CCI wins a 'competition'

The Supreme Court has set deadlines for completing probes and passing final orders to help companies in the dock.

The Competition Commission of India that was born in five-year-long smouldering litigation became a rare litigant before the Supreme Court as soon as it learned to walk.

The new-found regulator dragged its own appellate tribunal to the court and walked back with more muscles in its legal arms last week.

The court ruled in a judgment running to over 100 pages that the commission can order an investigation into a complaint of an anti-competitive agreement or abuse of dominant position in the market.

It cannot be appealed against except in rare cases.

It can also issue orders temporarily restraining a firm from carrying on a disputed act till the enquiry is over. These can be done on a preliminary forming of opinion, without hearing the affected party.

The court has, therefore, put enormous power in the hands of the commission.

Since an enquiry by its director general can damage the reputation of a company and delay mergers and amalgamations with serious consequences to the players and the economy in general, the court has also put in place a set of fast-track procedures that were not originally found in the Competition Commission Act and its regulations.

This is another instance of 'legislation' by the court that is a matter of eternal controversy. But the judges have always claimed their right to fill up the crevices left by the lawmakers.

The court clarified that its directions are in the 'larger interest of justice administration'.

The regulations prescribe a general rule that the investigation and proceedings should be concluded within a 'reasonable time'.

Regulation 16 prescribes a limitation of 15 days for the commission to hold its first ordinary meeting to consider whether a prima facie case exists.

A decision must be taken within two months. The court stated that this was too long a period, and it should be done in a shorter span of time.

To stop the prevailing practice of one party getting favourable interim orders or injunctions against another and then vanishing from the scene, the court stipulated that when an interim order is passed, the commission must pass the final order in less than 60 days.

The director general, who conducts investigations, is supposed to submit his report within 'reasonable time'.

The court specified the time and restricted it to 45 days. It has further asked the commission to frame regulations spelling out the exact number of days within which each procedural step should be completed.

Till a comprehensive set of rules is framed, the court's time schedule should be followed.

Though many statutes lay down target dates for procedural steps, it has been the bane of investigations and trials that the courts give liberal extensions and condone delays for the asking.

The predecessor of the commission, the Monopolies and Restrictive Trade Practices Commission, also fell into the rut.

It took a decade to get a final judgment from that commission. By then, the substantial issues might have receded, solved themselves, or become irrelevant leaving only the shell of the complaint before the commission and lawyers' bills before the parties.

At present, it is clearing such deadwood and luxury litigation of corporations on borrowed time.

The call for 'expeditious hearing' should, therefore, be taken seriously by the Competition Commission, if it does not want to fall into the same trough where its predecessor fell and became irrelevant.

The example of the consumer commissions should be a warning to other quasi-judicial bodies dealing with market and consumer issues.

The Consumer Protection Act and its Rules started with target dates.

The complaints should have been finally disposed of within a few months.

However, these non-formal forums have gone the way of all civil courts, with senior counsel followed by juniors carrying bundles of case law.

Electricity regulatory authorities and their tribunals in various states are also caught up in legal riddles, often reaching the Supreme Court where several seminal issues are still to be determined.

Despite target dates in other procedural laws, the average life of a suit is 15 years, according to the government.

The collaboration of the legal fraternity is essential to reduce the length of litigation.

Last week's case involving the Competition Commission, SAIL and Jindal Steel & Power Ltd over supply of rails to Indian Railways is already one- year-old and all that has yielded is a benevolent judgment from the Supreme Court.

Now it will go back to the commission, and perhaps to the tribunal and snake its way back to the Supreme Court.

The nit-pickers will see to that. This is the area where the commission, the judges and the legal advisors should bring reforms from within lest the new-found law should again be bogged down in forensic quicksand.