By Tanishka Tiwari

Published on: November 17, 2023 at 00:35 IST

The Competition Commission of India was established to govern competition in domestic and overseas markets that substantially influence India’s domestic market. With the onset of liberalisation and privatisation in India in 1991, it was natural for competition to expand dramatically. However, before such scientific and technological innovation, markets were under the supervision of the respective state governments.

Due to liberalisation in India, governmental authority over such markets began to wane, but it also created the path for more competition inside the home market. The earlier legislation of the Monopolistic and Restrictive Trade Practise Act, 1969 (MRTP Act 1969) has been superseded by the Competition Act, 2002, whose main goal was to reduce the concentration of economic power in the hands of a few monopolistic market holders and to restrict unhealthy trade practices.

The Competition Act, 2002 is in line with modern competition regulations. Essentially, the Act prohibits anti-competitive agreements, the misuse of dominant market positions by firms, and the regulation of combinations such as acquisition, takeover, merger, and amalgamation that are likely to significantly adversely affect competition inside India.

Object and Purpose of the Act and Appeal

The Act’s goals are to promote healthy competition in India’s home market and to prevent anti-competitive agreements. Other major goals are the prohibition of dominating position abuse, freedom of commerce with other competitors, and market economic progress.

The Act’s major goal is to encourage healthy competition in the home market and to limit the exploitation of dominating market positions.

If the appellant is offended by the decision of the Competition Commission of India, he or she may appeal to the Appellate Tribunal, which is the National Company Law Appellate Tribunal (NCLAT).

Previously, the COMPAT was the appellate body for CCI decisions. However, with the merger of COMPAT and NCLAT in 2017, the NCLAT was designated as the sole appeal body for competition-related disputes.

How to appeal: Section 53T of the Competition Act

A party that is dissatisfied with the Authority’s judgement may file an appeal with the Appellate Tribunal, which is the National Company Law Appellate Tribunal (NCLAT) under the Competition Act of 2002. If a party is dissatisfied with the National Company Law Appellate Tribunal’s decision, instruction, or order, he or she may submit an appeal under Section 53T within 60 days of receiving the order from the National Company Law Appellate Tribunal.

A party who is dissatisfied with the Competition Commission of India’s ruling may file an appeal with the Appellate Tribunal, which is the National Company Law Appellate Tribunal, under the Competition Act, 2002. If a party is dissatisfied with the National Company Law Appellate Tribunal’s decision, instruction, or order, he or she may submit an appeal under Section 53T¹ within 60 days of receiving the order from the National Company Law Appellate Tribunal.

According to Section 53T, “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 Appellate Tribunal may file an appeal to the Supreme Court within sixty days of the date of communication of the decision or order of the Appellate Tribunal to them; provided, however, that the Supreme Court may, if it is satisfied that the applicant was prevented by the decision or order of the Appellate Tribunal, dismiss the appeal. “

Grounds for Appeal to the Supreme Court

The presence of a serious question of law is the most prevalent ground for appeal. When there is a serious legal matter at stake, the interpretation or application of the law is called into question, or there is a conflict in legal precedents, the Supreme Court hears appeals.

Appeals to the Supreme Court are permissible if there are errors in interpreting the law or if the lesser authorities or tribunals’ jurisdiction is challenged.

Appeals to the Supreme Court may also be founded on significant factual mistakes if lower authorities or tribunals fundamentally misread or misrepresented factual information, resulting in an incorrect ruling.

If the decision-making process breaches natural justice or fair procedural standards, it may constitute a viable ground for appeal.

Availability of class actions for infringement of competition law and/or damages in India

Section 53N(4) of the Act² states that if a loss or damage is caused to a number of people who have a common interest, one or more of them may, with the permission of the NCLAT, file an application to adjudicate on a claim for compensation for and on behalf of, or for the benefit of, those people. The provisions of Rule 8 of Order 1 of the Code of Civil Procedure, 1908,³ shall apply in such circumstances. If a person opts out of the joint claim, the NCLAT’s ruling on the claim will not bind that person.

Conduct of proceedings and costs

The Claimant must demonstrate the loss or harm sustained as a result of a violation of Chapter II of the Act or disobeying an order/direction issued by the CCI and/or NCLAT. As a result, in order to receive compensation, a Claimant must bear the burden of demonstrating cause as well as the loss or harm incurred.

The standard of proof required in certain circumstances is not specified in the Act. However, the threshold for civil claims such as these should be “on the balance of probabilities.”

The Act does not recognise cartel participants’ joint and multiple liabilities. A claim for compensation under the Act requires the applicant to demonstrate the loss or harm sustained as a result of an enterprise violating Chapter II.

Section 52N(3)⁴ states unequivocally that the COMPAT may order an enterprise to pay the applicant for loss or damage suffered as a result of “any contravention of the provisions of Chapter II committed by such enterprise” (emphasis added).

Anyone submitting an application to the NCLAT for adjudication on a claim under Section 53N⁵ must demonstrate the loss or damage sustained as a result of a violation of the requirements of Chapter II or a violation of an order of the CCI or the NCLAT (as the case may be).

As a result, a claimant must provide proof to support its claim for compensation, such as relevant documents/witnesses, etc.

There is no obligation of disclosure owed to infringers, but if a claimant plans to rely on a specific document in the custody of the defendant or any third party, it may apply to the NCLAT for an order requiring disclosure of such material.

