TaxTMI 
TaxTMI 
2019 (4) TMI 2107
X X X X Extracts X X X X
X X X X Extracts X X X X
.... & ANR For the Respondents : Mr. Arvind K. Nigam, Sr. Advocate with Mr. Sameer Gandhi, Mr. Mikhil Sharda, Mr. Mehtaab Singh Sandhu & Mr. Pratishth Kaushal, Advs. for TATA Motors. Mr. Abhishek Manu Singhvi, Sr. Advocate with Mr. Arvind. K. Nigam, Sr. Advocate, Ms. Ruby Singh Ahuja, Mr. Shravan Sahny, Ms. Ashwati, Mr. Nakul Gandhi, Ms. Hemangini, Ms. Krithika Ramesh & Mr. Nitin Nair, Advs. for TATA Motors. Mr. Amit Sibal, Sr. Advocate with Mr. Aakash Bajaj, Mr. Sanjeev Kapoor, Mr. Vinay Tripathi & Mr. Ambar Bhushan, Advocates, for Mahindra Electric Mobility Ltd. & M&M Ltd. Mr. Sanjay Jain, Sr. Advocate with Mr. Vaibhav Gaggar, Ms. Neha Mishra, Ms. Aayushi Sharma, Mr. Vidur Mohan, Mr. Adarsh Chamoli, Ms. Niti Richhariya, Mr. Soham Goswami, Mr. Uvraj Sharma, Advs. for Respondent/CCI. Mr. V. Lakshmikumaran, Mr. Aditya Bhattcharya & Ms. Aishwarya Dubey, Advs. for Honda Motors. Mr. Neeraj Kishan Kaul, Sr. Advocate, Mr. Arun Kathpalia, Sr. Advocate. with Mr. Akshat Kulshrestha, Ms. Rajshree Sharma, Ms. Bani Brar & Mr. Siddharth Nath, Advs. for Mercedes Benz. Mr. Abhishek Malhotra & Mr. Karan Kapoor, Advs. for Hindustan Motors. Mr. Neel Mason, Ms. Sanyukta Banerjie & Mr. Vishe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... these materials, the Competition Commission of India (hereafter "CCI") recorded its prima facie opinion that the complaints needed investigation by its order of 24.02.2011. Subsequently, on 19.04.2011, the Director General ("DG" hereafter) in pursuance of the directions of the CCI conducted investigation into the allegations made by the Informant and submitted his investigation report. The DG by that report requested for permission to expand the scope of the investigation to include other car manufacturers. By its order of 26.04.2011, CCI expanded the scope of investigation being conducted by the DG to include the petitioner herein and certain other car manufacturers operating in India. The DG thereafter issued notice to the other car manufacturers, on 04.05.2011 under Section 36 (2) read with Section 41(2) of the Act, seeking detailed information and documents from them with reference to an investigation being conducted into certain anti-competitive practice alleged to be prevalent in the sale, maintenance, service and repair market of the cars manufactured in India in Case No. 03/2011. Proceedings in this case were stayed by the Madras High Court in WP 31808/2012 filed by M/s. H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of economic power and to control monopolistic and restrictive trade practices. The report of the MIC highlighted the opinion that restrictive practices need a judicial determination and finding. The report of the MIC clearly stated that the success of the proposed MRTP Commission to curb the restrictive practices would largely depend on fair and quick investigations of all complaints. The MIC considered it essential in their view that the question whether a restrictive practice is the common detriment or not should be decided judicially by those at the head of the permanent body. The MIC considered it essential that the Commission should judicially decide the questions to be determined by it. The MIC stated in its report that where the judicial examination results in a finding that no restrictive practice is being pursued or that though such a practice is being pursued, it is in the interest of the general public, then no further action be taken. Where, however, the decision is otherwise, the most fruitful line of action would be for the Commission to issue an order. It is submitted that based on the recommendations of the MIC, the Monopolies and Restrictive Trade Practices Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y should have a positive advocacy role in shaping policies affecting Competition." *********************** ******************* B) Adjudication 6.2.2 Central to effective implementation and enforcement of Competition Policy and Competition Law is an appropriate competent and effective adjudicative body, in the instant case, the Competition Commission of India. CCI will have to be a quasi-judicial body with autonomy and administrative power. It would be an independent statutory body without any political or budgetary control of the Government. Like the Supreme Court of India the CCI should be free to control its budget, after the Parliament votes its budgetary subvention. The remuneration of the Chairperson and Members of the CCI and all other expenditure should be a charge on the Consolidated Fund of India. 6.2.3 CCI will be a multi-member body with its Chairperson and Members chosen for their expertise, knowledge and experience in Judiciary Economics Law International Trade, Commerce, Industry, Accountancy, Public Affairs and Administration. It is imperative that those selected have a record of unimpeachable probity, integrity and solvency. 6.2.4 The number of Member....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7 2 KB 309), were brought to the notice of the Department for their comments. The Ministry has admitted in their written submission that the Bill (clauses 36 read with clause 40) makes it closer to a judicial body. The CCI has specific adjudicatory function in relation to abuse of dominance and anti-competitive agreement and on combinations under clause 27 and 31, respectively. The decision of CCI has extraterritorial reach under clause 32. Clause 36(3) says that the proceedings before the CCI would be judicial proceedings. The CCI can detain a person in civil prison for specific purposes. Thus, the Ministry is of the opinion that it is a judicial body. 7.3 In contradistinction to the Statement of Objects and Reasons which describes CCI as a quasi-judicial body, the Department has now submitted that it is adjudicatory. Besides, the Department, having admitted the apparent contradiction, has also submitted that CCI can sue or be sued. Here, the Committee wishes to point out that a judicial body never needs to sue anybody but it can issue orders for compliance. Suing means filing litigation against an opposite party before another judicial body to ventilate grievances. Admittedly ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Supreme Court or of a High Court, to be nominated by the Chief Justice of India or by a Committee presided over by the Chief Justice of India and further the right to appoint the Judicial Members of the CCI should also rest with the Chief Justice of India or his nominee. The Supreme Court in its interim order dated 31.10.2003 stayed the judicial functioning of the CCI and the operation of Rule 3 of the Competition Commission of India (Selection of Chairperson and other Members of the Commission) Rules, 2003. It is stated that the Central Government then submitted before the Supreme Court that it intended to bring about certain changes in the Act, in light of the issues raised in the Writ Petition. The Supreme Court delivered its judgment in the matter on 20.01.2005. It disposed of the writ petition leaving open all questions regarding the validity of the enactment, including the validity of Rule 3 of the Rules to be decided after the amendment of the Act and declined to pronounce on the matters argued before it in a theoretical context and based only on general pleadings. The relevant portions of the case decided by the Supreme Court of India is as follows: "5. We find that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....parate bodies, one with expertise that is advisory and regulatory and the other adjudicatory. This followed up by an appellate body as contemplated by the proposed amendment, can go a long way, in meeting the challenge sought to be raised in this Writ Petition based on the doctrine of separation of powers recognized by the Constitution. Any way, it is for those who are concerned with the process of amendment to consider that aspect. It cannot be gainsaid that the Commission as now contemplated, has a number of adjudicatory functions as well." 8. The petitioners then refer to portions of the Standing Committee Report of 2006 on the Bill to amend the Act, so far as it related to the Central Government‟s views on the need to ensure transparency and fairness in selection of members, through a provision by which the Chief Justice of India or his nominee was to chair the selection committee and its views on the expression "information" substituting the then existing term "complaint". 9. The common thread of arguments of all the writ petitioners is that the CCI is essentially an adjudicatory body, given its mandate to investigate into allegations that fall within its watch (abusi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plete misreading of Braham Dutt (supra). The adjudicatory function of the CCI remained unchanged, but several amendments with respect to its procedure were a mismatch to its adjudicatory functions and were more suited to a corporate body. 11. Mr. Sibal urges that CCI's functions are overwhelmingly adjudicatory (to substantiate this, reference is made to Sections 3, 4, 26, 27 and 28 of the Act). It is argued that the CCI perceives itself to be a judicial body and in this regard, he placed reliance on Regulations 24, 26, 27, 29, 31, 32, and 35 of the General Regulations. Learned senior counsel submitted that the CCI clearly passed the impugned order while exercising adjudicatory/judicial functions. It was also contended that Section 22(3) of the Act is ex facie unconstitutional. He said that the terms used, i.e. "meetings", "voting", "second" or "casting vote" and "quorum" are anathema to adjudicatory functions. According to the learned senior counsel, Section 22(3) particularly, which enables the Chairperson to rely on a casting vote is anathema to a judicial body. It is submitted that the Union of India ("UOI" hereafter) and the CCI failed to point out a single instance of jud....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he body participate in any proceeding at any given point of time, without any principle or pre-determined manner, essentially destroying the guarantee of fair hearing: this is enabled by Section 22(3) of the Act and violates the basic principle that one who hears must decide. It is submitted that the "revolving door" is a death knell to collegiality and collective decision making which is essential to all judicial decision making, as a collegium has a personality that exceeds its members. This is an unconstitutional aspect embedded in Section 22(3) in unambiguous and definite terms. Therefore, it cannot be read down nor be saved by the manner in which it is administered. 15. The learned senior counsel relied on Surendra Singh v State of UP AIR 1954 SC 194 to underline that the essence of a tribunal‟s functioning is the ability of a judge sitting on it, to effectively participate and bring her mind to the final decision, till the making of that decision or judgment. Particularly, the following observations were relied on: "10. In our opinion, a judgment within the meaning of these sections is the final decision of the court intimated to the parties and to the world at large....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... may have been signed beforehand, it is nothing but a draft till formally delivered as the judgment of the court. Only then does it crystallise into a full-fledged judgment and become operative. It follows that the Judge who "delivers" the judgment, or causes it to be delivered by a brother Judge, must be in existence as a member of the court at the moment of delivery so that he can, if necessary, stop delivery and say that he has changed his mind. There is no need for him to be physically present in court but he must be in existence as a member of the court and be in a position to stop delivery and effect an alteration should there be any last-minute change of mind on his part. If he hands in a draft and signs it and indicates that he intends that to be the final expository of his views it can be assumed that those are still his views at the moment of delivery if he is alive and, in a position, to change his mind but takes no steps to arrest delivery. But one cannot assume that he would not have changed his mind if he is no longer in a position to do so. A Judge's responsibility is heavy and when a man's life and liberty hang upon his decision nothing can be left to chance....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t opinion given by the Chief Judge or a Judge having precedence in rank or seniority, more experienced is always right and preferable to the opinion of a junior Judge. In our view, this assumption is totally illogical and irrational. The seniority or a rank of a Judge may be relevant consideration in the internal administration of the Court. It may also be relevant for further promotion to the higher Court, but merely because the Judge happens to be the Chief Judge or he happens to be a senior Judge cannot be a ground for accepting his decision as correct decision by completely disregarding the decision given by the junior Judge. Needless to mention that the Judges, who are equal in rank, enjoy equal powers and jurisdiction as far as judicial work is concerned. The irrationality of the rule can be further demonstrated by a simple illustration where both the Judges are appointed on the same day and out of whom, one Judge will be necessarily senior and simply because seniority has been given to him at the time of his appointment, his opinion will always supersede the opinion of the junior Judge (who was also appointed on the same day). We do not see any rational or logic in giving a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent of executive influence. Separation of powers equally applies to all legislations, but is violated in the Act. It is submitted that separation of powers prohibits one branch of the State taking over an essential function of another branch (in the present case, the Executive exercising both direct and indirect control and influencing over adjudication by the CCI). The following passage from R. Gandhi (supra) was highlighted: "Impartiality, independence, fairness and reasonableness in decision making are the hallmarks of the judiciary. If impartiality is the soul of the judiciary, "independence" is the lifeblood of the judiciary. Without independence, impartiality cannot. Independence is the not freedom for judges to do what they like. It is independence of judicial thought. It is the freedom from interference and pressure which provides the judicial atmosphere where he can work with absolute commitment to the cause of justice and constitutional values. It is also the discipline in life, habits and outlook that enables a judge to be impartial. Its existence depends however not only philosophical, ethical or moral aspects but also upon several mundane things -security in tenure, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bers, along with the power to call upon experts under Section 36(3) would satisfy the requirement of Section 19. Judges experienced in these fields can be appointed. On the other hand, that final arguments in the present case were heard in part by seven members, but finally signed by three non-judicial members which illustrates the perils of proceeding without judicial/legal members. 22. The argument advanced by Mr. Gopal Subramanian, learned senior counsel was that CCI adjudicates a lis whereas the COMPAT, is primarily appellate and has limited original jurisdiction. This is in contrast to the TRAI-TDSAT model, where the TDSAT discharges adjudicatory functions with a very wide original jurisdiction, while the TRAI is a regulatory body. Reliance was placed upon State of Gujarat v. Utility Users Welfare Association 2018 (6) SCC 21 where the Supreme Court held that it is mandatory that a person of law to be a member of a primarily regulatory body performing some judicial function and further that the presence of a judge in an appellate body cannot cure the defect of not having a judicial member in original adjudicatory proceedings. 23. Mr. Subramanian argued that there is no provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sions the right to have adjudication of disputes of citizens "adjudicated by a forum which exercises judicial power in an impartial and independent manner, consistent with the recognized principles of adjudication" and that "wherever access to courts to enforce such rights is sought to be abridged, altered, modified or substituted by directing him to approach an alternative forum such legislative Act is open to challenge if it violates the right to adjudication by an independent forum." 