Supreme Court: CCI valid from Investigating Anti-Competition Element
The Supreme Court has decided that the Competition Commission of India may not be prevented from investigating whether
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Supreme Court: CCI valid from Investigating Anti-Competition Element The Supreme Court has decided that the Competition Commission of India may not be prevented from investigating whether the tender process for lotteries contains anti-competitive elements or not due to the lottery business falling outside the purview of commercial activity. It all began when the Competition Commission...
Supreme Court: CCI valid from Investigating Anti-Competition Element
The Supreme Court has decided that the Competition Commission of India may not be prevented from investigating whether the tender process for lotteries contains anti-competitive elements or not due to the lottery business falling outside the purview of commercial activity.
It all began when the Competition Commission of India received a complaint that respondent wanted to have State Lottery conducted by the State of Mizoram investigated under the Competition Act, 2002. As part of the present proceedings, the successful bidders, and to a much lesser extent, the State of Mizoram, have challenged the jurisdiction of CCI to investigate allegations of bid-rigging, collusive bidding, and cartelization in the appointments of selling agents and distributors for lotteries organized in the State of Mizoram.
There was a conclusion that the Competition Act applied to legal trade and goods, and that it was enacted to benefit competition in markets that are res commercium. Since lottery activities are in nature res extra commercium, they cannot be governed by the Competition Act and so the Commission of Competition had no jurisdiction to address the complaint made by the respondent.
Additionally, the High Court noted that the CCI had ruled that Mizoram had not violated Section 4 of the Competition Act, thereby no question of the CCI pursuing further proceedings against the State of Mizoram.
As Justice Sanjay Kishan Kaul and Justice M.M. Sundresh noted in their division bench decision, even if there is an element of anti-competition which requires investigation by the CCI, its transgression cannot be prevented by the argument that the lottery business is extra commercial, especially when the State Government decides to deal in lotteries.
"It must have waited for the CCI's decision but the CCI proceedings have been brought to a halt while the High Court had decided based on some aspects which may or may not arise," the court said.