LEGAL NEWS 17.04.2010

HC issues notice to govt for ‘ignoring’ heritage

DNJAI15211 | 4/17/2010 | Author : DNA Correspondent | WC :293 | Art & Culture

State allegedly making changes in old structures
The high court has issued notices to the state government on a petition seeking preservation of the heritage look of Jaipur’s old walled city areas.
A public interest litigation (PIL) moved before the court alleged that the government was making no efforts to prevent distortion of the city’s heritage. In fact, alleged the PIL, that the state government and its agencies were making changes in and around the Walled City areas thereby completely altering the original look of Jaipur.
Based on the contentions made in the PIL, the division bench of chief justice Jagdish Bhalla and justice MN Bhandari issued notice to the state chief secretary, principal secretary of the UDH department, CEO of the JMC and JDA secretary.
The petition filed by Kishan Lal Sharma, a resident of the city, particularly mentioned about the encroachments around the seven old gates of the Walled City.
“Encroachments are going on unabatedly on roads leading to and emerging from the seven gates of the old city,” Sandeep Pathak, the petitioner’s counsel, told the court. The seven gates include the Chandpole Gate, Ajmeri Gate, New Gate, Sanganeri Gate, Ghat Gate, Surajpole and the Jorawar Singh Gate.
It was argued before the court that the state government was not keen on maintaining the original shape of the Walled City and was turning a blind eye to everyday encroachments coming up along the old roads.
During the previous Ashok Gehlot government a special drive was carried out to free the Walled City roads and corridors from encroachment. The high court had then directed the state government to ensure that the encroachers did not return, once the special drive was over. However, over the past few years verandas before the shops in the Walled City have been heavily encroached.
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High court dismisses PIL seeking take over of BCCI by Centre


Friday, April 16, 2010 21:36 IST

Madurai: The Madurai bench of the Madras high court today dismissed a PIL seeking a direction to the Union ministry of culture, youth and sports welfare and finance ministry to take over administration of the Board of Control for Cricket in India (BCCI) to promote the game and charity effectively and transparently.

Justice FM Ibrahim Kalifullah and justice KBK Vasuki said if the petitioner felt the BCCI was not meeting the objectives of society, then he could complain to the registrar of societies.

“If they violated income tax rules, then the same could be taken up with the income tax department,” the court said.

The petitioner could not straightaway file a PIL without approaching the authorities concerned to get a proper remedy for his grievance, the bench held.

The petitioner B Stalin, a city advocate, contended that the BCCI, under the category of a charitable institution received grants, donations and contributions and enjoyed tax exemption (till 2006-07). But it was not spending even 8% of its total income to promote the game.

The cricket body has billions of rupees as surplus in its account, but lacked infrastructure, he said.

He claimed that certain activities of BCCI were totally commercial and there was no element of charity in its conduct, the major income arises not from the game, but from business of cricket. BCCI’s intention was to promote business and not the game, he charged.

Is this the BEST price for Santa Cruz bus depot plot?

Nauzer K Bharucha, TNN, Apr 17, 2010, 01.47am IST

MUMBAI: Was the three-acre Santa Cruz (W) bus depot plot sold for a throwaway price by BEST last week? A week after the plot was awarded to the highest bidder, Indiabulls, for Rs 50 crore, it has come to light that the BEST tender document had stipulated a minimum reserve price of Rs 369 crore or seven times the price it ultimately fetched.

The tender document, a copy of which is with TOI, had fixed a “minimum non-refundable premium of Rs 2.79 lakh a sqm for the 13,212-sqm” plot. “There shall be limited bid-cum-auction on opening of tenders for those tenderers who would quote above the reserved rate of premium…,” it said.

But on March 25, barely two weeks before the bids were to be opened, the BEST administration shot off letters to interested builders, stating that there would now be no minimum price. “…Bidders who have submitted the tender shall be allowed to participate in the bid-cum-auction, which would be held immediately after opening the tenders, irrespective of the rate offered by the bidder for payment of non-refundable premium, provided it fulfils the other eligibility criteria for participating…,” said the letter issued by the civil engineering department of the BEST.

BEST GM U Khobragade said, “It was an open auction and the correct price was paid. The (minimum non-refundable premium) was mere guesswork. It was a mistake and, the moment we realised that it could not command such a price, we circulated a letter to all bidders and held an open auction.”

