Mahindra Electric Mobility Limited And Anr. vs. Competition Commission Of INDIA And Anr.

Held

The Court declared Section 22(3) of the Competition Act, 2002 (except the proviso) unconstitutional and void, reasoning that it allowed for varying quorums which could compromise the integrity of decisions. Section 53E (prior to the 2017 amendment) was also declared unconstitutional and void, subject to the Supreme Court's decision on the Finance Act, 2017. All other provisions of the Competition Act were held valid, subject to specific directions. The CCI was directed to frame guidelines ensuring that members who hear final arguments also decide the case, to fill vacancies within six months, to ensure the presence of a judicial member during final hearings, and for parties to address arguments on penalty mitigation. Since petitioners had not availed the appeal remedy, they were permitted to approach the Appellate Tribunal within six weeks, with the tribunal to decide appeals on merits irrespective of limitation.

Facts

The petitioners, various automobile manufacturers, challenged provisions of the Competition Act, 2002, and a notification amending the Competition Commission of India (General) Regulations, 2009. The dispute originated from a complaint alleging anti-competitive practices in the spare parts market for cars. The Competition Commission of India (CCI) initiated an investigation, which was expanded to include the petitioners. The CCI issued a final order on August 25, 2014, holding that several car manufacturers, including the petitioners, had contravened specific provisions of the Act related to anti-competitive agreements and abuse of dominant position. The petitioners approached the High Court under Article 226 of the Constitution, challenging the impugned provisions and the CCI's actions. The Finance Act, 2017, subsequently transferred the appellate functions from the Competition Appellate Tribunal (COMPAT) to the National Company Law Appellate Tribunal (NCLAT).

Key Issues

1. Whether Section 22(3) of the Competition Act, 2002, is unconstitutional and void, particularly concerning the quorum requirements for CCI decisions, as argued by the petitioners who contended that varying quorums could lead to injustice, and the respondents (CCI) who maintained that the provision was valid. 2. Whether Section 53E of the Competition Act, 2002 (prior to the 2017 amendment), which dealt with the constitution of the COMPAT, was unconstitutional and void, as argued by the petitioners, while the respondents did not record specific arguments on this point but implicitly defended the existing framework. 3. Whether other provisions of the Competition Act, 2002, and the impugned amending regulation were valid, with the petitioners challenging their validity and the respondents defending them. The petitioners also raised procedural issues regarding the composition of the CCI during hearings and decision-making.