RAJIV GANDHI NATIONAL UNIVERSITY OF LAW, PUNJAB

TOPIC- NATURE AND FUNCTIONS OF QUASI-JUDICIAL BODIES

SUB-TOPIC- COMPETITION COMMISSION OF INDIA AND ITS

CONSTITUTIONAL CONFLICTS

SUBMITTED TO SUBMITTED BY:

PROF. JASWINDER KAUR SHAURYA ARON

PROF. SIDDHARTH FUELLER 16132, BA.LLB

 RAJIV GANDHI NATIONAL UNIVERSITY OF LAW, PUNJAB

TABLE OF CONTENTS

INTRODUCTION..........................................................................................................................2

CONSTITUTIONAL LIMITS TO THE GROWTH OF TRIBUNALS IN INDIA................................4

IS A TRIBUNAL A COURT?.......................................................................................................4

“TRIBUNALISATION” AND THE FORTY-SECOND AMENDMENT..............................................6

CONSTITUTIONALITY OF THE PROVISIONS RELATING TO THE CCI AND THE COMPAT9

THE CONSTITUTIONAL CHALLENGE TO THE 2002 ACT.........................................................9

THE CASE AGAINST THE CCI AND THE COMPAT.............................................................11

NATURE OF FUNCTIONS UNDER THE 2002 ACT....................................................................14

CONCLUSION............................................................................................................................16

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INTRODUCTION
Since India achieved independence, the Indian judiciary has been widely acclaimed as the
most powerful in the world, for its display of activism and grit. 1 However, the attainment of
this stature has been subject to many concerted attempts at usurping political hegemony over
judicial supremacy, and at throttling the judiciary's independence and its power of judicial
review — two significant factors determining the level of judicial empowerment in a
country.2 
The insertion of Articles 323A and 323B, through the Forty Second amendment 3 to the
Constitution of India (‘Forty Second amendment’), is often cited as a fitting illustration of
such an attempt4, for this amendment stripped away essential judicial functions from High
Courts and Civil Courts, and vested them in tribunals instead.5

Since the Forty Second amendment, the Supreme Court of India (‘SC’) and the High Courts
have considered a number of constitutional challenges relating to tribunals, in an attempt to
preserve their independence and power of judicial review, which are features embedded in
the basic structure of the Indian Constitution. 6 These considerations became critical, because
the attempt to usurp judicial power by the executive in the name of tribunals (such as the
National Company Law Tribunal/National Company Law Appellate Tribunal 7, the National
Tax Tribunal (‘NTT’)8, the Central Administrative Tribunal 9, the Copyright Board10, and the
Intellectual Property Rights Appellate Board)11 became increasingly evident. Through the
judgments that were delivered in these cases, the judiciary attempted to build an impregnable
boundary wall that would ensure that the principle of separation of powers is obeyed in letter
and in spirit12, and that the power of judicial review remains intact.

1
Santosh Paul, Choosing Hammurabi-Debates on Judicial Appointments (2013)
2
 Ran Hirschl, The Political Origins of Judicial Empowerment Through Constitutionalization: Lessons from
Four Constitutional Revolutions, 25 LAW AND SOCIAL INQUIRY 91, 99-149 (2000)
3
The Constitution (Forty Second Amendment) Act, 1976.
4
Arvind P. Datar, Tribunals: A Tragic Obsession, available at http://india-
seminar.com/2013/642/642_arvind_p_datar.htm (Last visited on August 4, 2016); Arun K.
Thiruvengadam, Tribunals in THE OXFORD HANDBOOK OF THE INDIAN CONSTITUTION 413, 416-420 (1st ed.,
2016).
5
See Part II.B.
6
Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225; Indira Nehru Gandhi v. Raj Narain, 1975 Supp
SCC 1; Minerva Mills v. Union of India, (1980) 3 SCC 625.
7
Union of India v. R. Gandhi, (2010) 11 SCC 1.
8
Madras Bar Assn. v. Union of India, (2014) 10 SCC 1.
9
L. Chandra Kumar v. Union of India, (1997) 3 SCC 261.
10
South Indian Music Companies Assn. v. Union of India, 2016 SCC OnLine Mad 1787: (2016) 3 MLJ 647.
11
Shamnad Basheer v. Union of India, 2015 SCC OnLine Mad 299: AIR 2015 Mad 250.
12
Datar, supra note 4.

