COMPETITION APPELLATE TRIBUNAL

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

                        In exercise of the powers conferred by Section 53A of the Competition Act, 2002, (‘Act’ for short)  the Central Government established with effect from 15^th May, 2009, the Competition Appellate Tribunal (‘Tribunal’ for short) having its headquarters at Delhi vide Notification No. S.O.1240 (E), dated 15.05.2009.  The Tribunal is-

• to hear the appeals against any direction issued or decision made or order passed by the Commission;
• to adjudicate on claim for compensation that may arise from the findings of the Commission or the orders of the Appellate Tribunal in an appeal against the finding of the Commission or under Sec. 42A or under Sec. 53Q(2) of the Act and pass orders for the recovery of compensation under Section 53N of the Act. 

COMPOSITION OF TRIBUNAL:

                        The Tribunal shall consist of a Chairperson and not more than two other members to be appointed by the Central Government.

Qualification:

  The Chairperson of the Tribunal shall be a person, who is or has been a Judge of the Supreme Court or the Chief Justice of a High Court.  A member of the Tribunal shall be a person of ability, integrity and standing having special knowledge of, and professional experience of not less than twenty five years in, competition matters, including competition law and policy, international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, administration or in any other matter which in the opinion of the Central Government, may be useful to the Tribunal.  The Chairperson and members of the Tribunal shall be appointed by the Central Government from a panel of names recommended by the Selection Committee. 

Tenure:

                        The Chairperson or a Member of the Tribunal shall hold office as such for a term of five years from the date on which he enters upon his office and shall be eligible for reappointment.   No Chairperson or other member of the Tribunal shall hold office as such after he has attained-

• in the case of the Chairperson, the age of sixty eight years;
• in the case of any other member  the age of sixty five years

Disqualification:

                        Sec. 53K of the Act deals with the disqualification of the Chairperson and the members.  The Central Government may, in consultation with the Chief Justice of India, remove from office of the Chairperson or any other member of the Tribunal who-

a)      has been adjudged an insolvent; or

b)   has engaged at any time, during his term of office, in any paid employment; or

c)      has been convicted of an offence which, in the opinion of the Central Government involves moral turpitude; or

d)      has become physically or mentally incapable of acting as such Chairperson or other Member of the Tribunal; or

e)      has acquired such financial or other interest as is likely to affect prejudicially his functions as such Chairperson or member of the Tribunal;

f)        has so abused his position to render his continuance in office  prejudicial to the public interest.

No Chairperson or a member shall be removed from his office on the ground specified in clause (e) or (f) except by an order made by the Central Government after an inquiry made in this behalf by a Judge of the Supreme Court in which such Chairperson or member had been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.

APPEALABLE DIRECTIONS, DECISIONS OR ORDERS OF COMMISSION:

• Sec. 26(2) – Where on receipt of a reference from the Central Government or a State Government or a statutory authority or information received on certain agreements and dominant position of enterprises, the Commission is of the opinion that there exists no prima facie case, it shall close the matter forthwith and pass such orders as it deems fit;
• Sec. 26(6) If, after consideration of the objections or suggestions, if any, the Commission agrees with the recommendation of the Director General it shall close the matter forthwith and pass such order as it deems fit;
• Sec. 27 – Where after inquiry the Commission finds that any agreement is anti competitive agreement or action of an enterprise in a dominant position, is in contravention of Sec. 3 or Section 4 as the case may be, it may pass all or any of the following orders, namely:
  • 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;
  • impose such penalty, as it may deem fit which shall be not more than ten per cent of the average of the turnover for the last three preceding financial years, upon each of such person or enterprises which are parties to such agreements or abuse;  In case any agreement referred to in Sec. 3 has been entered into by a cartel, the Commission may impose upon each producer, seller, distributor, trader or service provider included in that cartel, a penalty of up to three times of its profit for each year of the continuance of such agreement or ten per cent of the turnover for each year of the continuance of such agreement whichever is higher;
  • direct that the agreements shall stand modified to the extent and in the manner as may be specified in the order by the Commission;
  • direct the enterprises concerned to abide by such other orders in the Commission may pass and comply with the directions, including, payment of costs, if any;
  • pass such other order of issue such directions as it may deem fit.
• Sec. 28 – It deals with the division of enterprise enjoying dominant position.   The Commission may, notwithstanding anything contained in any other law for the time being in force, by order in writing, direct division of an enterprise enjoying dominant position to ensure that such enterprise does not abuse its dominant position.  In particular, and without prejudice to the generality of the foregoing powers, the order may provide for all or any of the following matters, namely:
  • the transfer or vesting of property, rights, liabilities or obligations;
  • the adjustment of contracts either by discharge or reduction of any liability or obligation or otherwise;
  • the creation, allotment, surrender or cancellation of any shares, stocks or securities;
  • the formation of winding up of an enterprise or the amendment of the memorandum of association or articles of association or any other instruments regulating the business of any enterprise;
  • the extent to which, and the circumstances in which, provisions of the order affecting an enterprise may be altered by the enterprise and the registration thereof;
  • any other matter which may be necessary to give effect to the division of the enterprise;