Khobragade added, “There are height restrictions on this plot and there is so much work to be done. As many as 600 quarters are to be constructed, as also a bus depot. Who will pay for it? Will you pay for it? The land will be available to the developer two years after making all these investments. All these factors were not discounted while calculating the premium.”

A spokesperson for the BEST Workers’ Union said the union was planning to file a PIL in the high court. “This is an obvious scam and a huge loss for BEST,” he said. Congress corporator and BEST committee member Ravi Raja said he had opposed the sale. “The price is too little. I request the BEST administration to review its decision,” he said.

On the other hand, a builder, who was in the fray, justified the price paid by Indiabulls. “There are various obstacles including height restrictions at various spots ranging from 18 m to 25 m since there are two airports in the vicinity. One of them is in fact touching the site and the other is creating a flight funnel situation. There is excessive noise factor since aircrafts fly over the site at full thrust due to take off requirements at very high frequency,” he claimed.

Moreover, the builder pointed out that 150 buses were to be parked at ground level with adequate height clearances. “Driveways are to be provided including servicing bays for the same, CNG and fuel refilling pumps. The highest bidder will also have to construct 600 residential quarters for the BEST staff free of cost and a few more structures with a huge periphery wall. Besides, the area gets water-logged and does not have any high commercial potential ,” he claimed.

But sources say the construction of staff quarters and remodelling the BEST depot would cost the winning bidder not more than Rs 45 crore. A developer told TOI that in his estimation the plot could have fetched the BEST at least Rs 400 crore.
(Inputs from Clara Lewis)

Delegation presses Moily on SC status for Dalit Christians

By: Dibin Samuel

Saturday, 17 April 2010, 14:38 (IST)

A delegation of Catholic and Protestant leaders on April 13 met Law Minister M Veerappa Moily pressing for action on the implementation of Ranganath Mishra Commission Report (NCRLM Report) that recommended extending SC status to Dalit Christians and Muslims.

Representatives of National Coordination Committee for Dalit Christians (NCCDC), a joint programme of the CBCI and NCCI, apprised Moily on the “pain and agony” the delay had caused despite the NCRLM report submitted to the Prime Minister in May 2007.

The report prepared by former Chief Justice of India, Ranganath Mishra, asserts that discrimination of Dalits who convert from Hinduism to Christianity or Islam is unwarranted and goes against articles 14, 15 and 25 of the Constitution of India.

The same delegation had met the minister earlier in November 2009 and requested that government table the NCRLM report in the Parliament and also file their response in the PIL pending before the Supreme Court.

The PIL was filed in the year 2004. Despite repeated assurances from government, no reply has been filed in the PIL till date and as a result it has been adjourned to July 2010.

The Law Minister emphasised and informed representatives of CBCI Fr. Cosmon Arokiaraj and from NCCI Ms. Anjna Masih that the decision has to be taken by the Union Cabinet.

Meanwhile, a Dalit Christians’ conference was held in Tirunelveli, Tamil Nadu, during which Communist Party of India (Marxist) Polit Bureau member Brinda Karat strongly condemned the social discrimination against Christians and Muslims.

Karat hailed the role of Chief Minister M. Karunanidhi in demanding the implementation of NCRLM report by sending a letter to Prime Minister Manmohan Singh, and asked if DMK Ministers at the Centre would do the same.

Members of Tamil Nadu Untouchability Eradication Front would stage a statewide demonstration in all district headquarters May 6 to demand SC status to Christians and Muslims.

Judgement in murder case against Soren deferred

April 17th, 2010 ians

A fast track court Saturday deferred the judgement in a 36-year-old double murder case involving Jharkhand Chief Minister Shibu Soren and will hear fresh arguments May 15.

Soren appeared in court Saturday and the judge asked the two sides whether they wanted to make fresh argument in the case. Both sides agreed and the court posted the matter for hearing May 15.

The case is related to murder of two people over a dispute over killing of two goats. The murders took place at Kodko village of Giridih district in April 1974.

