No SC stay for Kingfisher appeal on CCI powers

The Supreme Court today declined to stay a Mumbai high court order to Kingfisher Airlines to cooperate with an investigation by the Competition Commission of India on charges of forming a cartel with Jet Airways.

The bench, headed by Chief Justice S H Kapadia, told counsel for the Vijay Mallya-promoted airline that the court was examining the power of the CCI in such matters, on another petition. The question being argued is whether an injunction can be ordered if the commission comes to a preliminary opinion that an action by an enterprise is anti-competitive.

As the issue is going to be decided very soon, the Kingfisher appeal was ordered to be listed after the judgment in the earlier case. That latter case was argued before the Chief Justice on Wednesday and Thursday. It was on an appeal from the CCI itself, in a case involving Jindal Steel and Steel Authority of India. The CCI argues there is no need to hear the parties involved even before an investigation is ordered. The opposite view is that the companies involved should be heard before the Commission orders an investigation.

“We are thinking of providing some kind of protection to the enterprises, so that their credibility in the market is not affected,” the judges said.

The Competition Appellate Tribunal (CAT) had passed an order stopping investigation against the two steel giants. Upon which, CCI appealed to the Supreme Court against CAT. The court is examining the scope of Section 36 of the Competition Commission Act, which deals with “inquiry into agreements or abuse of dominant position”.

This is the first case in the Supreme Court dealing with the new competition law.

Senior counsel Fali Nariman, arguing for Kingfisher today, said the high court had decided the issues at the procedural stage itself. More, the agreement with Jet Airways was signed in 2008, whereas the new law came into force only last year. Therefore the CCI had no power to conduct an investigation retrospectively.

Additional solicitor general Parag Tripathi, appearing for CCI, informed the court that Kingfisher was not co-operating in the investigation.