Defying Competition Commission to be a crime

NEW DELHI: Not heeding the directives of the proposed new Competition Commission of India (CCI) or appellate tribunal may cost companies dearly.

The government is likely to make the penalties for contravention of the orders of the commission and tribunal more stringent. The ministry of company affairs, which has circulated a Cabinet note on a Bill to amend the competition law, has significantly stepped up the punitive provisions. It treats all such misconduct — treated as civil offences under the existing law — as criminal offences.

Besides, the quantum of punishment has also been significantly enhanced. Non-compliance would invite a penalty of up to Rs 1 crore or imprisonment of up to three years, against the existing provision of up to Rs 10 lakh fine or up to one year in jail. Imprisonment and monetary penalty can be awarded together.

In addition, the offender will have the civil liability to pay compensation to the person affected by the non-compliance or delay in compliance. Since CCI cannot punish offenders on its own, this provision would allow the offender to be tried at the court of the chief metropolitan magistrate in New Delhi.

The Bill also places the responsibility of selecting the chairperson and members of the CCI and the tribunal on two panels headed by the Chief Justice of India or his nominee. Although the parliamentary committee which studied the Bill and the Planning Commission felt the panel choosing CCI members should be headed by an expert, the Bill reflects the government’s intention of not ruffling the Judiciary’s feathers. While the panel that selects the members of the tribunal will have secretaries of the company affairs ministry and the law and justice ministry, the panel selecting the CCI will have two more experts.

The Bill also allows the CCI to seek opinion from other sectoral regulators in a time-bound manner as these regulators are allowed under the existing law to consult the CCI. The idea is to ensure smooth communication and not to pit one regulator against the other in a tug-of-war over jurisdiction.