26. Reliance was also placed on the observations that the personnel who man such tribunal should be sufficientlyqualified and should possess relevant experience in law or judicial office, so as to discharge the functions entrusted impartially; and furthermore, the predominance of any individuals attached to or associated with the government or the executive would undermine the rule of law and separation of powers. It was further argued that adjudicatory responsibilities do not involve technical expertise of any kind, or knowledge and that consequently, provisions enabling appointment of non-judicial members is unconstitutional. 27. It was urged that the predominantly judicial nature and function o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....XXXIX, Rules 3 and 3A of the Code of Civil Procedure also have similar provisions. Certain procedural directions will help in avoiding prejudicial consequences, against any of the parties to the proceedings and the possibility of abuse of jurisdiction by the parties can be eliminated by proper exercise of discretion and for valid reasons. Courts have been issuing directions in appropriate cases and wherever the situation has demanded so. Administration of justice does not depend on individuals, but it has to be a collective effort at all levels of the judicial hierarchy, i.e. the hierarchy of the Courts or the fora before whom the matters are sub-judice, so that the persons awaiting justice can receive the same in a most expeditious and effective manner. The approach of the Commission even in its procedural matters, therefore, should be macro level rather than micro level. It must deal with all such references or applications expeditiously in accordance with law and by giving appropriate reasons. Thus, we find it necessary to issue some directions which shall remain in force till appropriate regulations in that regard are framed by the competent authority." 29. It is argued that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re not charged with the duty of discharging their functions in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision. " 31. It is submitted that the Supreme Court underpinned that it is impossible to delineate watertight categories of what are "administrative" and "quasi- judicial" functions. Therefore, in this event, slotting the CCI into one or other of these watertight categories is inappropriate in deciding the instant case. This is because firstly, irrespective of whether CCI is a judicial body, all statutory decision makers are delegates of state power. So, they must be independent of influence, and have duty to act justly and fairly to uphold the rule of law. Secondly, CCI has the power to alter freely formed agreements. Whenever freedom of contract is at issue, the substance and impact of the action is material, not the form in which it is performed. Furthermore, the counsel submitted, various forms of state actio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nto play during adjudication by the SEBI. 34. Counsel submits that though superficially, CCI and ECI perform adjudicatory functions with no judicial input in the latter body, a deeper analysis of the ECI‟s functions show that adjudication is confined to registration of parties and recommending findings on qualification or disqualification; it lacks any power of review or imposition of penalty. On the other hand, even with such limited adjudicatory functions, it has greater functional independence; the appointment of its Commissioners (and Chief Election Commissioner) is not by a government dominated body, but rather by an independent collegium; its members have an assured age of retirement and constitutionally protected tenure of office and protected conditions of service. Despite performing judicial functions, CCI‟s members lack both protections and are chosen by a selection body dominated by members of the government. It was argued that Sections 55 and 56 show that CCI inherently lacks independence. These provisions are so sweeping in scope that they cast the shadow of the central government over all activities of the CCI. This creates a high likelihood of bias, and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... learned senior counsel submitted that Section 27 (b) of the Act is void and arbitrary, because CCI has unfettered discretion on WHEN to impose penalty; Section 27(b) provides no guidance on when CCI should impose penalty, i.e. whether circumstances warrant the imposition of penalty. It also has unfettered discretion as to quantum of penalty; it has unfettered discretion to pick an arbitrary percentage figure from 0 - 10% of turnover or 0 times to 3 times of profits of an enterprise for imposing penalty. The Act provides no guidelines. 37. Learned senior counsel stated that the Act contains no provisions engrafting the factors to be taken into consideration CCI must consider for imposing a penalty. The separate opinion of N.V. Ramana, J in Excel Crop Care India v Competition Commission of India 2017 (8) SCC 47 highlighted the need for guidelines while imposing penalties. It is argued that non-judicial bodies in and outside India, set out elaborate guidelines for imposing penalties. It is submitted that reliance on fiscal statutes, like the Customs Act or Excise Act is inapt, because those enactments provide upper penalty limits. There is no upper absolute limit under Section 27(b)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....alty on total turnover of the OEMs, they could have used the opportunity to distinguish the cases and highlight that penalty on turnover from outside India should be excluded. Unlike the Act, the Competition and Markets Authority, UK provides a draft penalty statement, which sets out key aspects for penalty calculation, post which parties are able to present arguments. 40. It was contended that there is discrimination in the manner for imposing penalty: Regulation 48(1) of the General Regulation- specifically denies enterprises an opportunity of hearing to present arguments on penalty if CCI finds a case of contravention of Sections 3 and 4. By amendment to Regulation 48 (1)of General Regulations in 2011, CCI amended its own regulations to take away the right of parties to benefit from (a) a show cause notice and (b) reasonable opportunity to represent his case before CCI. Counsel highlighted that in contrast, opportunity of hearing is provided before imposing penalties in cartel cases under Section 46 of the Act, read with lesser Penalty Regulations, but not under Section 3 of the Act. Hearing on penalty is extended to all other cases under Chapter VI of the Act including for non....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The Major Law Lexicon, (Vol.5, 4thEdn. 2010 P.5804) . It is submitted that in India, regulators were set up in different sectors to ensure that the interests of consumers and the interest of the various players in the market are balanced. Such bodies dealt in different sectors where previously the government was operating exclusively and has since liberalized or privatized the sector. It was contended that this was thought to be expedient to bring in independent bodies balancing the competing interests of the stakeholders in the field. 44. Mr. Lakshmikumaran, argued that regulators principally performed the functions which are regulatory, advisory or recommendatory, executive and in certain cases adjudicatory (the latter is incidental to regulatory framework in order to maintain the balance in the principal sector or industry concerned). In the process, the regulator is concerned mainly with issuing rules or regulations which forms the framework governing the sector and ensuring compliance by issuing directions; it advices in certain cases while also discharging adjudicatory functions. The learned counsel dealt with the provisions of the SEBI Act (Section 11 delineating the regul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions fall in between legislative and administrative functions and that they partake legislative character as well as administrative (in the nature of directions licensing, etc.). The regulatory functions are predominantly legislative. On the other hand, authorities which are required to adjudicate are either quasi judicial statutory bodies or tribunals. Counsel relied upon provisions of Customs Act, which creates adjudicating officials and bodies to undertake specific functions but without trapping of courts. The Appellate Tribunal under Section 129 has power of Civil Court and its proceedings are considered judicial proceedings. If one keeps this functions and rules in mind, it is clear that the Competition Commission of India is not a regulator and it is a principal authority which exercises a judicial functions conferred by the Statute. It has all the trapping of courts and is a Tribunal. It in fact determines the rights and liabilities of the parties before it. 46. It is urged by Mr. Lakshmikumaran who supplemented the submission of the previous counsel that a body which is a Tribunal and performs judicial functions as opposed to one which predominantly advices or regulates o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....them in the final decision vitiates it. Learned counsel relied upon the judgment of the Calcutta High Court in Mahomed Akil vs. Asadunnisa Bibee, 9WR 1 (FB) and the judgment in State of Punjab vs. Khan Chand (1974) 1 SCC 549. 47. Mr. Gurukrishnakumar, learned senior counsel appearing for Skoda Auto India Pvt. Ltd. argued that the Act sought to replace the forum dealing with anticompetitive behaviour. Both under the MRTP Act as well as the Act, the investigation is conducted by Director General (Investigation) ["DG(I)" or "DG"] under the supervision of the Commission. Further, under both the Acts, the DG submits the report to the respective Commission on the basis of which the Commission decides to enquire. The procedure for enquiry of a restrictive/unfair/monopolistic trade enquiry under the MRTP Act was that the MRTP Commission followed an adjudicatory process which involved hearings, recording of evidence, cross-examination and proper adjudication. Under the Act, this step/stage of adjudication under Section 26 of the Act is done by the CCI which is also evident from Section 36(2) of the Act. Therefore, the determination of existence of anti-competitive behaviour and consequenti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1990‟s necessitated the introduction of the CCI which discharges a wide array of functions in order to achieve its administrative policy, i.e. to promote competition and protect the interest of consumers. 51. Mr. Jain argued that it is a well settled principle of law that the executive is bound to implement its policies in accordance with the Constitution, thus by necessary implication the CCI is an executive body. Furthermore, it is also no longer res integra that if a function is not performed by the legislature or the judiciary it is a function which is performed by the executive. CCI regulates the economic landscape by performing a wide array of functions under the various provisions of the Act. The CCI under Section 6 of the Act is entrusted with the function of approving combinations, which are defined in Section 5 of the Act. In the process of approving combinations, the enterprises approach the CCI with the terms of proposed combination, to which CCI can make changes to, before approving the proposed combination. For it to do so CCI has to conduct an in-depth analysis of various economic factors and adjudicate / determine whether the proposed combination could cause....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Competition Act. Therefore merely because CCI also performs adjudicatory functions it does not acquire the character of judicial tribunal or Court. According to Black‟s Law Dictionary, Seventh Edition, Administrative Adjudication is defined as "the process used by an administrative agency to issue regulations through an adversary proceeding. The same definition has been reiterated in Wharton's Law Lexicon, Fifteenth Edition." 53. It is emphasized that CCI was not set up to substitute any court or tribunal or to adjudicate upon matters which earlier belonged to the domain of an Adjudicatory body akin to a Court or Tribunal. The observations in S.P. Gupta v. Union of India, AIR 1982 SC 149 are relied on to show that such functions could never be performed by courts. The court held: "The Court does not decide issues in the abstract. It undertakes determination of a controversy provided it is necessary in order to give relief to a party and if not relief can be given because none is sought, the Court cannot take upon itself a theoretical exercise merely for the purpose of deciding academic issues, howsoever important they may be. The Court cannot embark upon an inquiry wheth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t an unbridled or unfettered power. 55. It is argued that administrative adjudication is not an alien concept but rather its importance has been recognized in various judgments in India and internationally. Fundacio Privida Intervida vs. Additional Commissioner, Pune Division & Anr. 2005 (2) ALL MR 48 that under the Indian Constitution, quasi-judicial or administrative adjudication is a known feature; the observations of the Bombay High Court in this context, were relied on, that "Sometimes, the task of adjudication is merely an incidental administration; sometimes, it is more than incidental and it begins to assume a very close resemblance with the work usually assigned to the judiciary. This practice of vesting adjudicatory functions in person, bodies or institutions outside the ordinary hierarchy or regular law courts is becoming increasingly pronounced with the passage of time." 56. It is urged that the CCI must impose penalty in a quasi-judicial manner. The expression "quasi-judicial" is an expression where an executive body exercises discretion by adopting certain judicial procedures to ensure fairness. This is described in Gullapalli Nageswara Rao v. State of Andhra AIR 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....situation. If a person with legal background is appointed to any of these posts, then his appointment can be challenged on the ground that such a person though would be fit to discharge the quasi-judicial duties, but totally unfit to discharge other administrative duties which are the primary and day-to-day duties attached to the said office. 12. We would have still given some weightage to the argument of the petitioner, had it been a case where the order of the Registrar, deciding the dispute, was made final. That is not so...." 59. Learned counsel also relied on the observations in Ujjam Bai v State of Uttar Pradesh AIR 1962 SC 1621, to advance CCI‟s argument in this context, especially the following passage: "169. In this case a further attempt is made on behalf of the State to restrict the scope of the Court's jurisdiction. Uninfluenced by judicial decisions, let us approach the question on principle. An illustration arising on the facts of the present case will highlight the point to be decided. A citizen of India is doing business in bidis. He has fundamental right to carry on that business. The State Legislature enacts the Sales Tax Act imposing a tax on the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvalid, or if the officer acts with inherent want of jurisdiction, the petitioner's fundamental right can be enforced. It is said that if a valid law confers jurisdiction on the officer to decide rightly or wrongly, the petitioner has no fundamental right. What is the basis for this principle ? None is discernible in the provisions of the Constitution. There is no provision which enables the Legislature to make an order of an executive authority final so as to deprive the Supreme Court of its jurisdiction under Article 32 of the Constitution. 