NCLAT judgment: CCI can’t be made hostage to locus standi (Indian Express)

Mains Paper 2: Polity
Prelims level: National Company Law Appellate Tribunal
Mains level: Role of National Company Law Appellate Tribunal under competition Act

Context:

• Recently, the National Company Law Appellate Tribunal (NCLAT) has delivered a judgment whose effect could be to severely limit the ability of the enforcement regulator, the Competition Commission of India, to deliver upon its statutory mandate of maintaining healthy competition in Indian markets.
• In its judgment in the matter of Samir Agarwal v. .................

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Constricting effect:

• The constricting effect of the NCLAT judgment ought to cause serious concern not only to the Commission but to all who have a stake in maintaining robust competitive markets in the country that, as is known, leads to enhanced efficiencies, higher levels of innovation and better products and services.

Section 18 of the Competition Act:

• The Commission under the Competition Act in Section 18 of the Act and also in its Preamble.
• Section 18 states that “it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of the consumers, and ensure freedom of trade carried on by other participants, in markets in India.” The mandate could not have been more unambiguous and emphatic.
• Accordingly, the Commission is obliged to seek all reasonable means of ensuring that the Indian markets remain robust and to come down heavily against anti-competitive practices such as cartels or abuse of dominance.
• The duty of the Commission is toward the market and the economy at large, and not toward any particular informant or complainant who approaches the Commission. Its decisions are not ‘in personam’ but ‘in rem’.

Observations by the Commission in various other orders:

• It follows that what matters to the Commission is the substance of an information filed before it, not the antecedents or the standing of the informant.
• If the information is such from which the Commission can prima facie form an opinion that a violation likely exists, the Commission is required to launch an investigation; in such cases.
• Section 26 mandates that the Commission “shall direct the Director General to cause an investigation to be made into the matter.”
• On the other hand, if prima facie the information does not satisfy the Commission about the possible existence of a violation, the Commission can dismiss the complaint at the ‘prima facie stage’.
• The Commission has ample ..........................................

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Way forward:

• NCLAT’s observation limiting the eligibility of a “person” to only those having a locus standi is not in keeping with the scheme and the fundamentals of the Act.
• It is hoped that the NCLAT will sooner rather than later reconsider its approach to the important issue.

  Online Coaching for UPSC PRE Exam

  E-Books Download for UPSC IAS Exams

  General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q1.  With reference to the waste management, consider the following statements:
1. Union Minister of Housing and Urban Affairs has launched three advisories on the occasion of World Environment Day.
2. These advisories have been prepared by the Central Public Health and Environmental Engineering Organisation (CPHEEO) under Swachh Bharat Mission (Urban).

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer: ...........................................

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Mains Questions:
Q1.  NCLAT’s recent judgment effectively d........................................................