Soren was made accused of inciting a mob to kill Chundi Singh and Khirodhar Singh, who were accused of stealing two goats and killing them. There were a total 10 accused in the case. The charge sheet against all accused, including Soren, was filed in 1978. Eight accused were acquitted in 1986 and one died during trial.

The case against Soren was pending as he failed to appear in court earlier. A warrant pending against Soren surfaced in 2004 and he then surrendered. He was later released on bail.

The murder case was transferred to the fast track court of Mohammad Qasim in Giridih just three days before the judegment date. On April 3, Soren had appeared in the court of Additional District Judge N.N. Singh. The hearing was completed and the judegment was reserved and was scheduled to be delivered Saturday.

But just days before the judegment day, Singh separated himself from the case and Giridih District Judge Sanjay Kumar transferred the case to the fast track court of Mohammad Qasim.

HC raps cops over missing boy’s ‘murder’

Rebecca Samervel, TNN, Apr 17, 2010, 02.48am IST

MUMBAI: The Bombay high court on Friday reprimanded the police for applying murder charges in the case of a minor boy who has been missing since more than a year.

The court directed deputy commissioner of police (Andheri zone) Prakash Mutiyal to file an affidavit stating the reasons that prompted the application of Section 302 of the IPC even though the police has been unable to trace the boy. A chargesheet was filed on March 8, 2010, for kidnapping, murder and causing disappearance of evidence.

“You must place before the court that the boy is dead. On what basis have you arrived at the conclusion,” asked the judges. The division bench of Justice D B Bhosale and Justice A R Joshi were hearing a habeas corpus petition filed by Pavankumar Prajapati, father of Ajaykumar (10) who the police claim was killed by his mother Janakdulari (30) and her alleged paramour Satyanarayan Harijan (25), alias Nanhe. Earlier, the police conducted a lie detector and brain mapping tests on Nanhe who allegedly confessed to killing the boy with Janakdulari’s help since the boy caught them in a compromising position.

Nanhe was arrested in November 2009, and Janakdulari, in December. The narco-analysis test on Janakdulari was inconclusive. The police claimed that Nanhe showed them the site where the boy’s skeleton was buried. However, a DNA test was negative.

Public prosecutor P A Pol told the court that the police are now awaiting super-imposition test results. “In view of the negative DNA test, what is the value of superimposition,” asked Justice Joshi.

Justice Bhosale said, “If the DNA test was not matching, how can you say it was his body? We understand, if it was inconclusive. But the report specifically says that it did not match with the parents’.” The judge further said, “The accused may be misleading you. During trial, they may say the body was not his and get acquitted. Have you looked in the direction of the accused misleading the investigators?”

Shoaib moves Andhra HC to get back passport

April 16, 2010 15:01 IST

Pakistani cricketer Shoaib Malik [ Images ] on Friday moved the Andhra Pradesh High Court for a direction to Central Crime Station police in Hyderabad to release his passport.

The Banjara Hills police had seized Shoaib’s passport during the investigation into a complaint lodged by his first wife Ayesha Siddiqui.

Malik, who recently married tennis star Sania Mirza [ Images ], approached the court and said that the issue between him and Ayesha has been resolved amicably and police has no reason to detain his passport.

Justice C V Nagarjuna [ Images ] Reddy heard the arguments of the counsel for Shoaib Malik and adjourned the matter to Monday for his judgement.

© Copyright 2010 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.

Filing false case against in-laws is cruelty: HC

Shibu Thomas, TNN, Apr 17, 2010, 01.55am IST

MUMBAI: Filing a false criminal case against the husband and in-laws for harassment amounts to cruelty and is ground for divorce, the Bombay high court. “Humiliation… that is caused on account of arrest and detention of appellant and his family members and relatives in a false case does constitute mental cruelty to enable the husband to seek decree of divorce on this sole ground,” said a division bench of Justices A P Deshpande and R P Sondurbaldota while granting divorce to a Pune resident.

Dyanesh Soparkar and Lata (names changed) had an arranged marriage in March 2001 as per Hindu rites and they have a daughter. According to Soparkar, on the wedding night itself Lata called him blind for wearing spectacles and complained that she was given to understand that he earned a higher salary than what he actually got. The couple had frequent quarrels, according to Soparkar, over his wife’s insistence that they stay separately.