171. But the finality of the order is sought to be sustained on the principle of res judicata. It is argued that the Sales-tax Tribunals are judicial tribunals in the sense they are courts, and, therefore their final decisions would operate as res judicata on the principle enunciated by this Court in Daryao's case [1962]1SCR574 . Can it be said that Salestax authorities under the Act are judicial tribunals in the sense they are courts ? In a Welfare State the Governments is called upon to discharge multifarious duties affecting every aspect of human activity. This extension of the governmental activity necessitated the entrusting of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lowing the analogy of the Income-tax Act, at the instance of the party aggrieved a reference can be made by the reviewing authority to the High Court on a question of law shows only that the help of the High Court can be requisitioned only to elucidate questions of law, but the High Court has no power to make final orders, but on receipt of the judgments of the High Court, the revising authority shall make an order in conformity with such judgment. 60. Mr. Jain argued that it is clear that a body charged with performing multiple functions can adjudicate and it is not necessary that the person(s) manning the body must have a legal background. The only aspect that emerges is that the body while adjudicating performs in a quasi-judicial manner, which mandates that the executive must adopt judicial procedures and not that the person performing a quasi-judicial function must have a judicial background. Furthermore, if a body decides between an individual and public interest at large there is no lis per se, which further ratifies the fact that the CCI does not perform a judicial function. CCI‟s adjudication is also used to regulate and monitor conduct of various companies. Accord....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s only concerned with the issue whether a particular body was a "tribunal" for the purposes of Article 136 of the Constitution of India, i.e. if an appeal would lie to the Supreme Court from the decision of such a body and not whether tribunals required judicial members. The fallacy of the said argument can be seen from these judgments itself wherein the Central Government/State Governments have been held to be a tribunal, therefore these purely executive bodies have been held to be tribunals. Therefore, the reliance placed by the petitioner on these judgments to show that the tribunals must be manned by judicial members is completely misplaced. 62. Mr. Jain argued that the doctrine of separation of powers does not apply in its strict rigor in India and highlighted observations in several judgements of the Supreme Court, which said so: Bhim Singh v Union of India 2010 (5) SCC 538; Indira Nehru Gandhi v Raj Narain AIR 1975 SC 2299 and Jayantilal Amritlal Shodhan v F.N. Rana 1964 (5) SCR 294. It is submitted, therefore, that the incidental performance of quasi judicial functions by a regulatory authority, under law, cannot militate against that doctrine so as to be called arbitrary ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of existing tribunals and the High Court as regards interpretation of company law and allied enactments was sought to be ousted and replaced by a tribunal. This attempt was similar to the creation of NTT, which sought to do away with over five decades old tribunals and High Courts‟ jurisdiction, which was held to be unconstitutional inasmuch as judicial power was sought to be tribunalized thus undermining the doctrine of separation of power, leading to arbitrariness. 65. It was next argued-in the context of Section 27 that there is no need to give a separate hearing for the purpose of determination of quantum of penalty, for the reason that (a) the "opposite parties" are at liberty to address them compositely while making submissions on merits and (b) the COMPAT is empowered to reduce or stay the penalty even without insisting on full or partial pre-deposit unlike several other appellate regimes. It was submitted that as to the concept of „relevant turnover‟, merely because the CCI has in a particular order, taken the total turnover or a company rather than the product specific turnover, it does not given rise to challenge being mounted for constitutional validit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing vote enables achievability of a majority decision. 68. Mr. Jain refuted that the enactment was void as it permitted "the revolving door" procedure. It was submitted that the allegation is unfounded and misconceived since it is a settled proposition of law that validity of a law cannot be determined on the assumption that the concerned authority is likely to act in an arbitrary or irregular manner. It was further submitted that "the revolving door" allegation is based on the premise that certain members who heard the final arguments of the case, chose not to sign the final order. This is disputed as incorrect since apart from the three members who signed the final order, all the other members who had heard the final arguments of the petitioners before the CCI had retired. Further, the cases cited by the petitioners relate to the proposition that "only one who hears must decide", i.e.; someone who has not heard the parties should not decide and that‟s the reason that even when new members were appointed, since they had not heard the petitioners on the final arguments, they did not sign or pass the final order. It is argued that the petitioners are seeking to take benefit o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....litate against it. 71. Counsel submitted that CCI is considered to be an expert regulatory body. While culling out the market share, relevant geographical, relevant product market there are various economic formulae, economic tools, accounting principles, understanding of socio-economic factors and algorithms which are required to be pressed into service and are used by the CCI, thus there is a need for experts. An example of one of such formulas is the Herfindahl index (also known as Herfindahl- Hirschman Index, or HHI) -a measure based on the total number and size distribution of firms in the industry which is important for determining the level of concentration in a sector. It is computed as the sum of the squares of relative size of all firms in the industry. 72. Mr. Jain concluded his submissions, urging that the grounds in support of the petitioner‟s case that the doctrine of separation of powers or independence of the judiciary, being violated resulting in the invalidation of the Act are insubstantial. He submitted that even if arguendo, any particular procedure in a given case or group of cases is found to be irregular, that cannot lead to the declaration by the cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting the merits of the case Section 22 : Meetings of Commission (1) The Commission shall meet at such times and such places, and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be provided by regulations. (2) The Chairperson, if for any reason, is unable to attend a meeting of the Commission, the senior-most Member present at the meeting, shall preside at the meeting. (3) All questions which come up before any meeting of the Commission shall be decided by a majority of the Members present and voting, and in the event of an equality of votes, the Chairperson or in his absence, the Member presiding, shall have a second or casting vote: Provided that the quorum for such meeting shall be three Members.] Section 26 : Procedure for inquiry on complaints under section 19 (1) On receipt of a reference from the Central Government or a State Government or a statutory authority or on its own knowledge or information received under section 19, if the Commission is of the opinion that there exists a prima facie case, it shall direct the Director General to cause an investigation to be made into the matter: Provided th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er or itself proceed with further inquiry in the matter in accordance with the provisions of this Act. (8) If the report of the Director General referred to in sub-section (3) recommends that there is contravention of any of the provisions of this Act, and the Commission is of the opinion that further inquiry is called for, it shall inquire into such contravention in accordance with the provisions of this Act.]] Section 27 : Orders by Commission after inquiry into agreements or abuse of dominant position Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the following orders, namely:-- (a) direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be; (b) impose such penalty, as it may deem fit which shall be not more than ten per cent. of the average of the turnover for th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent or copy of such record or document from any office. (3) The Commission may call upon such experts, from the fields of economics, commerce, accountancy, international trade or from any other discipline as it deems necessary to assist the Commission in the conduct of any inquiry by it. (4) The Commission may direct any person: (a) to produce before the Director General or the Secretary or an officer authorized by it, such books, or other documents in the custody or under the control of such person so directed as may be specified or described in the direction, being documents relating to any trade, the examination of which may be required for the purposes of this Act; (b) to furnish to the Director General or the Secretary or any other officer authorized by it, as respects the trade or such other information as may be in his possession in relation to the trade carried on by such person, as may be required for the purposes of this Act.] Section 53C. Composition of Appellate Tribunal.- (Omitted by the Finance Act, 2017 ) The Appellate Tribunal shall consist of a Chairperson and not more than two other Members to be appointed by the Central Government. Section 53D. Qualifica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay be specified in the notification: Provided that before issuing any such notification, the Central Government shall give a reasonable opportunity to the Commission to make representations against the proposed supersession and shall consider representations, if any, of the Commission. (2) Upon the publication of a notification under sub-section (1) superseding the Commission,- (a) the Chairperson and other Members shall as from the date of supersession, vacate their offices as such; (b) all the powers, functions and duties which may, by or under the provisions of this Act, be exercised or discharged by or on behalf of the Commission shall, until the Commission is reconstituted under subsection (3), be exercised and discharged by the Central Government or such authority as the Central Government may specify in this behalf; (c) all properties owned or controlled by the Commission shall, until the Commission is reconstituted under sub-section (3), vest in the Central Government. (3) On or before the expiration of the period of supersession specified in the notification issued under subsection (1), the Central Government shall reconstitute the Commission by a fresh appo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct to the provisions of the Act, the Commission or the Director General, as the case may be, may determine the manner in which evidence may be adduced in the proceedings before them. (2) Without prejudice to sub-regulation (1), the Commission or the Director General, for the purpose of inquiry or investigation, as the case may be, may - (a) admit evidence taken in the form of verifiable transcripts of tape recordings, unedited versions of video recording, electronic mail, telephone records including authenticated mobile telephone records, written signed unsworn statements of individuals or signed responses to written questionnaires or interviews or comments or opinions or analyses of experts based upon market surveys or economic studies or other authoritative texts or otherwise, as material evidence; (b) admit on record every document purporting to be a certificate, certified copy or other document, which is by law declared to be admissible as evidence of any particular fact provided it is duly certified by a gazetted officer of the Central Government or by a State Government or a statutory authority, as the case may be or a Magistrate or a Notary appointed under the Notar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....; (f) section 81-A - presumption as to Gazettes in electronic forms; (g) section 85-A - presumption as to electronic agreements; (h) section 85-B - presumption as to electronic records and electronic signatures; (i) section 85-C - presumption as to digital signature certificates; (j) section 88-A - presumption as to electronic messages; (k) section 89 - presumption as to due execution etc., of documents not produced; (l) section 90-A - presumption as to electronic records five years old; may be applicable for the purpose of inquiry or investigation, by the Commission or the Director General, as the case may be. (4) The Commission or the Director General, as the case may be, may call for the parties to lead evidence by way of affidavit or lead oral evidence in the matter. (5) If the Commission or the Director General, as the case may be, directs evidence by a party to be led by way of oral submission, the Commission or the Director General, as the case may be, if considered necessary or expedient, grant an opportunity to the other party or parties, as the case may be, to cross examine the person giving the evidence. (6) The Commission or the Director Ge....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or the Director General, as the case may be, and whose attendance, in the opinion of the Commission or the Director General, as the case may be, cannot be procured without incurring unnecessary expense within the stipulated time; (f) not being covered under any of the situations mentioned in clauses (a) to (e), if his or her evidence is considered necessary in the interest of justice. (2) Subject to the provisions of sub-regulation (1), the Commission or the Director General, as the case may be, either on its or his own motion or on an application made by a party to any proceeding before the Commission or the Director General, may also issue a commission for the examination on questionnaires or otherwise of any witness residing at any place not within India if satisfied that the evidence of such witness is necessary and may issue a letter of request to the Indian High Commission or the Indian Embassy to facilitate the execution of the commission, under this regulation. (3) Subject to the provisions of sub-regulations (1) and (2), the Commission or the Director General, as the case may be, either on its or his own motion or on an application made by a party to any proceedin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....trary contained in any regulations framed under the Act, no order or direction imposing a penalty under Chapter VI of the Act shall be made unless the person or the enterprise or a party to the proceeding, during an ordinary meeting of the Commission, has been given a show cause notice and reasonable opportunity to represent his case before the Commission. (2) In case the Commission decides to issue show cause notice to any person or enterprise or a party to the proceedings, as the case may be, under sub- regulation (1), the Secretary shall issue a show cause notice giving not less than fifteen days asking for submission of the explanation in writing within the period stipulated in the notice. (3) The Commission shall, on receipt of the explanation, and after oral hearing if granted, proceed to decide the matter of imposition of penalty on the facts and circumstances of the case." The Issues needing determination 74. This court is of the view that the issues involved in these batch of petitions are the following: (1) Is the CCI a tribunal exercising judicial functions, or is it performing administrative and investigative functions and also adjudicating issues before it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ture. The scope of such investigation has to be examined with reference to the statutory powers. In that case the Court found that the proceedings, before the High-Power Judicial Committee constituted, were neither civil nor criminal but sui generis." 