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Who has the locus standi to approach the Competition Commission of India

September 21, 2021
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This article is written by Aditya pursuing Certificate Course in Competition Law from LawSikho. This article has been edited by Aatima (Associate, LawSikho) and Dipshi Swara (Senior Associate, LawSikho).

Introduction 

Cambridge Dictionary defines ‘locus standi’ as the right to bring legal action to a court of law or to appear in a court. The legal competence to sue or approach courts is known as locus standi. The parties who seek the courts in both the inquisitorial and adversarial systems must have been wronged or deprived of their rights. As a result, the existence of locus standi is required in any judicial proceeding.

Competition law in India is governed by Competition Act, 2002 (“Act”) and the Competition Commission of India (“CCI”) adjudicates over violations of the Act. CCI has regulatory as well as quasi-judicial powers. The issue of locus standi before CCI is an important discussion in competition law jurisprudence, especially in India, where the law is ever-evolving. This article explains the relevant provisions of the Act as well as landmark judgment by the Supreme Court of India on this issue. 

Relevant provisions 

Competition Act, 2002

Section 19 provides that the Commission may inquire into any alleged contravention of Section 3 and 4 of the Act either on its own motion or on receipt of information from any person, consumer, or their association or trade association as provided by Section 19(1)(a) or on a reference made to CCI by the Central Government or a State Government or statutory authority as per Section 19(1)(b) of the Act. Section 19(1) of the Act was amended in 2007 and the words “receipt of complaint” were replaced by “receipt of information”.

Reading between the lines of the Preamble of the Act, it is the duty of the Commission to prevent practices having adverse effects on competition, to promote and sustain competition in markets, to protect the interest of the consumers, and to ensure freedom of trade. After perusal of these objectives, the term ‘any person’ implies no strict rule of locus standi. 

Section 2 (l) provides that the definition of ‘person’ includes :

(i) an individual; 

(ii) a Hindu undivided family; 

(iii) a company; 

(iv) a firm; 

(v) an association of persons or a body of individuals, whether incorporated or not, in India or outside India; 

(vi) any corporation established by or under any Central, State or Provincial Act or a Government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956); (vii) anybody corporate incorporated by or under the laws of a country outside India; 

(viii) a co-operative society registered under any law relating to co-operative societies; 

(ix) a local authority; 

(x) every artificial juridical person, not falling within any of the preceding sub-clauses. 

Competition Commission of India (General) Regulations, 2009 

The following provisions of CCI General Regulations are relevant to our understanding of locus standi before the Commission: 

Regulation 2(i) defines ‘party’ as: 

(i) “Party” includes a consumer or an enterprise or a person defined in clauses (f), (h) and (l) of Section 2 (20) of the Act respectively, or an information provider, or a consumer association or a trade association or the Director-General defined in clause (g) of Section 2 of the Act, or the Central Government or any State Government or any statutory authority, as the case may be, and shall include an enterprise against whom any inquiry or proceeding is instituted along with any person permitted to join the proceedings or an intervener.”

Regulation 10 provides for the contents of information or reference as provided in Section 19 of the Act – 

10. Contents of information or the reference. – 

(1) The information or reference (except a reference under sub-section (1) of Section 49 of the Act) shall, inter alia, separately and categorically state the following seriatim- 

(a) the legal name of the person or the enterprise giving the information or the reference; 

(b) complete postal address in India for delivery of summons or notice by the Commission, with Postal Index Number (PIN) code; 

(c) telephone number, fax number, and also electronic mail address, if available; 

(d) mode of service of notice or documents preferred;

 (e) legal name and address(es) of the enterprise(s) alleged to have contravened the provisions of the Act; and 

(f) legal name and address of the counsel or other authorized representative, if any;

 (2) The information or reference referred to in sub-regulation (1) shall contain – 

(a) a statement of facts; 

(b) details of the alleged contraventions of the Act together with a list enlisting all documents, affidavits, and evidence, as the case may be, in support of each of the alleged contraventions; 

(c) a succinct narrative in support of the alleged contraventions; 

(d) the relief sought if any; 

(da) details of litigation or dispute pending between the informant and parties before any court, tribunal, statutory authority, or arbitrator in respect of the subject matter of information; 21 

(e) Such other particulars as may be required by the Commission. 

