Written by CA Somya Satsangi and Shamila Jibin

India’s commitment to regulatory governance has recently come under scrutiny, particularly due to persistent delays in establishing a quorum within its prominent competition authority, the Competition Commission of India (CCI). This issue has been further exacerbated by recent events that have raised doubts about the CCI’s status as a single-member body following the expiration of Quorum Member Sangeetha Verma’s term under Chairperson Ravneet Kaur. In response to the pressing challenge of an inadequate quorum, the Appointments Committee of the Cabinet (ACC) took action by approving the appointment of three new members to the CCI: Anil Agrawal, a former Director General of Police and former Additional Secretary at the Department for Promotion of Industry and Internal Trade (DPIIT); Deepak Anurag, a retired Deputy Comptroller and Auditor General (CAG); and Sweta Kakkad, an advocate.

The issue of an insufficient quorum within the antitrust regulatory body dates back to 2018 when the Union government chose to reduce its membership from seven to four individuals. This challenge became more pronounced following the departure of Chairman Ashok Kumar Gupta on October 25 of the preceding year, leaving the CCI in a state of inquoracy for an extended seven-month period. In May 2023, a selection committee chaired by the Chief Justice was tasked with shortlisting candidates for three vacant positions within the CCI. This development coincided with the appointment of Ravneet Kaur, an Indian Administrative Service (IAS) officer, as the full-time Chairperson of the CCI during the same month.

It is crucial to emphasize that a quorum is indispensable not only for the adjudication of cases but also for initiating investigations. Since October of the previous year, the commission has refrained from referring matters to the Director General for investigative purposes. Moreover, even in cases where the Director General has submitted investigation reports, the commission has yet to acknowledge them. This prevailing situation not only imperils the effectiveness of antitrust cases but also introduces uncertainty into mergers that have already secured the necessary approvals. These quorum-related issues have also had repercussions in other domains, such as anti-profiteering, which now falls within the purview of the CCI. In the previous regulatory framework for anti-profiteering, the Central Goods and Services Tax (CGST) rules stipulated a minimum requirement of three members for the authority, formerly known as the National Anti-Profiteering Authority (NAA).

In an effort to address the quorum issue, the CCI sought guidance from the Ministry of Law. The Ministry advised that the CCI possesses the authority to address sensitive matters, even in the absence of a quorum, under the principle known as the doctrine of necessity. This principle empowers a regulatory body to make decisions on pressing issues, notwithstanding the formal requirements for issuing such orders, especially when time-sensitive matters are at stake. It is essential to note, however, that this interpretation applies exclusively to combination approvals and does not extend to investigations that are in a state of limbo.

The quorum issue at the CCI is not limited to the mere count of members; it also pertains to the absence of judicial members among the current members. The determination of whether a judicial member is necessary has yielded inconclusive precedents. In the Beer Cartel case, the company law appellate tribunal affirmed the requirement of a judicial member within the CCI, aligning with the stance of the Delhi High Court in the case of Mahindra Electric Mobility v. CCI, where it was emphasized that a judicial member’s presence is crucial during final orders. However, a different ruling from the same Delhi High Court in the CADD Systems case held that the CCI’s operations should not be hindered by the absence of a judicial member until one is appointed. This interpretation relied on section 15 of the Act, emphasizing that discrepancies in the CCI’s composition do not nullify its proceedings.

Beyond the judicial ambiguity surrounding the necessity of judicial members, the Standing Committee on Finance, in its 52nd Report, delved into this issue. It scrutinized various suggestions from stakeholders, who argued in favor of judicial members due to the adjudicatory functions performed by the CCI. However, the Ministry of Corporate Affairs countered this argument by highlighting that the statute does not explicitly mandate the appointment of a judicial member and should be interpreted accordingly.

The recent appointments aim to bolster CCI’s effectiveness, although questions remain regarding the necessity of judicial members. While the Ministry’s doctrine of necessity provides a workaround, unresolved judicial interpretations and legislative gaps continue to influence the Commission’s functioning.

CA Somya Satsangi is the Ex- Director of  Tata Consultancy Services.

She is currently the Director,  TLGS Consulting Group. (https://tlgs.consulting/people/)

Ms. Shamila Jibin is currently a Manager at TLGS Consulting Group, and is a lawyer who graduated from the National University of Advanced Legal Studies in Kochi.