Dyanesh filed for divorce in June 2003 and a month later Lata filed a case for dowry harassment (Section 498 A of the IPC). She named Dyanesh, his mother and three other relatives. They were arrested and sent to custody. Two years later, a magistrate’s court acquitted them, saying there was no evidence that Lata’s family were coerced to pay Rs 50,000 as dowry.

The family court dismissed Dyanesh’s plea for divorce saying that a single complaint filed by the wife could constitute cruelty. Dyanesh moved the HC in appeal. His lawyers claimed that the arrest and detention of the family members and Dyanesh’s near relations in a false case “has caused him agony”.

The HC agreed with Dyanesh’s contention. “One thing is crystal clear and it can be safely assumed that the wife had filed a false case not only against her husband and mother-in-law but had unnecessarily roped in other near relations,” said the judges, adding, “It is obvious that on account of arrest and detention of the husband and his family members, Lata has treated Dyanesh with utmost mental cruelty and he has suffered agony.”

Form panel to resolve Gujjar quota, HC tells govt

Abhinav Sharma, TNN, Apr 17, 2010, 05.50am IST

JAIPUR: In a new twist to the Gujjar agitation in the state, Rajasthan High Court on Friday directed the state government to constitute a committee headed by a retired high court judge to look into all aspects of the quota issue, including the ongoing agitation.

It also directed the government to take all necessary steps to maintain public order in the state and take action against those who fail to abide by its directions. The order came on a PIL filed by one J P Dadhich, a resident of Ajmer, alleging that during the previous agitations, the Gujjar community had resorted to massive violence.

A bench of Chief Justice Jagdish Bhalla and Justice Munishwar Nath Bhandari further said that the committee shall include a bureaucrat, a social activist, members of the Bar, a parliamentarian or legislator who could help in resolving the issue.

The court asked an advocate, V S Gurjar, to communicate the feelings of the court to the leaders of the community.

The order is being construed as a major relief to the Ashok Gehlot government. The court took a serious view of the fact that the Gujjars once again took to the streets and are blocking national highways despite previous orders by the court to maintain peace. “We expect from the leaders of the agitating community not to take law into their hands. As we have already said earlier, the leaders of the agitating community shall take care that no inconvenience is caused to the public,” the bench said.

“On March 25, we had passed a detailed order taking note of the fact that nearly 70 people lost their lives in the agitations apart from serious damage to public and private properties. We passed the order to ensure that such things are not repeated. Therefore, the government was expected to take all necessary measures,” the bench said.

In its response, the state government said that adequate measures have been taken to solve the impasse and talks are still on.

Steam not a chemical, rules Bombay HC

Shibu Thomas, TNN, Apr 17, 2010, 04.00am IST

MUMBAI: Ask any schoolkid and she will tell you that steam is H²O. Bombay High Court was however recently approached to decide on a 21-year-old issue: whether steam was a chemical or not.

At stake was tax to the tune of crores; if it was designated as a chemical it would attract a mere 4% sales tax. But a division bench of Justice V C Daga and Justice K K Tated last week ruled that steam was not a chemical for tax purposes, which meant 10% sales tax would have to be paid.

The judges said for sales tax purposes the usage of the product in common parlance had to be considered. “In common sense, the steam is treated as byproduct of water and for preparation of the steam the process is just to boil water,” said the judges.

“Therefore, the common man always treats steam as part and parcel of water. It is a fact that in taxing statute the words which are not of technical expressions or words of art but are words of every day use, must be understood and given a meaning, not in their scientific sense, but in a sense as understood in common parlance.”

The court was hearing a case filed by M/s Gopalanand Rasayan, a company manufacturing sulphuric acid and other chemicals. During the manufacturing process, steam is generated which is sold as a byproduct. Tax authorities directed the company to pay 10% as sales tax for the assessment years 1988 to 1991. The dispute finally referred to HC.

CJI names Kapadia as his successor


New Delhi, Apr 16 (PTI) Chief Justice of India K G Balakrishnan, who retires next month, has recommended the name of seniormost judge of the Supreme Court Justice S H Kapadia as his successor, setting in motion the process of change of guard in the apex court.

Sources in the Law Ministry said Justice Balakrishnan, due to retire on May 11, recommended the name of Justice Kapadia (63) recently.

