INTRODUCTION:

The Competition Act of 2003 was enacted to handle horizontal and vertical anticompetitive
agreements, as well as enterprise abuse of dominant positions such as mergers, acquisitions,
and amalgamations, statutory authority referrals, and competition advocacy. The Competition
Commission of India (the CCI) was to be constituted to deal with the foregoing provisions,
which were adjudicatory, regulatory, and advisory in character, according to the Act. A
chairman and no more than ten other members would make up the CCI. Despite the fact that
the Chairman was not nominated by a higher judicial authority and that neither the Chief
Justice of India nor his nominee were engaged in his selection, the Act states that the CCI
was needed to exercise adjudicatory powers.

Brahm Dutt v. Union of India, AIR 2005 SC 730

Supreme Court of India

DATE OF JUDGMENT: 20/01/2005 

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

FACTS:

Shortly after the CCI was created under the Act, a Writ Petition was filed in the Supreme
Court, contesting the Rules provided by the Central Government under the Act for the
selection of the Chairperson and other Members of the Commission. While the CCI was
essentially a judicial body, Rule 3 was said to be illegal because the Central Government
possessed the power to select and appoint its members. The rule in question, it was
contended, was in breach of the theory of separation of powers and hence should be annulled.

ISSUE:

Whether the Chairman of the Competition Commission of India should be a judge as they
discharge a significant amount of judicial function?

LAWS:

Section 7, 8 and 9 of the Competition Act.

DECISION AND REASONING OF THE COURT:

The Union of India argued before the Supreme Court that: 

 The CCI is more of a regulatory body that requires expertise in the field, and as such
should not be supplied by members of the judiciary who can adjudicate on matters in
dispute 
 The Government's right to appoint the CCI Chairman in terms of the Act could not be
successfully challenged as long as the High Courts and Supreme Court's power of
judicial reviews is not taken away or hampered.
 The CCI is an expert body, and India is not the first country to appoint such a
Commission presided over by persons qualified in the relevant disciplines who are not
judges or judicial officers.
 The expert body's main function was regulatory in nature 
 The Government was proposing to amend the Act and the Rules, 2003 
 An appellate body, which would effectively be a judicial body operating in
accordance with the 2003 Act and Rules.
After hearing all of the arguments, the Supreme Court decided that, in order to establish an
expert body in accordance with what is said to be international practise, the Union of India
should consider establishing two separate expert bodies, one as Advisory and Regulatory and
the other as Adjudicatory, with an Appellate Body (based on the doctrine of separation of
powers).
The Apex Court declined to give any order in light of planned revisions to the Act and Rules,
2003, which have a direct relevance on the problems addressed in the writ case, leaving all
pertinent questions about the Competition Act and Rules, 2003's validity open. The Supreme
Court's message was clear: the Chairman should be a professional expert in his field, not a
High Court or Supreme Court judge. However, because the CCI would be performing
adjudicatory tasks, a separate adjudicatory body led by a judge should be established.

ANALYSIS:

In this matter, the Central Government initially requested that the appellate body be
established as a judicial body that would adhere to the SC's laid out standards. The Central
Government was given the option to change the provisions of the 2002 Act only on the basis
of this argument, without jeopardising the petitioner's ability to appeal the amendments to the
Supreme Court. Regardless of the fact that the Supreme Court refrained to answer any of the
writ petition's questions, it was clear that the Central Government could not deny that the CCI
was conferred with a number of adjudicatory responsibilities under the 2002 Act. 
The Government responded with a counter-affidavit that refuted the Petitioner's claims.
However, it filed two more counter-affidavits after that, indicating that specific adjustments
to the Act and Rules were suggested. The suggested reforms would be adopted so that the
Chairman and Members would be appointed by a committee chaired by the Chief Justice of
India or his nominee. The introduction of an appellate authority, which would be a judicial
body adhering to the notion of separation of powers, would address the claimed intrusion of
judicial power. Because the proposed amendments would have a direct impact on the
outcome of the Writ Petition, the Supreme Court did not rule on the issue at the time. It
resolved to end the discussion by keeping all questions unanswered until the requested
changes were implemented.
The adjustments that the Central Government mentioned were implemented in 2007. The
CCI, which was founded in 2003, received its current structure as a result of this revision.

IMPACT OF THE CASE:

The Competition (Amendment) Bill, 2006 was developed and introduced in Parliament,
considering the Supreme Court's decision in Brahm Dutt v. Union of India and consultations
with several Ministries. Following that, the 2006 Bill was referred to the Parliamentary
Standing Committee for study, and the 2007 Amendment Act was passed based on the
Committee's recommendations. The Competition (Amendment) Bill, 2007, stated explicitly
that the revisions were being presented in view of the observations made by the Supreme
Court in the Brahm Dutt case.
However, the structural alterations to the CCI brought about by the 2007 Amendment Act
reveal that it was completely fictitious and an exercise in utter misapplication of the Brahm
Dutt dictum. Through the addition of Chapter VIIIA in the 2002 Act, the 2007 Amendment
Act permitted for the establishment of an appellate body, the COMPAT, in conformity with
the Central Government's position in Brahm Dutt. The COMPAT had the authority to hear
and decide appeals against any CCI judgement, instruction, or order, as well as rule on any
claim for compensation arising from the CCI's conclusions.