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Locus Standi under the Competition Act 2002: The Supreme Court’s Decision in the Samir Agrawal Case

Contributed by: Samvad Partners

The question of who can approach the Competition Commission of India (CCI) with information, and who can maintain an appeal against an order passed by the CCI has been settled by a recent judgment of the Supreme Court[Samir Agrawal v. Competition Commission of India(Judgment dated 15 December, 2020 in Civil Appeal No. 3100 of 2020)]. The Supreme Court disagreed with a recent ruling of the National Company Law Appellate Authority ("NCLAT") on the aspect of locus-standi of the informant under the Competition Act, 2002 ("Act").

The case relates to an information filed by Samir Agrawal, a legal practitioner, against app-based cab aggregators Ola and Uber, alleging contravention of Section 3(1) read with Section 3(3)(a) of the Competition Act, 2002 ("Act"). The CCI as well NCLAT concurrently agreed that no case of contravention had been made out against the cab aggregators on the facts of the case. However, the NCLAT had held that Mr. Agrawal could not have filed the information before the CCI or filed an appeal challenging the order of the CCI. The NCLAT held that an informant had to establish that it was a person who had “suffered invasion of his legal rights as a consumer or beneficiary of healthy competitive practices”. It was this conclusion of the NCLAT that the Supreme Court took exception to, and clarified that the categories of persons who could bring information or file an appeal under the Act could not be narrowed down in this manner.

The Supreme Court observed that the definition of ‘person’ under the Act was quite wide. Importantly, the concept of ‘complaint’ had been substituted with the concept of ‘information’ under the Act by a ‘significant’ amendment in 2007. While a complaint could be filed only by a person who was aggrieved by a particular action, an information could be received from any person, whether or not such person was personally affected. Reference was also made to section 35 of the Act, in which the earlier expression “complainant or defendant” had been substituted by the expression, “person or an enterprise.”

One of the concerns raised by the cab aggregators was of frivolous information being filed under the Act by business rivals to cause harassment. The Supreme Court took note of the penal provisions under Section 45 of the Act, which provides for imposition of monetary fine of upto INR 10,000,000 (Rupees One Crore or Ten Million) by the CCI when the information supplied is either frivolous or mala fide. This could keep in check what was described as the growing tendency of persons being "set up" by rivals in the trade. The Court also emphasized the confidentiality provisions of the Act and the Regulations framed under the Act, which were intended to protect an informant from harassment. For this reason also, the Court concluded that the locus standi of an informant could not be interpreted narrowly.

The Act provides a right to appeal to any person, who is aggrieved by orders passed by the CCI or the NCLAT[See sections 53-B and 53-T of the Competition Act]. The Supreme Court held that in the context of the Act, which dealt with rights in rem, and the public interest of consumers, the expression ‘person aggrieved’ could not be construed narrowly. The Court placed heavy reliance on the principles laid down in Competition Commission of India v. Steel Authority of India[(2010) 10 SCC 744)]. It held that the CCI performs inquisitorial, as opposed to adjudicatory functions, and consequently “the doors of approaching the CCI and the appellate authority, i.e., the NCLAT, must be kept wide open in public interest, so as to subserve the high public purpose of the Act.”

The NCLAT’s judgment in this case, was at odds with its earlier decision in Surendra Prasad v. Competition Commission of India[2015 SCC OnLine Comp AT 789] and the CCI’s own consistent position on the issue. In our view, the judgment of Supreme Court provides important clarity on the subject of who can initiate a proceeding before the CCI or file an appeal under the Act.

Contributed by Samvad Partners

The above article has been authored by Mr. Arjun Krishnan(Partner). Samvad Partners, through its Partner Arjun Krishnan, had represented the CCI before the Supreme Court in this matter.

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