(3) The contents of the information or the reference mentioned under sub- regulations (1) and (2), along with the appendices and attachments thereto, shall be complete and duly verified by the person submitting it.”

Regulation 25 provides for the power of Commission to permit a person or enterprise to take part in proceedings – 

25. Power of Commission to permit a person or enterprise to take part in proceedings. (1) While considering a matter in an ordinary meeting, the Commission, on an application made to it in writing, if satisfied, that a person or enterprise has a substantial interest in the outcome of proceedings and that it is necessary for the public interest to allow such person or enterprise to present his or its opinion on that matter, may permit that person or enterprise to present such opinion and to take part in further proceedings of the matter, as the Commission may specify….”

Case laws 

Samir Agarwal v. Competition Commission of India 

Supreme Court of India answered the following issues in this case – 

1. Whether a member of the public can file information with the CCI alleging a violation of the Act. 

2. Whether an aggrieved party can file an appeal to the NCLT and thereafter to the Supreme Court against the order of the CCI. 

National Company Law Appellate Tribunal (NCLAT) dismissed the petitioner’s appeal on the ground that he is not a consumer of either Ola or Uber, while the Supreme Court, on perusal of the provisions of the Act and Regulations, held that the definition of person in Section 2(l) of the Act is inclusive and extremely wide in nature. The Competition (Amendment) Act, 2007

substituted ‘receipt of complaint’ to ‘receipt of information’ under Section 19(1) of the Act. This substitution is significant as a complaint can be filed only by an aggrieved person while information may be received from any person. The Court also held that Section 45 of the Act acts as a deterrent against frivolous and vexatious litigation as it provides for a penalty up to Rs. 1 crore for false claims. With regard to Appeals, the Court held that Section 53B of the Act provides that any person aggrieved by any order, direction, or decision of the Commission can appeal to NCLAT. Section 53T of the Act provides for appeals to the Supreme Court by any person aggrieved by any order, decision, or direction of the Appellate Tribunal. 

Harshita Chawla v. WhatsApp Inc

In this case, the Opposite Parties (OP) challenged the locus standi of the informant relying on NCLAT’s decision in the Samir Agarwal case. Referring to the preamble and provisions of the Act, CCI observed that the Act had been conceived to follow an inquisitorial system wherein the Commission is expected to investigate cases involving competition issues in rem rather than acting as a mere arbiter to ascertain facts and determine rights in personam arising out of rival claims between parties.

Shri Surendra Prasad v. Competition Commission of India 

In this case, the Competition Appellate Tribunal (COMPAT), held that ‘Parliament has neither prescribed any qualification for the person who wants to file an information under Section 19(1)(a) nor prescribed any condition which must be fulfilled before information can be filed under that section.’ The erstwhile Tribunal observed that Sections 18 and 19 don’t give powers to the Commission to reject the prayer for investigation under Sections 3 and 4 on the grounds that the informant does not have a personal interest in the matter. 

Dr. L.H. Hiranandani Hospital v. Competition Commission 

COMPAT held that the Act does not prescribe any qualification to identify the locus of an informant.

Conclusion 

When NCLAT altered the position of locus standi on competition law cases, this was a trending debate in competition law jurisprudence. CCI used to rely on its earlier judgments cited above to contradict this viewpoint of NCLAT. This created confusion and uncertainty for the litigants. However, Supreme Court’s judgment in Samir Agarwal Case has been a landmark for this highly debatable issue. Both the Act as well as Regulations provide any person locus standi to file information before the Commission.


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