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Source– The post is based on the article “A question of quorum” published in the Business Standard on 13th February 2023.
Syllabus: GS3- Indian economy
Relevance– Regulation of economic activities
News– Competition Commission of India has invoked the “doctrine of necessity” to clear six deals involving mergers & acquisitions and investment proposals.
What are the issues raised by this event?
It lacked the requisite three-member quorum after the Chairperson retired. The Competition Act provides that there should be at least three members to approve deals.
But, the CCI obtained a green signal for a two-member quorum from the law ministry to the corporate affairs ministry.
What is the legality of action by CCI?
CCI’s actions were not a violation of the law.
Section 15 of the Competition Act provides that no proceeding of the commission shall be invalid due to any vacancy in, or any defect in the constitution of the Commission.
As per section 15, any irregularity in the procedure of the Commission not affecting the merits of the case shall not make the proceeding invalid.
What are the important questions raised by CCI action?
The first is the delay in the appointment of a new chairperson.
The second is that the government was unable to find a suitable successor by the time of Chairman retirement. In this scenario, a reference to the law ministry on the issue of a quorum ahead of the event would have also reduced the anxiety for companies and investors waiting for their deals to be cleared.
The third is whether a two-member commission has the ability to scrutinise the merits of so many deals.
