CCI faces quorum crunch as MCA moves to fill two member vacancies

The competition watchdog could be left with only two members, potentially affecting antitrust proceedings even as merger clearances may continue under the doctrine of necessity

The Ministry of Corporate Affairs (MCA) has invited applications to fill two vacancies at the Competition Commission of India (CCI), after one member resigned in July and another is due to complete his term in September. With both positions falling vacant, the competition watchdog will be left with just two members, raising concerns over its ability to meet the quorum required to function.

 

The antitrust watchdog’s member Anil Agarwal resigned on July 14 after a three-year tenure. The term of member Deepak Anurag will end in September.

 

A member holds office for a term of five years from the date of joining the post or until the age of 65 years, whichever is earlier.

   

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 Commission could continue to clear combinations — mergers and acquisitions — even with a two-member quorum by invoking the doctrine of necessity. However, antitrust matters could come to a halt in the absence of a quorum.

 

The CCI is currently hearing high-profile antitrust matters involving iPhone maker Apple, food delivery platform Zomato and several others.

 

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

 

In 2023, after the vacant post of chairman left the CCI without a quorum, the regulator invoked the doctrine of necessity to clear pending combination deals.

 

Under the Competition Act, all merger deals have to be assessed within 150 days, with deemed automatic approval if the CCI is unable to form a prima facie view within the first 30 calendar days.

 

“Application of the doctrine of necessity means there is a timely necessity. If all combination applications are allowed to go through deemed approval because of lack of quorum then it is detrimental to competition in the economy and can distort the market. In antitrust matters, however, there is no such timeline prescribed in the law; hence the doctrine would not be applied,” a senior policy expert said.

 

The notification inviting applications for the CCI member posts said: “As per Section 8(2) of the Competition Act, 2002, a person of ability, integrity and standing, who has special knowledge of, and at least 15 years of professional experience in, international trade, economics, business, commerce, law, finance, accountancy, management, industry, technology, public affairs or competition matters, including competition law and policy, which in the opinion of the Central Government, may be useful to the Commission is eligible for appointment as Member, CCI.”