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The Competition Commission of India (‘CCI’) and the Competition Appellate Tribunal
(‘COMPAT’) are amongst the latest functionaries to be assailed before the Delhi High Court,
for not conforming to the limits and standards evolved by the SC with regard to the
constitution and functioning of tribunals.13 This paper examines the constitutional validity of
provisions of the Competition Act, 2002 (‘2002 Act’) relating to the constitution, powers and
functions of the CCI and the COMPAT. The judgment of the Delhi High Court in this case
would be an important precedent, when examined in light of the constitutional history of
tribunals and the law laid down by the SC and various High Courts. This is because the
subject matter of the case before the Court ostensibly demonstrates the power struggle
between the judiciary and Parliament, each of which is attempting to secure its own
dominion. This, in turn, has been counterproductive to the very object that the 2002 Act was
enacted to achieve. Part II of this paper thus provides an overview of the permissible limits
within which quasi-judicial powers can be exercised by tribunals in India, and various other
constitutional issues dealt with in the body of case law that has laid down the parameters
which need to be overcome, so as to resist a constitutional challenge.

Thereafter in Part III, the case before the Delhi High Court against the CCI and COMPAT,
which are both creatures of the 2002 Act, has been examined. An overview of the evolution
of India's competition law regime, resulting in the enactment of the 2002 Act, has also been
dealt with in Part III. What is striking with regard to this case is that earlier, in a similar
challenge relating to the CCI before the SC, an opportunity was given to the legislature to
suitably amend the 2002 Act.14 Under the garb of fulfilling such a judicial mandate, the
Competition (Amendment) Act, 2007 (‘2007 Amendment Act’) came to be enacted. This
amendment only exacerbated the unconstitutionality of the CCI's framework, which had been
previously assailed before the SC. This paper tries to demonstrate the deliberate attempt of
the Parliament to undermine judicial independence through the 2007 Amendment Act. In Part
IV, I conclude that the unfortunate result of this battle for supremacy between the two wings
of the Government has been the downfall of the competition regime in the country.

13
Mahindra and Mahindra Ltd. v. Competition Commission of India, WP (C) No. 6610 of 2014 
14
Brahm Dutt v. Union of India, (2005) 2 SCC 431.

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CONSTITUTIONAL LIMITS TO THE GROWTH OF TRIBUNALS IN

INDIA
IS A TRIBUNAL A COURT?
In constitutional challenges relating to tribunals, a discernible trend has emerged in the
primary defence taken by the executive, that the ‘tribunal’ in question does not perform
judicial or quasi-judicial functions, or/and that the adjudication carried out by the tribunal
concerned does not have all the attributes of judicial decisions of traditional courts. 15 In this
light, it is contended that the tribunal in question does not have to be subject to the standards
of courts vested with judicial powers. This attempt of the executive to distance tribunals from
judicial scrutiny became evident since India achieved independence.16

In Bharat Bank Ltd. v. Employees (‘Bharat Bank’)17, an award rendered by a three-member

tribunal, constituted by the Central Government for the adjudication of industrial disputes in
banking companies, was appealed under Article 136 of the Constitution. 18 An unsuccessful
preliminary jurisdictional objection was raised that the appeal filed under Article 136 was not
an appeal from a “decree” or “judgment”, since industrial tribunals neither performed judicial
functions, nor possessed all the attributes of a court. Two instances were cited in Bharat Bank
that would render an award of a tribunal appealable under Article 136 - first, where the
tribunal is a creature of the State and observes the provisions of a special law, and second,
where the tribunal is found to be vested with certain functions of a court or to have the
“trappings of a court”. on noting that the same powers that were vested with Civil Courts
were vested with industrial tribunals, and that the decision of the tribunal was binding on the
parties before it, the SC went on to hold that:

“…the word “tribunal” in Article 136 has to be construed liberally and not in any
narrow sense and an Industrial Tribunal inasmuch as it discharges functions of a judicial
nature in accordance with law comes within the ambit of the article and from its
determination an application for special leave is competent.”19

15
Competition Appellate Tribunal (New Delhi), Lafarge India Ltd., In re, 2015 SCC OnLine Comp AT 1120, ¶
28
16
Bharat Bank Ltd. v. Employees, AIR 1950 SC 188 
17
Id.
18
Nick Robinson, Judicial Architecture and Capacity in THE OXFORD HANDBOOK OF THE INDIAN
CONSTITUTION 330 (1st ed., 2016); Arvind P. Datar, The Tribunalisation of Justice in India, ACTA JURIDICA 228
(2006).
19
Bharat Bank Ltd. v. Employees, AIR 1950 SC 188, ¶58 (per Mahajan J.).