Notwithstanding anything contained in any other law for the time being in force or in any contract or in any memorandum or articles of association, an officer of a company who ceases to hold office as such in consequence of the division of an enterprise shall not be entitled to claim any compensation for such cesser.

• Sec. 31 – It deals with orders of Commission on certain combinations. 
  • Where the Commission is of the opinion that any combination does not, or is not likely to, have an appreciable adverse effect on competition, it shall by order, approve that combination including the combination in respect of which a notice has been give under Sec. 6(2);
  • Where the Commission is of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition, it shall direct that the combination shall not effect;
  • Where the Commission is of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition but such adverse effect can be eliminated by suitable modification to such combination, it may propose appropriate medication to the combination, to the parties to such combination.
• Sec. 32 – It deals with acts taking places outside India but having an effect on competition in India.   The Commission shall, notwithstanding that-
  • an agreement has been entered into outside India; or
  • any party to such agreement is outside India; or
  • any enterprise abusing the dominant position is outside India; or
  • a combination has taken place outside India; or
  • any party to combination is outside India; or
  • any other matter or practice or action arising out of such agreement or dominant position or combination is outside India

have power to inquire in accordance with the provisions contained in Sec. 19, 20, 26, 29 and 30 of the Act into such agreement or abuse of dominant position or combination if such agreement or dominant position or combination has, or is likely to have, an appreciable adverse effect on competition in the relevant market in India and pass such orders as it may deem fit in accordance with the provisions of this Act.

• Sec. 33 – Where during an inquiry, the Commission is satisfied that an act in contravention  of Sec.3(1) and Sec. 4(1) or Sec. 6 has committed, the Commission may, by order, temporarily restrain any party from carrying on such act until the conclusion of such inquiry or until further orders without giving notice to such party, where it deems it necessary;
• Sec. 38 –It deals with rectification of orders.   It provides that with a view to rectifying any mistake apparent from the record, the Commission may amend any order passed by it under the provisions of this Act.  The Commission may make an amendment of its own motion or an amendment for rectifying any mistake which has been brought to its notice by any party to the order;
• Sec. 39 – It deals with execution of orders of Commission imposing monetary penalty.  In a case where the Commission is of the opinion that it would be expedient to recover the penalty imposed under this Act in accordance with the provisions of Income Tax Act,1961, it may make a reference to this effect to the concerned income tax authority under that Act for recovery of the penalty as tax due under the said Act;
• Sec. 43 – It deals with imposing penalty for failure to comply with directions of Commission and Director General.   If any person fails to comply, without reasonable cause, with a direction given by the Commissioner or the Director General, such person shall be punishable with fine which extend to Rs.1 lakh for each day during which such failure continues subject to a maximum of Rs.1 crore as the case may be determined by the Commission.
• Sec. 43A – It deals with the power to impose penalty for non furnishing of information on combination.   If any person or enterprise who fails to give notice to the Commission the Commission shall impose on such person or enterprise a penalty which may extend to one per cent of the total turnover or the assets, whichever is higher, of such a combination.
• Sec. 44 – It deals with imposing penalty for making false statement or omission to furnish material information.   If any person, being a party to the combination makes a statement which is false in any material particular, or knowing it to be false or omits to state any material particular knowing it to be material such person shall be liable to a penalty which shall not be less than Rs.50 lakhs but which may extend to Rs.1 crore, as may be determined by the Commission;
• Sec.45 – It deals with imposing penalty for offences in relation to furnishing of information.  If a person, who furnishes or is required to furnish under this Act any particulars, documents or any information makes any statement or furnishes any document which he knows or has reason to believe to be false in any material particular or omits to state any material fact knowing it to be material or willfully alters, suppress or destroys any document which is required to be furnished, such person shall be punishable with fine which may extend to Rs.1 crore as may be determined by the Commission;
• Sec. 46 – It deals with power to impose lesser penalty.  The Commission may, if it is satisfied that any producer, seller, distributor or service provider included in any cartel, which is alleged to have violated Sec. 3, has made a full and true disclosure in respect of the alleged violations and such disclosure is vital, impose upon such producer, seller, distributor, trader or service provider a lesser penalty as it may deem fit, than leviable under this Act or the rules or the regulations.

