The Hindu Business Line : Non-compliance of CCI orders may be treated as civil offence

New Delhi May 24 A reprieve is on the cards for corporates that may fail to comply with the orders of the Competition Commission of India (CCI) once it becomes fully functional.

Against the earlier proposal of treating any non-compliance as a criminal offence, the Government is now veering around to the view that disregard of orders of the CCI or its Appellate Tribunal be considered a civil offence, leading to severe monetary penalty, instead of criminal offence.

A Group of Ministers headed by the Finance Minister, Mr P. Chidambaram, which met recently, is understood to have taken a view to this effect.

As per the Bill to amend the Competition Act, 2002, in case of non-compliance with the orders of the Commission or failure to pay the penalty imposed, the CCI would refer the case to the Chief Metropolitan Magistrate.

The original Act stipulated that CCI could impose penalties or order civil imprisonment.

The Group is said to have felt that any non-compliance with CCI or the Competition Appellate Tribunal (CAT) orders at the first instances could be treated as a civil offence.

However, if the non-compliance persists, it could be treated as a criminal offence.

Speaking to Business Line, official sources said that the Group was asked by the Cabinet to examine whether non-compliance with the orders of CCI or CAT should be treated as a criminal offence or not.

Since the Chief Metropolitan Magistrate essentially deals with criminal cases and cases emanating from non-compliance of CCI orders are civil in nature, the matter was referred to the Group, they added.

Based on the view expressed by the Group, the Ministry of Corporate Affairs in consultation with the Law Ministry is examining suitable changes in the provisions before the Group's next meeting.

Debate on powers

The punitive powers of the Commission, which will replace the Monopolies and Restrictive Trade Practices Commission (MRTPC), had been an issue of debate for some time.

In view of the economic developments that have resulted in opening of the economy, the Competition Act 2002 provided for establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in the markets while protecting consumer interests.

The CCI was established in 2003 but could not be made fully functional due to filing of a writ petition before the Supreme Court.

The apex court, while disposing of the petition in January 2005, had suggested certain amendments to the Act.