Competition Appellate Tribunal: Overview

The article gives insight into the Competition Appellate Tribunal. It also lays down the qualifications, tenure, and disqualification of the members and Chairperson of the Tribunal. Further, it throws light on the amendments that have taken away the spirit of the COMPAT and landed up with the NCLAT.

Introduction

Businesses and the economy all over the world have seen a very challenging time over the past few years, and pursuant to this, forming regulations or policies on the same has become more daunting for policymakers. During the trend of globalization, the response of India to the same was the removal of control and opening of its market for foreign nationals and companies to invest in. When such a step was taken, it was realized by the Indian government felt that there was a need to gear the market in such a way as to make it compatible with the competition faced by its national and multinational companies.

Since 1991, the Indian government has come up with various reforms in the country's economic policies due to the atmosphere of liberalization all across the world. Further, in 1999, to be in line with the guidelines of the World Trade Organization, the Indian government led to the formation of the Raghavan Committee, a high-level committee with a major focus on competition policies and competition laws for the country.

This committee was entrusted with the duty to provide advice on the modern competition law with a view on the developments that take place in the international market and also to provide suggestions on the legislative framework that is in tune with the developments internationally or provide suggestions to amend the MRTP Act.

The new Competition Act got enforced in the year of 2002 and was drafted in such a way that it lays down certain tools and legal frameworks in order to make sure that the competition policies are being followed and to do away with anti-competitive practices and if any of such policies are followed, the Act provides punishment for the same. The Act, inter alia, works upon protecting free, fair and healthy competition in the market, freedom of trade and interests of the public at large.

The Act was brought with the following objectives:

1. Providing a framework so that the Competition Commission can be established
2. Preventing monopolies and promoting competition in the market
3. Protecting freedom of trade for all the entities and individuals that participate in the market
4. Protecting the interests of the consumer

The broad areas of the market that are regulated by the Competition Act, 2002 are as follows:

1. Anti-Competitive Agreements: When a person comes into an agreement with other person(s) that deals with a business transaction which is of the nature that can result in negative competition in a certain market or which provides an undue benefit that causes benefit to a particular person or market while causing loss to others, such agreements fall under the scope of anti-competitive agreements, which are done away by the Act of 2002.
2. Abuse of Dominant Position: It is deemed that an enterprise or a person holds a dominant position in the market when any such entity is in possession of a position of strength, and with the help of such a position, that entity can operate independently from any of the competitive forces that are capable of producing an effect on consumers or competitors or any other force that is available in the market.[1]
3. Regulation of Combinations: The provisions dealing with the regulations of combinations have been looked into by Section 6 of the Act. It necessitates issuing a notice containing the details of the combination that is proposed to the Commission with the fees prescribed within a time limit of 30 days from the date on which the Board of Directors had approved the proposal of merger or amalgamation or execution of any other document of acquisition.[2]
4. Advocacy of Competition: The ability of the competition office established under the Act to provide advice, participate and influence the regulatory and economic policies of the government so that market performance, firm behaviour and competitive industry structure can be promoted as per the guidelines by the World Trade Organization.

The Parliament approved the Competition (Amendment) Act in 2007, which ultimately received assent from the President on September 24, 2007. The amendment was brought with the motive to make some notable changes in the already existing infrastructure for regulating the market under the Competition Act, 2002.

According to the provisions of the Competition Act, 2002, the Competition Commission of India got established in the year of 2003. However, there was some lack at the end of the Central Government as they failed to notify some of the important provisions of the Act. This is why the Commission was set up late, and then the members of the Commission were appointed by the Central Government.

Later, a significant move was taken by the Government by virtue of a notification[3] and they came out with the Competition (Amendment) Act in 2007 which laid down a provision[4] for establishing a forum known as the Competition Appellate Tribunal with an objective of hearing all the appeals that raise from the orders passed by the Competition Commission of India, providing a set mechanism to be followed for mutual consultation amongst the various regulators in the sector and competition regulators and also rationalizing the scheme of penalties.

It was made clear by the Government that the CCI will retain its earlier position with the body of experts directed towards regulating and preventing all the anti-competitive practices of the market but the upcoming Competition Appellate Tribunal will be there to discharge the judicial functions[5].

Composition of Tribunal

The Tribunal consists of a body of three members that, include a Chairperson and two other members. These members of the Tribunal are to be appointed by the Central Government.

Qualifications

The Act has provided the qualifications of all the members of the Tribunal. For instance, a person who wants to be a Chairperson of the Tribunal should be or had been either a Judge of the Supreme Court of India or Chief Justice of any of the High Courts of various states. However, a person has to prove his integrity, ability and whether he has special knowledge in the subject along with the experience of around twenty-five years or more for becoming a member of the Tribunal.

It’s important for all the members of the Tribunal to possess a substantial amount of experience in some of the matters of the competition law such as administration, public affairs, industry, management, accountancy, finance, law, commerce, economics, business, international trade, competition law and policies relating to the competition and any other matter that is notified by the Central Government as a qualification for the members of the Tribunal.

The Central Government is the body that is responsible for choosing not only the members but also the Chairperson of the Tribunal, and the names of the applicant for the body of the Tribunal is to be recommended by the Selection Committee.

Tenure

The normal tenure of the member or chairperson of the Tribunal is for five years from the date when he or she holds the office. A member or the Chairperson is also subject to reappointment for his post only if he qualifies the following conditions:

1. The person should be more than sixty-eight for being a Chairperson
2. The person should be more than sixty-five for being a member

Disqualifications

The disqualifications of the members and the Chairperson are dealt with under Section 53 K of the Act. The Central Government, only after consulting the Chief justice of India, can pass an order for removal of any of the members or the Chairperson of the Tribunal.

The points to be considered for removing a person from his post are as follows:

1. If he has fallen into the category of insolvent
2. If he has made himself involved in any kind of paid employment during his tenure
3. If he has been adjudged as a convict for any offence falling under the ambit of turpitude in the eyes of the Central Government
4. If he has lost his physical or mental capability that suits the post of the chairperson or member of the Tribunal
5. If he has involved himself in such an interest that will affect his functions prejudicially required to be performed as a member or chairperson
6. If he has abused his position in a manner that is not in the interests of the public at large

The road from COMPAT to NCLAT

The Government vide a notification[6] ended the earlier Competition Appellate Tribunal and provided that all the matters related to the competition will be heard by the National Company Law Appellate Tribunal (NCLAT).

Part XIV of the Finance Act 2017 was brought into operation by the notification of the Government. This notification provided that various tribunals, along with the COMPAT, should get merged into NCLAT. COMPAT lost its existence on May 26, 2017, and NCLAT took its position and, thus, operated as a replacement or substitute for COMPAT.

Transition

The amendment was brought in May in the year of 2017, and from this date onwards, any fresh appeal has to be filed with NCLAT. However, all the cases that were pending before COMPAT got transferred to the bench in NCLAT. It was upon the bench in NCLAT to either continue the case from the pending stage or start it afresh.

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[1] Section 4 Explanation (a) of the Competition Act, 2002

[2] Section 6 (2) of the Competition Act, 2002

[3] Notification No. S O 1240 (E) dated May 15, 2009

[4] Section 53 A of the Competition Act, 2002

[5] Section 53 Q (2) of the Competition Act, 2002

[6] Notification S O 1696 (E) dated May 26, 2017; Available Here

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1. Competition Law; Notes, Case Laws and Study Material
2. Competition Law in India: An Overview