76. Characterizing the proceeding before CCI as one akin to the preliminary stages of a departmental proceeding, the court, in SAIL (supra), held that prima facie opinion formation was merely an administrative function and that inquiry into the information or complaint (received by CCI) commences after such opinion was formed, for which notice to the opposite party is not a pre-requisite, though it may seek information in that regard, in view of Regulation 17: "The jurisdiction of the Commission, to act under this provision, does not contemplate any adjudicatory function. The Commission is not expected to give notice to the parties, i.e. the informant or the affected parties and hear them at length, before forming its opinion. The function is of a very preliminary nature and in fact, in common parlance, it is a departmental function. At that stage, it does not condemn any person and therefore, application of audi alteram partem is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefore, clear that though information or complaint which may trigger an inquiry, (but not necessarily so, in all cases) is received by the CCI, the initial steps it takes are not always towards, or in aid of adjudication. They are to ascertain fuller details and inquire into the veracity (or perhaps) seriousness of the contents of the information, to discern whether such investigation and further steps towards adjudication are necessary. It is important to flag this function, because a court or tribunal, which has adjudicatory functions, is seized of the lis or the dispute, when the suitor or litigant approaches it. The issuance of notice or summons, by the court, in exercise of compulsive jurisdiction (like in a suit, or civil proceeding, or by a tribunal, in an appeal before it) or in discretionary jurisdiction (like in writ proceedings) are judicial acts, necessarily in furtherance of the adjudicatory function which the court or tribunal performs. At the stage when CCI entertains and directs an inquiry, it does not perform any adjudicatory function; the function is merely administrative. This position has been reiterated in Competition Commission of India v Bharat Sanchar Niga....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of competition advocacy, creating awareness and imparting training about competition issues." 80. In the discharge of investigative functions under the Act and regulations, a striking feature which can be noticed is that the bodies constituted under it (the CCI and the DG) are not concerned with any lis, in the sense of a dispute between two parties over a legal relationship, status or private property; it is rather, having regard to the peculiar remit of the Act, is [as stated in Excel Crop Care (supra)]: "to ensure that there is a healthy competition in the market, as it brings about various benefits for the public at large as well as economy of the nation. In fact, the ultimate goal of competition policy (or for that matter, even the consumer policies) is to enhance consumer well-being. These policies are directed at ensuring that markets function effectively. Competition policy towards the supply side of the market aims to ensure that consumers have adequate and affordable choices. Another purpose in curbing anti-competitive agreements is to ensure "level playing field" for all market players that helps markets to be competitive. It sets rules of the game" that protect t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the government on policy (as an expert body) and advocating competition, in addition to issuing directions or orders against specific entities or companies with the aim of eliminating a practice found pernicious or one which constitutes a barrier to competition and fair dealing in the marketplace. 84. However, the above finding that the CCI is not a tribunal exercising exclusive judicial power, does not lead to the conclusion that its orders are any less quasijudicial- at the stage when they attain finality. They are, for the simple reason that the consequences are far reaching, to those entities and companies which are subjected to directions (cease and desist orders, directions to alter agreements, etc). The right to freedom of trade, to the extent that it impinges on the right of the entity to exercise free choice about contractual terms, or whom to associate with (in regard to association and merger) are undeniably implicated. These orders, however, are subject to appeal, to a tribunal (COMPAT). CCI is also amenable to judicial review under Article 226 of the Constitution of India as regards the directions it makes procedurally. For instance, if it can be shown that investigat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r of its regulating entities, markets, contractual relationships and associations once it determines, with respect to the undesirable effect upon competition in the "relevant market" of a particular product or service. The term "regulation" is broad, and has many hues. Reference in this connection can also be made to the judgment in U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills Association and Ors. (2004) 5 SCC 430] where the court interpreted the word "regulation" in the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 and observed that: "20. ... 'Regulate' means to control or to adjust by Rule or to subject to governing principles. It is a word of broad impact having wide meaning comprehending all facets not only specifically enumerated in the Act, but also embraces within its fold the powers incidental to the Regulation envisaged in good faith and its meaning has to be ascertained in the context in which it has been used and the purpose of the statute." 88. It is hence plain that the expression "regulate" is adaptable enough to include the power to issue directions. [Also see Star India Private Limited v. Department of Industrial Polic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve, thereby making it harder for the targets of the agency's regulatory effort to conform their conduct to the policy that the agency is attempting to adopt. A change in agency policy adopted through adjudication can also come as quite a surprise to the first party to whom it is applied. Courts sometimes deem it unacceptable for the agency to penalize the first entity that violates a new policy announced through adjudication. The Administrative Procedure Act (APA) also creates differences between the two processes. The APA explicitly insists that an independent administrative law judge pre- sides over an adjudication-a requirement not duplicated by the rulemaking processes.9This requirement, however, applies largely to the trial-level decision maker in an adjudication. The appeals process will eventually allow the agency itself to interject its policy concerns into the process. Likewise, even though ex-parte contact and influence by political entities is thought to be less appropriate in an adjudicatory proceeding than in rulemaking, once again, this applies largely to the initial triallevel determination and not to the appeals process." 90. Each state devices its legislation and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder investigation; the power to attach after passing of an order on an application made for approval (by the Judicial Magistrate of First Class having jurisdiction) for a period not exceeding one month, one or more bank account(s) of any intermediary or any person associated with the securities market in any manner involved in violation of any of the provisions of the SEBI Act, or the rules/regulations framed thereunder; and the power to direct any intermediary or any person associated with the securities market in any manner not to dispose of or alienate an asset forming part of any transaction which is under investigation. If SEBI, after due investigation, discerns that a person has violated (or is likely to violate) any provision of the SEBI Act, or any rules/regulations made there under, it is authorized under Section 11D of the SEBI Act, to pass an order requiring the person concerned, to cease and desist from committing or causing such violation. Chapter VIA of the SEBI Act provides for penalties and adjudication. Under it, a penalty can be levied, for failure to furnish information, return or report to the Board (Section 15A inserted with retrospective effect from 25.01.199....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll issues which are to be considered by SEBI are to be decided by majority of votes and in the event of equality of votes, the Chairperson would have a casting vote. 93. Speaking about the powers of the SEBI, the Supreme Court, in Clariant International Ltd. and Anr. vs. Securities & Exchange Board of India 2004 (8) SCC 524, had remarked that: "77. The Board exercises its legislative power by making regulations, executive power by administering the regulations framed by it and taking action against any entity violating these regulations and judicial power by adjudicating disputes in the implementation thereof. The only check upon exercise of such wide ranging power is that it must comply with the Constitution and the Act. In that view of the matter, where an expert Tribunal has been constituted, the scrutiny at its end must be held to be of wide import. The Tribunal, another expert body, must, thus, be allowed to exercise its own jurisdiction conferred on it by the statute without any limitation." Later, in National Securities Depository Ltd. v Securities and Exchange Board of India 2017 (5) SCC 517 the court again said, about SEBI that "The Board is indisputably an expert b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a group of consumers. Every "direction, decision or order" by the TRAI- made, in the course of its regulatory power, is subject to appeal to TDSAT (Section 14A (2)). 97. The composition of TDSAT is dealt with Section 14B. The Tribunal comprises of a Chairman and not more than two members - to be appointed by the Central Government. These are to be selected by the Central Government in consultation with the Chief Justice of India [Section 14B(2); Section 14B(3)] confers the option of Bench formation of the TDSAT and the distribution of work. Section 14(c) of the TRAI Act states that the Chairperson should have been a former Judge of the Supreme Court or the Chief Justice of the High Court [Section 14C (a)]. As far as members are concerned, the essential qualification and experience is that the individual concerned should have held the post of Secretary to the State Government or any equivalent post of State Government for a period not less than two years or one well-versed in the field of technology, telecommunication, industry, commerce or administration. The term of office of TDSAT member is provided in Section 14D. For Chairperson, the tenure is not exceeding three years and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s constituted in the States - The State Electricity Regulatory Commissions, under Section 82(1). The Chairperson and members of the State Commissions are to be appointed by the concerned State Government on the recommendations of a Selection Committee under Section 85 - by virtue of Section 82(5). Like in the case of the Central Commission, Section 89 follows the similar pattern. The tenure of Chairperson or members shall be for five years. The qualification of Chairperson and Members of the State Commission is provided under Section 84. They should be from amongst persons of integrity and standing with adequate knowledge and having shown capacity in, dealing with problems relating to engineering, finance, commerce, economics, law or management. The Chairperson can, however, be appointed from amongst those who were Judges of High Courts [Section 84(2)] subject to previous consultation with the concerned Chief Justice of that High Court. 101. The functions of the State Commission are outlined under Section 86 and they include determination of tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, within the State; regulating electricity ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Civil Court. Such powers to execute the decree are conferred upon the Tribunal itself. The Tribunal‟s decision and orders are appealable to the Supreme Court under Section 125, on the grounds specified under Section 100 of the CPC. (d) Airports regulation: the Airports Authority of India Act and the Airports Economic Regulatory Authority Act, 2008 105. The first regulation in the field of airport regulation is the Airports Authority Act, 1994; it establishes the Airports Authority of India (AAI), whose functions-under Section 12 to manage civil airports, civil enclaves and aeronautical communications. By Section 12 (2) and (3), the AAI is invested with manifold regulatory duties including providing for air traffic and air transport service in every airport. It has the overarching duty to plan, conceive and establish airports and provide every kind of regulatory direction in that regard; also provide technical services such as navigational aids, etc. Section 3 provides for constitution of the AAI; Section 3 (3) prescribes that the AAI shall be comprised of a Chairperson and eight members- all to be appointed by the Central Government. One of them is the Director General of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....India or any equivalent post in the Central or State Government for a total period of not less than three years." Selection of individuals to these positions is by a committee, under Section 5, comprised of high ranking officers of the Central Government, including the Cabinet Secretary. Section 6 prescribes that the term of the Chairman and others is to be five years; the outer age limit for the chairperson is 65 years and the members is 62 years. 109. The functions of AERA include, under Section 13, determination of tariff for the aeronautical services, in all major airports, taking into consideration several factors, i.e. the capital expenditure incurred and timely investment in improvement of airport facilities; the service provided, its quality and other relevant factors; the cost for improving efficiency; economic and viable operation of major airports; revenue received from services other than the aeronautical services; the concession offered by the Central Government in any agreement or memorandum of understanding or otherwise; any other factor which may be relevant for the purposes of this Act. Different tariff structures may be determined for different airports having re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mit for Chairperson is 70 years; for member it is sixty-five years. Petroleum Regulation 112. The Petroleum and Natural Gas Regulatory Board Act, 2006 (hereafter as "the PNGRB Act") was framed to promote competitive markets and protect the interests of consumers by ensuring fair trade and competition among the entities. The Board under Section 11 of the PNGRB Act has to protect the interest of consumers by passing fair trade and competition among entities and through its regulations enable access to common carriers or contract carriers. To achieve those objectives, the Board has tariff framing authority : through regulations under Section 22(1). By virtue of Section 28, the PNGRB Board is empowered to entertain complaints or upon its satisfaction upon information, that anyone contravenes provisions of the Act or its directions or authorize the terms and conditions subject to which authorization is guaranteed to carriers and other service providers (under Section 15 and 19) or retail service obligations etc. It can entertain such complaints. These complaints and information can be the subject matter of an enquiry during the course of which opportunity should be given to the conce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....especially in the matters relating to the Petroleum and Natural Gas or should be a person of an ability and standing, having adequate knowledge of or experience in dealing with matters relating to exploration, production, transmission pipelines, marketing or regulation of petroleum, petroleum products or natural gas, economics, commerce, law or management. The jurisdiction of the Appellate Tribunal as is spelt out by Section 33; any order or decision of the Board is appealable by any person aggrieved to the Tribunal. The appeal against any order of the Appellate Tribunal shall lie with the Supreme Court (Section 37) on grounds specified in Section 100 of the CPC. 115. It is evident from the above enumeration of powers conferred upon the TRAI, the SEBI, the Electricity Commissions, the AAI, the AERA the PNGRB, that a two stage pattern has evolved in regulation of various sectors of the economy: the telecom, the securities, the power, airports and petroleum sectors. At the first stage the legislation provides for a primary regulator: in most cases, apart from regulatory duties, the concerned body also possesses regulation framing powers and power to issue directions, - after consult....