CCI meeting this Thursday to clear 20 merger deals pending approval

Decision on these applications had been delayed due to lack of full strength of CCI quorum

After a hiatus of almost four months, the Competition Commission of India (CCI) is expected to conduct a meeting of its members to take decision on 20 merger deals pending approval on Thursday, according to sources. The decision on these applications had been delayed due to the lack of full strength of the CCI quorum.

The law ministry however, had advised the corporate affairs ministry that the CCI can invoke the doctrine of necessity to take decision on the pending applications without the full strength of the three-member quorum. There have been only two members in the CCI quorum since its former chairperson Ashok Gupta retired.

The doctrine of necessity enables legal authorities to take certain actions at a particular moment, which would otherwise not be regarded within the scope of the law in a general legal situation.

The law ministry’s suggestion came in the backdrop of various industry bodies flagging the issue to the government that the delay at CCI’s end had kept thousands of crores worth of deals hanging.

Some of the combination deals pending include Ardor Holding Pte and Hero Future Global Energies; AGI Greenpack and Hindustan National Glass; Megha Engineering and Infrastructure and Lanco Anpara Power; Cummins and Meritor; Dalmia Cement and certain businesses of Jaiprakash Associates, among others.

Of the pending mergers, one is a major global deal that has received approvals in 11 jurisdictions and is only awaiting CCI clearance. At least ten deals involve a foreign enterprise.

Section 22 of the Competition Act says, “...All questions which come up before any meeting of the Commission shall be decided by a majority of the Members presiding and voting…Provided that the quorum for such meeting shall be three members.”

The deals have been pending since September, a month before Gupta retired.

Legal experts are concerned that invoking the doctrine of necessity to clear the mergers might lead to more uncertainty as other parties could challenge these decisions in court.