A commentator on a previous post recently  brought to my attention a recent judgement of the Delhi High Court in which the hon’ble Court chose to deal with the concept of what would constitute “a sovereign function”. (W.P.(C) 993/2012 & C.M. Nos. 2178-79/2012, Union of India  v. Competition Commission of India)

The Court in this case discussed the Supreme Court judgement’s of Common Cause v. Union of India, (1999) 6 SCC 667  and Agricultural Produce Market Committee Vs. Ashok Harikuni & Another, (2000) 8 SCC 61  where the Supreme Court held that sovereign functions in the new sense may have very wide ramifications, but essentially sovereign functions are primarily inalienable functions which only the State could exercise. It was also observed by the Court, quoting from the petitioners brief that:

“….it appears that the courts have taken a very narrow view of the term “sovereign function” by confining the same to strict constitutional functions of the three wings of the State. Welfare activities, commercial activities and economic adventures have been kept outside the purview of the term “sovereign functions”.”

While the judgement’s of the Supreme Court and the Delhi High Court may serve as effective guidelines for the government to help determine what sovereign functions should be exempted under the Act, I strongly  feel that it is in the end the sole prerogative of the Central Government to determine what enterprises and their sovereign functions, if any, should be exempted under the Act.  In fact, even a non – sovereign function of an enterprise may be exempted from the CCI’s jurisdiction by the government under Section 54(a) of the Act.

It should be noted that the Court was in fact in a way, forced to discuss this issue due to the contentions advanced by the Petitioner and that the actual issue was whether the function being performed by the governent could be classified as an “enterprise” under Section 2(h) of the Competition Act.