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The most basic and the fundamental feature that is common to both courts and tribunals is the
discharge of judicial functions20, i.e. the discharge of duties exercisable by a judge or by
justices in courts, which makes the nature of a tribunal's functions crucial. 21 To understand
what distinguishes a court from a tribunal in India, it would suffice to state that tribunals are
exclusively constituted to carry out certain judicial functions in addition to certain
administrative/regulatory/inquisitorial functions, in a manner not necessarily in pari
materia with traditional courts. For instance, unlike courts, persons not having any judicial
experience may be present amongst members presiding over tribunals, which are created as
specialist bodies.22 In practice, the difference can also be on account of its functions or/and
constitution. For instance, certain regulatory/administrative functions that courts traditionally
do not perform, may also be vested in tribunals along with their judicial/adjudicatory
functions. These distinctions have rendered tribunals ‘quasi-judicial’ in character.23

This quasi-judicial characteristic of tribunals is associated with powers, which are exercisable
only when certain facts have been found to exist, which are guided by executive authority,
and which are ideally underpinned by judicial restraints. However, it is important to bear in
mind, that while the word ‘tribunal’ attaches to itself the exercise of quasi-judicial power, the
converse is not necessarily always the case. In other words, it is not only ‘tribunals’ that can
exercise quasi-judicial power. For instance, in cases where the Central or State Government
is empowered to reach a decision affecting contesting parties in accordance with evidence,
and not on grounds of policy or expediency, a duty is imposed upon the Government
concerned to act judicially and not just judiciously, irrespective of the fact that a
‘tribunal’ per se has not been constituted for the purpose.24

A court, in the strict sense, is necessarily a tribunal that is a part of the ordinary hierarchy of
courts, however, not all tribunals are akin to courts-for instance, where no judicial functions
are vested in them, or the nature of judicial functions vested in them are only supplementary
to the main regulatory/administrative functions, then in such a case, they would not be akin to
courts. A tribunal is tested against judicial standards and restraints, laid down by a large
number of precedents, only where it possesses all the trappings of a court, or/and there has
been a transfer of judicial power to a tribunal, which was previously vested in courts, or it is a

20
Associated Cement Companies Ltd. v. P.N. Sharma, AIR 1965 SC 1595, ¶ 9.
21
Royal Aquarium and Summer and Winter Garden Society Ltd. v. Parkinson, (1892) 1 QB 431 (per Lopes
L.J.).
22
L. Chandra Kumar v. Union of India, (1997) 3 SCC 261, ¶ 95.
23
H.W.R. Wade, ‘Quasi-Judicial’ and its background, 10 Cambridge L.J. 216 (1948-1950) 
24
Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala, AIR 1961 SC 1669: (1962) 2 SCR 339, ¶ 10.

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functionary akin to a court.25 In such cases, the law authorising and creating tribunals, in
order to be constitutionally valid, must vest in them, those salient characteristics and
standards of a court that are sought to be substituted.26

“TRIBUNALISATION” AND THE FORTY-SECOND AMENDMENT

The examination of Bharat Bank also brings to light the fact that tribunals have been in
existence much prior to the Forty Second amendment, which entailed express Constitutional
authorization of their creation for the first time. As a result of the Forty Second amendment,
the Administrative Tribunals Act, 1985 (‘1985 Act’) was enacted, and administrative
tribunals were created. Since then, there has been a rapid increase in the number of tribunals
that have been created by the State in different areas of law. 27 It is important to understand the
changing trends in the reasons for creating such tribunals.

Initially, the primary reason attributed to the creation of tribunals was overcoming the crisis
of delays and backlogs in the administration of justice 28, a problem which has come to haunt
our judicial system from the colonial era.29 As early as 1958, the Law Commission of India
(‘Law Commission’) recognised the ‘tribunal solution’ for the mounting number of cases
before courts, relating to administrative law. 30 Consequently, the Law Commission
recommended a new system of tribunals at the Centre and States, empowered to specifically
deal with claims of government servants relating to their constitutional rights, conditions of
service, etc. It is significant to note that the report of the Law Commission, much prior to the
Forty-second amendment, cautioned against ‘executive-adjudication’, and emphasised the
supplementary role that tribunals should take, as opposed to supplanting traditional courts.31 
Since then, the body of case law that has developed from constitutional challenges to various
tribunals over the years, has reiterated the same sentiment.

25
S.D. Joshi v. High Court of Bombay, (2011) 1 SCC 252, ¶ 62; Madras Bar Assn. v. Union of India, (2014) 10
SCC 1, ¶ 113.2.
26
Madras Bar Assn. v. Union of India, (2014) 10 SCC 1.
27
Supreme Court of India, Tribunals and Authorities, available
at http://supremecourtofindia.nic.in/judlib/Rellks.pdf (Last visited on August 5, 2018) (The Supreme Court
website lists a total of 19 tribunals).
28
Law Commission of India, Reform of Judicial Administration, Report No. 14, Vol. 2, 694 (September 1958),
available at http://lawcommissionofindia.nic.in/1-50/Report14Vol2.pdf (Last visited on August 5, 2018) (‘Law
Commission Report’).
29
Robinson, supra note 18, 336; GRANVILLE AUSTIN, WORKING A DEMOCRATIC CONSTITUTION: A HISTORY OF
THE INDIAN EXPERIENCE 139 (2000)
30
Law Commission Report, supra note 28.
31
Id.

