COMPETITION LAW OBSERVER

A blog by Centre for Competition law & Policy, NLU Jodhpur

THE PARADOXICAL ORDER OF CCI: A CARTE BLANCHE APPROACH TO ADJUDICATION

THE PARADOXICAL ORDER OF CCI: A CARTE BLANCHE APPROACH TO ADJUDICATION

Jaskaran Singh Saluja and Yash Jain

Introduction

The Competition Commission of India (“CCI” or “Commission”) was established with the view to curb anti-competitive practices and ensure healthy competition in the market and the same is embedded in the Preamble and Section 18  of the Competition Act, 2002 (“Act”). For this purpose, Section 19 of the Act confers the Commission with the power to inquire into any alleged contravention of the Act on receipt of information from any person, consumer or their association or trade association. However, in Samir Agrawal v. Competition Commission of India (“Samir Agrawal”), the National Company Law Appellate Tribunal (“NCLAT”) while discussing the issue of locus standi, held that the term “person” under Section 19(1) (a) means “a person who has suffered an invasion of his legal rights as a consumer or as a beneficiary of healthy competitive practices.”

Recently, in Harshita Chawla v. WhatsApp Inc. & Anr. (“Whatsapp case”), the Informant, not being aggrieved of any anti-competitive practices, alleged abuse of dominance against Whatsapp Inc. for launching their payment app service “WhatsApp Pay” in the market. The Informant averred that Whatsapp had abused its dominant position by bundling its messaging app with its payment app, i.e., WhatsApp Pay and thus violating Section 4 of the Act. Pertinently, the Commission did not find any contravention of the provisions of the Act and dismissed the information. 

It is relevant to note that in the Whatsapp case, the Opposite Parties had challenged the locus standi of the Informant to approach the Commission because she had neither claimed any injury nor aggrieved as a consumer. Notably, the Commission, while taking a different stance from Samir Agrawal, opined that “the Informant need not necessarily be an aggrieved party to file a case before the Commission.” This view of CCI caters certain legal ambiguities regarding the scope and nature of locus standi under the Act. This article discusses the conundrum that revolves around the snag of locus standi under antitrust cases. Further, the authors have analysed the paradoxical path taken by the CCI in the Whatsapp case by going against the view of NCLAT provided in Samir Agrawal.

Tracing Up The Contrarieties From The Decision

It’s a fallacy to believe that any principle or legislation empowers the CCI to overrule the decision of any higher appellate authority like NCLAT and such fallacy triggers the contrarieties in the Whatsapp case. Therefore, the authors will deal with the certain well-settled judicial principles and their infraction by the CCI in the Whatsapp case.

                 i.          Principle of Judicial Discipline is set at naught

The principle of judicial discipline is well-settled in the Indian jurisprudence. The concept of judicial discipline is expounded in various landmark pronouncements of the Hon’ble Supreme Court (“SC”). In the case of Union of India v. Kamalakshi Finance Corporation Ltd., the foremost requisite for maintaining the judicial discipline is that every quasi-judicial body or lower authority is bound by the decisions passed by the higher appellate authority, i.e., the Commission is bound by the decision of NCLAT when the same question of law arises. A similar kind of inference can also be drawn from the case of Commissioner of Income Tax, Bhopal v. Ralson Industries Ltd.

Moreover, it is also held that overriding of the said judgement by the subordinate authority will hamper the principle of judicial discipline. Further, in the case of Bhopal Sugar Industries v. Income Tax Officer, the Apex Court highlighted that if the subordinate authority fails to comply with the directions and decisions given by a superior tribunal, then it will result in chaos in the administration of justice, ultimately causing the miscarriage of justice.

The doctrine of stare decisis also operates on the principle of judicial discipline. The doctrine of stare decisis means ‘to stand by decisions,[1] and the same is embodied under Article 141 of the Constitution. Further, CCI is also bound by the doctrine of stare decisis while passing any order or decision. Following the principle of stare decisis, the SC has stressed the need to cling to precedents, and consequently, it becomes the defined obligation of the CCI to stick to the precedent from a higher court.[2]

However, in the Whatsapp case, the CCI had removed the question of locus standi of the Informant, i.e., any person can provide information to the Commission related to any anti-competitive practices. The Whatsapp order ‘impliedly’ overruled the judgement of Samir Agrawal in which the NCLAT has already dealt with the question of locus standi and narrowed the garb of the same. 

