Supreme Court Affirms Expansive Locus Standi under Competition Law

The Supreme Court in Samir Agrawal v. Competition Commission of India (decided 15 December 2020) was concerned with some basic but important questions of law. Can a member of the public file information with the Competition Commission of India (CCI) alleging a violation of the provisions of the Competition Act, 2002 and thereby triggering an investigation by the regulatory authority? If aggrieved by the decision of the CCI, can such a person prefer an appeal to the National Company Law Tribunal (NCLT) and thereafter to the Supreme Court? Upon an analysis of the Competition Act as well as the Competition Commission of India (General) Regulations, 2009, the Supreme Court answered both questions in the affirmative.

The appellant, Samir Agrawal, an independent practitioner of law, filed information before the CCI seeking an inquiry against ANI Technologies Private Limited (Ola) and Uber India Systems Pvt. Ltd. and related companies (together “Uber”) due to their alleged anti-competitive conduct. Upon reviewing the merits, the CCI found no contravention of the Competition Act and therefore closed the case. The NCLAT dismissed an appeal preferred by Agrawal on two grounds. First, it found that Agrawal did not bring the case as a consumer of either Ola or Uber, and hence did not have the locus standi to initiate the present proceedings. Second, in any event, he had not case against the merits. It is against this decision of the NCLAT that Agrawal appealed to the Supreme Court.

The Supreme Court analysed the provisions of the Competition Act as well as the 2009 Regulations. In particular, section 19 of the Act allows the CCI to inquire into contraventions either suo moto or upon “receipt of any information … from any person, consumer or their association or trade association” [emphasis added]. The Court noted that the definition of “person” under section 2(l) of the Act “is an inclusive one and is extremely wide, including individuals of all kinds and every artificial juridical person”. The essential jurisprudential foundation for the Court’s analysis rested on the fact that proceedings before the CCI and its orders are in rem. The Court accordingly noted:

A look at section 19(1) of the Act would show that the Act originally provided for the “receipt of a complaint” from any person, consumer or their association, or trade association. This expression was then substituted with the expression “receipt of any information in such manner and” by the 2007 Amendment. This substitution is not without significance. Whereas, a complaint could be filed only from a person who was aggrieved by a particular action, information may be received from any person, obviously whether such person is or is not personally affected. This is for the reason that the proceedings under the Act are proceedings in rem which affect the public interest.

A concern emerges that such a liberal interpretation could lead to frivolous and vexation litigation, including those that are instigated by rivals. However, the Court downplayed this apprehension because section 45 of the Competition Act acts a deterrent against such claims, as it provides for a hefty penalty of up to Rs. 1 crore (rupeen ten million) for false claims, in addition to other orders that CCI may pass. This, hence, provides sufficient checks and balances by encouraging public interest litigation and, at the same time, guarding against its misuse.

When it comes to appeals before the NCLAT or the Supreme Court, as the case may be, sections 53B and 53T respectively provide the right to “any person … aggrieved by” any direction, decision or order of the forum from which the appeal has been preferred. According to the Court, this language signifies that “all persons who bring to the CCI information of practices that are contrary to the provisions of the Act, could be said to be aggrieved by an adverse order of the CCI in case it refuses to act upon the information supplied.” It further observed:

Obviously, when the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI and the appellate authority, i.e., the NCLAT, must be kept wide open in public interest, so as to subserve the high public purpose of the Act.

This ruling has the effect of providing an opportunity to any person, whether with a personal interest in the subject matter or not, to act as an informant under Indian competition law. Implicitly recognised in this approach is the acceptance that competition law carries a strong public interest element, thereby widening the scope of locus standing. While concerns relating to frivolous and vexatious complaints continue to linger, much will depend upon how firmly the regulators and courts exercise their powers under the Competition Act to deal with such complaints so as to disincentivise persons from raising them.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.

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