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... orders are made by appellate bodies). But the primary determinations are made by regulatory bodies. This model or pattern inures under the Competition Act, as well. 117. In the United States of America, courts- notably the US Supreme Court- have grappled with problems arising from regulatory adjudication. The clearest statement of the scope of such decision making- which resembles an adjudicatory outcome by courts- was made in Securities Exchange Commission v. Chenery Corp., 332 U.S. 194 (1947) arose from an order of the commission (SEC) refusing to approve a utility company's bankruptcy reorganization plan, due to that plan's favourable treatment of management's stock purchases during the reorganization period. The Commission originally had based its disapproval on its understanding of general corporation law principles. The Supreme Court initially struck down that decision as a misreading of the principles. On remand, the SEC reaffirmed its rejection of the reorganization plan. But this time SEC relied on its interpretation of the standards of the Public Utility Holding Company Act of 1935.When the Supreme Court decided the appeal for the second time, it affirmed SE....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... law by the legislature whereas a quasi-judicial order comes from adjudication which is also a part of administrative process resembling a judicial decision by a court of law. 50. Applying the above test, price fixation exercise is really legislative in character, unless by the terms of a particular statute it is made quasijudicial as in the case of tariff fixation under Section 62 made appealable under Section 111 of the 2003 Act, though Section 61 is an enabling provision for the framing of regulations by CERC. If one takes "tariff" as a subject-matter, one finds that under Part VII of the 2003 Act actual determination/fixation of tariff is done by the appropriate Commission under Section 62 whereas Section 61 is the enabling provision for framing of regulations containing generic propositions in accordance with which the appropriate Commission has to fix the tariff. This basic scheme equally applies to the subject-matter "trading margin" in a different statutory context as will be demonstrated by discussion hereinbelow." 119. PTC India, (a Constitution Bench decision) as well as the decision of the Supreme Court in Bharat Sanchar Nigam Ltd v Telecom Regulatory Authority of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....udicial powers of the State to adjudicate upon rights of the parties in civil matters when there was a lis between the contesting parties, and so, the conclusion was that it acts as a tribunal and not as an executive body. Jaswant Sugar Mills (supra) held that the Conciliation Officer acting under clause 29 of a statutory order promulgated in 1954 under the U.P. Industrial Disputes Act, 1947, has to act judicially in granting or refusing permission to alter the terms of employment of workmen at the instance of the employer, but even so, he was not a tribunal, because he was not invested with the judicial power of the State, as he was empowered merely to lift the ban statutorily imposed on the employer's rights, and was not authorized to make a final order or binding decision in any dispute. Engineering Mazdoor Sabha representing Workmen employed under the Hind Cycles Ltd. v Hind Cycles Ltd., Bombay (1963) Suppl (1) SCR 625, referred to the trappings of a court and it was observed that sometimes a rough and ready test is applied in determining the status of an adjudicating body by enquiring whether the said body or authority is clothed with the trappings of a court. In that conn....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g exercised by both courts and Tribunals. Except the powers and jurisdictions vested in superior courts by the Constitution, powers and jurisdiction of courts are controlled and regulated by Legislative enactments. High Courts are vested with the jurisdiction to entertain and hear appeals, revisions and references in pursuance of provisions contained in several specific legislative enactments. If jurisdiction of High Courts can be created by providing for appeals, revisions and references to be heard by the High Courts, jurisdiction can also be taken away by deleting the provisions for appeals, revisions or references. It also follows that the legislature has the power to create Tribunals with reference to specific enactments and confer jurisdiction on them to decide disputes in regard to matters arising from such special enactments. Therefore it cannot be said that legislature has no power to transfer judicial functions traditionally performed by courts to Tribunals. 88. The argument that there cannot be `whole-sale transfer of powers' is misconceived. It is nobody's case that the entire functioning of courts in the country is transferred to Tribunals. The competence of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of courts). Similarly while constituting Tribunals, the Legislature can prescribe the qualifications/eligibility criteria. The same is however subject to Judicial Review. If the court in exercise of judicial review is of the view that such tribunalisation would adversely affect the independence of judiciary or the standards of judiciary, the court may interfere to preserve the independence and standards of judiciary. Such an exercise will be part of the checks and balances measures to maintain the separation of powers and to prevent any encroachment, intentional or unintentional, by either the legislature or by the executive...." 124. The leading authority relied upon by the Petitioners was the Madras Bar Association (supra) judgment. It would be essential to extract some of the observations and findings of the Supreme Court in that judgment, dealing with the transfer of judicial powers to tribunals. They are reproduced as under: "108...The position that Parliament had the power to amend the Constitution, and to create a court/tribunal to discharge functions which the High Court was discharging, was reiterated, in Union of India v Madras Bar Association case (supra). It was con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, it was essential that the incumbent had held a judicial office in India for a period of 10 years, or had practiced as an Advocate for a similar period. It is the above qualification, which enabled the enactments to provide, by a fiction of law, that all the said Appellate Tribunals were discharging "judicial proceedings". The next stage of appellate determination, has been traditionally vested with the High Courts. The income-tax legislation, the customs legislation, as well as, the central excise legislation uniformly provided, that in exercise of its appellate jurisdiction, the jurisdictional High Court would adjudicate appeals arising out of orders passed by the respective Appellate Tribunals. The said appeals were by a legislative determination, to be heard by benches comprising of at least two judges of the High Court. Adjudication at the hands of a bench consisting of at least two judges, by itself is indicative of the legal complications, insofar as the appellate adjudicatory role, of the jurisdictional High Court was concerned. It would, therefore, not be incorrect to conclude, by accepting the submissions advanced at the hands of the learned counsel for the petitioners....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ticipate in the aforestated administrative functioning of the NTT, in our view, would impinge upon the independence and fairness of the Members of the NTT. For the NTT Act to be valid, the Chairperson and Members of the NTT should be possessed of the same independence and security, as the judges of the jurisdictional High Courts (which the NTT is mandated to substitute). Vesting of the power of determining the jurisdiction, and the postings of different Members, with the Central Government, in our considered view, would undermine the independence and fairness of the Chairperson and the Members of the NTT, as they would always be worried to preserve their jurisdiction based on their preferences/inclinations in terms of work, and conveniences in terms of place of posting. An unsuitable/disadvantageous Chairperson or Member could be easily moved to an insignificant jurisdiction, or to an inconvenient posting. This could be done to chastise him, to accept a position he would not voluntarily accede to. We are, therefore of the considered view, that Section 5 of the NTT Act is not sustainable in law, as it does not ensure that the alternative adjudicatory authority, is totally insulated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... One cannot lose sight of the fact, that hitherto before, the issues which will vest in the jurisdiction of the NTT, were being decided by a bench of at least two judges of the High Court. The onerous and complicated nature of the adjudicatory process is clear. We may also simultaneously notice, that the power of "judicial review" vested in the High Courts under Articles 226 and 227 of the Constitution has not been expressly taken away by the NTT Act. During the course of hearing, we had expressed our opinion in respect of the power of "judicial review" vested in the High Courts under Articles 226 and 227 of the Constitution. In our view, the power stood denuded, on account of the fact that, Section 24 of the NTT Act vested with an aggrieved party, a remedy of appeal against an order passed by the NTT, directly to the Supreme Court. Section 24 aforementioned is being extracted hereunder: "24. Appeal to Supreme Court.- Any person including any department of the Government aggrieved by any decision or order of the National Tax Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the National Tax Tribunal to h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tituted. 137. (iv) Constitutional conventions, pertaining to constitutions styled on the Westminster model, will also stand breached, if while enacting legislation, pertaining to transfer of judicial power, conventions and salient characteristics of the court sought to be replaced, are not incorporated in the court/tribunal sought to be created. 138.(v) The prayer made in Writ Petition (C) No.621 of 2007 is declined. Company Secretaries are held ineligible, for representing a party to an appeal before the NTT. 139.(vi) Examined on the touchstone of conclusions (iii) and (iv) above, Sections 5, 6, 7, 8 and 13 of the NTT Act (to the extent indicated hereinabove), are held to be unconstitutional. Since the aforesaid provisions, constitute the edifice of the NTT Act, and without these provisions the remaining provisions are rendered ineffective and inconsequential, the entire enactment is declared unconstitutional...." 125. In Madras Bar Association (supra) and R. Gandhi (supra), therefore, the common ground was whether Parliament could transfer jurisdiction vested in courts to specially created tribunals. This principle finds clearest enunciation in Madras Bar Association (s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ature of the Constitution and it cannot be abrogated without affecting the basic structure of the Constitution, but if any constitutional amendment made by Parliament takes away from the High Court the power of judicial review in any particular area and vests it in any other institutional mechanism or authority, it would not be violative of the basic structure doctrine, so long as the essential condition is fulfilled, namely, that the alternative institutional mechanism or authority set is no less effective than the High Court.." 128. The problems felt when the Administrative Tribunals were set up, i.e. complete exclusion of judicial review [under Article 226 of the Constitution by virtue of Article 323A (2) (b) and 323B (3) (b)] resulted in a reference to a larger bench of (seven judges); this led to the decision in L. Chandra Kumar (supra). The court, in L. Chandra Kumar (supra), held, inter alia, that: "90. In the years that have passed since the Report of the Malimath Committee was delivered, the pendency in the High Courts has substantially increased and we are of the view that its recommendation is not suited to our present context. That the various Tribunals have not per....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ensure that frivolous claims are filtered out through the process of adjudication in the Tribunal. The High Court will also have the benefit of a reasoned decision on merits which will be of use to it in finally deciding the matter. 92. It has also been contended before us that even in dealing with cases which are properly before the Tribunals, the manner in which justice is dispensed by them leaves much to be desired. Moreover, the remedy provided in the parent statutes, by way of an appeal by special leave under Article 136 of the Constitution, is too costly and inaccessible for it to be real and effective. Furthermore, the result of providing such a remedy is that the docket of the Supreme Court is crowded with decisions of Tribunals that are challenged on relatively trivial grounds and it is forced to perform the role of a First Appellate Court. We have already emphasised the necessity for ensuring that the High Courts are able to exercise judicial superintendence over the decisions of Tribunals under Article 227of the Constitution. In R.K. Jain's case, after taking note of these facts, it was suggested that the possibility of an appeal from the Tribunals on questions of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rectly. All other decisions of these Tribunals, rendered in cases that they are specifically empowered to adjudicate upon by virtue of their parent statutes, will also be subject to scrutiny before a Division Bench of their respective High Courts. We may add that the Tribunals will, however, continue to act as the only courts of first instance in respect of the areas of law for which they have been constituted. By this, we mean that it will not be open for litigants to directly approach the High Courts even in cases where they question the vires of statutory legislations (except, as mentioned, where the legislation which creates the particular Tribunal is challenged) by overlooking the jurisdiction of the concerned Tribunal. ************************** *************** 96. We are also required to address the issue of the competence of those who man the Tribunals and the question of who is to exercise administrative supervision over them. It has been urged that only those who have had judicial experience should be appointed to such Tribunals. In the case of Administrative Tribunals, it has been pointed out that the administrative members who have been appointed have little or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r (supra) and L. Chandra Kumar (supra), the issue which confronted the court was complete exclusion of judicial review; the High Courts‟ jurisdiction in service matters, under Article 226 of the Constitution was completely ousted. The Administrative tribunals were created under the Act, and by reason of Article 323A (2)(d) and Article 323B (3) (d), such jurisdiction of the courts was ousted. L. Chandra Kumar (supra) declared that the amendment which introduced those provisions was violative of the basic structure or essential features, inasmuch as the entire exclusion of such judicial review from the High Court, and its conferment on a body which was not an effective substitute, was impermissible. Resultantly, the amendments were declared unconstitutional; as a consequence, on the one hand, the tribunal‟s jurisdiction to determine the vires of rules (barring rules and subordinate legislation under the parent statute, i.e. the Administrative Tribunals Act) was upheld; at the same time, judicial review jurisdiction over its orders, and the power of the High Court of superintendence over those tribunals, was reinstated. The court emphatically declined the argument that all....
