In a setback to Competition Commission of India’s (CCI) jurisdiction, the Delhi High Court on Friday ruled that regulatory powers exercised by statutory bodies are not subject to competition watchdog’s oversight.

Accordingly, the Delhi High Court quashed the investigation ordered by CCI against the Institute of Chartered Accountants of India (ICAI).

ICAI had filed petition in Delhi High Court challenging the CCI direction under Section 26(1) in 2014. 

CPE programme

CCI had then directed the Director General (DG) to conduct an investigation into the matter relating to the Continuing Professional Education (CPE) programme being conducted by ICAI. 

ICAI, as a part of its functions, had framed the CPE programme, which requires its members to continue to keep themselves abreast of professional developments and skills by participating in educational activities related to the profession on a continuous basis. 

However, a chartered accountant had approached CCI and filed an information case with the competition watchdog. 

It was contended that only ICAI and its organs are conducting the structured learning activities and that CA Institute has not affiliated or recognised any other body to conduct such learning activities. This falls foul of Section 4 of Competition Act and was alleged to be an anti-competitive conduct, it was submitted.

CCI had in 2014 prima facie agreed with the view of the informant and had directed its DG to initiate investigation against ICAI.

The Delhi High Court Single Judge Vibhu Bakhru on Friday in the order highlighted that it is important to note that the CCI’s power is for regulating of markets; it does not extend to addressing any grievance regarding arbitrary action by any statutory authority. 

In the present case, the CCI has proceeded on the basis that there is a relevant market “for organising recognised CP Seminars/Workshops/ Conferences”. Clearly, the said view is erroneous, Delhi High Court has said. 

There is no market for organising CPE seminars, workshop or conferences, according to the Delhi High Court order.

ICAI is charged with the function of maintaining professional standards and it conducts the educational programme for structured CPE Credits, in-house or through its organs. Thus, in essence, the Informant seeks that the said function be outsourced. Such outsourcing would create a market as the other entities would be entitled to participate as market players in that market. 

“This Court is unable to accept that the jurisdiction of the CCI extends to compelling a statutory body to outsource functions that it performs in discharge of its statutory duties notwithstanding that the same may fall within the sphere of economic activity. 

It would be erroneous to assume that if any activity falls within the broad definition of economic activity, it would be necessary to create an open market for the same. This Court is unable to accept that the CCI can compel an organisation or an enterprise to outsource its activities”, said the Delhi High Court order, setting aside the CCI order directing investigation against ICAI.

It maybe recalled that ICAI had, with a view to maintaining the standards of the professional services rendered by its members, identified CPE as an area of focus. 

In 2003, ICAI issued a Statement on Continuing Professional Education, which prescribes the norms for undergoing CPE activities. 

The CPE programme of ICAI requires its members to devote specified hours for CPE learning activities. The learning activities are classified into structured and unstructured activities. 

ICAI has also prescribed the minimum number of CPE credit hours including structured CPE credit hours that are required to be earned by its members, classified on the basis of their age (whether below or above 60 years) and on the basis of whether they hold a Certificate of Practice (CoP). 

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