The Competition Commission: Separation of Power troubles again?

Earlier on this blog, a series of posts had covered some of the IP-related issues in the Competition Act, 2002. Now, with several of the Acts provisions in force, I intend to look at some aspects of the Act in detail. Particularly, I intend to focus on the following areas; though with the help of our readers’ comments, I hope that the discussion shall cover other related areas too:

1. The Competition Commission

2. Exclusive agreements: When are they anti-competitive?

3. Can enforcing IP be an abuse of dominant position?

4. Section 3(5): Exceptions for IP

The Competition Commission

In recent days, the idea of executive authorities performing quasi-judicial functions has been strongly questioned. On Indian Corporate Law, I had written about a Constitution Bench hearing into the constitutionality of the National Company Law Tribunal. The law on the point will hopefully be clarified by the decision. (Of course, there is a seven-judge decision on the point, Chandra Kumar; yet, the position remains unclear).

How does the Competition Commission go about balancing the task of not violating separation of power principles with the need to have technical (and not just legal) experts? The Supreme Court in Brahm Dutt was called on to examine the issue of the constitutionality of the Commission. However, in view of the proposed amendments to the Act, the Supreme Court did not adjudicate the issue on merits. The writ petition was “disposed of leaving open all the relevant questions…” Prashant has discussed separation of power issues with respect to the Patent Office in his post here. Several of the concerns he raises may apply to the Competition Act also.

The current version of the Act is accessible here. The Composition of the Commission is discussed in Section 8. The Chairperson and Members must be persons qualified, among other things, in areas “including competition law and policy.” Further, the term of office of the Chairperson and other members is 5 years, after which they are (subject to a maximum age-cap of 65) eligible for re-appointment.

The Appellate Tribunal also has the same features. One difference is that a Judge heads the Appellate Tribunal; but the other member need not be a qualified judge. In fact, Section 53D(2) states that a member of the Appellate Tribunal should have experience in competition law, economics … or in any other matter which in the opinion of the Central Government, may be useful to the Appellate Tribunal! The 5-year term, with eligibility for re-appointment, is present here as well.

I have serious doubts over whether being qualified in areas “including competition law” is sufficient to discharge judicial functions. Furthermore, is it proper for a member of a (quasi) judicial body to be given a fixed term in office, and then being eligible for re-appointment? Would this not result in possible executive influence, considering that there is no security of tenure as such? Should not the qualifications and conditions of service be comparable with those of, say, a High Court Judge?

It might well be argued that the Commission is only playing a supplemental role to the judiciary; and not a substituting role. For instance, it can be argued the Act does not bar recourse to the writ jurisdiction of the High Court under Article 226 of the Constitution. This is true, but perhaps only in theory. For, the Act gives a statutory right to appeal to the Supreme Court (Section 53T). No High Court will entertain a 226 petition when there is a statutory Supreme Court appeal. In that scenario, is not the jurisdiction of High Courts under Article 226 effectively being taken away? If it is being taken away, should that jurisdiction not vest in a body composed similar to the High Courts? Will the principle of separation of powers be respected, if we say that writ petitions under Article 226 may be heard by any person who the government thinks is qualified, just because there is an appeal before the Supreme Court provided for?

The Commission itself may well need to have several technical experts. But, the constitution of the Appellate Tribunal at the very least appears to be open to a serious separation-of-powers challenge. What do our readers think?