X X X X Extracts X X X X
X X X X Extracts X X X X
....: "This court has previously held that the taking away of the judicial function through legislation would be violative of separation of powers. As Chandrachud, J. noted in Indira Nehru Gandhi case (supra), "the exercise by the legislature of what is purely and indubitably a judicial function is impossible to sustain in the context even of our co-operative federalism which contains no rigid distribution of powers but which provides a system of salutary checks and balances." [para. 689] This is because such legislation upsets the balance between the various organs of the State thus harming the system of accountability in the Constitution. Thus, the test for the violation of separation of powers must be precisely this. A law would be violative of separation of powers not if it results in some overlap of functions of different branches of the State, but if it takes over an essential function of the other branch leading to lapse in constitutional accountability. It is through this test that we must analyze the present Scheme." 132. Thus, in considering the complaint that a law violates the separation of powers feature of the constitution (which is a part of the basic structure) what....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e tribunals uniformly are chaired by a judicially trained person (former High Court Chief Justice or former Supreme Court judge) in a couple of tribunals, in addition, other members drawn from the legal field are necessary. However, as regards the primary regulator, i.e. the bodies such as TRAI, SEBI, Electricity Commissions, AAI, AERA, PNGRB the statutes do not mandate that the members concerned (including adjudicating officers under Section 15I of SEBI Act) should be legally qualified or possess judicial experience. 134. Gullapalli Nageswara Rao (supra) recognized the broad functionality test to determine whether a body or tribunal has a duty to act judicially; it held that: "whether an Administrative Tribunal has a duty to act judicially should be gathered from the provisions of the particular statute and the rules made thereunder, and they clearly express the view that if an authority is called upon to decide respective rights of contesting parties or, to put it in other words, if there is a lis, ordinarily there will be a duty on the part of the said authority to act judicially. ..." 135. Now, to deal with the provisions of the Competition Act. As noticed before, the CCI ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reading of the various relevant provisions of the Competition Act is that not all of the CCI‟s powers are quasi-judicial or judicial; when it considers a complaint or information and records a prima facie opinion, it acts administratively. It does not issue notice, but rather orders investigation, in the course of which the DG collects materials, including calling for records, statements, documents, etc. and also wherever needed, recording evidence on oath. At that stage, it is possible that one party or the other might seek cross-examination. Nevertheless, the stage is only one of investigation. The report furnished by the DG does not decide any lis, nor results in any adverse consequence. The report has to be considered by the CCI, after hearing the parties concerned (before which they are furnished with copies of the report). It is only after the report is submitted and a hearing given, that an order (a quasi-judicial one) is made; it could result in closure of information or some directions (with a fully reasoned order dealing with all contentions) to the entity or entities concerned - or imposition of penalty. 138. The Raghavan Committee, whose report led to the enactm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ic Affairs and Administration. b) CCI should be independent and insulated from political and budgetary controls of the Government. The independent functioning of the CCI member need to be ensured by having appropriate provision for their removal only with the concurrence of the Supreme Court. c) CCI should separate the investigative, prosecutorial and adjudicative functions. d) The proceedings of CCI should be transparent, non-discriminatory and rule-bound. e) CCI should have a positive advocacy role in shaping policies affecting competition. To ensure the above, Competition Law should: (i) provide a system of checks and balances by ensuring due process of law with provisions for appeal and review. (ii) have extra-territorial reach. (iii) have punitive provisions for punishing the offenders besides other remedial methods (reformatory). 6.1.6 Competition Commission - A Framework of the Administrative Structure It may be noted that in the view of the Committee, the Competition Commission of India should be the sole recipient of all complaints regarding infringement of the Competition Act from whatsoever sources it may be' an individual, a firm or an ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....140. It was submitted, in the same vein that given the nature of adjudicatory functions for which the Act was conceived and brought into force, unlike other regulators, the CCI does not decide and apply pre-existing norms that dictate behaviour of an enterprise but rather adjudicates through regulation. In the submissions of one of the learned counsel, Mr. Lakshmikumaran, the CCI, in effect, regulates and does not apply existing norms - because there are no existing norms and that the norms that do exist are of a general character. Necessarily, therefore, the task of the CCI is closer or rather even identical to those of adjudicating bodies, Tribunals or Courts. As a corollary, the personnel who man the CCI should be drawn predominantly from the legal field with legal expertise or judicial experience. Section 8 was attacked on the ground that it only provides an option of a member with legal or judicial experience and does not compel it. Learned counsel seriously questioned certain other provisions, such as the terms of office of the Chairman and other Members (5 years) and the proviso to Section 12 (permitting employment under the State/Central Government, of Members or Chairman w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le behaviour, the CCI can direct a further enquiry and thereafter proceed further in the matter with the hearing. It is only at this stage after the culmination of the investigation that the CCI enters into an adjudicatory phase. Undoubtedly, at this final stage, it decides the rights and liabilities of the parties. Given these overall realities, the question is, can it be said that the CCI‟s composition ought to be substantially or predominantly drawn from those possessing legal expertise or judicial experience as is urged. 142. In the previous segment of this section, this Court had juxtaposed powers conferred by the Parliament upon the CCI with the role discharged by various regulatory authorities - SEBI, Electricity Commissions, AAI, AERA, PNGRB etc. In some cases, the primary regulatory body such as the SEBI and even the electricity commission are conferred with adjudicatory powers. In the case of SEBI, the powers conferred are akin to CCI as it too investigates into complaints and after giving the kind of opportunity which the statute mandates, imposes sanctions and, wherever necessary, issue appropriate directions. These directions are as consequential and substantive....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to be as a composite regulator and expert body which is also undoubtedly required to adjudicate at a stage. That stage, however, cannot be given such primacy as to hold that the CCI is per se or purely a judicial tribunal. As an adjudicatory body, there can be, no doubt, of course, that its orders are quasi-judicial and must be preceded by adherence to a fair procedure. As to what is a fair procedure has been elaborately dealt with by Section 26 and various regulations that mandate the kind of opportunity that various interested parties are to be given. Equally, in the course of such proceedings, the CCI is required to make procedural orders -which, a line of decisions require- are to be based on reasons. The final adjudicatory order, of course, has to contain elaborate reasoning. In that sense, the CCI is, no doubt, a Tribunal. But it is emphasized again that it is not purely a judicial Tribunal but discharges multifarious functions, one of which is adjudicatory. 145. As regards the challenge to Sections 61 of the Act, this Court notices that such provisions are not alien to the body of law. Similar provisions exist in the Income Tax Act (Section 293); Goods and Services Tax Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of the debts due to the bank. When in the Constitution Articles 323A and 323B contemplate establishment of a tribunal and that does not erode the independence of the judiciary, there is no reason to presume that the banking tribunals and the appellate tribunals so constituted would not be independent, or that justice would be denied to the defendants or that the independence of the judiciary would stand eroded." 147. Significantly, similar considerations prevailed in Jagdish Singh v Heeralal 2014 (1) SCC 479, when the Supreme Court held that the civil courts‟ jurisdiction is barred in cases arising under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. For these reasons, the challenge to the bar to jurisdiction of civil courts, contained in Section 61 fails. 148. The next challenge addressed was with respect to Section 53T, which provides for an appeal to the Supreme Court. The submission here was that this tends to exclude scrutiny by the High Court altogether and places a heavy burden on parties adversely affected by the COMPAT‟s orders. This court is of opinion that given the fact that no citizen can claim....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ertise in law and competent to discharge judicial functions. We are conscious of the fact that the case (MJ-I) dealt with a factual matrix where the powers vested in courts were sought to be transferred to the tribunal, but what is relevant is the aspect of judicial functions with all the 'trappings of the court' and exercise of judicial power, at least, in respect of same part of the functioning of the State Commission. Thus, if the Chairman of the Commission is not a man of law, there should, at least, be a member who is drawn from the legal field. The observations of the Constitution Bench in Madras Bar Association30 (MJ-II) constitutes a declaration on the concept of basic structure with reference to the concepts of "separation of powers", "rule of law" and "judicial review". The first question raised before the Constitution Bench as to whether judicial review was part of the basic structure of the Constitution was, thus, answered in the affirmative. 107. We are, thus, of the view that it is mandatory to have a person of law, as a member of the State Commission. When we say so, it does not imply that any person from the field of law can be picked up. It has to be a p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om orders of CCI. However, the mandate that the Chairman should have been a Supreme Court judge or a Chief Justice of a High Court, in the opinion of this court, sufficiently guarantees the application of a judicial mind and, more importantly, application of judicial principles to the issues brought/agitated before that tribunal. This Court notices that the appellate tribunal provisions contained in regulatory enactments in various sectors (telecom, electricity, petroleum and natural gas, airports, securities etc.) follow an identical pattern. 152. With respect to the selection procedure contained in Section 8 (for members of CCI) the court perceives no infirmity in the impugned provision, having regard to the view taken previously, mandatorily, the CCI should have a judicial member, in keeping with the dicta in Madras Bar Association (supra), as reiterated in R. Gandhi (supra) and the recent ruling in Utility Users Welfare Association (supra). This would consequently mean that the provision of Section 8 has to be resorted to for selection at all times. This, in the opinion of the court is sufficient safeguard to ensure that executive domination in the selection process (of the pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... then was), (ii) Justice Ramana, (iii) Secretary, Department of Legal Affairs, Ministry of Law and Justice, and (iv) Secretary, Corporate Affairs, were constituted as the Selection Committee. This Selection Committee was reconstituted on 22.02.2017 to make further appointments. In compliance of the directions of this Court, advertisements dated 10.08.2015 were issued inviting applications for Judicial and Technical Members as a result of which, all the present Members of the NCLT and NCLAT have been appointed. This being the case, we need not detain ourselves any further with regard to the first submission of Shri Rohatgi." 154. In this context, it is significant that the Constitution Bench judgment in the second case of Madras Bar Association v. Union of India 2015 (8) SCC 583 [hereafter "the Madras Bar Association-II"] dealt with the issue concerning the composition of Selection Committees for the National Company Appellate Tribunal. There too, Section 412 of the Companies Act 2013, was in issue. Before the amendment noticed in Swiss Ribbons (supra), the Committee comprised of five members, including the Chief Justice of India or his nominee as Chairperson and a senior judge of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as members mentioned in Section 10FX, the Selection Committee should broadly be on the following lines: (a) Chief Justice of India or his nominee-Chairperson (with a casting vote); (b) A senior Judge of the Supreme Court or Chief Justice of High Court-Member; (c) Secretary in the Ministry of Finance and Company Affairs- Member; and (d) Secretary in the Ministry of Law and Justice-Member. 27. Notwithstanding the above, there is a deviation in the composition of Selection Committee that is prescribed Under Section 412(2) of the Act, 2013. The deviations are as under: (i) Though the Chief Justice of India or his nominee is to act as Chairperson, he is not given the power of a casting vote. It is because of the reason that instead of four member Committee, the composition of Committee in the impugned provision is that of five members. (ii) This Court had suggested one Member who could be either Secretary in the Ministry of Finance or in Company Affairs (we may point out that the word "and" contained in Clause (c) of sub-para (viii) of para 120 seems to be typographical mistake and has to be read as "or", as otherwise it won't make any sense). (iii) Now, fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in the form of a binding precedent, there is no scope for any relaxation as sought to be achieved through the impugned provision and we find it to be incompatible with the mandatory dicta of 2010 judgment. Therefore, we hold that provisions of Section 412(2) of the Act, 2013 are not valid and direction is issued to remove the defect by bringing this provision in accord with sub-para (viii) of para 120 of 2010 judgment." 