPAT) has ceased to exist effective 26 May 2017.
The appellate function under the Competition Act, 2002 (Competition Act) would now confer
to the National Company Law Appellate Tribunal (NCLAT). These amendments were
brought about under the provisions of Part XIV of Chapter VI of the Finance Act, 2017.
Accordingly, Sections 2(ba) and 53A of the Competition Act and Section 410 of the

Companies Act, 2013 (CA 2013) have been appropriately amended and various other
provisions of the Competition Act dealing with the COMPAT have been omitted. Further,
Section 417A has been introduced in the CA 2013 and deals with the qualifications, terms
and conditions of service of the Chairperson and Members of the NCLAT.