Court Confirms Competition Act Applies to Existing Deals; Denies Appeal Request.

The court dismissed the petition, affirming that the Competition Act, 2002, applies to existing agreements still in effect, despite not being retrospective. It confirmed the Competition Commission's jurisdiction to investigate, as the MRTP Commission had not conclusively acted and ceased to exist. The determination of the relevant market is integral to the investigation process. The court held that the Act is not penal, as it does not criminalize agreements but ensures compliance with the Commission's orders. The constitutional validity of the challenged sections was upheld, and the petitioners' request for leave to appeal to the Supreme Court was denied.

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Issues Involved:
1. Retrospective effect of the Competition Act, 2002.
2. Jurisdiction of the Competition Commission vis-`a-vis the MRTP Commission.
3. Determination of relevant market by the Competition Commission.
4. Constitutional validity of Sections 3, 4, 19, 27, 42, and 43 of the Competition Act, 2002.
5. Penal nature of the Competition Act, 2002.

Detailed Analysis:

1. Retrospective Effect of the Competition Act, 2002:
The petitioners argued that the Competition Act, 2002 should not have retrospective effect as it contains penal provisions. They contended that since the Act came into force on 20th May 2009, any agreement entered into before that date should be exempt from its purview. The court, however, clarified that while the Act is not retrospective, it covers all existing agreements that are still being acted upon after the Act came into force. The court stated, "The moment the Act comes into force, it brings into its sweep all existing agreements." Therefore, any action taken under such agreements after the Act's commencement would be subject to the new law.

2. Jurisdiction of the Competition Commission vis-`a-vis the MRTP Commission:
The petitioners claimed that the MRTP Commission had already taken cognizance of the matter and decided not to take any action, thereby precluding the Competition Commission from investigating the same issue. The court noted that the MRTP Commission had not taken any conclusive action and had left the matter open for further investigation. Moreover, the MRTP Commission ceased to exist from 14th October 2009, and thus, the Competition Commission had the jurisdiction to investigate the matter. The court stated, "Since no action whatsoever is taken or proposed to be taken by the MRTP Commission, there could be no question of the petitioners being subjected to double jeopardy."

3. Determination of Relevant Market by the Competition Commission:
The petitioners contended that the Competition Commission could not take action under Section 4 of the Act without first determining the relevant market, relevant geographic market, and relevant product market. The court held that the Commission is required to determine these factors during the investigation and not necessarily before it. The court explained, "The investigation would reveal if there is sufficient evidence available to take further action. It is after the report of the Director General that the Commission proceeds to pass order under Section 26(6) either to close the matter forthwith or under clause (7) may order further investigation."

4. Constitutional Validity of Sections 3, 4, 19, 27, 42, and 43 of the Competition Act, 2002:
The petitioners argued that these sections were violative of Article 20 of the Constitution of India, which protects against retrospective penal laws. The court dismissed this argument, stating that the Competition Act is not penal in nature as it does not make entering into an agreement contrary to the provisions of the Act an offence. Instead, it only makes the agreement void and unenforceable. The court clarified, "Strictly speaking, no criminal liability ensues for breach of Section 3 or 4 of the Competition Act."

5. Penal Nature of the Competition Act, 2002:
The petitioners argued that the Act should be considered penal because it prescribes punishment under Section 43. The court disagreed, stating that the Act is not penal as it does not criminalize the act of entering into an agreement itself but penalizes the non-compliance with the Commission's orders. The court noted, "The penalty is provided only with a view to ensure or enforce compliance of the directions of the Commission."

Conclusion:
The court dismissed the petition, holding that the Competition Act, 2002, while not retrospective, applies to existing agreements still being acted upon. The Competition Commission has jurisdiction to investigate the matter despite the previous involvement of the MRTP Commission. The determination of the relevant market is part of the investigation process, and the Act is not penal in nature. The court found no violation of constitutional provisions and upheld the validity of the sections challenged. The petitioners' request for leave to appeal to the Supreme Court was also rejected.

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