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CASE NO.: Writ Petition (civil)  490 of 2003

PETITIONER: BRAHM DUTT                                               

RESPONDENT: UNION OF INDIA                                           

DATE OF JUDGMENT: 20/01/2005

BENCH: C.J.I,G.P. MATHUR & P.K. BALASUBRAMANYAN

JUDGMENT: J U D G M E N T  P.K. BALASUBRAMANYAN, J.

                        The Competition Act, 2002 received assent of the President of  India on 13.1.2003 and was published in the Gazette of India dated  14.1.2003.  It is an Act to provide 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  ensure freedom of trade carried on by other participants in markets, in India,  and for matters connected therewith.   The statement of objects and reasons  indicates that the Monopolies and Restrictive Trade Practices Act, 1969 had  become obsolete in certain respects in the light of international economic  developments relating more particularly to competition laws and there is a  need to shift the country’s focus from curbing the monopolies to promoting  competition.  Section 1(3) of the Act provides that the Act shall come into  force on such date as the Central Government may, by notification in the  Official Gazette, appoint and provided that different dates may be appointed  for different provisions of the Act.  Pursuant to this, some of the sections of  the Act were brought into force on 31.3.2003 vide S.O. 340 (E) and  published in the Gazette of India dated 31.3.2003 and majority of the other  sections by notification S.O. 715 (E) dated 19.6.2003.  In view of bringing  into force Sections 7 and 8 of the Act, the Central Government had to make  prescription for the appointment of a Chairman and the members as  composing the Commission in terms of Section 9 of the Act.     

2.              In exercise of the Rule making power under Section 63(2)(a)  read with Section 9 of the Act, the Central Government made "The  Competition Commission of India (Selection of Chairperson and Other  Members of the Commission) Rules, 2003" and published the same in the  Gazette of India on 4.4.2003.  Section 9 of the Act provides for the selection  of the Chairperson and the other members as may be prescribed.  The Rules  above referred to was that prescription.  Under Rule 3, the Central  Government was to constitute a Committee consisting of a person who has   been retired Judge of the Supreme Court or a High Court or a retired  Chairperson of a Tribunal established under an Act of Parliament or a  distinguished jurist or a Senior Advocate for five years or more, a person  who had special knowledge of and professional experience of 25 years or  more in international trade, economics, business, commerce or industry, a  person who had special knowledge of and professional experience of 25  years or more in accountancy, management, finance, public affairs or  administration to be nominated by the Central Government.  The Central  Government was also to nominate one of the members of the Committee to  act as the Chairperson of the Committee.  The function of the Committee  was to fill up the vacancies as and when vacancies of Chairperson or a  member of the Commission exits or arises or is likely to arise and the  reference in that behalf had been made to the Committee by the Central  Government.  It is said that the Committee so constituted made a

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recommendation in terms of Rule 4(3) of ’the Rules’ and a Chairman and a  member were appointed.  Though, the member claims to have taken charge  immediately after being appointed, the person appointed as Chairman, has  taken the stand that he had not taken charge since he was content to await  the orders of this Court in view of the filing of this Writ Petition.

3.              The present Writ Petition was filed in this Court by a practicing  Advocate essentially praying for the relief of striking down Rule 3 of the  Competition Commission of India (Selection of Chairperson and Other  Members of the Commission) Rules, 2003 (hereinafter referred to as ’the  Rules’) and for other consequential reliefs including the issue of a writ of  mandamus directing the Union of India to appoint a person who is or has  been a Chief Justice of a High Court or a senior Judge of a High Court in  India in terms of the directions contained in the decision in S.P. Sampath  Kumar v. Union of India & Others, (1987 ) 1 SCC 124.  The essential  challenge was on the basis that the Competition Commission envisaged by  the Act was more of a judicial body having adjudicatory powers on  questions of importance and legalistic in nature and in the background of the  doctrine of separation of powers recognized by the Indian Constitution, the  right to appoint the judicial members of the Commission should rest with the  Chief Justice of India or his nominee and further the Chairman of the  Commission had necessarily to be a retired Chief Justice or Judge of the  Supreme Court or of the High Court, to be nominated by the Chief Justice of  India or by a Committee presided over by the Chief Justice of India.  In  other words, the contention is that the Chairman of the Commission had to  be a person connected with the judiciary picked for the job by the head of  the judiciary and it should not be a bureaucrat or other person appointed by  the executive without reference to the head of the judiciary.  The arguments  in that behalf are met by the Union of India essentially on the ground that the  Competition Commission was more of a regulatory body and it is a body  that requires expertise in the field and such expertise cannot be supplied by  members of the judiciary who can, of course, adjudicate upon matters in  dispute.  It is further contended that so long as the power of judicial review  of the High Courts and the Supreme Court is not taken away or impeded, the  right of the Government to appoint the Commission in terms of the statute  could not be successfully challenged on the principle of separation of powers  recognized by the Constitution.  It was also contended that the Competition  Commission was an expert body and it is not as if India was the first country  which appointed such a Commission presided over by persons qualified in  the relevant disciplines other than judges or judicial officers.   Since the  main functions of the expert body were regulatory in nature, there was no  merit in the challenge raised in the Writ Petition.