“The file is under process,” an official said.

As per the Memorandum of Procedure which governs the appointment of members of the higher judiciary, “appointment to the office of the Chief Justice of India should be of the seniormost Judge of the Supreme Court considered fit to hold the office.”

It stipulates that the Law Minister would, at the appropriate time, seek the recommendation of the outgoing Chief Justice of India for the appointment of the next CJI.

Competition Act, 2002 & impact on industry in the years ahead

Apr 16, 2010

Saibal C. Pal

1. Introduction :-Notification dated 28th August, 2009 issued by the Ministry of Corporate Affairs (`MCA’) repealed the Monopolies and Restrictive Trade Practices Act, 1969(`MRTP ACT’) with effect from 1st September, 2009. The repealed Act was replaced by the Competition Act, 2002 (`COMPETITION ACT’) as amended by the Competition (Amendment) Act,2007.  Chapter III of the repealed MRTP ACT which dealt with concentration of economic powers through mergers, amalgamations and acquisition was deleted with effect from 27th July, 1991. Therefore, restrictions on mergers, amalgamations and acquisitions in the country did not exist post July, 1991 until SEBI imposed restrictions on listing of unlisted companies through mergers and amalgamations. Further SEBI announced the Take over Code in 1994 substituted by the Code of 1997 and amended from time to time to restrict take over of listed companies. Restrictions of merger and amalgamation of banking companies, however, continued to be regulated by the Reserve Bank of India throughout.  On  the Competition Commission of India(`CCI’) coming into force, the MRTP Commission will continue exist for two years con-currently to handle old cases filed prior to 1st September,2009 for a period of two years up to 31st August, 2011. However, no new cases would be taken up by the MRTP Commission. On expiry of two years all pending cases pertaining to monopolistic or restrictive trade practices, including cases having an element of unfair trade practice shall stand transferred to the Competition Appellate Tribunal (CAT) which shall adjudicate such cases in accordance with the provisions of the repealed MRTP Act.

1.2 Competition laws all over the world are primarily concerned with the acquisition and/or exercise of market power and abuse. Market power is variously known in competition jurisdictions as dominant position, monopoly power and substantial market power. The Competition Act, 1992 and amended in 2007 follows the philosophy of modern competition laws and aims at fostering competition, protecting Indian markets against anti-competitive practices by enterprises who always want market leadership to maximize benefits from the market for their progress. The Act prohibits anti-competitive agreements and abuse of dominant position by enterprises and regulates combinations which include mergers, amalgamations and acquisitions thus laying down certain practices from which enterprises shall have to keep away. Enterprises not following the law on competition will have to face penalty which will thwart activities and operation in the market.

2. Transfer of pending cases before MRTP Commission and applicability of repealed MRTP ACT in such cases.

2.1. With the notification date 28th August,2009 all pending cases with the MRTP Commission relating solely to unfair trade practices shall stand transferred to the National Commission as constituted under the Consumer Protection Act,1986(`CPA’) which may in turn transfer such cases to a State Commission constituted under the said Act as deemed appropriate. Such transferred cases will be dealt by the Commission according to the provisions of the CPA.

2.2 Cases of false or misleading facts, disparaging the goods, services or trade of another person pending under the MRTP Act shall be transferred to  CAT however, the transferred cases will be dealt in accordance with the provisions of the repealed MRTP Act.

2.3   Investigations/proceedings undertaken by the Director General under the MRTP Act relating to : (i) Monopolistic/restrictive trade practices will be transferred to the CCI who may conduct such investigations/proceedings in any manner it deems appropriate.(ii) Unfair  trade practices will be transferred to the National Commission under the CPA;(iii) cases giving false or misleading facts disparaging the goods, services or trade of another person will be transferred to the CCI.

2.4 The provisions of the law for the transition from the MRTP regime to CCI regime is clear to avoid ambiguity.

3. Provisions on Combinations (Mergers, Amalgamations and Acquisitions) rovisions relating to Mergers and Acquisitions termed as combinations are covered by Section 5 and 6 of the Competition Act. The provisions deal with regulation of combinations. However, the sections have not made operative as yet.  Dates of implementation of the said provisions have so far not been announced by MCA. This being a critical area it is considered prudent to gradually implement the provisions once the other provisions of the Competition Act are observed.

