Act 039 of 2009 : Competition (Amendment) Act, 2009

SOR Statement of Objects and Reasons

Prefatory Note-Statement of Objects and Reasons.-The Competition Act, 2002 was enacted in 2002 keeping in view the economic developments that resulted in opening up of the Indian economy, removal of control and consequent economic liberalisation which required that the Indian economy be enabled to allow competition in the market from within the country and outside. It was subsequently amended in 2007. The Competition Act, 2002, inter alia, provides for the following, namely :-

(A) establishment of the Competition Commission of India, which shall be an expert body and would function as a market regulator for preventing and regulating anti-competitive practices in the country in accordance with the provisions of the Act and it would also have advisory and advocacy functions in its role as a regulator which can also impose a penalty in certain cases specified in the Act;

(B) establishment of the Competition Appellate Tribunal, which shall be a three member quasi-judicial body headed by a person who is or has been a Judge of the Supreme Court or the Chief Justice of a High Court to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission and to adjudicate claims on compensation and for passing of orders for the recovery of compensation from any enterprise for any loss or damage suffered as a result of any contravention of the provisions of the Act.

2. Sub-section (1) of Section 66 of the Act provides for repeal of the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) and dissolution of the Monopolies and Restrictive Trade Practices Commission (MRTPC) established thereunder. However, the MRTPC was allowed to continue under the said sub-section to exercise jurisdiction and powers under the repealed Act for a period of two years from the date of the commencement of this Act in respect of all cases or proceedings filed before the commencement of this Act.

3. Sub-section (3) of Section 66 of the Act, inter alia, provides that all cases pertaining to monopolistic trade practices or restrictive trade practices and sub-section (5) of Section 66 of the Act provides that all cases pertaining to unfair trade practices referred to in clause (x) of sub-section (1) of Section 36-A of the MRTP Act, pending before the MRTPC shall, after the expiry of two years referred to in sub-section (1) of Section 66 stand transferred to the Appellate Tribunal, and, be adjudicated by the Appellate Tribunal in accordance with the provisions of the repealed Act.

4. Sub-section (4) of Section 66 of the Act, inter alia, provides that all cases pertaining to unfair trade practices other than those referred to in clause (x) of sub-section (1) of Section 36-A of the MRTP Act before the MRTPC shall, on or before the expiry of two years stand transferred to the National Commission constituted under the Consumer Protection Act, 1986 and the National Commission shall dispose of such cases as if they were cases filed under that Act.

5. Section 66 of the Act was brought in force on the 1st September, 2009. The post of Chairperson of the MRTPC was vacant on the said date and there were only two Members in the said Commission out of five Members. Both Members in the said Commission demitted their office on the day of the 14th September, 2009 and on the day of the 1st October, 2009 respectively on completion of their tenure. Efforts were made to fill up the posts but were of no avail. The MRTPC became non-functional and a gap was created for the disposal of the cases pending with the Commission. On the other hand, the Competition Appellate Tribunal established under the Competition Act, 2002 was not having adequate workload.

6. As both the Houses of Parliament were not in session and the President was satisfied that the circumstances existed which rendered it necessary for her to take immediate action, the Competition (Amendment) Ordinance, 2009 was promulgated on the 14th October, 2009 so as to transfer immediately the cases pending with the Monopolies and Restrictive Trade Practices Commission to the Competition Appellate Tribunal and National Commission from the date of issue of the Ordinance.

7. Since the National Commission expressed its inability to accept the transfer of cases and also the investigations or proceedings as many of the cases were not covered by the definition of "consumer" under the Consumer Protection Act, 1986 and due to lack of investigating machinery with them, certain further amendments are proposed to Section 66 of the Act which, inter alia, contains that-

(i) all the cases relating to unfair trade practices pending before the National Commission on or before the date on which the Competition (Amendment) Bill, 2009 receives the assent of the President, shall, on and from that date, stand transferred to the Appellate Tribunal and be adjudicated by the Appellate Tribunal in accordance with the provisions of the repealed Act as if that Act had not been repealed;

(ii) all investigations or proceedings, relating to unfair trade practices pending before the National Commission, on or before the date on which the Competition (Amendment) Bill, 2009 receives that assent of the President shall, on and from that date, stand transferred to the Appellate Tribunal and the Appellate Tribunal may conduct or order for conduct of such investigation in the manner as it deems fit.

8. The Bill seeks to replace the aforesaid Ordinance with the above amendments.