4.              During the pendency of the Writ Petition, two additional  counter affidavits were filed on behalf of the Union of India, in which it was  submitted that the Government was proposing to make certain amendments  to the Act and also Rule 3 of ’the Rules’ so as to enable the Chairman and  the members to be selected by a Committee presided over by the Chief  Justice of India or his nominee.  This position was reiterated at the time of  arguments.  Of course, it was also pointed out that the question of  amendment had ultimately to rest with the Parliament and the Government  was only in a position to propose the amendments as indicated in the  additional affidavits.  But it was reiterated that the Chairman of the  Commission should be an expert in the field and need not necessarily be a  Judge or a retired Judge of the High Court or the Supreme Court.   

5.              We find that the amendments which the Union of India  proposes to introduce in Parliament would have a clear bearing on the  question raised for decision in the Writ Petition essentially based on the  separation of powers recognized by the Constitution.    The challenge that  there is  usurpation of judicial power and conferment of the same on a non- judicial body is sought to be met by taking the stand that an Appellate  Authority would be constituted and that body would essentially be a judicial

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body conforming to the concept of separation of judicial powers as  recognized by this Court.  In the Writ Petition the challenge is essentially  general in nature and how far that general challenge would be met by the  proposed amendments is a question that has to be considered later, if and  when, the amendments are made to the enactment.   In fact, what is  contended by learned counsel for the petitioner is that the prospect of an  amendment or the proposal for an amendment cannot be taken note of at this  stage.   Since, we feel that it will be appropriate to consider the validity of  the relevant provisions of the Act with particular reference to Rule 3 of the  Rules and Section 8(2) of the Act, after the enactment is amended as sought  to be held out by the Union of India in its counter affidavits, we are satisfied  that it will not be proper to pronounce on the question at this stage.  On the  whole, we feel that it will be appropriate to postpone a decision on the  question after the amendments, if any, to the Act are carried out and without  prejudice to the rights of the petitioner to approach this Court again with  specific averments in support of the challenge with reference to the various  sections of the Act on the basis of the arguments that were raised before us  at the time of hearing.  Therefore, we decline to answer at this stage, the  challenge raised by the petitioner and leave open all questions to be decided  in an appropriate Writ Petition, in the context of the submission in the  counter affidavits filed on behalf of the Union of India that certain  amendments to the enactment are proposed and a bill in that behalf would be  introduced in Parliament.  

6.      We may observe that if an expert body is to be created as submitted  on behalf of the Union of India consistent with what is said to be the  international practice, it might be appropriate for the respondents to consider  the creation of two separate bodies, one with expertise that is advisory and  regulatory and the other adjudicatory.  This followed up by an appellate  body as contemplated by the proposed amendment, can go a long way, in  meeting the challenge sought to be raised in this Writ Petition based on the  doctrine of separation of powers recognized by the Constitution.  Any way,  it is for those who are concerned with the process of amendment to consider  that aspect.  It cannot be gainsaid that the Commission as now contemplated,  has a number of adjudicatory functions as well.   

7.      Thus, leaving open all questions regarding the validity of the  enactment including the validity of Rule 3 of the Rules to be decided after  the amendment of the Act as held out is made or attempted, we close this  Writ Petition declining to pronounce on the matters argued before us in a  theoretical context and based only on general pleadings on the effect of the  various provisions to support the challenge based on the doctrine of  separation of powers.

8.      The Writ Petition is thus disposed of leaving open all the relevant  questions.