4. The Competition Act, 2002 as amended in 2007

4.1 India enacted its first anti-competitive legislation in 1969 known as the Monopolies and Restrictive Trade Practices Act, 1969 to provide that the operation of the economic system does not result in the concentration of economic power to the common detriment, for the control of monopolies, for the prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto. The scope of MRTP was found to be inadequate considering the changing world trade scenario. Considering the fact, the Indian Government formed a Committee on Competition Policy and Law (the Raghavan Committee) to advice on competition law.  Based on the recommendations of the Raghavan Committee the Government enacted the Competition Act, 2002 which came into effect from 13th January,2003.The Competition Act was enacted to provide ,keeping in view of the economic development of the country, for the establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensue freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto. The Act was implemented in stages on 31st March,2003, 19th June,2003, 14th October,2003 and 28th August,2009. The Act was amended by the Competition (Amendment) Act, 2007 with effect from 25th September, 2007.

4.2 The Competition Act defines dominance or dominant position in terms of a position of strength enjoyed by an enterprise, in relevant market in India, which enables it to: (i) operate independently of the competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market in its favour. It is the ability of the enterprise to behave/act independently of the market forces that determines dominant position. In a perfectly competitive market no enterprise has control over the market, especially in the determination of price of the product. Each enterprise is a price taker. However, perfect market conditions do not obtain reality. Keeping this in view the Act specifies a number of factors that should be taken into account while determining whether an enterprise is dominant.

4.3  MRTP Act did not address all the abuse of intellectual property rights which are monopoly rights for limited period of time. Competition Act has exempted intellectual property rights(IPRs) from the coverage of the rigors of S 3 related to anti-competitive agreements, no such derogation is available in case of abuse of  IPRs by right holders, in respect of specific abusive acts.(S 4).

S 28 empowers CCI to direct division of an enterprise enjoying dominant position to ensure that such enterprise does not abuse its dominant position.

6.  Agreements and Anti-Competitive Agreements under the Act.

An agreement for the purpose of the Act includes any arrangement, understanding or concerted action entered into between parties. It need not be in writing or formal or intended to be enforceable in law.

4.4 The Act prohibits anti-competitive agreements including cartels, abuse of dominant position, regulates combinations which includes mergers, amalgamations and acquisitions. An anti-competitive agreement is an agreement having appreciable adverse effect on competition.  Anti-competitive agreements may include, but not limited to:(i) Horizontal Agreements to : (i) fix prices; (ii) limit production and/or supply;(iii) allocate markets; and (iv) bid rigging or collusive bidding.(ii) Vertical Agreements including: (i) conditional purchase/sale (tie-up arrangement);(ii) exclusive supply arrangement ;(iii) exclusive distribution arrangement; (iv) refusal to deal; and (v) re-sale price maintenance.

5. Competition Commission of India (CCI)

Vide notification dated 14th October, 2003 CCI was established with head office at New Delhi. Consequently, CCI could not be made functional as a writ petition was filed before the Supreme Court. The petition was heard and while disposing of the petition on the 20th January, 2005, the Apex Court held that if an expert body is to be created by the Union Government it might be appropriate for the government to consider the creation of two separate bodies, one with expertise for advisory and regulatory functions and the other for adjudicatory functions based on the doctrine of separation of powers recognised by the constitution.  Keeping in view the judgment of the Supreme Court, the Competition (Amendment) Bill, 2006, a Money Bill within the meaning of Article 110 of the Constitution was introduced in the Lok Sabha on the 9th March, 2006. Under Article 117(1) read with (3), the Bill was referred for examination and report to the Parliamentary Standing Committee and taking into account the report of the Parliamentary Standing Committee the Parliament passed the Bill and the President assent was received on 25th September, 2006.

6. Salient features of Competition (Amendment) Act, 2007

Amendments to the Act through the Competition (Amendment) Act, 2007 pertaining to CCI/Commission are as follows:

(i)                 CCI shall be an expert body with functions of a market regulator for prevention and regulation of anti-competitive practices in the country in accordance with the Act. It would also have advisory and advocacy functions in its role as regulator.