155. Having regard to the above discussion, it is, therefore, held that necessarily, the composition of the Committee, which selects from amongst names to fill the position of Chairperson and members of the Company Appellate Tribunal has to conform to the dicta in Madras Bar Association-I (supra) and Madras Bar Association-II (supra). Swiss Ribbons (supra) too is an authority on this aspect; the amended provisions of the Companies Act which was faulted in Madras Bar Association-II (supra) was approved. Consequently, Section 53E, as it stood, before the amendment by the Finance Act, 2017, is exposed to the vice of unconstitutionality. The court notices that unlike a mere appellate tribunal, COMPAT also possesses special jurisdiction to award damages through adjud....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on, is rendered prejudicial to public interest, are matters exclusively to be decided by a reference made to the Supreme Court by the Central Government. This provision, in the opinion of the court, sufficiently entrenches the office of the Chairman and the members of the CCI and insulates them from arbitrary inroads by the executive. Re. Point No.3 - Section 22(3) unconstitutional for the reasons urged by the petitioners Re. Point No.4 - Revolving door policy vitiating any law, policy or practice rendered by the CCI 159. Both these points are taken up together because common arguments were addressed by all counsels on this aspect. Section 22(1) provides that the CCI would meet at such times and places and observe such procedure as is provided by the regulations. Section 22(2) enacts that in the event of Chairperson‟s inability to attend a meeting of the Commission, the senior most person present would preside over it. Section 22(3) stipulates that all questions which come up for consideration in a meeting would be decided by majority of members present and voting and that in the event of equality of votes, the Chairperson or the Member presiding would have a second or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gree upon a common opinion and express in it in one opinion and the third may differ for stated reasons. Equally, it is possible that there is complete unanimity on all aspects resulting in one common opinion or decision. Each potential decision is premised upon application of mind by every member who participated in the tribunal. Furthermore, a strong element of collegiality is necessary either in all stages of functioning and at least, at the stage of the decision making. This collegiality or collaborative process and requirement of application mind is entirely subverted if one member, Chairperson, senior member or any member characterized by any appellation is conferred a second or casting vote. The principle of each member‟s opinion and view carrying the same weight is destroyed in such instance. 162. In the considered opinion of this Court, there can be no two opinions that a casting vote, which potentially can lead to as adjudicatory result or consequence, is anathema to and destroys the Rule of Law in the context of Indian Constitution. In this regard, the petitioners had relied upon the Division Bench decision of the Bombay High Court in Shobhana Shankar Patil (supra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earing, which culminated in its final hearings: CCI Order dated Summary of the order Members present/signed 5.2.2013 6.2.2013 FINAL ARGUMENTS HEARD BY CCI HC Gupta Anurag Goel 7.2.2013 8.2.2013 Tata Motors was heard on 5.2.2013 M L Tayal Ashok Chawla R Prasad Geeta Gouri S N Dhingra 5 March 2013 (Vol IV, @ pg 798-802) CCI requested for additional information from the informant and the other OEMs (including Tata Motors). H C Gupta Anurag Goel M L Tayal Ashok Chawla Geeta Gouri S N Dhingra (R Prasad (retired on 28.02.2013), who heard Tata Motors was not present for this ordinary meeting.) 9.5.2013 CCI considered the additional information submitted by the OEMs, pursuant to its order dated 5 March 2013 (including the objections to the informant and response to the additional CCI queries filed by Tata Mtors on 22 April 2013 @b Vol IV, pgs 803-842) The order noted that the oral arguments and the submissions made on behalf of the parties have been concluded. However, in case the CCI has any query, the parties concerned may be directed to answer the queries of the CCI. HC Gupta Anurag Goel M L Tayal &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, was not present during the oral submissions made by Tata (only joined the CCI on 25 March 2013) considered the additional submissions filed by Tata Motors post the oral submissions.) 165. There can be no two opinions about the impropriety of a decision which is contrary to the principle that a tribunal or adjudicatory body is bound to render its decision, after hearing the parties; if the body comprises of one or several members, it is a necessary corollary that only those who hear should decide. The decisions of the Supreme Court in Gullapalli Nageswara Rao (supra); Union of India v Shiv Raj & Others (2014) 6 SCC 564 establish this rule. The ratio of these judgments is that one who hears must decide and violation of this rule will render the final order void. 166. The question here is, did anyone who did not hear the complaints decide it? The record and the tabular chart, listing the members who heard the matters on 05.02.2013 to 08.02.2013, shows that those who participated were Mr. HC Gupta, Anurag Goel, M L Tayal, Ashok Chawla, R Prasad, Justice S.N. Dhingra (Retd) and Ms. Geeta Gouri. On 05.03.2013, when CCI requested for additional information from the informant and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gnated Authority &Ors(2011) 2 SCC 258, the issue was that one Designated Authority under the Customs Tariff Act heard the parties; he was transferred; another official took charge. He issued notice to the parties and asked them to provide written submissions. The Supreme Court considered the submission that the parties were given notice to appear, and did not do so; it however, rejected it as unsubstantiated. In the light of these facts, it was held that the decision was vitiated because one who heard did not decide the matter. 169. In Ossein and Gelatine Manufacturers Association of India v Modi Alkalies & Chemicals Limited &Ors1989 (4) SCC 264, the court held as follows: "5. On the issue of natural justice, we are satisfied that no prejudice has been caused to the assessee by any of the circumstances pointed out by the appellant. It is the true that the order has been passed by an officer different from the one who heard the parties. However, the proceedings were not in the nature of formal judicial hearings. They were in the nature of meetings and full minutes were recorded of all the points discussed at each meeting. It has not been brought to our notice that any salient poi....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 1 S.C.R. 319 has disapproved of Alridge's case and that natural justice demands that the hearing and order should be by the same officer. This is a very interesting question and Alridge's case has been dealt with by wade (Administrative Law, 6th Edition) at pp. 507 et. seq.) We are of opinion that it is unnecessary to enter into a decision of this issue for the purposes of the present case. Here the issue is one of grant of approval by the Government and not any particular officer statutorily designated. It is also perfectly clear on the records that the officer who passed the order has taken full note of all the objections put forward by the petitioners. We are fully satisfied, therefore, that the requirements of natural justice have been fulfilled in the present case." 170. In Tan Boon Chee David v Medical Council of Singapore [1980] 2 MLJ 116, the Singapore High Court expressed disapproval at the manner the Singapore Medical Council had conducted an inquiry casually, and passed strictures upon the council for committing a glaring breach of natural justice. The appellant was held guilty of misconduct and suspended from medical practice. The inquiry had been held over ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orised Official and Income-Tax Officer and Anr.) (1956) 29 ITR 349 (SC)". 173. Again, in Budhan Choudhary & Ors. v State of Bihar 1955 CriLJ 374, the Supreme Court repelled the contention holding that on the possibility of abuse of a provision by the authority, the legislation may not be held arbitrary or discriminatory and violative of Article 14 of the Constitution: "13. From the decided cases in India as well as in United States of America, the principle appears to be well settled that if a statutory provision is otherwise intra-vires, constitutional and valid, mere possibility of abuse of power in a given case would not make it objectionable, ultra-vires or unconstitutional. In such cases, "action" and not the "section" may be vulnerable. If it is so, the court by upholding the provision of law, may still set aside the action, order or decision and grant appropriate relief to the person aggrieved." 174. Likewise, it was said, in State of Rajasthan v Union of India (1978) 1 SCR 1 it was observed that: "it must be remembered that merely because power may sometimes be abused, it is no ground for denying the existence of power. The wisdom of man has not yet been able to con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....larger body and decision by a smaller number (for compelling reasons or otherwise) does lead to undesirable and perhaps at times avoidable situations. To address this, the court hereby directs that when all evidence (i.e. report, its objections/affidavits etc.) are completed, the CCI should set down the case for final hearing. At the next stage, when hearing commences, the membership of the CCI should be constant (i.e. if 3 or 5 members commence hearing, they should continue to hear and participate in all proceedings on all hearing dates); the same number of members (of the CCI) should write the final order (or orders, as the case may be). This procedure should be assimilated in the form of regulations, and followed by the CCI and all its members in all the final hearings; it would impart a certain formality to the procedure. Furthermore, the court hereby directs that no member of the CCI should take a recess individually, during the course of hearing, or "take a break" to rejoin the proceeding later. Such "walk out and walk in" practise is deleterious to principles of natural justice, and gravely undermines public confidence in the CCI‟s functioning. Once the hearing commenc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the complaint by the informant and supplementary materials, the CCI recorded its prima facie opinion that the complaints needed investigation by its order of 24.02.2011. On 19.04.2011, the DG conducted investigation into the allegations made by the informant and submitted his investigation report. That DG Report requested for permission to expand the scope of its investigation to include other car manufacturers. By its order of 26.04.2011, CCI expanded the scope of investigation being conducted by the DG to include the petitioners herein and certain other car manufacturers operating in India. The DG thereafter issued notice to the other car manufacturers, i.e. the petitioners on 04.05.2011 under Section 36 (2) read with Section 41 (2) of the Act, seeking detailed information and documents from them with reference to an investigation being conducted into certain anti-competitive practices alleged to be prevalent in the sale, maintenance, service and repair market of the cars manufactured in India in Case No. 03/2011. The DG‟s request for expansion reads as follows: " In terms of CGI Order 03/2011 dated February 24, 2011, the Hon'ble Commission has directed the office of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....initiate investigation against other car manufacturers also as mentioned in the note of DG dated 19.04.2011. 4. Commission further observed that whenever Commission orders of investigation in any case it need not be confined to the parties mentioned in the information. The investigation is ordered on certain issue and all the parties which are covered by that issue should be investigated. There is no need to obtain the orders of Commission on each individual case." 184. The final order of the CCI further records the following findings - while dealing with the issue of validity of the expansion of hearing by a separate order under Section 26 (1): " The direction of the Commission was with respect to alleged anticompetitive conduct by the said industry in general and not specifically qua the car manufacturers named in the information. This is apparent from the order of the Commission dated April 26, 2011 which was passed after considering the request of the DG when he found, at that stage that alleged anticompetitive conduct was not confined to the named entities in the information but was prevalent across the industry. Further, while directing the DG to investigate against th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... facts leading to pervasive practises that amount to abuse of dominant position on the part of one or more individuals or entities may be possibly unearthed. At that stage, the investigation is quasi inquisitorial, to the extent that the report given is inconclusive of the rights of the parties; however, to the extent that evidence is gathered, the material can be final. Neither is the DG‟s power limited by a remand or restricted to the matters that fall within the complaint and nothing else. The Excel Crop Care (supra) case has explained the DG‟s powers in broad terms: ("if other facts also get revealed and are brought to light, revealing that the 'persons' or 'enterprises' had entered into an agreement that is prohibited by Section 3 which had appreciable adverse effect on the competition, the DG would be well within his powers to include those as well in his report....If the investigation process is to be restricted in the manner projected by the Appellants, it would defeat the very purpose of the Act which is to prevent practices having appreciable adverse effect on the competition"). The assumption of jurisdiction of the CCI, then is upon receipt of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore the DG could have proceeded with the inquiry, is unmerited and, therefore, rejected. Re Point No. 6 Is Section 27 (b) of the Act and the provision for penalties unconstitutional or the orders impugned arbitrary, for the reason that no separate hearing is provided, and the statute provides no guideline for exercise of discretion. 