The NCLAT in Samir Agarwal Vs. CCI, while siding with cab-aggregators upholding CCI’s Order under Section 26(2), has introduced a troublesome curveball by evolving a new and restrictive locus standi requirement under the Act by removing the scope of information from ‘any person’, not having an interest in the substance of the allegation against the OP. In this article, I will illustrate why this decision stands counter to the deliberate legislative scheme of the Competition Act, 2002, and isn’t sustainable in law.
What the NCLAT Held
Under Section 19(1)(a) of the Competition Act, CCI can initiate an inquiry into an alleged anti-competitive agreement or abuse of dominant position (a) on its own motion; (b) on receipt of information from any person, consumer, or their association, or trade association; or (c) on a reference by a government or a statutory body.
The NCLAT had held in Samir Agarwal, that reference to ‘any person’ under Section 19(1)(a) of the Competition Act is necessarily to be construed as a reference to a person who has suffered an invasion of his legal rights as a consumer, or beneficiary of healthy competitive practices (in other words, a member of any consumer or trade association). According to it, any other interpretation would invite people of oblique motives to misuse the law.
2007 Amendments: CCI Moves from Being a Judicial Body to an expert regulatory body
NCLAT’s decision in Samir Agarwal doesn’t simply qualify CCI’s discretion in sourcing information of alleged violations but outrightly strikes out an important class of informant, i.e. ‘any person’, acting only as a ‘provider of information’. This limitation imposed on CCI is erroneous as it betrays the legislative scheme of the Competition Act and settled law regarding expert regulatory bodies.
In 2005, the legislative scheme of the Competition Act had been challenged for violation of the separation of powers, as the then CCI was more of a judicial body having adjudicatory powers, lacking certain essential safeguards of judicial propriety and independence. The government of India had undertaken before the Supreme Court to make the necessary amendments to the cure defects in separation in the Competition Act. The Supreme Court, while parting, had concluded that “it might be appropriate for the respondents to consider the creation of two separate bodies, one with expertise that is advisory and regulatory and the other adjudicatory.”
The Competition (Amendment) Act, 2007 was passed to essentially overhaul CCI as an ‘expert body’ functioning as a market regulator for preventing anti-competitive practices in the Indian markets and to omit the provisions relating to the adjudication of disputes between two or more parties by the CCI. It is also important to note that for the specific purpose of fulfilling the adjudicatory role under the Competition Act, like the determination of the claims of compensation and passing of orders for the recovery of it, a new Appellate Tribunal had been set up under Section 53A. Therefore, the adjudicatory role of the CCI has been transferred to an adjudicatory body in the Appellate Tribunal and only limited quasi-judicial attributes have been entrusted to it, in pursuit of its larger mandate as an ‘expert’ market regulator.
It is important to note that in pursuit of this de-escalation of the adjudicatory character of the CCI, the word ‘complaint’ had been amended out of Section 19(1)(a) in favor of the more inclusive, ‘information’. The 44th Standing Committee on the Competition (Amendment) Bill, 2006 had noted the following stand of the Ministry of Corporate Affairs:
“The term information is wider and has an inclusive meaning. Even a complaint may be treated as information and action taken. Also, this change would enable the Commission to inquire into any information received on contravention of provisions of the Act, instead of only on receipt of a complaint. In fact, the ability to act on information gives CCI a better articulated regulatory role.”
Therefore, information is the genus, a complaint, now its species. This enabled, ‘any person’ to file information before the CCI against any anti-competitive conduct. Removal of ‘complaint’ Additionally, the de-escalation of the judicial character of the CCI is apparent throughout the Act.
NCLAT’s Conservative Locus Standi Standard is Misplaced
NCLAT’s ruling in Samir Agarwal, is based on a misunderstanding of CCI’s mandate as a regulator. This new standard of locus militates squarely against deliberate legislative reformation of the jurisdiction of the CCI as an expert regulatory body in 2007. Proceedings before the CCI are not in personam but in rem. It conducts inquisitorial proceedings and does not decide a traditional lis like courts or tribunals. Under Section 18 of the Act, CCI is dutybound to eliminate practices having an adverse effect on competition, promote and sustain competition, protect the interest of consumers, and to secure freedom of trade carried on by other participants. To this end, it is empowered to initiate investigations in a multifarious manner and thus, the imposition of adversarial standards of locus standi is misplaced.
In a previous case before the CCI, it was held that “antecedents of the Informant cannot be a ground for the Commission to not take cognizance of abusive conduct of any entity”. Furthermore, COMPAT had held that the Parliament has not qualified the scope of information that may be received from ‘any person’. Moreover, it had held that the CCI does not have the power to reject the prayer for an investigation into the allegations competition violations only on the ground that the informant does not have a personal interest in the matter or he appears to be acting at the behest of someone else.
The Bigger Picture
Much like the Securities and Exchange Board of India, after which the CCI is going to be structurally modelled, all functions of the regulator are in service and best interest of the markets. With such a hefty mandate, information from all sources, competitors, consumers, whistle-blowers, etc. are welcomed. This is the fundamental difference between an adjudicatory body and an expert body.
The Supreme Court, in Clariant International Vs. Securities and Exchange Board of India had held on expert administrative bodies that “the modern sociological condition as also the needs of the time has necessitated the growth of administrative law and administrative tribunal. Executive functions of the State calls for the exercise of discretion. The executive also, thus, performs quasi-judicial and quasi-legislative functions and, in this view of the matter, the administrative adjudication has become an indispensable part of the modern state activity.”
One might even say that such a high standard of personal interest will substantially hinder the ability of the effective functioning of the CCI and blur the lines between competition law and consumer protection law.
Concerns Regarding Frivolous Investigations
The Competition Act is born out of a very dynamic mandate and that mandate should not be defeated by clipping CCI’s wings. That mandate, while amenable to abuse, does not warrant such a prohibitive approach but proactive safeguards.
Concerns regarding the frivolity of information filed with the CCI are not misplaced. These concerns had been raised in the report of the 44th Standing Committee as well, however, the ministry had concluded that the rules and regulations under the Competition Act, 2002 would be best suited to tackle frivolous information over time. To that end, various safeguards have been put in place like the power to impose a penalty for misleading the CCI, mandatory filing of litigation history between the OP and the Informant, the power to disclose the identity of the informant, etc. Moreover, the CCI has in practice, been proactive in weeding out frivolous cases before it.
CCI, as an expert regulatory body, is not bound by traditional rules of locus standi that the NCLAT has superimposed on it. Not only is the standard set in Samir Agarwal highly inhibitive, it runs counter not only to the legislative history of the Competition Act, 2002, but also damages the cause of free and effective competition in markets. In that sense, a conservative approach to a dynamic law like the Competition Act does more harm than good. In the end, decisions such as this, are only indicative of the larger problem of insufficient latitude allowed to expert regulators by our Courts.
 Brahm Dutt v. Union of India, (2005) 2 SCC 431, ¶3.
 Lok Sabha 44th Report of the Lok Sabha Standing Committee on Finance, 2006.
 Ibid, at Para 36.
 It ought to be noted that even for combination violations, the CCI can act on the more liberal standard of ‘information’ and not the conventional complaint by an interested party or stakeholder.
 Sections 26, 35, 20, etc.; The Competition Act, 2002.
 Matrix Infosystems Private Limited Vs. Intel Corporation (2019 – CCI).
 Report of the Competition Law Review Committee (Observations of Mrs Pallavi Shroff) Pg. 195.
 The Competition Commission of India (General) Regulations, 2009 – Regulation 10(2)(da).
 Ibid, Proviso to Regulation 35(1).