2005 (1) TMI 410 - SC - Companies Law

Composition of Commission - Held that - If an expert body is to be created as submitted on behalf of the Union of India consistent with what is said to be the international practice, 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. 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. Thus, 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 as held out is made or attempted, we close this Writ Petition declining to pronounce on the matters argued before us in a theoretical context and based only on general pleadings on the effect of the various provisions to support the challenge based on the doctrine of separation of powers

Summary

Issues:
1. Challenge to the selection process of the Chairperson and members of the Competition Commission of India.
2. Question of separation of powers in the appointment of members to the Commission.

Analysis:
1. The judgment deals with a Writ Petition challenging the selection process of the Chairperson and members of the Competition Commission of India (CCI). The petitioner argued that the CCI, being a judicial body with adjudicatory powers, should have judicial members appointed by the Chief Justice of India or a Committee presided over by the Chief Justice. The Union of India contended that the CCI is a regulatory body requiring expertise in the field, and judicial members may not possess the necessary expertise. The government proposed amendments to allow the Chief Justice of India or his nominee to select the Chairperson and members. The Court deferred a decision on the challenge pending the proposed amendments, emphasizing the importance of expertise in the appointments to the CCI.

2. The issue of separation of powers in the appointment of members to the CCI was raised in the context of whether judicial members should be appointed by the judiciary or the executive. The petitioner argued that the Chairman of the Commission should be a person connected with the judiciary, while the Union of India emphasized the need for expertise in the field. The Court acknowledged the importance of balancing regulatory and adjudicatory functions within the CCI and suggested the creation of separate bodies for advisory and regulatory functions, followed by an appellate body. The judgment emphasized the need to consider the impact of proposed amendments on the separation of powers doctrine and deferred a decision on the validity of the relevant provisions pending the enactment of proposed amendments to the Act.

In conclusion, the judgment deferred a decision on the challenge to the selection process of the Chairperson and members of the CCI, pending proposed amendments to the Act. The Court highlighted the importance of expertise in regulatory bodies like the CCI while considering the implications of the separation of powers doctrine in the appointment of members. The judgment suggested the creation of separate bodies for advisory, regulatory, and adjudicatory functions within the CCI to address the concerns raised regarding the appointment process.