The Hon’ble High Court of Delhi, in the matter of Mahindra Electric Mobility Limited and Anr. v. Competition Commission of India and Anr. along with batch writ petitions has held that Section 22(3) except the proviso of the Competition Act, 2002 as unconstitutional. Further, subject to the outcome of the matter pending before the Hon'ble Supreme Court of India relating to constitutionality of Finance Act, 2017, Section 53E of the Competition Act, 2002 has been held to be unconstitutional. All the other provisions impugned in the batch matters have been held to be constitutionally valid.

The interim order passed by the Hon'ble High Court of Delhi granting stay of the operation of the CCI order has been directed to be continued till the disposal of the SLPs by the Hon’ble Supreme Court of India today, i.e. May 08, 2019 filed on behalf of Skoda Auto india Pvt. Ltd. bearing SLP(C) No. 11761 of 2019 and Volkwagen India Pvt. Ltd. bearing SLP(C) No. 11648 of 2019.     

In the batch petitions before the Hon'ble High Court of Delhi, under Article 226 of the Constitution of India, constitutional validity of provisions of Sections 8, 9, 22(3), 27(b), 53A, 53B, 53C, 53D, 53E, 53F, 55 and 56 of the Competition Act, 2002 and the notification dated 31.03.2011 amending Regulation 48 (1) of the Competition Commission of India (General) Regulations, 2009, was assailed before the Hon’ble High Court of Delhi.

Common thread of arguments of all the writ petitioners was that the Competition Commission of India (“CCI”) was essentially an adjudicatory body, given its mandate to investigate into allegations that fall within its watch (abusive behaviour due to market dominance, cartelization etc.), adjudicate the rights of parties and entities, and where necessary, impose penalties. It was averred that the Composition of the CCI (in terms of its membership), manner of the appointment of its members, their qualifications, the procedure adopted by it, violated principles of separation of powers and independence of the judiciary, which are essential bulwarks upon which the Constitution rests and which are assured to the people of India, with regard to adjudication of disputes. 

The Hon’ble Court passed the following directions to be followed by the CCI: -

(i) When all evidence (i.e. report, its objections/affidavits etc.) are completed, the CCI should set down the case for final hearing. At the next stage, when hearing commences, the membership of the CCI should be constant (i.e. if 3 or 5 members commence hearing, they should continue to hear and participate in all proceedings on all hearing dates); the same number of members (of the CCI) should write the final order (or orders, as the case may be).

(ii) The procedure should be assimilated in the form of regulations and followed by the CCI and all its members in all the final hearings; it would impart a certain formality to the procedure.

(iii) No member of the CCI should take a recess individually, during the course of hearing, or ?take a break to re-join the proceeding later. Such “walk out and walk in” practise is deleterious to principles of natural justice, and gravely undermines public confidence in the CCI’s functioning.

(iv) Once the hearing commences, all members (who hear the case, be they in quorums of 3 or 5 or seven) should continue to be part of the proceeding, and all hearings, en banc.

(v) Hearings may take place from time to time before benches of varying composition, but once the final hearing has commenced, the matter is heard and decided only by the same bench. There is no addition, deletion or substitution in the composition of the bench during the course of final hearing.

(vi) If at all, it becomes impossible to continue the hearing before the same bench (for example, due to one of the judges having demitted office), the matter is heard afresh by the  new bench even if the composition is partly common with the previous bench.

Further, the Hon’ble Court made an observation that the Central Government should seriously consider recruiting legal practitioners who regularly practise in the field of company law, competition, securities and other related fields, with sufficient experience (of over 7 years, as in the case of District Judges, under the Constitution) as technical members. Central Government shall take expeditious steps to fill all existing vacancies in the CCI, within 6 months.

In view of the aforesaid, the writ petitions were disposed of by the Hon’ble Court with the liberty to the Petitioners to approach the Appellate Tribunal, within 6 weeks. It was further directed that in such eventuality, the Appellate Tribunal shall entertain their appeals and decide them on their merits in accordance with law, unhindered by the question of limitation.