(ii)               Mandatory notice is required to be served on the Commission for merger or combination by a person or enterprise within thirty days.  Commission shall have power of imposing penalty of up to one per cent of the total turnover or  assets, whichever is higher, on a person or enterprise which fails to give notice of merger or combination to the Commission as per the provisions of the Act.

(iii)             CAT shall be established which shall be a 3 member quasi judicial body headed by a person who is or has been  a judge of Supreme Court or the Chief Justice of a High Court . CAT shall hear and dispose of appeals against direction issued or decision made or order passed by the Commission.

(iv)              CAT shall adjudicate claims on compensation and passing of orders for the recovery of compensation from an enterprise for loss or damage suffered as a result of any contravention of the provisions of the Act.

(v)                Orders of CAT shall be implemented as a decree of a civil court.

(vi)             Filing appeal against orders of the CAT shall be to the Supreme Court.

(vii)           Imposition of  penalty by the Commission for contravention of its orders and in certain cases of continued contravention a penalty which may extend to Rs 25 crores or imprisonment which may extend to 3 years or with both as the Chief Metropolitan Magistrate, Delhi may deem fit and  may impose.

(viii)         MRTP Commission will continue upto two years after constitution CCI for trying pending cases under the MRTP Act after which it would stand dissolved.  MRTP Commission shall not entertain any new case after the CCI is duly constituted. Cases remaining pending after 2 years period would be transferred to the CAT or the National Commission under the CPA depending on the nature of cases.

The announcement of MCA on 28th August 2009 on the operation of CCI from 1st September, 2009 is in the above lines.

7. Anti-competitive agreements and regulations on combinations

Ss 3 to 6 under Chapter II of the Act is the substantive portion of the Act and restricts: (i) anti-competitive agreements,(ii) abusive dominant position, (iii) combination, and (iv) regulation of combinations. Under the provisions,  anti competitive agreements are restricted and no enterprise or association of enterprises or persons shall enter into any agreement in respect of  production supply, distribution, storage, acquisition  or control of goods or provision of services which cause or is likely to cause an appreciable adverse effect on competitive agreement. However, pursuant to section 3(5) of the act the provisions do not cover the following agreements/restrictions/protections:

i)        protection of right in respect of the following intellectual property rights :

(a)    the Copyright Act,1957;

(b)    the Patent Act,1970

(c)    the Trade Mark Act,1999

(d)    the Geographical Indication Registration Act,1999

(e)    The Design Act,2000;and

(f)     The Semi- Conductor Integrated Circuits Layout Design Act, 2000.

ii)   The right of any person, export of goods from India to the extent to which the agreement relates exclusively to the production, supply, distribution or control of goods or provision of services for such export.

8. Discussion on the provisions of Competition

8.1. The Competition Act discards the concept of dominant undertaking which was included in the MRTP Act. It provides that an entity having dominant position is not per se bad unless such dominance is declared illegal as per the Act. Dominance is said to be abused when there is an appreciable adverse effect on competition due to an action undertaken.

8.2. The Competition Act regulates the operation and activities of combination, a term which contemplates acquisitions, merger, joint venture, take-over or amalgamation. No person or enterprise shall enter into a combination to cause an appreciable adverse effect on competition within the relevant market in India and a combination of enterprises causing adverse effect on competition shall be void and the enterprise will have to face penalty as per the Act. Combination has a wide meaning and includes acquisition of shares, acquisition of control by an enterprise over another and amalgamation between or amongst enterprises. Combination that exceeds the threshold limits specified in the Act in terms of asset or turnover which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India, can be scrutinized by the Commission.

9. Combination

9.1 In the case of combination, the threshold limits are:

(i)  Joint assets of the enterprises of the value of more than Rs 1000 crore or joint turnover is more than Rs 3000 crore. In case either or both of the enterprises have assets/turnover in and outside India then the joint assets of the enterprises value more than  USD 500 million including at least Rs 500 crore in India or turnover is more than USD 1500 million including at least Rs 1500 crore in India.

(ii)  Joint assets of enterprises of the value of  more than Rs 4000 crore or joint turnover is more than Rs 12,000 crore, if the party being acquired or remaining after merger or created as a result of amalgamation belongs to a group. In case such party has assets/turnover in and outside India, then the joint assets of the group value more than USD 2 billion, including at least Rs 500 crore in India or turnover is more than USD 6 billion including at least Rs 1,500 crore in India.

