HIMANSHI GAREWAL

5TH YEAR, BA.,LLB(Hons.)

INTERPLAY BETWEEN INDIAN CONSTITUTION AND COMPETITION

LAW

Post independence, India relied on the Nehruvian Socialism Model as an economic structure.
The said Model was a mixed economy model wherein both the private and public sector co-
existed. The pursuit behind the mixed model was to make certain that the Government acted as a
pivotal factor in shaping the capital of the nation and in promoting socio-economic justice.
However, the model seemed to be a distorted one when realised that it was inclined towards a
socialistic pattern of economic growth. It was recorded that the economy was elevating at the
rate less than 3% per annum with income elevated to 1.75%. The elevation in terms of economy
and income was considered not satisfactory. Concerning this, the Government constituted a
Mahalanobis Committee. The Committee scrutinized the factors that led to inequality in
distribution of income and the status of living. It came to light that due to the presence of
planned economic structure practiced by the Government, big businesses had dominated. The
Committee put forth certain recommendations that were aimed to restructure the industrial
spectrum. Afterwards, the Monopolistic Restrictive Trade Practices Act (MRTP) was formulated
that predominantly prevented concentration of economic power in hands of few players,
monopolistic behaviour and unfair trade practices. Simultaneously, the Act also safeguarded the
interests of consumers.

With the evolving dynamic economic situations and advent of economic reforms post 1991, the
MRTP Act was substantiated to be inadequate to meet comprehensive competition concerns in
the nation. As a new predicament surfaced over the landscape of competition law, the appearance
of the Raghavan Committee came to light. It was by the entrance of the Raghavan Committee the
MRTP Act was replaced by Competition Act, 2002. It is pertinent to note that after the
enactment of the Competition Act, in the prime case of Brahm Datt v. Union of India1, the
constitutional validity of the various provisions of the Competition Act was challenged at the
point where it was not completely operational. It was brought before the Apex Court through a

1 AIR 2005 2 SC 431.

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writ petition wherein it was contended that the Composition of Competition Commission of
India performs a judicial function thus a person should be appointed who is or has been, a chief
justice or Judge of the Supreme Court or of High Court as the Chairman of Competition
Commission of India. It was emphasised in the contention that in presence of usurpation of
judicial power and vested power of the same on non-judicial bodies delineated the violation of
separation of power. The Apex Court stated that the Union of India should consider that an
expert body should be constituted in consonance with the principle of separation of power
wherein two separate bodies with requisite expertise should be constituted, that is, first advisory
and regulatory secondly followed by adjudicatory body with an appellate body. Although, the
Apex Court did not render any judgement as proposed amendments in the Competition Act and
Rules, 2003 came to light that addressed all the relevant concerns regarding constitutional
validity of the Act.
Precisely, from the statement of Apex Court it can be inferred that Chairman should have
requisite expertise in the sphere of his field and it was not incumbent to be a Judge of the
Supreme Court or High Court. Although, it was highlighted that the Competition Commission of
India is required to perform adjudicatory functions thus a distinct and separate Adjudicatory
body headed by judicial members should be constituted.

The Constitution of India is a supreme law of the nation and any law that contravenes it is
unconstitutional that is liable to be struck down. It is the Constitution that guarantees and
empowers fundamental rights to every citizen. Precisely, the Constitution aims for securing
economic, social and political justice.
Article 39 of the Constitution directs the State to formulate a policy that secures the operation of
an economic system that does not develop concentration of wealth and means of production to
common detriment. The Competition Act, 2002 is consistent with Article 39 of the Constitution.
The Competition Act does not prohibit development of concentration of dominance of any
enterprise but the abuse of such concentration of dominance is prohibited under the Section 4 of
the Competition Act, 2002. It is through very prime mechanisms an enterprise strives to become
dominant or wealthy in a relevant market. Under Section 19(4) of the Competition Act, 2002
prime factors are analysed in pursuance to determine the dominance of an enterprise. The
Competition Act regulates the conduct of dominant enterprises when found in contravention of

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the Act. Abuse of dominance is not acknowledged as per se illegal thus such alleged abuse of
dominance cases must hold appreciable adverse effect on Competition in a relevant market.
Competition Act primarily regulates every anti competitive agreement and abuse of dominance
cases that aim to stifle competition and economy. It is the core principle of competition
regulators to secure consumer welfare by rendering products at efficient prices. It has been a
decade since Competition Act has become operational and since then CCI has worked
commendably in regulating anti competitive conducts that eradicated concentration of
dominance.