January 16, 2021

Restrictions imposed by CCI on Advocates

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RESTRICTIONS IMPOSED BY CCI ON ADVOCATES

Author: Vishakha Jaiprakash Thanvi, TMV Lokmanya Tilak Law College

INTRODUCTION

Competition Act, 2002 was enacted by the government of India to govern Competition Law in India. This act repealed the MRTP( Monopolies and Restrictive Trade Practices) Act,1969.

Under this legislation, a new body namely the Competition Commission of India was established on 14th October 2003 and was duly constituted in March 2009 for the administration, implementation, enforcement of the Competition Act & to protect the competition law in India and prevent malpractices from happening within the market. The commission comprises a chairperson and six members.

ROLE, FUNCTIONS & DUTIES OF CCI

Competition Commission of India aims to establish a competitive environment in the society by regulating unfair trade practices through transparency, professionalism, & high competence level and also through proactive engagement of all the stakeholders including producers, consumers of national as well as international jurisdiction. The commission thus focuses on the development of the economy in the country.

Further certain important noteworthy functions carried out by CCI are :

a) It is the responsibility of CCI to prohibit anti-competitive agreements, abuse of dominance, and regulate combinations through proper inquiry & investigations.

b) CCI is also mandated to create & promote public awareness and impart adequate training on competition issues in the society.

c) CCI shall also give its opinion on competition issues on a reference received from an authority established under the law( Central or State Government).

Duties of CCI:-

a) Eliminate Unfair trade practices adversely affecting the competition, that is to ensure that there is free trade & competition in the market and so that the welfare of the consumer remains the foremost priority of the market.

b) The Commission should also promote and sustain the competition so that the consumers get the product at fair prices since when there is an adverse impact on the competition, there are mainly two stakeholders who are at stake, the first one being consumers and secondly, the domestic producer’s as some of them might incur a loss because of the adverse situation and ultimately consumers will be at a loss as they won’t receive the products at fair prices in the market.

c) It is also the duty of the Commission to protect the interest of the consumers by keeping a check on the quality of the products being sold in the market and their prices.

d) The Commission is also responsible to ensure that there is freedom of trade in the markets of India.

CONCEPT OF COMPETITION ADVOCACY UNDER SECTION 49 OF THE COMPETITION ACT

The best way of dealing with the challenge of building a competitive environment in the market is competition Advocacy.

Competition Advocacy is a statutory Section under the competition act, 2002.

The commission is made responsible under this section to take suitable measures for the promotion of competitive market in the country.

The International Competition Network has defined Competition Advocacy as “all those activities conducted by the competition authority related to the promotion of a competitive environment for economic activities by means of non-enforcement mechanisms, mainly through its relationships with other governmental entities and by increasing public awareness of the benefits of competition”.

SECTION 49 OF THE COMPETITION ACT:

Chapter VII of the Indian Competition Act contains following specific provisions related to Advocacy:

Under Section 49 (1), Central Govt. or State Govt. while formulating a law or policy may make a reference to the Commission, and the Commission shall within sixty days give its opinion.

Under Section 49(2) The opinion given by the Commission are not binding upon the Govt.

Under Section 49 (3), The Commission is mandated to take suitable measures for the promotion of competition advocacy, creating awareness and imparting training about the competition issues.

REGULATIONS IMPOSED ON ADVOCATES BY CCI

Competition Commission of India in the exercise of the powers conferred by section 64 of the Competition Act 2002 amended the competition commission of India ( General) regulations, 2009 by inserting regulation 46A in the act.

This regulation allowed the advocates to accompany their parties during an investigation by DG when summoned by CCI for the same, but with the following conditions. The conditions are divided into two sub-clauses.

CONDITIONS MENTIONED UNDER SUB-CLAUSE 1 OF THE REGULATION,

1) The foremost condition is that an advocate shall not be allowed to accompany the party without a written request accompanied by vakalatnama or power of attorney to the DG before the commencement of proceedings of the case.

2) The second important condition is that the advocate shall not sit in front of the person summoned in the case during the investigation.

3) Thirdly the advocate shall not be at a hearing distance and shall not interact or communicate with the party during his examination on oath.

SUB-CLAUSE 2 OF THE REGULATION DESCRIBES THE CONDITIONS AS FOLLOWS,

1) No misconduct on the part of the advocate of his presence before the DG shall be permitted.

2) In case of any misconduct on the part of the advocate noticed by DG, a written complaint against the advocate shall be made by DG to the Commission.

3) The Commission if satisfied with the complaint made by DG for the misconduct of the Advocate can then debar the advocate from appearing before the DG or the competition commission of India for the future proceedings or for the time Commission deems necessary.

4) The Commission also has the authority to direct the secretary to forward a written complaint against the advocate to the state bar council of the advocate is a member of on account of his misconduct in front of DG or the Commission.

This amendment received a great amount of criticism from the lawyer’s fraternity and the amendment was also challenged before the court. The sub-clause 2 of the regulation which states that CCI has the authority to debar advocate from appearing before the DG on a written request made by him on grounds of misconduct was challenged by the member of the Bar, P.S Amalraj member of Tamil Nadu Advocates Association challenged the above clause before the Hon’ble Madras High Court and contended that this regulation assaults the nobility and importance attached to the lawyer’s fraternity and it also violates the provision of the Advocates Act, 1961.

The bench of Justice N Kirubakarn and Justice R Pongiappan issued a stay on the sub-clause 2 of the regulation which allows CCI to debar advocates on grounds of misconduct by stating that it encroaches the Jurisdiction of Bar Council when it comes to debarment of the Advocates in the country.

In the case of Competition Commission of India vs Oriental Rubber Industries, 2018 the Competition Commission of India had imposed certain regulations on the advocates that a case which would come under the jurisdiction of CCI for its inquiry & investigation, the parties in that case summoned by the CCI for inquiry/investigation/recording of the evidence/statement by Director-General shall not be entitled to be accompanied by their advocates during the investigation procedure.

This restriction was imposed by the CCI with a concern that if the parties would be allowed to accompany their advocates during the investigation by DG, then the efficacy of investigation may get hampered as during the investigation, the advocate may caution the witness orally or through a non-verbal communication refraining him/ her from making a statement in the front of DG also the collection or recording of evidence may become a burdensome task for the CCI.

This request of CCI was denied by a bench of Justice A Ravindra Bhatt and Justice Sanjeev Sachdeva of Hon’ble Delhi High Court stating the fact that powers of DG are far-reaching as the investigation by DG may be very severe and drastic and thus it is very essential for a party or person to be accompanied by their advocate during the investigation. Further, the court also ordered that it shall be the duty of the DG to ensure that the advocate accompanying the witness shall not sit in front of the witness and should maintain such a distance where the witness can’t consult his/ her counsel during the investigation.

CONCLUSION

It can therefore be concluded that the Competition Commission of India is the regulatory body that has the responsibility to ensure that there is free competition in the market without any hindrance but with regards to the 2018 amendment which inserted a new regulation with Section 46(A) do arise many pertinent questions like does CCI has the right to supersede the authority of BCI in case of debarment of the advocates? Also, is CCI allowed to impose such restrictions only on the advocates leaving other professions including CA, CS which are also authorized to appear before the DG or Commission as per section 35 of the competition act, 2002 but as per the regulations of 46A there are no such restrictions imposed on these professions so this becomes very unfair to a great extent. Sub-clause 1 of the regulation also reduces the role of advocates as mere spectators because it states that the advocate shall not be at a hearing distance of the witness during the investigation.

It can be therefore said that these new regulations made have been surely made without studying the best practices across other jurisdictions.

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