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Another reason attributed to the creation of tribunals was the rise of socio-economic
legislations. The nature of these statutes, it was felt, required specialised bodies, comprising
of persons having expert knowledge of the working of these laws to deal with the application
of statutory provisions.32 With these legislations, the rationale for the constitution of the
tribunals was not only the promise of speedy, effective, decentralised dispensation of justice,
but also the expertise and knowledge in specialised areas of law that was felt to be
insufficiently demonstrated by judges of traditional courts.33

It was during the ‘emergency era’ of the 1970s, when various amendments to the
Constitution vide the Forty Second amendment were brought into force, that a new dimension
was added to the aforementioned rationale (of decentralization, speedy justice and expertise)
for the creation of tribunals - balancing power between the judiciary and the Parliament,
which was perceived by the contemporary Government to have tipped in favour of the
judiciary.34 Owing to the Forty Second amendment, the Parliament was constitutionally
empowered to create two separate categories of tribunals by law—“administrative tribunals”
and “tribunals of other matters.”35 Through Article 323A of the Constitution, the power to
adjudicate disputes relating to recruitment and conditions of service of the Union and States,
was taken away from the jurisdiction of Civil Courts, and vested in administrative tribunals
instead. Article 323B of the Constitution provided for constitution of tribunals for other
matters, illustrated under Article 323B (2). The jurisdiction of all courts was excluded,
including the exercise of writ jurisdiction, and only the SC's power to grant leave to appeal
was allowed. In effect, the SC and High Courts' powers to examine a constitutional challenge
to enactments under Articles 323A and 323B were stripped away.

Even though Articles 323A and 323B were enabling provisions that authorised the setting up
of the tribunals contemplated therein, there was nothing prohibiting the legislature from
establishing ‘other tribunals’ not covered by these two Articles. 36 In other words, as long as
requisite legislative competence subsisted, there was nothing stopping the legislature from
creating tribunals outside the purview of Articles 323A and 323B; and as stated earlier, the
32
MONOPOLIES INQUIRY COMMISSION, Report of the Monopolies Inquiry Commission, Vol. 1, (1965) (‘MIC
Report’).
33
RAGHAVAN COMMITTEE, Report of the High Level Committee on Competition Policy, ¶ 6.1.2 (May, 2002)
(‘Raghavan Committee Report’), available at
http://www.competitioncommission.gov.in/Act/Report_of_High_Level_Committee_on_Competition_Policy_La
w_SVS_Raghavan_Committee29102007.pdf
34
SWARAN SINGH COMMITTEE, Report of the Swaran Singh Committee (April, 1976) (‘Swaran Singh
Committee Report’).
35
Supra note 3, §46.
36
Union of India v. Delhi High Court Bar Assn., (2002) 4 SCC 275, ¶ 12.

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Constitution had vested supervisory powers in the High Courts and the SC over these ‘other
tribunals’, under Articles 227 and 136 of the Constitution respectively.

The Forty-second amendment, besides excluding the courts' jurisdiction under Articles 323A
and 323B, also took away the High Courts' superintendence over ‘other tribunals’ under
Article 227. Therefore, though the official justification for the insertion of these provisions in
the Constitution spoke of mounting arrears in High Courts and the need for speedy disposal
in service matters, it was apparent the real purpose for adding impetus was to strengthen
government control at the expense of the judiciary, that had stood up against the Congress
Government during the Emergency era.

Moreover, it is important to note the fact that only the SC's power under Article 136 was
saved by the Forty-second amendment. Exceptions were carved out to preserve the SC's
jurisdiction37, seemingly satisfying the judicial mandate in Bharat Bank. This trend of
unconstitutional Acts giving rise to tribunals, under the garb of respecting judicial precedent,
started with the Forty-second amendment, and has a significant bearing even today, as will be
seen even in the case against the CCI and COMPAT in the Delhi High Court. For this reason,
“tribunalisation”, as commonly understood to signify the numerical rise of tribunals, also
evinces the beginning of a period when judicial hostility towards tribunals was ignited,
making the judiciary cautious about its independence and power of judicial review.

37
The Constitution of India, Arts. 323A(2)(d), 323B(3)(d).

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CONSTITUTIONALITY OF THE PROVISIONS RELATING TO THE

CCI AND THE COMPAT
THE CONSTITUTIONAL CHALLENGE TO THE 2002 ACT
Though the CCI was vested with powers akin to a court, the constitution of the CCI did not
conform with the acceptable norms of procedure for appointments to the judiciary, and
qualifications required for such appointments. §8(1) of the 2002 Act provided that the CCI
was to consist of a Chairman and two or more members (maximum ten). The Chairman and
other members had to have been/qualified to be a judge of the SC/High Court, ‘or’
necessarily have special knowledge ‘or’ professional experience of at least fifteen years in
“international trade, economics, business, commerce, law, finance, accountancy,
management, industry, public affairs, administration or in any other matter, which in opinion
of the Central Government, may be useful for the Commission”. 38 Therefore, neither was any
eligibility criteria, which would ensure the presence of judicial members to man the CCI,
outlined; nor was a person who is or has been a Chief Justice of a High Court or a senior
judge of a High Court, appointed as the Chairman. The qualification prerequisites in the 2002
Act for the Chairman and other members did not even mandate that the person selected had to
be a judge or qualified to be a judge of a High Court, let alone possess experience in, or
specialised knowledge in the law. This was completely contrary to the law laid down in
Sampath Kumar and the cases that followed.

