2021 (11) TMI 304 - AT - Law of Competition

Tribunal Upholds Ruling: Bar Council of India Not an 'Enterprise' Under Competition Law.

The Tribunal dismissed the appeal, affirming the Competition Commission of India's (CCI) order that the Bar Council of India (BCI) is not an 'enterprise' ... Reduction of the competition to its electors by creating indirect entry barriers into the profession of legal service - whether the Second Respondent/ ‘Bar Council of India’ comes within the ambit of ‘enterprise’ as per Section 2(h) of the Competition Act, 2002? - HELD THAT:- Undoubtedly, the definition of ‘enterprise’ is very wide and the definition does not only cover those institutions connected with activities pertaining to goods but also covers activities relating to provisions of ‘services’ of any kind, which gives a very broad connotation to the range of activities that can be covered in the definition of the ‘services’ - any entity to come within the meaning of ‘enterprise’ as per Section 2(h) of the Competition Act, 2002 that it is or has been engaged in any ‘activity’ of the nature defined therein. Moreover, the activities mentioned in the Section 2(h) ‘enterprise’ of the Competition Act, 2002 have to be ‘Economic’ and commercial in character. Also that the words employed in preceding the words ‘any activity’ reflect not only regularity and continuing of activities made mention of in the Section. It is crystalline clear that the Second Respondent/ ‘Bar Council of India’/ Statutory Body has its primordial role to perform its duties and hence, this ‘Tribunal’ without any haziness holds that the Second Respondent/ ‘Bar Council of India’ is not an ‘enterprise’ having any economic and commercial activity. The First Respondent/ Competition Commission of India are not of any economic and commercial/business activity and further that keeping in mind yet another fact that the Second Respondent/ ‘Bar Council of India’/ Statutory Body, which is to perform its role as a Regulatory one, cannot be said by any stretch of imagination that the ingredients of Section 4 of the Competition Act, 2002 ‘abuse of dominant position’ are attracted in the present case, with a view to consider the same, as opined by this Tribunal - the view taken by the First Respondent/ Competition Commission of India in the impugned order dated 20.01.2021 in Case No.50 of 2020 stating that there existed no prima facie case as per Section 4 of the Competition Commission Act, 2002, not granting any interim relief as per Section 33 of the Act and ultimately rejecting the case are free from any legal flaws. Appeal dismissed. Issues Involved:1. Whether the Bar Council of India (BCI) is an 'enterprise' under Section 2(h) of the Competition Act, 2002.2. Whether Clause 28 of the Rules of Legal Education, 2008 constitutes an abuse of dominant position under Section 4 of the Competition Act, 2002.3. Whether the Competition Commission of India (CCI) erred in rejecting the complaint and not granting interim relief.Issue-wise Detailed Analysis:1. Whether the Bar Council of India (BCI) is an 'enterprise' under Section 2(h) of the Competition Act, 2002:The primary question was whether BCI qualifies as an 'enterprise' under Section 2(h) of the Competition Act, 2002. The term 'enterprise' includes any person or department of the government engaged in economic or commercial activities. The CCI observed that BCI, established under Section 4 of the Advocates Act, 1961, performs regulatory functions related to legal education and the legal profession, which are non-economic in nature. The CCI referenced Case No.39 of 2014 (Dilip Modwil and IRDA) to support that regulatory functions are not amenable to the Commission's jurisdiction. Consequently, BCI was not considered an 'enterprise' under Section 2(h) of the Act, and the allegations did not merit examination under Section 4 of the Act.2. Whether Clause 28 of the Rules of Legal Education, 2008 constitutes an abuse of dominant position under Section 4 of the Competition Act, 2002:The Appellant argued that Clause 28, which imposes an age limit for pursuing legal education, creates indirect barriers to entry into the legal profession and constitutes an abuse of BCI's dominant position. The CCI noted that BCI's role is to set standards for legal education and regulate the profession, which are regulatory and non-economic activities. Therefore, the CCI concluded that the allegations did not establish a prima facie case of abuse of dominant position under Section 4 of the Act.3. Whether the Competition Commission of India (CCI) erred in rejecting the complaint and not granting interim relief:The Appellant contended that the CCI should have taken suo moto action under Section 19(1) of the Competition Act, 2002, and equated BCI with other regulatory bodies like ICAI, BCCI, AICF, and VFI, which have been considered 'enterprises' in previous cases. The CCI, however, distinguished BCI's regulatory functions from the economic activities of these bodies. The Tribunal upheld the CCI's decision, stating that BCI's regulatory role does not involve economic or commercial activities and, therefore, does not attract the provisions of Section 4 of the Competition Act, 2002. The Tribunal found no legal flaws in the CCI's decision to reject the complaint and deny interim relief.Result:The Tribunal dismissed the appeal, affirming the CCI's order that BCI is not an 'enterprise' under Section 2(h) of the Competition Act, 2002, and that there was no prima facie case of abuse of dominant position under Section 4 of the Act. Consequently, the appeal was devoid of merits, and no costs were awarded.