SC pitches in to sort out CCI-tribunal tussle

The Supreme Court today decided to sort out the tussle between the Competition Commission of India (CCI) and the Competition Appellate Tribunal over the power of the latter to stop investigation by the commission. On a petition moved by the commission, Chief Justice S H Kapadia directed that the matter be taken up on July 26.

Solicitor General Gopal Subramaniam, representing the commission, submitted before the court that the issue should be solved because the appellate tribunal had passed an order stopping investigation into a matter involving Jindal Steel and Steel Authority of India Ltd (SAIL). However, the question that arose was a matter of general importance and “everyone should be clear on the law”.

Jindal Steel and Power Ltd (JSPL) filed a petition before CCI, alleging an agreement for supply of rails between Indian Railways and SAIL was anti-competitive and amounted to abuse of their dominant position. While JSPL also makes rails, SAIL is the sole supplier of these to the railways.

CCI decided that there was a case prima facie and referred the matter to its director general (DG), investigations, in December. Before the DG could commence its inquiry, SAIL moved the tribunal, appealing against the CCI order. The tribunal allowed SAIL’s appeal and stayed the DG’s investigation.

The Solicitor General argued that if the tribunal passed a stay order even before the commission started investigation and formed an opinion, it would be difficult for the commission to function. There was no need for hearing the parties even before the commission formed a prima facie opinion on whether there was any injury to a party in the market. The DG, after scrutiny, could close the issue if he found there was no adverse impact on the market. This was the norm for all competition commissions the world over, and India had adopted the same model to speed up the procedure. He also said this was the procedure under several other Indian statutes, like the the anti-dumping rules.

This is the first time that the commission has come up before the Supreme Court after the commission replaced the Monopolies and Restrictive Trade Practices Commission last year. Appeals against CCI decisions are heard by the tribunal, a three-member tribunal headed by retired Supreme Court judge, Justice Arijit Pasayat.