The manner for selection of the Chairperson and other members of the CCI was notified in
accordance with §9 of the 2002 Act, and the Competition Commission of India (Selection of
Chairperson and members of the Commission) Rules, 2003 (‘2003 Rules’) were brought into
force.39 As per Rule 3 of the 2003 Rules, a Selection Committee was to be constituted by the
Central Government for the purpose of selection of the Chairperson and members of the CCI.
The Selection Committee was to consist of i) a person who was a retired Judge of the SC or a
High Court or a retired Chairperson of a Tribunal established under an Act of Parliament or a
distinguished jurist or a Senior Advocate for five years or more, ii) a person who had special
knowledge of and professional experience of twenty-five years or more in international trade,
economics, business, commerce or industry, and iii) a person who had special knowledge of
and professional experience of twenty-five years or more in accountancy, management,

38
The Competition Act, 2002, §8(2).
39
 §63(2)(a) of the Competition Act, 2002.

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finance, public affairs or administration, to be nominated by the Central Government. 40 The

Central Government was also authorised to nominate one of the members of the committee to
act as the Chairperson;41 and the joint secretary in the Ministry of Finance and Company
Affairs was to be the Convener of the committee. 42 This committee was left with the
discretion to devise its own procedure for the selection of Chairperson or members of the
CCI.43

In Sampath Kumar it was suggested that appointments to the tribunals that were vested with
powers akin to courts, should be made by the Government in ‘consultation’ with the Chief
Justice.44 Interestingly, when the question of whether ‘consultation’ meant that judicial
primacy was to be accorded to appointments to the superior judiciary came up for
consideration in Supreme Court Advocates-on-Record Assn. v. Union of India, Justice
Ahmadi held, in his dissenting opinion, that the suggestion made in Sampath Kumar was to
provide ‘consultation’ with the Chief Justice of India and not ‘concurrence’ in the matter of
appointments to tribunals.45 However in the majority opinion, it was settled that primacy in
the matter of appointment of judges to the superior courts was to vest with the
judiciary.46 Even the observation made in Justice Ahmadi's dissenting judgment, that the
suggestion in Sampath Kumar meant mere consultation with the Chief Justice and did not
impute primacy of the judiciary's choice in appointments, was completely ignored by the
Parliament while providing for the manner of selection of members and the Chairman of the
CCI under the 2002 Act and 2003 Rules. The 2003 Rules explicitly vested unfettered powers
of appointment of members and the Chairman of the CCI, with the Central Government.

Naturally, almost immediately after the notification for appointments made under the 2003
Rules was published, a writ petition came to be filed praying for the striking down of Rule 3
of the 2003 Rules and for issuance of directions. First, it was prayed that the Central
Government should only appoint a person who was a retired Chief Justice or Judge of the SC
or a High Court to the CCI. Second, it was prayed that the appointees should be nominated by
the Chief Justice of India or by a Committee presided over by the Chief Justice of

40
Competition Commission of India (Selection of Chairperson and members of the Commission) Rules, 2003,
Rule 3.
41
Id., Rule 3(3).
42
Id., Rule 3(4).
43
Id., Rule 4(2).
44
S.P. Sampath Kumar v. Union of India, (1987) 1 SCC 124.
45
Supreme Court Advocates-on-Record Assn. v. Union of India, (1993) 4 SCC 441, ¶ 302.
46
Id., ¶ 450, 456.

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India.47 The challenge, essentially based on the separation of powers doctrine, entailed that
the Chairman of the CCI had to be a person connected with the judiciary, and selected by the
head of the judiciary, as opposed to the mechanism under the 2002 Act wherein the
appointments were allowed to made by the executive or a non-judicial member was allowed
to head the CCI — which effectively amounted to usurpation of judicial power and
conferment of the same on a non-judicial body, and which was impermissible under the
Constitution.48

The defence taken by the Government, though it was not finally adjudicated upon, is
interesting to note. Even after the Raghavan Committee had observed in its report that the
CCI was admittedly a judicial body being vested with powers of a court, it was posited that
the CCI was only an ‘expert body’ performing mainly regulatory functions; and therefore
there was no need for the judiciary to have any say in the appointment of its members, or for
the members to possess any knowledge of the law.49 During the pendency of the writ petition,
however, the challenge of the petitioner (that there was usurpation of judicial power and
conferment of the same on a non-judicial body) was sought to be met by the Central
Government by taking the stand that an appellate authority would be constituted. 50 Therefore,
the SC allowed the Central Government to carry out the amendments, and did not decide
finally on the issues involved.51