187. This issue is an important one; during the hearing, counsel had highlighted that in the absence of a statutorily mandated notice and hearing procedure preceding penalty, Section 27 (b) is arbitrary and unreasonable. Section 27 reads as follows: "Orders by Commission after inquiry into agreements or abuse of dominant position 27. Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the following orders, namely:- (a) direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of domina....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to these facts, it is now essential to consider whether the absence of a mandatory provision, which precedes the imposition of penalty under Section 27(b) renders it unconstitutional and arbitrary. 189. The common refrain of all petitioners on this aspect is that sans a mandated pre-penalty notice and hearing, an adverse action by way of monetary penalty cannot be imposed and that the provision which enables such penalty without hearing is void. In this respect, the learned counsel has relied upon the judgments reported as S.L. Kapoor v. Jagmohan and Ors. 1980 (4) SCC 379; Swadeshi Cotton Mills v. Union of India 1981 (1) SCC 664; and Canara Bank vs V.K. Awasthy 2005 (6) SCC 321. The other allied aspect with respect to Section 27(b) is that it provides no guidance or guidelines as to how penalty is to be imposed and what would be the quantum of penalty. The further complaint is that in the present case, the CCI has taken a uniform and arbitrary rate of 2% without differentiating between individual facts of the other case and moreover departed from its own prescribed foundation of the "relevant market". The CCI, had, on the other hand, distinguished the rulings relied upon by the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or service provider a lesser penalty as it may deem fit, than leviable under this Act or the rules or the regulations: Provided that lesser penalty shall not be imposed by the Commission in cases where proceedings for the violation of any of the provisions of this Act or the rules or the regulations have been instituted or any investigation has been directed to be made under section 26 before making of such disclosure: Provided further that lesser penalty shall be imposed by the Commission only in respect of a producer, seller, distributor, trader or service provider included in the cartel, who first made the full, true and vital disclosures under this section: Provided also that the Commission may, if it is satisfied that such producer, seller, distributor, trader or service provider included in the cartel had in the course of proceedings,- (a) not complied with the condition on which the lesser penalty was imposed by the Commission; or (b) had given false evidence; or (c) the disclosure made is not vital, and thereupon such producer, seller, distributor, trader or service provider may be tried for the offence with respect to which the lesser penalty was imposed and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch, it is open to impose the penalty." 193. The Supreme Court quoted with approval its previous decision in Hindustan Steel Ltd. v State of Orissa AIR 1970 SC 253, that held that "breach of a civil obligation which attracts penalty under the provisions of an Act would immediately attract the levy of penalty irrespective of the fact whether the contravention was made by the defaulter with any guilty intention or not." 194. In the present case, what is important is that the petitioners‟ complaint is not that they were not given any opportunity; rather it is that they ought to have been given a separate opportunity of hearing. Ordinarily, the court would have concurred with such an argument. However, a deeper analysis of the nature of the proceeding before the CCI would reveal that the procedure it adopts- and is required to adopt gives sufficient safeguard to parties likely to be affected adversely, both as regards findings and the sanctions. The first step, of course, is to decide whether to issue notice. Excel Crop Care (supra) and the later decisions have now held conclusively that this step is administrative and does not contemplate any prior notice or hearing to the opp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ority is of the opinion that an enquiry should be held, it shall issue a notice, fixing a date for the appearance of that person either personally or through his legal practitioner. 196. The pattern or structure of the statute and its object, in every such case, defines the nature of hearing provided for. In some cases, the opportunity of hearing is preceded by a composite one; in other cases, however, of necessity, a show cause notice is to be issued separately. In the Income Tax Act, 1961, for instance, every person or entity who earns taxable income has a duty to file returns; those returns then can be merely "framed" without adjudication (under Section 143(1)) or assessed, after due notice of scrutiny, under Section 143 (2) culminating in an assessment order. Necessarily, therefore, before the assessment order is made, the Assessing officer (i.e. the primary adjudicating authority) has no occasion to consider and apply his mind, if the assessee has under-reported income or claimed an obviously unjustified deduction or tax benefit. It is during the course of assessment that such behaviour, in the form of a claim, is noticed; the assessment order, which is adverse on that point,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....municipal committee. The Supreme Court held that the silence of the statute did not preclude the obligation to follow a fair procedure of granting opportunity to the party likely to be affected, by the adverse action; in doing so, it followed its previous rulings in Mohinder Singh Gill v Chief Election Commissioner 1978 (2) SCR 272 [that "(t)he silence of a statute has no exclusionary effect except where it flows from necessary implication."] and State of Orissa v Dr. Binapani Dei AIR 1967 SC 1269 [that an "administrative order which involves civil consequences.... must be made consistently with the rules of natural justice"]. Furthermore, the court also is aware that these decisions crystallized into a rule best spelt out by the seminal decision in Swadeshi Cotton Mills (supra), where the court enunciated the guiding principle, (since considered an aphorism, and axiomatic in public law) as follows: "If the statute conferring the power is silent with regard to the giving of pre-decisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature and no full review or appeal on merits against that decision i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and reason that this law was foreseen as a tool against concentration of unjust monopolistic powers at the hands of private individuals which might be detrimental for freedom of trade. Competition law in India aims to achieve highest sustainable levels of economic growth, entrepreneurship, employment, higher standards of living for citizens, protect economic rights for just, equitable, inclusive and sustainable economic and social development, promote economic democracy, and support good governance by restricting rent seeking practices. Therefore an interpretation should be provided which is in consonance with the aforesaid objectives. 85. At this point, I would like to emphasize on the usage of the phrase 'as it may deem fit' as occurring Under Section 27 of the Act. At the outset this phrase is indicative of the discretionary power provided for the fining authority under the Act. As the law abhors absolute power and arbitrary discretion, this discretion provided Under Section 27 needs to be regulated and guided so that there is uniformity and stability with respect to imposition of penalty. This discretion should be governed by Rule of law and not by arbitrary, vague ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute." (Emphasis supplied) 86. It should be noted that any penal law imposing punishment is made for general good of the society. As a part of equitable consideration, we should strive to only punish those who deserve it and to the extent of their guilt. Further it is well established by this Court that the principle of proportionality requires the fine imposed must not exceed what is appropriate and necessary for attaining the object pursued. In Coimbatore District Central Co-operative Bank v. Coimbatore District Central Co-operative Bank Employees Assn. (2007) 4 SCC 699 this Court has explained the concept of 'proportionality' in the following manner- 'proportionality' is a principle where the Court is concerned with the process, method or manner in which the decision-maker has ordered his priorities, reached a conclusion or arrived at a decision. The very essence of the decision....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ention, market circumstances in which the contravention took place, nature of the product, market share of the entity, barriers to entry in the market, nature of involvement of the company, bona fides of the company, profit derived from the contravention etc. These factors are only illustrative for the tribunal to take into consideration while imposing appropriate percentage of penalty. 89. At the cost of repetition it should be noted that starting point of determination of appropriate penalty should be to determine relevant turnover and thereafter the tribunal should calculate appropriate percentage of penalty based on facts and circumstances of the case taking into consideration various factors while determining the quantum. But such penalty should not be more than the overall cap of 10% of the entity's relevant turnover. Such interpretation of Section 27 (b) of the Act, wherein the discretion of the commission is guided by principles established by law would sub-serve the intention of the enactment.." 202. In the opinion of this Court, the enunciation of the above principles as the guiding norm which CCI has to follow, in each case, when it determines deviant behaviour ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...." 205. Following the salutary principle of constitutional interpretation, this Court is of the opinion that the soundness of discretion and the method adopted by the CCI having regard to the objectives of the Act and regulations framed under it should be the paramount guiding factors, apart from the principle of proportionality which Excel Crop Care (supra) talked about. Given that the Supreme Court has indicated the path and course that guides CCI, and the relevant considerations, this Court is of the opinion that the objection to the unconstitutionality of Section 27 (b) cannot survive. 206. The last aspect on the issue of Section 27 is that the common refrain of learned counsel (for the petitioners) was that the CCI misapplied the "relevant market" principle which should have been considered. Tata Motors, particularly complained that the CCI‟s impugned order was inconsistent, and, therefore, arbitrary, inasmuch as it faltered in the application of that principle- in its (i.e. Tata Motors‟) case, despite outlining the relevant market as the domestic market, the turnover (based on which penalty was imposed) was expanded to include the global turnover. The objection ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....son against whom it is pronounced, as that litigant is unable to know the ground which weighed with the Court in rejecting his claim and also causes impediments in his taking adequate and appropriate grounds before the higher Court in the event of challenge to that judgment... 13. The principle of natural justice has twin ingredients; firstly, the person who is likely to be adversely affected by the action of the authorities should be given notice to show cause thereof and granted an opportunity of hearing and secondly, the orders so passed by the authorities should give reason for arriving at any conclusion showing proper application of mind. Violation of either of them could in the given facts and circumstances of the case, vitiate the order itself. Such rule being applicable to the administrative authorities certainly requires that the judgment of the Court should meet with this requirement with higher degree of satisfaction. The order of an administrative authority may not provide reasons like a judgment but the order must be supported by the reasons of rationality. The distinction between passing of an order by an administrative or quasijudicial authority has practically ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to deal with the same anti-competitive act from the lens of the Competition Act. If such activities offend the provisions of the Competition Act as well, the consequences under that Act would also follow. Therefore, contention of the IDOs that the jurisdiction of the CCI stands totally ousted cannot be accepted. Insofar as the nuanced exercise from the stand point of Competition Act is concerned, the CCI is the experienced body in conducting competition analysis. Further, the CCI is more likely to opt for structural remedies which would lead the sector to evolve a point where sufficient new entry is induced thereby promoting genuine competition. This specific and important role assigned to the CCI cannot be completely wished away and the 'comity' between the sectoral regulator (i.e TRAI) and the market regulator (i.e the CCI) is to be maintained. 103. The conclusion of the aforesaid discussion is to give primacy to the respective objections of the two regulators under the two Acts. At the same time, since the matter pertains to the telecom sector which is specifically regulated by the TRAI Act, balance is maintained by permitting TRAI in the first instance to deal with and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sulting in concentration of resources of the nation (which Article 39 of the Constitution of India, enjoins the State to avoid). Speaking of the Sherman Anti-Trust Act, in Essential Communications Sys, Inc. v AmTel & Tel Co 610 F 2d 1114, 1117 (3d Cir 1979) the third Federal Circuit Appellate Court held: "The Sherman Act, embodying as it does a preference for competition, has been since its enactment almost an economic constitution for our complex national economy. A fair approach in the accommodation between the seemingly disparate goals of regulation and competition should be to assume that competition, and thus antitrust law, does operate unless clearly displaced" 211. The need to experiment and bring in new legislation to face the challenges of the changing times and the legislature duty to do so- as well as the correct approach that courts should adopt was outlined as follows in New State Ice Co. v. Liebman, 285 U.S. 262 (1932), where Justice Brandeis stated as follows: "...There must be power in the States and the Nation to remould, through experimentation, our economic practices and institutions to meet changing social and economic needs. I cannot believe that the fram....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues." 212. Similar views were expressed in Director General of Foreign Trade v Kanak Exports, (2016) 2 SCC 226, and Swi....