Proceedings Before Competition Commission Of India Won’t Be Invalidated Due To Vacancy Or Defect In Its Constitution: Delhi High Court

The Delhi High Court has observed that the proceedings before the Competition Commission of India would not be vitiated due to vacancy or any defect in its constitution.

“Merely because of a defect or a vacancy in the constitution of the CCI, the CCI cannot be considered as a statutory authority not having jurisdiction to adjudicate the complaints or other proceedings pending before it. Any interpretation, other than the aforesaid, would render the provisions of Section 15 otiose and which could not possibly be the intention of the Legislature either,” Justice Tushar Rao Gedela said.

The observations were made while directing CCI to take up the applications moved by an alliance of start-ups against Google’s new in-app user choice billing policy, and decide the same on or before April 26. 

The court disposed of a plea moved by Alliance of Digital India Foundation, against the new policy which also sought direction on the tech giant to keep the new policy in abeyance till the issue is adjudicated by CCI.

Perusing section 8 of the Competition Act which provides about the composition of CCI, the court said that there is no prescription as to what would be the minimum number of members who would constitute a valid quorum.

“As such, the argument that the Act prescribes a minimum number of members who would validly constitute the quorum, so far as the adjudicatory role of the CCI is concerned, is without any legs to stand,” the court said.

Furthermore, Justice Gedela said that the the composition of the Commission itself has no nexus with the word “quorum” as employed in the proviso of section 22(3) of the Act.

The court also rejected the submission that the constitution of CCI less than three members would create lack of jurisdiction as an adjudicatory authority.

“In view of the aforesaid analysis, this Court is of the considered opinion that the provisions of Section 15 act as a saving clause in regard to a situation where a vacancy or a defect in constitution of the CCI would arise and any such vacancy or defect in the constitution would not invalidate any proceedings so far as the adjudicatory powers of the CCI is concerned,” the court said.

The petitioner alliance was aggrieved by the alleged inaction of the CCI to decide its application seeking interim relief against the policy, which is set to come into force from April 26, for lack of quorum at since October last year.

It was contended that Google’s new billing policy is “cloaked as another version of Google Play Billing System” which projects the “hoax of giving liberty to app developers to opt for third party payment processors.”

It was submitted that despite the user using third-party payment processors, Google will be charging “service fee” at a 4% reduced rate from the developer for transaction which happen via non GPBS under the garb of new pricing policy.

The plea placed reliance on the order passed by CCI on October 25, 2022, directing Google to not impose any condition on app developers which is unfair, unreasonable or discriminatory to the services provided to them. The tech giant was also directed to ensure complete transparency in communicating to app developers the services provided and corresponding fee charged.

The plea thus sought a direction that the CCI can validly invoke “doctrine of necessity” in the matter for initiating non-compliance proceedings against Google.

The court noted the submission of ASG N. Venkataraman that the CCI is constituted in accordance with the provisions of the Competition Act, is functional and carrying out adjudicatory functions simultaneously.

“In view of the above, there is no impediment, legal or otherwise, in directing the CCI to take up the applications under Section 42 of the Act, as filed by the petitioner, for hearing and considering the same in accordance with law on or before 26.04.2023. Accordingly, the petition stands disposed of in above terms,” the court said.

It clarified that the observations made were only to the extent of deciding the matter before the court and shall not tantamount to any expression on the merits of the case.

Title: Alliance of Digital India Foundation v. Competition Commission of India and Ors.

Citation: 2023 LiveLaw (Del) 339

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