It should be noted that under Section 53O(2),⁶ the NCLAT has the same powers as a civil court under the Code of Civil Procedure, 1908 for the following matters:

• summoning and enforcing the attendance of any person and examining him on oath
• requiring the discovery and production of documents
• receiving evidence on the affidavit.
• obtaining from any office any public record or document, or a copy of such record or document.

While the Act does not prescribe any alternative dispute resolution mechanisms for compensation claims, it is theoretically possible for parties to explore alternative methods of claim resolution, such as negotiations, mediation, conciliation, or even arbitration, while an application under Section 53N is pending.

Neither the CCI nor the NCLAT have statutory authority to order parties to pursue alternative dispute settlement techniques.

However, a recent Madras High Court judgement held that the Act’s scheme allows parties to enter into a compromise or settlement, which will be scrutinised by the CCI, which will examine whether the public interest would continue to suffer and whether the object of inquiry would be defeated by acceptance of a compromise.⁷

Relief

A claimant may apply to the COMPAT for adjudication on a compensation claim under Section 53N of the Act. While the term “compensation” is not defined in the Act, it is linked to the amount determined by the NCLAT as realisable from the enterprise for the loss or damage caused to the Claimant as a result of any violation of the provisions of Chapter II of the Act under Section 53N(3) of the Act.⁸

Since the key sections of the Act only went into effect in 2009, the NCLAT has yet to make any decisions/orders on any application for adjudication of a compensation claim. offered the provisions of Section 53N(3) stated above, it is likely that the term “compensation” will be read broadly to relate to anything offered to compensate for loss.

In terms of quantification, a claim for “compensation” for the purposes of an application under Section 53N(1) must be substantiated by documentary, oral, or both proof. Such proof must establish the loss or damage that such a party should have experienced as a result of an enterprise’s violation of the provisions of Chapter II of the Act or of an order of CCI or NCLAT.⁹

Claimants can be any “person” or “consumer,” both of which have broad definitions in the Act. A consumer is defined as a buyer (direct or indirect), regardless of whether the purchase is for personal use, commercial use, or resale.

Due to a lack of precedent, it is unclear whether the NCLAT or the Supreme Court of India will recognise the passing-on defence under the Act. However, general principles of damages law will recognise factors that have diminished or eliminated the Claimant’s loss.

According to Section 33 of the Act,¹⁰ if the CCI is satisfied during the course of an inquiry that any conduct in violation of the Act has been and continues to be committed, or that such act is about to be committed, the CCI may temporarily restrain any party from carrying out such acts until the conclusion of such inquiry or until the issuance of further orders, without giving such party notice, where it deems necessary.

In Competition Commission of India v Steel Authority of India Ltd.,¹¹ the Supreme Court of India established the following factors that must be met before granting temporary relief under Section 33 of the Act:

• The CCI must be satisfied (which requires a significantly higher level of proof than forming a prima facie view under Section 26(1)¹² of the Act) that an act in violation of the listed requirements has been, is being, or is likely to be committed.
• It is required to issue the order of restraint from the record before the CCI because there is every chance that the applicant will suffer irreparable and irreversible harm, or that continuing the activity will have a negative impact on market competition.

Following the conclusion of an investigation, the CCI may, in accordance with Section 27(a) of the Act,¹³ issues an order directing an enterprise engaged in anti-competitive agreements to permanently cease and never repeat any infringing act (“cease-and-desist” order); and permanently restrain abusive behaviour by dominant enterprises.

Similarly, the NCLAT has broad authority over the parties before it. It can issue “any order it deems fit” as long as it is within the law and its powers.

Conclusion

In disputes pertaining to the Competition Act, 2002, the Supreme Court of India serves as the apex judicial body for addressing significant legal concerns and providing justice. Parties that are unsatisfied with CCI or NCLAT decisions may appeal to the Supreme Court if the appeal is based on important problems of law, mistakes in jurisdiction or law, factual inaccuracies, or violations of natural justice.

Understanding the possibilities for an appeal to the Supreme Court under the Competition Act is critical for ensuring fair competition practices and efficient competition law enforcement in India’s market setting.

References

• PROCEDURE FOR FILING APPEAL BEFORE NCLAT UNDER COMPETITION ACT, 2002
• Competition Litigation in India
• Appellate Tribunal Under the Competition Act, 2002
• Points to remember while drafting an appeal under section 53T of the Competition Act, 2002

Endnotes

1. The Competition Act, 2002, s.53T, No.12, Acts of Parliament, 2002 (India)

2. The Competition Act, 2002, s.53N(4), No.12, Acts of Parliament, 2002 (India)

3. Code of Civil Procedure, 1908, O I R VIII

4. The Competition Act, 2002, s.52N(3), No.12, Acts of Parliament, 2002 (India)

5. The Competition Act, 2002, s.53N, No.12, Acts of Parliament, 2002 (India)

6. The Competition Act, 2002, s.53O(2), No.12, Acts of Parliament, 2002 (India)

7. The Tamil Nadu Film Exhibitors Association v CCI & Ors, [2015] CompLR 0420

8. The Competition Act, 2002, s.53N(3), No.12, Acts of Parliament, 2002 (India)

9. The Competition Act, 2002, s.53N(1), No.12, Acts of Parliament, 2002 (India)

10. The Competition Act, 2002, s.33, No.12, Acts of Parliament, 2002 (India)

11. [2010 COMPLR 0061 (Supreme Court)]

12. The Competition Act, 2002, s.26(2), No.12, Acts of Parliament, 2002 (India)

13. The Competition Act, 2002, s.27(a), No.12, Acts of Parliament, 2002 (India)