THE CASE AGAINST THE CCI AND THE COMPAT

As observed above, the seeds for a constitutional challenge were effectively sown by the
2007 Amendment Act. The structural changes brought about in the functioning of the CCI
through the 2007 Amendment Act, only served to upsurge the case against the 2002 Act that
was subject to challenge in Brahm Dutt. It has also acted counterproductively towards
achieving the very object that was sought to be achieved by the 2002 Act, as is discernable
from the following analysis of the challenge against various provisions of the 2002 Act, of
which the judgment is awaited before the Delhi High Court.52

The aforementioned challenge arose in a case against a group of automobile manufacturers,

wherein the CCI, in its final Order dated August 25, 2014, held that the automobile

47
Brahm Dutt v. Union of India, (2005) 2 SCC 431.
48
Brahm Dutt v. Union of India, (2005) 2 SCC 431, ¶ 3.
49
Id., ¶5.
50
Id., ¶4.
51
Id., ¶7.
52
Mahindra and Mahindra Ltd. v. Competition Commission of India, WP (C) No. 6610 of 2014

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manufacturers had contravened §§3 and 4 of the 2002 Act. 53 The allegation in the complaint
was that anti-competitive practices were being carried out in relation to spare parts for the
cars, which were not available in the open market. In addition to imposing a penalty of about
INR 2545 crores along with a cease and desist order 54, the CCI also directed the automobile
manufacturers to establish an effective system, to make the spare parts and diagnostic tools
easily available through an efficient network, and to ensure that no impediments were placed
on the operations carried out in independent garages.55 It was this Order of the CCI that gave
rise to writ petitions in the Delhi High Court that were filed by the automobile manufacturers
challenging various provisions of the 2002 Act as unconstitutional.56

One ground particularly relating to the Order of the CCI dated August 25, 2014, which also
led to impugning §22 of the 2002 Act, merits mention, as it serves to demonstrate the
repercussions of the 2007 Amendment Act. As mentioned above, prior to the 2007
Amendment Act, §22 provided for the constitution of ‘Benches of Commission’ to exercise
its jurisdiction and powers. With the 2007 Amendment Act, this was changed to ‘Meetings of
the Commission’.57 Further, after the 2007 Amendment Act, §22(2) provides that if the
Chairperson is unable to attend a meeting, the senior-most member present at the meeting is
to preside over the meeting; and §22(3) provides that all questions brought up in any meeting
of the CCI are to be decided by a majority of members present and voting, and in the event of
an equality of votes, the Chairperson or in his absence, the member presiding is to have a
second or casting vote. The proviso to §22(3) states that the quorum for such meetings will be
three members.58

According to the amended §8 of the 2002 Act, the maximum number of members that may be
appointed to the Commission at a time, excluding the Chairperson, is six. 59 In view of §8, it is
important to point out that the proviso to §22(3) (that provides for a quorum of three
members), is contradictory to the main provision which gives statutory recognition only to a
decision rendered by a majority of members (which may be up to six in number). 60 The
proviso therefore validates a decision by three members present and voting in a meeting, even

53
Competition Commission of India, Shamsher Kataria, In re, 2014 SCC OnLine CCI 95.
54
Id., ¶ 22.3.
55
Id., ¶ 22.6.
56
Mahindra and Mahindra v. Competition Commission of India, WP (C) No. 6610 of 2014 (Del) 
57
The Competition (Amendment) Act, 2007, §17.
58
Id.
59
Id., §6.
60
§10 of the Competition Act, 2002 provides that 10 members shall be maximum number of members be
selected to the CCI.

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though the same may not constitute a majority of the members who are appointed to the
Commission at a given time. Thus, the proviso is inconsistent with the main provision, and
with settled law that a proviso to a section is not independent of the main section of an Act,
and cannot render the main provision itself ineffective.61

§23(3) of the 2002 Act, and the proviso thereunder, also envisage a scenario wherein a matter
can be heard by different sets of members at different stages, and a decision may be given by
a different set of members. This negates the established rule of ‘he who hears must
decide’.62 A failure to follow this basic procedural mandate would result in a situation where
one person hears and another decides, or not all persons who have heard the matter, decide
finally upon it. It has been held that in such a case, affording a right to hearing — an
important facet of natural justice — would become an empty formality.63

Because of the 2007 Amendment Act, in the case before the CCI against the automobile
manufacturers mentioned above64, seven members of the CCI were present at the meeting, at
the initiation of hearing. However, due to the retirement of four members, the final Order
dated August 25, 2014, was passed only by three members; and the three members were not
even consistently present at all the meetings before passing of the Order. 65 This practice was
clearly against established norms of judicial procedure and principles of natural justice that
require that all those who have heard the matter ought to finally decide it. 66 This formed one
of the main grounds of challenge before the Delhi High Court.

