Also, in cases where the DG has submitted investigation reports to the commission, it is yet to take cognizance of the reports due to lack of quorum, people cited above added.
On October 25, CCI’s previous chairperson Ashok Kumar Gupta retired from service and this vacancy led to the quorum falling below the mandate. As per current rules, the commission needs to have at least three members to approve mergers or pass orders.
“The DG office doesn’t have suo moto powers to initiate investigations; so any probe must be referred to it by the commission,” said a person cited above. “Due to lack of quorum, the commission is unable to pass the preliminary orders and hence no new cases have come to the investigations arm.”
Even mergers and acquisitions needing CCI approval were stuck in limbo for months due to the lack of quorum. The commission wrote to the Law Ministry and sought its opinion on how to navigate the situation. In response, the law ministry is learnt to have advised CCI that it had powers under the Competition Act to undertake such time sensitive matters even in absence of a quorum.
Based on this interpretation, CCI started clearing combination applications last week. However, the interpretation has been adopted only for combination approval and not for investigations, people cited above added.
“There has been no change in the status of investigations even after the Law Ministry’s interpretation,” the person added. “Unlike combinations where there is little scope for litigation, the regulatory orders passed by CCI are often challenged in courts; hence one must adopt a cautious approach,”The DG’s office is currently probing several high-profile cases including those into Google, Apple and leading cement companies. The investigations arm of CCI can continue to work on the cases that have already been referred to it. However, once they submit a report to the commission, a quorum is required for taking further steps.
Market participants say the issue of quorum is expected to continue until the government appoints a new full-time chairperson for CCI.