AWARDING COMPENSATION:

                        Sec.53 N deals with awarding compensation by Tribunal.   Claim for compensation, that may arise from the findings of the Commission or the orders of the Appellate Tribunal in an appeal against finding of the Commission or under Sec. 42A (compensation in case of contravention of orders of Commission), or under Sec. 53Q(2) (compensation of in case of contravention of orders of Appellate Tribunal) may be made to the Appellate Tribunal. 

PROCEDURE FOR FILING APPEAL BEFORE TRIBUNAL:

Who can represent before Tribunal?

                        Sec.53S provides that a person preferring an appeal to the Tribunal may either appear in person or authorize one or more Chartered Accountants or Company Secretaries or Cost Accountants or Legal Practitioners or any of its officers to present his or its case before the Tribunal.   The Central Government or a State Government or a local authority or any enterprise preferring an appeal to the Tribunal may authorize one or more Chartered Accountants or Company Secretaries or Cost Accountants or Legal Practitioners or any of its Officers to act as Presenting Officers and every person so authorized may present the case with respect to any appeal before the Appellate Tribunal.  The Commission may authorize one or more Chartered Accountants or Company Secretaries or Cost Accountants or Legal Practitioners or any of its officers to act as Presenting Officers and every person so authorized may present the case with respect to any appeal before the Tribunal.

Procedure:

• The Central Government or the State Government or a local authority or enterprise or any person, aggrieved by any direction, decision or order may prefer an appeal to the Tribunal;
• Every appeal shall be filed within a period of sixty days from the date on which a copy of the direction or decision or order made by the Commission is received by the Central Government or the State Government or a local authority or enterprise or any person;
• The Tribunal may entertain an appeal after the expiry of the said period of sixty days if it is satisfied that there was sufficient cause for not filing it within that that period;
• A memorandum of appeal shall be presented in the Registry  or shall be sent by Registered post addressed to the Registrar of Appellate Tribunal in the Form appended to the Competition Appellate Tribunal (Form and fee for filing an appeal and fee for filing compensation applications) Rules, 2009;
• A memorandum of appeal sent by post shall be deemed to have been presented on the day  it was received by the Registry;
• Every memorandum of appeal shall be in five copies and shall be accompanied with the certified copy of the direction or decision or order against which the appeal is filed;
• Where a party is represented by an authorized representative, a copy of the authorization to act as  the authorized representative and the written consent thereto by such authorized representative, shall be appended to memorandum of the appeal;
• Every memorandum of appeal presented to the Appellate Tribunal shall be in English and in case it is on some other Indian language, it shall be accompanied by a copy translated in English and shall be fairly and legibly type written, lithographed or printed in double spacing on one side of standard petition paper with an inner margin of about four centimeters width on top and with a right margin of 2.5 cm, and left margin of 5 cm, duly paginated, indexed and stitched together in paper book form;
• Every memorandum of appeal shall be accompanied with a fee as detailed below

AMOUNT OF PENALTY IMPOSED	AMOUNT OF FEES PAYABLE
Less than Rs.20,000/-	Rs.1,000/-
Twenty thousand or more rupees but less than one lakh	Rs.2,500/-
One lakh or more rupees	Rs.2,500/- plus Rs.1,000 for every additional one lakh of penalty or fraction thereof, subject to a maximum of Rs.3 lakhs.