The provision of casting vote or second vote is also antithetical to the judicial process and
suffers from the vice of arbitrariness and unreasonableness.67 Under our judicial system, the
seniority of the member concerned/judge has never been a criteria based upon which a
decision can be reached. Therefore, §22(3) that vests the Chairperson or member presiding
with such an extraneous power, is liable to be struck down as unconstitutional.

§§8 and 9, and §§53C and 53D of the 2002 Act, which relate to composition of the CCI and
the COMPAT, and the manner of selection of members and the Chairperson of the CCI and
the COMPAT are also the subject matter of challenge and will be analysed in the following
61
South Asia Industries (P) Ltd. v. S. Sarup Singh, AIR 1966 SC 346, ¶ 16, 17; CIT v. Ajay Products Ltd., AIR
1965 SC 1358, ¶ 18, 19.
62
United Commercial Bank Ltd. v. Workmen, AIR 1951 SC 230 
63
 Competition Appellate Tribunal (New Delhi), All India Organization of Chemists and Druggists, In re, 2015
SCC OnLine Comp AT 380; Gullapalli Nageswar Rao v. A.P. SRTC, AIR 1959 SC 308, ¶ 27.
64
Competition Commission of India, Shamsher Kataria, In re, 2014 SCC OnLine CCI 95.
65
Id.
66
Supra note 62.
67
Shobhana Shankar Patil v. Ramchandra Shirodkar, 1996 SCC OnLine Bom 55 : AIR 1996 Bom 217, ¶ 9.

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paragraphs. Predictably, the Central Government's defence was aimed at claiming that after
the 2007 Amendment Act, the CCI no longer had any adjudicatory role. The following
paragraphs point out the constitutional infirmities in these provisions relating to the CCI and
the COMPAT, and the reasons for which the defence of the Central Government does not
hold any water.

NATURE OF FUNCTIONS UNDER THE 2002 ACT

Despite an effort of the legislature to distance the CCI from being viewed as a judicial body,
the judicial nature of functions vested with the CCI remained intact even after the 2007
Amendment Act. For instance, the CCI continues to be vested with the power to declare any
‘agreement’ defined in §2(b) of the 2002 Act, which is entered into between parties in
contravention of §3, to be void. Such a power of voiding an agreement is otherwise only
vested with courts, as is evident on an examination of provisions of the Indian Contract Act,
1872.

Furthermore, under §19 of the 2002 Act, the CCI was empowered to pass orders based on
enquiry into agreements. Besides being vested with powers to impose penalty and give
directions, the CCI is even vested with powers to direct that the agreement shall stand
modified to the extent and in the manner that may be prescribed. 68 Annulment of a contract
under the Indian Contract Act, 1872 can only be either through consent of the parties to the
contract, or through the discharge of judicial/curial functions giving such effect.69 Since the
provisions of the 2002 Act vest the power to modify a contract or declare such a contract to
be void, with the CCI, it necessarily follows that the CCI cannot be a mere expert or
regulatory body, and that it is also performing functions that are purely curial in nature.
Besides, under the 2002 Act itself, even post the 2007 Amendment Act, the CCI has been
vested with powers that are vested in a Civil Court. 70 While §36 of the 2002 Act provides the
CCI with the power to regulate its own procedure, §36(2) grants it the same powers as that of
a Civil Court with respect to certain matters, including summoning witnesses, requesting
production of documents and receiving evidence on affidavits.

The fact that the CCI performs adjudicatory functions is also no longer res integra71. There
was a complete transfer of power from the MRTP Commission, a body vested with judicial

68
The Competition Act, 2002, §19.
69
The Indian Contract Act, 1872, §§62, 19-25.
70
The Competition (Amendment) Act, 2007, §29.
71
Competition Commission of India v. SAIL, (2010) 10 SCC 744, ¶ 9; Rangi International v. Nova Scotia
Bank, (2013) 7 SCC 160, ¶ 3.

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functions, to the CCI; the powers of the CCI only came to broadened under the 2002 Act (as
compared to the powers of the MRTP Commission). It was for this reason that under the
2002 Act, prior to the 2007 Amendment Act, all proceedings were deemed to be judicial
proceedings.72

Both the Monopolies Inquiry Commission Report and the Raghavan Committee Report, to
which the MRTP Act and the 2002 Act were corollary, had stressed on the judicial nature of
the primary functions to be carried out by the MRTP Commission and the CCI, which
necessitated that they be kept at arm's length from the executive. 73 It is also pertinent to
reiterate here that the creation of the COMPAT did not in any way divest the CCI of its
adjudicatory role, as was sought to be projected by the Central Government, since the
functions of the CCI under the 2002 Act remained the same even after the 2007 Amendment
Act. That the CCI continues to primarily perform judicial functions, thus, cannot be gainsaid.

