NCLAT
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This article is written by Neelam Prusty, from Madhusudan Law College, Odisha. The article explains the importance and role of the Competition Law, 2002 and Limitation Act, 1963 in India. The cases related to the relationship between the Competition and Limitation Act, 1963 is briefly explained where the National Company Law Appellate Tribunal (NCLAT) has decided to make a bridge between the two Acts which will not create any confusion relating to the time period.

Introduction

India is a country with the second largest population in the world. There is a growing population along with their growing numbers of problems relating to their property, business, family, society, etc. These increasing numbers of their problems give rise to a various number of cases either civil or criminal. In recent years, the Government of India has established some other tribunals like National Company Law Appellate Tribunal (NCLAT) to deal efficiently with a particular type of case. The Competition Law, as well as the Limitation Act, 1963, was new for the people and even some of the sections in the Acts were not clearly mentioned or overlapping each other. For years together, there was a discussion relating to the jurisdiction and limited period of filing appeal. Later, in 2020, the National Company Law Appellate Tribunal (NCLAT) cleared the view of the limited period and sufficient cause. In the article, we will discuss the role and relation of the Competition Law and the Limitation Act, 1963.

Competition Law and its Importance

The Monopoly and Restrictive Trade Practice Act came into force in 1969 which soon became old-fashioned in today’s cut-throat competitive world. The Act was preventing the companies from having assets more than 100 crores from expanding their business without permission from the Government of India. Hence there was a need for a change where companies can compete in the Indian markets to provide the people with a variety of products at a reasonable price.

Thereafter, a new law came in 2003 to ensure fair competition and freedom of trade in the Indian market. Soon in 2009, the Government of India set up an anti-monopoly body to investigate mergers, acquisition, and price strategy by the different companies. The Commission was named the Competition Commission of India. The main responsibility of this commission was to restrict companies from practicing monopoly trade practices.

In 1991, the economic policy came up with the objectives for the working of the Competition Act, 2002 are as follows:

  1. It protects the interests of the consumers by providing them with goods and services at reasonable prices.
  2. It promotes fair and healthy competition in the Indian market.
  3. The Act prevents Micro, Small, and Medium Enterprises (MSMEs) and smaller companies from abuse by other competing big companies in the market.
  4. The Act even banned the practices that can have an adverse impact on competition in the Indian markets.
  5. The freedom of trade in Indian markets was given utmost importance.
  6. The combinations of such companies through mergers, acquisitions, and amalgamation was regulated and maintained by the Commission.

The Commission is very strict regarding the misutilization of power by the big companies to dominate the small companies and MSMEs in the India Market. The Commission used to impose a huge penalty on the big companies for their mischievous act which may hamper the freedom of trade of the small companies.

In recent years, the Competition Commission has imposed huge penalties on some cement companies and airlines for deciding the price of their goods and services. The Competition Commission in India has played a major role in the lives of people by protecting their trading rights as well as their consumer rights by promoting healthy competition in the Indian Market.

Limitation Act and its importance

The limitation itself says about fixing or prescribing a certain period of time for barring legal actions. The term ‘period of limitation’ under Section 2(j) of the Limitation Act, 1963,  refers to the certain period of limitation time prescribed for any suit, appeal, or application, whereas the term ‘prescribed period’ refers to the period of limitation measured according to the provisions of the Limitation Act, 1963.

The Law of Limitation protects the aggrieved party by limiting the last date for different legal actions that the accused can take against the aggrieved party and to stretch the suit or seek a remedy before the court. The Limitation Act, 1963 will forbid the suit if the suit is initiated after the prescribed time limit. The Limitation Act, 1963  is based on the principle derived out of a Latin maxim “actus curiae neminem gravabit” which means that an act of court shall not prejudice anyone. The court can overlook the delay of filing the appeal if the appellant is able to satisfy the court that the delay was caused beyond the control of the appellant. The main objective of the Act is to protect the aggrieved person from the lengthy judicial procedure. This will indirectly harm the aggrieved person and penalize the person in the form of litigation expenses without doing any offence.

The Limitation Act, 1963 in India was adopted in 1859 and subsequently, the Limitation Act, 1963 came into force in 1964 with the purpose to connect and amend the legal theories and principles that are related to the limitation period of different legal proceedings. The main idea of the provisions of the Limitation Act, 1963 is not only to protect the rights of an aggrieved person but also to save time and provide the public with a better legal system. This law was established for the welfare of the public for fixing a certain time span for the specific legal actions that can be availed to seek the remedy.

NCLAT decision regarding time

The Government of India established a new tribunal to deal efficiently with the cases under the Competition Act, 2002. National Company Law Appellate Tribunal (NCLAT) is the appellate body formed under Section 53A of the Competition Act, 2002 to address matters against the orders of the Competition Commission of India. The Limitation Act, 1963 was enforced to safeguard the aggrieved party by limiting the time period to file an appeal in the tribunal or court to seek a remedy.

