CCI curtailing elected person's tenure 'ultra vires': Compat

The Tribunal made the observations while delivering an order in a case related to Alkem Labs

Competition Commission directing curtailment of tenure of elected office bearers of an association will be "ultra vires" the powers vested with it under the competition law, according to Compat.

The Competition Appellate Tribunal (Compat) made the observations while delivering a judgement on a plea by an individual in the case related to Alkem Laboratories.

"If we were to hold that wide and open-ended language used in Section 27(g) (of Competition Act) empowers the Commission to issue a direction which interferes with the rights of the elected representatives of an association, then the results would be catastrophic," the tribunal said.

Last December, Competition Commission of India (CCI) had penalised Alkem Laboratories, its two officials, All Kerala Chemists and Druggists Association (AKCDA) and one of its officials for indulging in unfair business practices.

Besides, the watchdog had directed AKCDA not to associate A N Mohana Kurup and Thomas Raju with its affairs including administration, management and governance in any manner for a period of two years.

Kurup, who was also slapped with a fine of Rs 50,203, as well as Raju had challenged the CCI order.

In its ruling, dated May 10, Compat set aside the penalty on Kurup as well as the direction asking Kurup and Raju not to associate with AKCDA affairs for two years.

Kurup and Raju were President and Secretary of AKCDA.

Compat noted that CCI cannot make an order or issue a direction which would directly or indirectly impinge upon the provisions of other statutes.

"... The Commission does not have the jurisdiction, power or authority to pass an order which has the effect of directly or indirectly curtailing the tenure of the duly elected office-bearers or deprive them of their right to exercise powers and discharge the functions of the elected offices/ posts under the particular statutes," it noted.

Further, the tribunal said such a direction is "ultra vires the powers vested in the Commission under the Act".

According to the tribunal, in another case, the Commission may curtail the tenure of the elected office-bearers as has been done in the present case.

"Such consequence of the exercise of unbridled power was never envisaged by the Legislature," it said.

Meanwhile, Compat has also set aside the fine imposed by CCI on Alkem Laboratories in the matter.