9.2 Any firm proposing to enter into a combination, may, at its option, notify the Commission in the specified form disclosing the details of the proposed combination within 7 days of such proposal.

10. Procedure of Investigation by CCI.

10.1 If CCI is of the opinion that a combination is likely to cause or has caused adverse effect on competition, it shall issue a notice to show cause the parties as to why investigation in respect of such combination shall not be conducted. On receipt of the response from the party, if CCI is of the prima facie opinion that the combination has or is likely to have appreciable adverse effect on competition, it may direct publication of details inviting objections of public and hear them, if considered appropriate. It may invite any person likely to be affected by the combination to file his objections. CCI may also enquire whether the disclosure made in the notice is correct and the combination is likely to have an adverse effect on competition. The Commission shall approve the combination if no appreciable adverse effect on competition is found. It shall disapprove of combination in case of appreciable adverse effect on competition. CCI may propose suitable modification as accepted by the parties.

10.2 During the course of any proceeding before the CCI, the Central Government may make a reference for opinion if any party raises an issue that the decision of the authority is likely to be contrary to the provision of the Competition Act, 2002 as amended in 2007. The Central Government in formulation of policy relating to competition may seek opinion of the CCI. On reference, CCI is mandatorily required to give its views within 60 days.


11. Government Clarification

Formation of CCI has caused the Government to clarify to the various queries raised on combination as the business circles opine that there is likely to be curbs by the Government on enterprises .The Government was quick in clarifying that 90 per cent of mergers and acquisitions deals for the enterprises falling within the brackets stated would be cleared within two months as against the 210 days period provided in the Act. MCA has said that only in 5 to 10 per cent of the cases, CCI would require additional time in the larger interest of the country, to investigate the anti-competitive practices.

12. Opinions on the restrictions on combinations

12.1 Views expressed during the phase of implementation of the Act include fear that the Competition Act would impede M&As. It is felt that the current provisions of the Act will kill all M&A deals falling in its ambit, hamper FDI inflow and affect the growth of the economy in general. It is expected to result in loss of transactions, delay the opportunities for absorption of advanced technologies and growth.

12.2 MCA have clarified time and again that the objective of the CCI is to check the monopolistic and restrictive trade practices followed by certain industries through illegal tie-ups and M&As.

12.3 Study done by Grant Thornton, a consultancy firm has found that the value of domestic M&A deals declined during the year 2007 although cross border M&A deals hit a new high in the same year.  Value of domestic deals declined from USD 6.9 billion in 2005 to USD 4.99 billion in 2006 and to USD 2.83 in 2007 even though the volume increased form 151 deals in 2005 to 214 deals in 2006 and to 313 deals in 2007 the study said. Deals further declined during 2008 and 2009 due to the world financial crises which hit enterprises resulting in a spate of bankruptcies.

13. Competition Compliance Programme

13.1 The efficacy of the Act will be seen in its implementation and show whether the Act implemented replacing MRTP Act is in the right direction for the economy. When an enterprise takes certain steps to ensure that knowingly or unknowingly it does not infringe the provisions of the Act, it can be stated to maintain a `Competition Compliance Programme’ (`CCP’). A CCP should include the under mentioned three main objectives:

(i) prevent violation of  the Competition Act, rules, regulations and orders made there under ;

(ii) Promote a culture of compliance; and

(iii) Encourage good corporate citizenship.

13.2 As the consequences of non-compliance may be serious, enterprises are expected to have in place their compliance programs so as to avoid violation of the provisions of competition law and promote the culture of compliance down the line. For effective compliance of the enactment a Compliance Officer with appropriate delegation of authority be appointed to ensure CCP. The Compliance Officer should be preferably be an independent professional with expertise and core competency in compliance management.

13.3 With a CCP in place in an enterprise there is limited chance of violating the provisions of competition law. An efficient CCP in place may reduce the severity of punishment that may be inflicted on an enterprise for violation. An enterprise will look forward to the Company Secretary to guide the management in devising and implementing the CCP to meet the challenges to be faced by an enterprise with the CCI coming into operation to foster growth by check unethical practices in business.


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