After a year long deliberations, the Standing Committee on Finance has recommended several changes in the Competition Commission Act, 2002, making it a more powerful body.
One of the key suggestions of the committee is its disapproval to let a retired judge head the commission.
The committee has said that the commission should remain a body of experienced experts from the fields of industry, business, law and finance.
However, keeping in view the Supreme Court observations made during the disposal of a public interest litigation, the committee has advised setting up of Competition Appellate Tribunal, which will act a quasi-judicial body and headed by either a retired chief justice of a high court or retired judge of the Supreme Court.
CAT shall have the powers to review the orders of Competition Commission of India, while an appeal to the tribunal's decision will lie before the Supreme Court.
The recommendations form part of the committee's report, which was submitted before the Parliament about a week ago during the winter session. The report shall now be scrutinised by the Ministry of Company Affairs to amend the Competition Commission Act, 2002 accordingly.
Until the amended Act is not passed by the Parliament, the CCI will not be able to initiate inquiries into mergers of companies. Presently, it is a one-man team and awaits implementation of the Act, which shall now happen in 2007.
If the committee's report is accepted by the government, it will become mandatory for the merging companies to inform the CCI about their mergers and acquisitions.
The Act, in its present form, makes it optional for companies to divulge this information to CCI, which can initiate an inquiry either on the basis of an information or suo motu cognizance.
Another suggestion by the committee, to further strengthen the CCI, is to extend more search and sieze powers to the commission.
Although the existing Act has sanctioned powers to CCI for carrying out the search, it has made it mandatory for the commission to take permission of magistrate concerned of the area before doing so.
The committee, however, has advised elimination of this clause as taking permission would act as a hurdle for the CCI, which would be dependant on a local magistrate.
With regard to government's proposal to transfer the power of compensation to CAT, the committee feels that it should be retained with the CCI since the latter's order would be reviewable before the tribunal.
- To set up a quasi judicial body, Competition Appellate Tribunal, headed by a retired chief justice of High court or a retired Supreme Court judge.
- The Standing Committee of Finance has recommended making it mandatory for the companies to inform CCI about their mergers.
- The committee has also advised to do away with a clause making it mandatory for CCI to take a local magistrate's permission before carrying out a search and seizure.