Tag: Executive Authority

Supporting And Growing Our Premise

In our post titled “Executive Actions And Indian Competition Law:A Premise”, we tried to develop a premise on when the executive actions may be considered anti-competitive under the Competition Act. In an attempt to grow on that post, a recent article in Mint titled “Ending India’s Food Cartels“ helps us to further stress on the point in the above post. The article focuses on the monopoly of the Food Corporation of India (FCI) and the Agricultural Produce Marketing Committees (APMC’s).

While I do not entirely agree with the article ( APMC’s cannot be considered for anti-competitive practices, the reasons for which please read the previous posts and “hoarding” by the FCI is forgetting the fact that the FCI is also the organisation to manage the buffer stocks of the country), I do feel there may be a case against the FCI with regards some of its procurement policies. However, only a detailed in-dept investigation can reveal more.

Executive Actions and Indian Competition Law: A Premise

In one of our previous posts, I had tried to highlight that a regulatory authority of the government could not in most cases be challenged as anti-competitive or an abuse of dominant position. Using the facts of that particular case, I had tried to show that in most cases such authority of a ministry or a sub-division of the ministry could not be challenged.

To grow upon that post, I submit the Commissions order in Arshiya Rail Infrastructure Ltd. (ARIL) vs Ministry of Railway (MoR) & Ors.  (Main Order/Per S.N. Dhingra, Member/Per M.L. Tayal, Member/Per R. Prasad, Member (Dissenting)) is one of the few cases where executive actions could be challenged as anti-competitive. While once again the Commission dismissed the case on merits, the Order helps in clarifying the Commissions stand regarding this issue and consequently, also helps us to update our previous premise to as follows:

1.   Exercise of executive authority through regulations or rules issued by an executive authority for the purposes of regulation of the provision of any goods or service cannot by itself be considered a service on the part of the Government.  It is merely the exercise of the legitimate state authority, and thus cannot be challenged as anti-competitive or an abuse of dominant position.

2. Any action of such a government authority when  a subdivision of that ministry or authority ( in this case, the Indian Railways) wherein the ministry or executive authority’s position results in a DIRECT relation as a competitor in the relevant market may be challenged as anti-competitive or an abuse of dominant position as the ministry or its sub-division would end up coming under the ambit of the definition of “enterprise” under Section 2(h) of the Act and thus could also be interpreted under the definition of “group” as given under clause (b) in the Explanation to Section 5.

We welcome your comments, criticism and feedback on the above premise.