Bombay High Court: CCI to Decide Whether it has Jurisdiction to Investigate Alleged Cartelization by Debt Trustee Units of IDBI, Axis & SBICap

Bombay High Court: CCI to Decide Whether it has Jurisdiction to Investigate Alleged Cartelization by Debt Trustee Units of IDBI, Axis & SBICap

The Bombay High Court held that the Competition Commission of India (CCI) shall decide whether it has jurisdiction to investigate alleged cartelization and price fixing by debenture trustee units of Axis, SBICap and IDBI.

The division bench comprising of Justices G.S. Patel and Neela Gokhale clarified that if the CCI decides it has jurisdiction, it doesn't have to defer consideration on merits at a later date.

"It is self-evident that the jurisdictional issue will have to be decided first, one way or the other. We clarify that this does not mean that, should the CCI find that it indeed has jurisdiction, it should defer a consideration on the other aspects to a later date. The CCI will decide the issue of jurisdiction and will pass an order on that issue," the bench observed.

Last year in 2022, the Trustees Association of India along with Axis, SBICap and IDBI had approached the High Court in separate writ petitions contending that the CCI's investigation should be kept in abeyance as the Securities and Exchange Board of India was also investigating the issue.

The parties made contentions with respect to the interpretation of Competition Act, 2002 and the SEBI Act, 1992. Further, the parties also made submissions regarding the proper interpretation of Supreme Court judgement in Competition Commission of India vs. Bharti Airtel Limited.

The Counsel appearing for Trustees Association of India- Senior Advocate Navroz Seervai submitted before the Court that the petitioners will proceed to a hearing before the CCI on all aspects including jurisdiction.

CCI had established a prima facie view that there is a form of cartelization between debenture trustees to fix prices or rates of fees to the detriment of the debenture/security issuers.

The Securities Exchange Board of India (SEBI) and CCI both were investigating complaints filed by Muthoot Finance Group. In view of the possibility of conflicting orders due to parallel investigations, the High Court in 2022 stayed CCI's investigation till completion of SEBI's investigation.

The SEBI had previously submitted that its investigation is complete and report has been filed. The petitions along with CCI's applications for vacation of stay on investigation were posted for final disposal.

Preciously, the Court had ordered SEBI to forward a formal opinion on the complaint to the CCI in order to save time in the investigation.

The Court kept all the contentions open for the CCI to decide if it concludes that it has jurisdiction.