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Posted by on Apr 19, 2014 in Competition Act 2002 |

CCI – Duties, Powers and Control of Central Govt

The Competition Act 2002 provides a provision to establish a commission called Competition Commission of India (CCI) for execution of provisions of this act. Also act was amended in 2007 to create an appellate tribunal called CAT to hear appeal against decisions of CCI but only in defined cases.

Duties & Powers of CCI

  • It shall be the duty of CCI to sustain competition in markets, protect freedom of trade and interests of consumers in markets.
  • To sustain competition in markets, CCI has power to make inquiries in case of any certain agreement, abuse of dominant position or any combination by any person or body corporate on its own or on receipt of complaint by consumer or by reference of govt or any authority.
  • The CCI has powers to inquire into any of acts outside India that causes adverse impacts on competition within India.
  • The Chairperson shall constitute benches to exercise powers of CCI and a bench shall consist of at least 2 members include at least 1 judicial member (qualified to be a judge of High Court. The Bench where Chairperson presides is known as Principal bench and others are known as additional benches.
  • The CCI has power to make inquiry (either Suo Motto or on request of any person, consumer or trade association) and pass order for any certain agreement, abuse of dominant position or any combination that cause adverse effect on competition within India.  
  • The CCI can impose penalties on enterprises or on persons which shall not be > 10% of turnover of enterprise or person in case of any offence as provided under this act. Also CCI can order to any enterprise or person to pay compensation to person or enterprise who suffered from acts of that person or enterprise.
  • The CCI can advise central govt for division of a dominant enterprise to ensure that it does not abuse its position. Consequently, govt can take action either same as advised by CCI or in other form as case may be. 
  • The CCI has power equivalent to a civil court while discharging its functions in matters such as summoning, producing evidences etc. Also has power to regulate its own procedure such as place of sittings, timings etc.
  • Any person or enterprise can appeal to Supreme Court against order of CCI within 60 days from date of order. But no appeal shall be allowed if order passed by CCI involves consent of both parties.
  • No Civil court can exercise jurisdiction on any matter under this act or any matter on which CCI is empowered to exercise jurisdiction.    

Penalties

  • If any enterprise or person not complies with any order of CCI shall liable for punishment of imprisonment up to 1 year or/and fine which shall not be > 10 lakh.
  • If any person fails to comply with any direction given by CCI or Director General such as ignore summons etc. shall be liable for penalty of Rs 1 lakh per day during such failure continues.
  • If any person or enterprise (party to a combination) provides any false information or hide any considerable information shall liable for penalty of not less than 50 lakhs and may be extended up to 1 crore.
  • Also every person of an enterprise (contravenes any provisions of act) who was responsible to company for conduct of particular business shall be tried and punished as may be determined by CCI.

Control of Central Govt over CCI

  • The Central Govt has power to exempt any number of enterprises from provisions of act as it may deems fit for security or interests of country or public.
  • The Central can issue directions to CCI and CCI is bound to follow that directions.
  • The Central Govt can suspend & take charge over the CCI for period not exceeding 6 months in circumstances such as default made by CCI or situation beyond control of CCI or in public interest etc. The Govt shall reconstitute CCI after that period by fresh appointments may be differed from previous one.

Amendment 2007 (Key Features)

  • A Competition Appellate Tribunal (CAT) is established to hear and dispose of appeals against certain decisions made by the CCI. Some of the decisions that can be challenged include:
    • The CCI’s decision that an agreement is not causing adverse effect on competition or an enterprise is not abusing its dominant position;
    • The CCI’s order to discontinue the abuse of dominant position, modify agreements or divide an enterprise;
    • The CCI’s decision on whether a combination is having an adverse effect on competition, and if so, the steps to be taken to rectify the matter.
  • The CAT would consist of a Chairperson and a maximum of two members, appointed by the central govt from the panel of names proposed by the Selection Committee. The Chairperson would have to be a Judge of the SC or the CJ of the HC.
  • Any person can appeal the decision of the CAT in the SC within 60 days from the date on which the order of the CAT is communicated to the person.
  • The bill also repeals the MRTP Act, 1969 but MRTP Commission may continue work for next 2 yrs on subjects it was working on before this act.
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