Previously, the Constitution of India under Article 226 empowers the High Court to entertain any kind of writ petition as appellate bodies. But soon after the emergence of the Competition Act, 2002, the power of the High Court was limited to entertain cases under Article 226. Even in the case of Benedict Denis Kinny v. Tulip Brian Miranda [Civil Appeal No.1431/2020], the Supreme Court of India held that the High Court is barred from entertaining any case that comes under the jurisdiction of any similar statutory bodies.

In the case of Maj. Pankaj Rai v. Secretary, Competition Commission of India [AT No. 1 of 2020], it was held that no High Court is allowed to entertain the appeal against the orders of the Competition Commission of India since the Act provides a special forum for challenging the orders of the Competition Commission of India.

In the case of Swiss Ribbons Pvt. Ltd. v. Union of India [(2019) 4 SCC 17], the court held that the aggrieved party is not allowed to invoke the writ jurisdiction of the High Court. The National Company Law Appellate Tribunal is established for entertaining the competition cases so the litigant must approach the National Company Law Appellate Tribunal under Section 53A of the Competition Act, 2002.

The Competition Act, 2002 is also linked with the Limitation Act to protect the aggrieved party by limiting the days to approach the forum.

Under Section 53B(2) of the Competition Act, 2002, the appeal is restricted to be filed within a period of sixty-day of the last event. But the Appellate Tribunal or Forum has the power to entertain an appeal even after the expiry of sixty days only if the reason is sufficient enough to convince the court or tribunal for not filing the appeal within the time limit. 

The Limitation Act under Section 5 allows the forum or court to entertain an appeal or application after the prescribed time only if the appellant has sufficient reason to satisfy the court or tribunal.

The National Company Law Appellate Tribunal has relied on the case of Geeta Kapoor v. Competition Commission of India [2016 SCC OnLine Comp AT 180]  and hence declared that “sufficient cause” under Section 5 of Limitation Act, 1963 can be interpreted from the ratio of the past cases. The term “sufficient cause” under Section 53B(2) of the Competition Act, 2002 also interpreted along with the Limitation Act, 1963. The purpose of different limitation periods in the Limitation Act, 1963 creates confusion relating to the sufficient cause and time. Hence the provisions of the Limitation Act, 1963 are basically excluded during the proceedings that are governed by the Competition Act, 2002 to avoid confusion.

The explanation by the National Company Law Appellate Tribunal to interpret Section 53B (2) of the Competition Act, 2002 to provide a clear vision for ‘sufficient cause’ was cleared in two ways:

  1. Since the High Court has the power to entertain writ petitions, the appellant used to approach the High Court even after the Act clearly provided a mechanism of appeal at the Competition Commission of India.  In case any appellant felt that there are unfair proceedings by the Competition Commission of India, it is admissible to approach the High Court. In the case of Monsanto Holdings Pvt. Ltd. v. Competition Commission of India [2020 SCC OnLine Del 598], the question on the jurisdiction of the Competition Commission of India has been clarified by the High Court of Delhi that the High Court has the ultimate power to entertain such cases under the writ of quo warranto.
  2. The other point of view was laid down that since the High Court of Telangana and the National Company Law Appellate Tribunal had jurisdiction to hear the competition case, it was held that the litigant must approach the nearest forum to seek justice.

Therefore, the National Company Law Appellate Tribunal changed its vision of sufficient cause. The National Company Law Appellate Tribunal clarified that there is nothing such as “sufficient cause”, as mentioned under Section 53B(2) of the Competition Act, 2002, for providing excuses for the delay of filing the appeal after the expiry of 60 days. Hence, the National Company Law Appellate Tribunal finally held that there are no such grounds that can be taken into consideration for filing the appeal beyond the prescribed period of limitation.

Conclusion

Sooner or later, the clarification made by the National Company Law Appellate Tribunal in 2020 proved to be beneficial for the citizens of India. In many situations, the aggrieved party used to suffer a lot due to the chance of re-appeal of the suit even after the limitation period under the provision for appeal with ‘sufficient cause’.

The tribunal held a landmark judgment while interpreting the Competition Act, 2002 and Limitation Act relating to the maximum time period of appealing in the court or forum. The justification not only cleared the loopholes in the Competition Act, 2002 but also helped the people from suffering unnecessarily. The litigation process even became short as well as less time-consuming and the justice delivery system started working efficiently. Hence we can conclude that the change is the need of the time and the judiciary system should take necessary steps to interpret the law according to the demand of the time and maintain law and order in the society. The changes make the justice delivery system to provide justice to the citizens of the county without any loopholes.

References


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