The process for appointment of the new Competition Commission of India (CCI) Chief is likely to be delayed further as a central government appointed selection committee has called for a second round of interactions with candidates on November 27, sources closed to the development said.
It maybe recalled that erstwhile full-time CCI Chairman Ashok Kumar Gupta had superannuated on October 25, post which the Corporate Affairs Ministry (MCA) had appointed Sangeeta Verma, Member CCI, as Acting Chairperson for three months or till further orders, whichever is earlier.
Selection process
In October, over 50 short listed candidates were called for interviews for the post of CCI Chairperson. Pursuant to the advertisement, over 100 candidates, which included senior bureaucrats, judges from higher judiciary and economists, applied for the top job.
The selection panel that interviewed the candidates forwarded its recommendations to the Government. However, official sources said that the Government had a re-think on the matter and wanted the selection panel to have a second round of interactions with those shortlisted. Crucially, in the recent past, CCI headed by then Chairperson Ashok Kumar Gupta levied heavy penalties upon big-tech companies, including Google and MakeMyTrip. The order against Google was passed by CCI on the last day of Gupta’s tenure.
The process for appointment of CCI chief is likely to be further prolonged as after the interactions, the selection panel will forward its recommendations to Government (MCA), that will then send the file to PMO.
After PMO’s approval, the file will be formally processed by Appointments Committee of the Cabinet (ACC) and a formal gazette notification will follow through the Line Ministry i.e. MCA.
Without quorum
Presently, CCI is composed of only two Members. As per provisions of Section 22 of the Competition Act, 2002, the quorum for CCI meetings has been prescribed as three, thus, CCI does not as yet meet the quorum criterion.
All questions that come up before any CCI meeting are decided by a majority of the Members present and voting. And in the event of an equality of votes, the Chairperson, or in his absence, the Member presiding shall have a second or/casting vote. The Delhi High Court has already struck down the casting vote of Chairperson as unconstitutional. In the absence of the quorum, CCI cannot fulfill any adjudicatory and regulatory work.
Delays in M&As
This is likely to create impediments in the discharge of CCI’s role as market regulator, particularly in granting approvals for mergers and acquisitions. Presently, CCI has 210 days to process any M&A filing, and as such a delay of few weeks may not hamper the merger control regime. However, competition law practitioners pointed out that as against the statutory limit of 210 days, CCI was processing merger filings by an average of about 17-18 days, and as such any delay in appointment of Chairperson will significantly delay the deals.
NAA merger
CCI is beset with another issue of the impending merger of National Anti-Profiteering Authority (NAA) with itself. As per GST Council recommendations, the work of NAA will transfer to CCI. The current mandate of NAA is expiring on November 30, and CCI will take over the role of NAA from December 1.
A notification under Section 171 of CGST Act, 2017, empowering CCI is likely to be issued in the next few days by the Revenue Department, top officials in Ministry of Finance told businessline on condition of anonymity.
This provision provides that the Central Government may, on Council recommendation, by notification, constitute an authority, or empower an existing authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of goods or services or both, supplied by him.