The Telegraph
Since 1st March, 1999
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Centre tastes legal lash on competition panel

New Delhi, Oct. 31: An adverse observation by the Supreme Court has forced the Centre to freeze the judicial function of the Competition Commission of India, the successor to the monopolies watchdog.

The brake on a key responsibility of the competition commission, which is meant to deal with mergers and demergers of companies, has also thrown a bureaucratic shuffle into uncertainty.

Commerce secretary Deepak Chatterjee, scheduled to go into premature retirement this morning to head the commission, is now expected to stay on at his current post. Chatterjee can carry out administrative functions if he takes over the commission now but the government is likely to wait till a clearer legal picture emerges.

The setback to the government came when the court frowned on the choice of a retired bureaucrat to head the commission, whose previous avatar — the Monopolies and Restrictive Trade Practices Commission (MRTPC) — used to be headed by a retired high court chief justice.

The court felt that the Centre’s decision to appoint a retired bureaucrat as chairman of the commission was a “direct attempt” to encroach upon the jurisdiction of the judiciary.

The Union government then gave an oral undertaking that it would not assign any judicial function to the commission “until further orders” of the court. The commitment was conveyed by attorney-general Soli J. Sorabjee to a division bench of Chief Justice V.. Khare and Justice S.B. Sinha.

This is the second time in recent months that the court’s intervention has forced the government to shelve a policy decision. The Centre had put on hold the divestment in the oil giants BPCL and HPCL when the court ruled that such a step needed Parliament’s approval.

Though the impact of the latest blow is far less severe than the halt to the divestment, it does raise fresh questions about the efficacy of the government’s legal advisers. The apex court had earlier ruled that the judicial function of the competition commission “shall” be performed only by people from the judiciary.

The judges observed today that the nature of the work of the panel warranted at least a person of the rank of high court judge. As such, a retired bureaucrat heading the commission could not discharge the judicial function of the panel, said the apex court.

The observations came on resumed hearings of a public interest litigation filed by one Brahm Dutt who contended that the panel would replace the MRTPC, which was always headed by a retired chief justice of a high court.

The petitioner contended that a 1987 Supreme Court judgment had held that tribunals discharging judicial functions “shall ordinarily be headed by a retired chief justice of a high court or a senior judge of the high court”.

The competition commission would have to decide on matters involving crores of rupees, the petition pointed out. It said the commission would be vested with powers to impose penalty up to Rs 1 crore and deal with sensitive judicial matters pertaining to competition, ensuring freedom of trade, protection of interest of consumers.

The judges said the matter was “very serious” as the high courts were the executing courts for the orders passed by the commission and that a bureaucrat could not head the commission.

The apex court’s observations saw red faces in the government. The Centre had announced this morning that textiles secretary S.B. Mahapatra would replace Chatterjee, a Bengal cadre officer, as commerce secretary.

However, following the court’s comments later in the day, Chatterjee’s farewell was cancelled and his premature retirement application will now be rejected, sources said.

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