When the jurisdiction of a court is ousted, or when there is a transfer of judicial power, it is
incumbent that a judicial or quasi-judicial body then necessarily exercises the
jurisdiction. In Madras Bar Assn. v. Union of India (‘Madras Bar Association’)74, it was
settled that judicial power could be transferred to tribunals. However, it was held that
whenever there was such transfer, all conventions/customs/practices of the court, sought to be
replaced, had to be incorporated in the court/tribunal created.75 Therefore, the CCI, which was
vested with judicial functions that were previously performed by an adjudicatory body (the
MRTP Commission), and were divested from civil courts, was required to be constituted and
to function in consonance with the salient characteristics and standards of a traditional
court. However, as the following paragraphs will illustrate, the procedure and qualifications
prescribed for appointment of members and the Chairman of the CCI and the COMPAT, are
antithetical to judicial independence, and to the doctrine of separation of powers, which is
the sine qua non for any court/tribunal that is vested with curial functions previously vested
in a court.76

CONCLUSION
The 2002 Act was brought into effect by the Parliament to further the Directive Principles
stated in the Constitution, and to achieve fair competition and consumer protection; the CCI,
72
The Competition Act, 2002, §36(3).
73
Raghavan Committee Report, supra note 36, ¶ 4.8.4; MIC Report, supra note 35, 159.
74
Madras Bar Assn. v. Union of India, (2014) 10 SCC 1, 113.2.
75
Id.
76
Union of India v. R. Gandhi, (2010) 11 SCC 1; Madras Bar Assn. v. Union of India, (2014) 10 SCC 1.

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and later the COMPAT, were constituted in order to carry out the aims of the 2002 Act.
Though the legislature apparently intended to vest the CCI with a primarily adjudicatory role,
and the COMPAT with only an adjudicatory role, a strong case can be made to demonstrate
how the executive has attempted to secure control over the CCI's and the COMPAT's
composition and functioning, resulting in the dilution of judicial independence.

Mere structural changes in the procedure for functioning have not undone the purpose for
which the CCI was created, or the nature of functions that remain vested in the CCI. Instead,
they have inhibited effective fulfilment of the CCI's functions under the 2002 Act. With
regard to the COMPAT, it was admittedly constituted as judicial body; and since a direct
appeal is preferable only to the SC from an order of the COMPAT, it has to be considered
analogous to a High Court. However, the 2002 Act allows for a majority of non-judicial
members to man the COMPAT.

An analysis of the case law dealing with various constitutional issues related to tribunals and
their exercise of judicial/quasi-judicial functions77, demonstrates the susceptibility of the
provisions concerning the functioning of the CCI and the COMPAT, to a constitutional
challenge. Not only has the composition and manner of appointments directly infringed upon
judicial independence, they have also had a bearing on the effective functioning of the two
bodies, which has led to compromising judicial standards in the country.

While it is true that when the constitutionality of statutes is being examined, the doctrine of
severability can be applied in cases where a few provisions or a single provision is found to
be unconstitutional;78 with regard to the 2002 Act, the unconstitutionality strikes at the
structural and functional aspects of the bodies that were created to carry out the purposes of
the 2002 Act. Therefore, the infirmity is pervasive and runs through the entire 2002 Act, and
the statute should be annulled in its entirety.79 With the judgment of the Delhi High Court
which would decide such a challenge in the offing80, it would not be too far-fetched to
suggest that the 2002 Act, and all that it seeks to achieve, are hanging by a thin thread.

77
Madras Bar Assn. v. Union of India, (2014) 10 SCC 1; Union of India v. R. Gandhi, (2010) 11 SCC 1; L.
Chandra Kumar v. Union of India, (1997) 3 SCC 261; S.P. Sampath Kumar v. Union of India, (1987) 1 SCC
124.
78
Kihoto Hollohan v. Zachillhu, 1992 Supp (2) SCC 651, ¶ 66; R.M.D. Chamarbaugwalla v. Union of
India, AIR 1957 SC 628, ¶ 19-21.
79
THOMAS M. COOLEY, A TREATISE ON THE CONSTITUTIONAL LIMITATIONS WHICH RESTS UPON THE
LEGISLATIVE POWER OF THE STATE OF THE AMERICAN UNION, Vol.1 360,361 (8th ed., 1927)
80
Mahindra and Mahindra v. Competition Commission of India, WP (C) No. 6610 of 2014 (Del).

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The case of the CCI and the COMPAT makes for a particularly interesting study on the topic
of ‘tribunalisation of justice’ in India, because it is for the second time that it is being assailed
before the judiciary. Therefore, it provides a fitting illustration of the judiciary's cautious
approach towards executive interference in the name of tribunals, as well as of the executive's
disregard for the judicial mandate.

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