Presently, keeping in mind the above-discussed pronouncements, CCI, being a subordinate authority and quasi-judicial body, is bound by the decisions passed by the higher appellate authority, i.e., NCLAT. Additionally, in the case of Competition Commission of India v. Steel Authority of India Ltd. &Anr., the Apex court distinctly states that the judgement of the Appellate Tribunal is binding on the Commission. Therefore, the said order of CCI, overriding the binding judicial precedent of NCLAT, consequently hampers the well-settled principles of judicial discipline and stare decisis and hence, causes a miscarriage of justice.

               ii.          The order counts as Per Incuriam

The infraction of the principle of judicial discipline also deems the said order of CCI as per incuriam, i.e., any order or judgement given in ignorance of any binding precedent. According to the case of Young v. Bristol Aeroplane Co. Ltd., ‘Incuria’ literally means ‘carelessness’ and while practice, per incuriam appears to mean per ignoratium. It also asserts that the order or decision of any court can be ignored and avoided if it is delivered, “in ignoratium of a statute or other binding precedent.” The SC also refers to the same understanding of per incuriam in the case of State of U.P. and Anr. v. Synthetics & Chemicals Ltd. and Anr. 

Even in the matter of the Government of A.P. and Anr. v. B. Satyanarayana Rao and Ors., the SC held that “the rule of per incuriam can be applied where a lower court omits to consider a binding precedent of the same court or the superior court rendered on the same issue.” Hence, the order of CCI, overruling the decision of NCLAT, is esteemed as per incuriam and thus annulled & not binding. 

Contempt of NCLAT

The law of contempt is implemented stiffly on the judicial and quasi-judicial body who neglects to comply with the obligatory legal precedents of the jurisdictional High Court or the Supreme Court.[3] The forenamed contempt would deem to be a civil contempt, and the said body would be held guilty of civil contempt of the respective High Court or the Supreme Court. The power to penalise such contempt is embedded under the Contempt of Courts Act, 1971 (“CC Act”).

The identical jurisdiction, authority and powers, pertaining to such contempt of High Court, are also exercised by the NCLAT for its civil contempt through Section 53U of the Act. Section 53U articulates that a reference to a High Court in the CC Act shall be interpreted as a reference to the NCLAT.

As the authors have discussed in the earlier limbs, CCI, being a quasi-judicial body, fails to comply with the obligatory judicial precedent of the NCLAT by order of eradicating the locus standi of the Informant while approaching the Commission. Thus, the said order of CCI overrides the binding judgement of the NCLAT and would be held guilty for the contempt of NCLAT under Section 53U of the Act read with Section 16(1) of the CC Act.

Conclusion

The present order of CCI induces a draconian effect on the Act and the long-lived principles of legal jurisprudence as it defies the purpose of Section 53U of the Act and further, it transgresses the legal foundations of judicial discipline, stare decisis and per incuriam. Moreover, the predicament for determining the locus standi of the Informant has been quite unsettling in India. The vagueness and uncertainty move one step forward in the present scenario of locus standi wherein the Commission has taken a contradictory opinion from the NCLAT.

Notably, in the current realm of locus standi, the tussle between CCI and NCLAT is a persisting conundrum as the NCLAT will overturn any appeal considering the stance taken in Samir Agrawal. The divergent opinions canvassed by the Commission and NCLAT have left the position wavering and inconsistent. Therefore, it becomes imperative for the SC to intervene and clear the air on the issue of locus standi, otherwise, this unrest will remain perpetual. An ideal approach will be to issue a set of guidelines so that the Informants can have a definite picture of locus standi, and the dispute is settled once and for all.    

Jaskaran Singh Saluja and Yash Jain are fourth year students at the Institute of Law, Nirma University. 


[1] A.K. Awasthi, ‘Stare Decisis and Supreme Court’ (Judicial Training & Research Institute, U.P.) <http://ijtr.nic.in/webjournal/8.htm#:~:text=’Stare%20decisis’%20means%20’to,at%20the%20top%20of%20pyramid.&text=The%20enunciation%20of%20the%20reason,binding%20as%20a%20precedent1> accessed 25 September 2020.

[2] Anupam Sanghi, ‘CCI Losing its Teeth – The Need for Developing Jurisprudence’ (2016) 3 COMPETITION L. REP. 180, referred pg. 185.

[3] ‘Presentation on the law of Judicial Precedents and Contempt of Court’ (West Bengal Judicial Academy) <http://www.wbja.nic.in/wbja_adm/files/Presentation%20on%20the%20law%20of%20Judicial%20Precedents%20and%20contempt%20of%20court.doc> accessed 28 September 2020.

Leave a Reply

Your email address will not be published. Required fields are marked *