Bombay High Court moved by Trustees Association opposing CCI order

Bombay High Court moved by Trustees Association opposing CCI order

The trustee firms included IDBI Bank, Axis Bank and SBI Capital Markets

The Trustees Association of India, an association of Debenture Trustees (DTs) has approached the Bombay High Court challenging the orders passed by the Competition Commission of India (CCI) in February 2022. The latter had directed an investigation into the conduct of the association.

The association contended that such an investigation fell within the domain of the Securities Exchange Board of India (SEBI). It filed an application praying that the matter be referred to the specialized sectoral regulator SEBI. But the CCI rejected it.

The petition prayed for quashing and setting aside the orders of the CCI, as those were without jurisdiction and illegal. It stated that the association would be gravely prejudiced if it was not granted relief.

The case arose on a complaint filed with SEBI by Muthoot Finance Limited alleging cartelization by DT. The grievance pertained to the DTs raising their fees charged to issuers without providing any specific background to substantiate such a raise.

While the complaint was still pending adjudication, Muthoot filed a complaint before the CCI alleging a violation of the Competition Commission Act (CCA).

The association said that it was done with the objective of deliberately circumventing SEBI's jurisdiction.

While the investigation order was passed in December 2021, the CCI directed the office of the Director-General to investigate the conduct of the association on the ground that the DTs and the association contravened the provision of the CCA.

In February this year, the CCI also passed an order rejecting the application filed by the association. It mentioned that a reference be made to SEBI to get its opinion. Thereafter, it issued a notice to the association seeking detailed information about the office bearers without providing it with a copy of the orders.