 

• Amount of fee payable in respect of any other appeal against a direction or decision or order of the Commission under the Act shall be Rs.10,000/-

• Such fee may be remitted in the form of Demand Draft drawn in favor of “Accounts Officer, Ministry of Corporate Affairs” payable atNew Delhi;
• The Tribunal may, to advance the cause of justice and in suitable cases, waive payment of fee or portion thereof, taking into consideration the economic condition or indigent circumstances of the petitioner or the appellant or applicant or such other reason, as the case may be, by an order for reasons to be recorded.;
• On receipt of an appeal the Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the directions, decisions or order appealed against;
• The Tribunal shall not be bound by the procedure laid down in the Code of Civil Procedure, 1908 but shall be guided by the principles of Natural Justice and, subject to the other provisions of this Act and of any rules made by the Central Government, the Tribunal shall have power to regulate its own procedure including the places at which they shall have their sitting;
• The Tribunal shall, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in respect of the following matters, namely-

• Summoning and enforcing the attendance of any person and examining him on oath;
• Requiring the discovery and production of documents;
• Receiving evidence on affidavits;
• Subject to the provisions of Sections 123 and 124 of the Indian Evidence Act, 1872 requisitioning any public record or document or copy of such record or document from any office;
• Issuing commissions for the examination of witnesses or documents;
• Reviewing its decisions;
• Dismissing a representation for default or deciding it ex-parte;
• Setting aside any order of dismissal of any representation for default or any order passed by it ex-parte;
• Any other matter which may be prescribed;

• Every proceeding before the Tribunal shall be deemed to be judicial proceedings within  the meaning of Section 193 and 228 and for the purposes of Section 196 of the Indian Penal Code and the Tribunal shall be deemed to be a civil court for the purposes of Sec. 195 and Chapter XXVI of the Code of Criminal Procedure, 1973;
• If for any reason other than temporary absence, any vacancy occurs in the office of the Chairperson or a Member of the Tribunal the  Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Tribunal from the stage at which the vacancy is filled;
• In the event of the occurrence of any vacancy in the office of the Chairperson of the Tribunal by reason of his death or resignation, the senior most member of the Tribunal shall act as the Chairperson of the Tribunal until the date on which a new Chairperson appointed in accordance with the provisions of this Act fo fill such vacancy enters upon his office;
• When the Chairperson of the Appellate Tribunal is unable to discharge his functions owing to absence, illness or any other cause, the senior most member or as the case may be, such one of the members of the Tribunal, as the Central Government may, by notification, authorize in this behalf, shall discharge the functions of the Chairperson until the date on which the Chairperson resumes his duties;
• No act or proceeding of the Tribunal shall be questioned or shall be invalid merely on the ground of existence of any vacancy or defect in the constitution of the  Tribunal;

• The Tribunal shall send a copy of every order made by it to the Commission and the parties to the appeal;
• The appeal filed before the Tribunal shall be dealt with by it as expeditiously as possible and endeavor shall be made by it to dispose of the appeal within six months from the date of receipt of the appeal.

