INTRODUCTION
The Competition Act of 2002 (hereinafter “the Act”) established the Competition Commission of India (CCI) as a regulator of anti-competitive practices and promote healthy competition in the economy. The Preamble read with Section 18 of the Act entrusts CCI the duty to “eliminate the practice having an adverse effect on the competition, promote and sustain competition, protect the interest of the consumers, and ensure freedom of trade carried on by other participants, in markets in India.” To achieve this objective, as per Section 19 (1) (a) of the Act, the Commission can initiate an inquiry even if it receives a complaint from any person. For filing information under Section 19(1) (a), two conditions are mandated, as was enshrined in the case Hyundai Motor v. The Competition Commission of India.[2] Firstly, the information must be received in a prescribed manner, along with the prescribed fee. Secondly, the information should be received from any person, consumer, or trade association. The informant may or may not be the aggrieved person.[3] Hence, a broad interpretation has been ascribed to the term ‘any person’. For the Commission, such interpretation has been beneficial, as it has increased the possibility of receiving information relating to anti-competitive practices, which are very crucial in maintaining healthy competition in the market.
However, the NCLAT in the case of Samir Agrawal v. Competition Commission of India[4] gave a narrow interpretation to “any person” which has impaired the ability of CCI to receive information. As per the Tribunal, a person who informs the CCI about the alleged anti-competitive practice must be one “who has suffered invasion in his legal rights as a consumer or beneficiary of healthy competitive practice.”
BACKGROUND AND DECISION
In the present case, Mr. Samir Agrawal, an independent lawyer, challenged the way the Ola and Uber (Cab aggregators) operated on the ground that their business model formed a hub-and-spoke cartel. A hub and spoke cartel is formed when there is collusion between the horizontal competitors (known as spokes) facilitated by a hub, which is a firm placed at a different level of the supply chain. In this case, the Cab Aggregator’s platform acted a hub that facilitated the collusion between the spokes i.e. drivers. The informant alleged that these Cab aggregators were engaged in price-fixing that other drivers were bound to accept. The Commission observed that there is no agreement or understanding between the cab aggregators and the drivers. Hence, no prima facie case can be made. The informant challenged this order before the NCLAT.
The NCLAT dismissed the appeal on the ground that the informant has no locus standi before the Tribunal and that there is no evidence to support that the cab aggregators were involved in anti-competitive practices. The Tribunal further explained who could be covered under “any person” as given under Section 19(1) (a). As per the Tribunal, the “any person” must be one whose legal rights have been adversely affected as a consumer or beneficiary of healthy competitive practice. Tribunal took this view to restrict people with oblique motive from falsely targeting an enterprise.
ANALYSIS
The Competition Commission has an obligation towards the market and the economy as a whole and not towards a particular informant or the complainant who has approached it.[5] The decisions of the Commission are in rem and not in personam.[6] Further, it is the substance of the information that holds a greater significance than the antecedent of the informant. The CCI in the case of Matrix Info Systems Private Limited v. Intel Corporation[7] when the respondent alleged that the informant has approached the Commission with unclean hands, the Commission observed that such allegation would have no bearing upon the merits of the case. The Court held that the “antecedent of the informant could not be a ground for the Commission to not to take cognizance of the abusive conduct of any entity.” In case if the Commission is not satisfied that a prima facie case exists based on the information received then it has the power to close the matter under Section 26(2) of the Act. In the case of Dr. L.H. Hiranandani Hospital v. Competition Commission of India[8], the Competition Appellate Tribunal (COMPAT) observed that “the act does not prescribe any qualification to identify the locus of the informant, the Commission is expected to act with caution where the informant is a third party or a busy body, who may be espousing the cause of someone-else with ulterior motive.” The purpose of the informant is to inform the CCI about the existence of the anti-competitive practice. The CCI determines whether the information has merits and whether such information warrants any further investigation. To keep a check on the informant that acts with mala fide intention, the Competition Commission of India (General) Regulations, 2009, Regulation 10 (da) was added that warranted the informant to disclose the details of the pending litigation or disputes between him and the parties against whom the complaint is made. Hence, the observation of NCLAT regarding the requirement of the locus standi to restrain people from falsely targeting an enterprise is unfounded as the Act provides a mechanism to ensure that an enterprise is not falsely targeted.
Further, the interpretation given by the Tribunal is also against the rule of statutory interpretation. As per the rule of statutory interpretation, the intention of the legislature is to be gathered from the language of the statute and any interpretation that adds or rejects any word must be avoided. In the original text of the Act, the term used ‘filing of the complainant.’ In 2007, it was amended to ‘filing of the information.’ The legislative intent behind such an amendment was to do away with the requirement of locus standi.[9] Furthermore, the statute must be read literally i.e. by giving the words their ordinary, natural and grammatical meaning if it does not lead to any ambiguity.[10] In the case of Competition Commission of India v. Steel Authority of India and Anr.,[11] it was held that the Court should not implant or exclude words where the language of the provision is plain and simple. In the case of Shri Surendra Prasad v. Competition Commission of India and others,[12] the COMPACT observed that the plain reading of Section 19(1) (a) does not provide for any qualification or condition that an informant must possess. There is no bar as to who can be considered as an informant. Hence, the present judgment of NCLAT is defeating the purpose of the Act by narrowly interpreting ‘any person.’
CONCLUSION
Thus, the Act and various decisions of the Courts and Tribunal justify the broader interpretation of the term “any person”. However, the NCLAT has erred in narrowly interpreting Section 19(1)(a) of the Act. It has not duly considered the legislative intent behind introducing such provision. Furthermore, such narrow interpretation may not deter a person with an oblique motive but it has certainly curtailed the right of a genuine informant to approach the Commission. This decision has set a limit to the possible opportunities for receiving information relating to anti-competitive practice. The Commission has a greater obligation towards controlling anti-competitive practices and hence, the question of the locus standi of the informant is not so significant. This decision has created hindrance for the Commission to function as a regulator. Hence, an appeal against this order can be made under Section 53T of the Act as to bring this matter under the scrutiny of the Honourable Supreme Court and to finally settle the dispute.
This article has been authored by Shwetna Priya, fifth-year student, Maharashtra National Law University, Nagpur.
[1] Competition Commission of India, Competition Appeal (AT) No.11 OF 2019, ¶16.
[2] 2015 SCC OnLine Mad 2364.
[3] S.M. Dugar, Guide to Competition Act. 2002, (7th ed., 2017).
[4] Supra 1.
[5] Shruti Bhat & Apurva Badoni, NCLAT judgment: CCI can’t be made hostage to locus standi, Financial Express (12 June 20202) available at https://www.financialexpress.com/opinion/nclat-judgment-cci-cant-be-made-hostage-to-locus-standi/1988913/ (Last visited on July 22, 2020).
[6] Competition Commission of India, Indian Motion Picture Producers’ Association v. Federation of Western India Cine Employees, Case No. 45 of 2017, ¶ 11.
[7] Competition Commission of India, Case No. 05 of 2019, ¶ 42.
[8] Competition Commission of India, Dr. L.H. Hiranandani Hospital v. Competition Commission of India, APPEAL No. 19 of 2014, ¶ 25.
[9] Abir Roy, Competition Law in India: A Practical Guide, (Kluwer Law International 2016).
[10] G.P. Singh. Principles of Statutory Interpretation, (14th ed., 2016).
[11] Competition Commission of India v. Steel Authority of India and Anr. (2010) 10 SCC 744.
[12] Competition Commission of India, Shri Surendra Prasad v. Competition Commission of India and others Appeal No. 43 of 2014, ¶21.
Picture source: Financial Express
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