In a noteworthy judgment pronounced by the Supreme Court, the locus standi (right or capacity to bring an action or to appear in a court) of a person as an informant in matters pertaining to competition law was examined. In the case of Samir Agrawal v Union of India (the Ola-Uber case), the Supreme Court discussed two pertinent aspects of the case and interpreted the law in a pragmatic manner.
The appellant, a practising advocate, had approached the Competition Commission of India (CCI) alleging that Ola and Uber were engaging in anti-competitive practices by indulging in acts that would constitute cartelisation. He sought an inquiry under section 26(2) of the Competition Act, 2002 against the two companies.
It was alleged that the companies had adopted a technique of algorithmic pricing, due to which neither the riders nor the drivers were able to negotiate fares, leaving both the parties at the whims of these companies. Furthermore, it was alleged that despite the fact that the drivers were independent entities, the fact that they were bound to accept the trip fare in the app, without having any discretion, curtailed the bargaining power of both the parties. This hampered the spirit and applicability of competition in the concerned market.
However, aggrieved by the CCI order, where it was held that there was no contravention of the act by Ola and Uber, the appellant approached the National Company Law Appellate Tribunal (NCLAT). Upholding the CCI ruling, the tribunal further delved into the locus standi of the appellant to approach the CCI.
It held that, “any person in section 19(1)(a) of the act has necessarily to be construed as a reference to a person who has suffered invasion of his legal rights as a consumer or beneficiary of healthy competitive practices. Any other interpretation would make room for unscrupulous people to rake issues of anti-competitive agreements, or abuse of dominant position, targeting some enterprises with oblique motives.” Accordingly, the NCLAT held that the informant (appellant) had no locus standi, as he had not suffered any legal injury from Ola or Uber in any manner.
The appellant then approached the Supreme Court. Upholding the decision of the NCLAT and CCI in one part, the Supreme Court held that Ola and Uber did not facilitate cartelization or anti-competitive practices between drivers, so as to attract the application of section 3 of the act.
However, the court turned the decision of the NCLAT on the point of locus standi, and stated that, “when the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI and the appellate authority, i.e., the NCLAT, must be kept wide open in the public interest, so as to subserve the high public purpose of the act”.
It deemed the approach of the NCLAT as narrow, and further held that, “the expressions used in sections 53B and 53T of the act are ‘any person’, thereby signifying that all persons who bring to the CCI information of practices that are contrary to the provisions of the act could be said to be aggrieved by an adverse order of the CCI, in case it refuses to act upon the information supplied”.
This ruling of the Supreme Court has opened the doors for individuals to take up information with the CCI, regardless of whether they have directly suffered legal injury or not. By expanding the scope of locus, the court effectively exercised its role as the custodian of the judicial system.
The dispute digest is compiled by Numen Law Offices, a multi-disciplinary law firm based in New Delhi & Mumbai. The authors can be contacted at firstname.lastname@example.org. Readers should not act on the basis of this information without seeking professional legal advice.