PROCEDURE FOR CLAIM OF COMPENSATION:

• The Central Government or a State Government or a local authority or any enterprise or any person may make an application to the Tribunal to adjudicate on claim for compensation that may arise from the findings of the Commission or the orders of the Tribunal in an appeal against any finding of the Commission and to pass an order for the recovery of compensation from any enterprise for any loss or damage shown to have been suffered, by the Central Government or a State Government or a local authority or any enterprise or any person as a result of any contravention of the provisions having been committed by the enterprise;
• Where any loss or damage is caused to numerous persons having the same interest, one or  more such persons may, with the permission of the Tribunal, make an application for permission of the Tribunal make an application for and on behalf of, or for the benefit of, the persons so interested and thereupon, the provisions of rule 8 of order 1 of the First Schedule to the Code of Civil Procedure, shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to the application before the Tribunal and the order the Tribunal thereon;
• An application may be made for compensation before the Tribunal only after either the Commission or the Tribunal on appeal has determined in a proceeding before it that violation of the provisions of the Act has taken place, or if provisions of Sec.42A or Sec. 53Q(2) of the Act are attracted;
• Every application made shall be accompanied by the findings of the Commission;
• The fee payable shall be as detailed below:

AMOUNT OF COMPENSATION CLAIMED	AMOUNT OF FEES PAYABLE
Less than One lakh rupees	Rs.1,000/-
More than One lakh rupees	Rs.1,000/- plus Rs.1,000/- for every additional one lakh rupees of compensation claimed or fraction thereof, subject to a maximum of Rs.3,00,000/-

 

• Such fee may be remitted in the form of Demand Draft drawn in favor of “Accounts Officer, Ministry of Corporate Affairs” payable atNew Delhi;
• The Tribunal may, to advance the cause of justice and in suitable cases, waive payment of fee or portion thereof, taking into consideration the economic condition or indigent circumstances of the petitioner or the appellant or applicant or such other reason, as the case may be, by an order for reasons to be recorded.;
• The Tribunal may, after an inquiry made into the allegations mentioned in the application pass an order directing the enterprise to make payment to the applicant, of the amount determined by it as reasonable from the enterprise as compensation for the loss or damage caused to the applicant as a result of any contravention of the provisions having been committed by such enterprise.
• The inquiry shall be for the purpose of determining the eligibility and quantum of compensation due to a person applying for the same and not for examining afresh the findings of the Commission or the Tribunal on whether any violation of the Act has taken place;
• The Tribunal may obtain the recommendations of the Commission before passing an order of compensation.

EXECUTION OF ORDERS OF TRIBUNAL:

                        Every order may be Tribunal shall be enforced by it in the same manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful for the Tribunal to send in case of the inability to execute such order, to the court within the local limits of whose jurisdiction-

• in the case of an order against a company, the registered office of the company is situated; or
• in the case of an order against any other person, place where the person concerned voluntarily resides or carries on business personally works for gain, is situated.

The Tribunal may transmit order made by it to a civil court having local jurisdiction and such civil court shall execute the order as if it were a decree made by that court.

CONTRAVENTION OF ORDERS OF TRIBUNAL:

                        If any person contravenes without any reasonable ground, any order of the Tribunal, he shall be liable for a penalty of not exceeding Rs. 1 crore or imprisonment for a term up to three years or with both as the Chief Metropolitan Magistrate, Delhi may deem fit.  The Chief Metropolitan Magistrate,Delhishall not take cognizance of any offence punishable save on a complaint made by an officer authorized by the Tribunal.  Any person may make an application to the Tribunal for an order for the recovery of compensation from any enterprise for any loss or damage shown to have been suffered by such person as a result of the said enterprise contravening, without any reasonable ground, any order of the Tribunal or delaying in carrying out such orders of the Tribunal.

APPEAL TO SUPREME COURT:

                        The Central Government or any State Government or the Commission or any statutory authority or any local authority or any enterprise or any person aggrieved by any decision or order of the Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Tribunal to them.  The Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period allow it to be filed after the expiry of the said period of sixty days.

POWER TO PUNISH FOR CONTEMPT:

                        The Tribunal shall have, and exercise, the same jurisdiction, powers and authority in respect of contempt of itself as a High Court has and may exercise and for this purpose the provisions of Contempt of Courts Act, 1971 shall have effect subject to modification that-

• the reference therein to a High Court shall be considered as including a reference to the Tribunal;
• the references to Advocate General in Section 15 of the said Act shall be construed as a reference to such Law Officer as the Central Government may, by notification, specify in this behalf.