4/8/24, 1:15 AM Case Analysis Competition Commission of India v.

Bharti Airtel India, (2019) 2 SCC 521

Case Analysis Competition Commission of

India v. Bharti Airtel India, (2019) 2 SCC 521
Kanishka Pandey + Follow
(He/Him)| JSA| Trained Mediator| Commercial Disputes & Competition Law
Published Feb 10, 2024

1. INTRODUCTION:

The Appellants in the present case, namely Bharti Airtel India, Vodafone India, Idea
Cellular & Cellular Operators Association of India are the major Telecom Operators i.e.
Incumbent Dominant Operators (IDO’s) in India. In this case, the respondents,
Competition Commission of India (CCI) & Reliance Jio Infocomm (RJIL) observed that
these players were acting in concert & collusion in an Anti-Competitive manner
indicative of an agreement having an AAEC. CCI may pass an order U/S. 27 of the
Competion Act however the same could not be done until Telecom regulatory
Authority of India (TRAI) returns finding on Jurisdiction issue with respect to IDO’s.
However, the CCI has already formed a Prima Facie opinion to investigate the matter
under S.26(1) for indulging into Anti-Competitive Practice which has led to conflict in
actions of the 2-regulator invoking the Jurisdiction of the Apex Court.

2. FACTS OF THE CASE:

In the present case an order of Investigation to the DG U/S.26(1) of Competition Act,

2002 was passed by CCI for alleged formation of an Anti-Competitive Agreement
leading to acts in concert & collusion i.e. formation of ‘Cartel’, to block or hinder the
entry of RJIL & leading to Appreciable Adverse Effect on Competition (AAEC) in
contravention of S.3(3)(b). An appeal was preferred before the High Court of Bombay,
wherein the court held that the telecom sector is governed & regulated by TRAI, hence

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4/8/24, 1:15 AM Case Analysis Competition Commission of India v. Bharti Airtel India, (2019) 2 SCC 521

the order passed by CCI under S.26(1) was lacking jurisdiction to deal with issues
pertaining to the appellants in the above case. The order of CCI was quashed & set
aside. Considering the same, the CCI & RJIL has preferred 4 SLP’s before the Apex
Court being aggrieved by the order of High Court of Bombay.

3. COMPOSITION OF THE BENCH:

Division Bench: Hon’ble Justice A.K Sikri & Ashok Bhushan, JJ.

4. CONTENTION OF THE APPELLANT

Counsel for CCI: P.S Narasimha, Additional Solicitor General

The 3 principal propositions are as follows:

I) Jurisdiction of the CCI: It was argued that issue before the 2 bodies were different.
CCI is a body operating with a view to sustain & promote competitions in markets &
prevent competition having appreciable adverse effect on competition among all
industries in the Indian Market. TRAI is a statutory regulator with a view to adjudicate
dispute, dispose of appeal & protect the interests of service providers & consumer of
telecom sector. Therefore, issue before TRAI is whether the delay/denial of POIs has
violated terms of the license agreement & QoS regulations while before CCI is whether
there was an anticompetitive agreement between the IDOs, using the platform of COAI.
Hence it was stated that Exercise of jurisdiction by the CCI to investigate an alleged
cartel does not impinge upon TRAI’s jurisdiction to regulate the Telecom industry.
Hence the CCI has jurisdiction in the present case, and it need not wait till the
conclusion of proceedings under the TRAI Act, 1997 to conclude.

(Relied on Deutsche Telekom v. European Commission[1] & Telefonica SA v.

European Commission[2])

II) Scope of Judicial Interference under Article 226: It was contended that the
extraordinary jurisdiction of the High Court under Article 226 would be very narrow &
exercisable in exceptional cases.

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4/8/24, 1:15 AM Case Analysis Competition Commission of India v. Bharti Airtel India, (2019) 2 SCC 521

In the instant case as the Order of CCI U/S.26(1) was only a prima facie view and same
was administrative in nature, no such exceptional occasion had arisen. Considering, the
same it was argued that the High Court of Bombay had erred in holding that the order
passed under section 26(1) was an order resulting in serious adverse consequences
merely because the CCI had granted a hearing.

(Relied on Steel Authority of India v. CCI[3])

III) CCI Order was not Perverse in Nature

It was contended that there was sufficient material before the CCI for formation of a
prima facie opinion that the conduct of the respondents was violative of S. 3(3)(b) of
the Competition Act,2002, It is argued, that such material was taken into consideration
and discussed in the order itself & while referring to certain paragraphs of the Order
dated April 21, 2017 it is imperative to mention that none of the observations made in
the said order are conclusive findings in any way & not binding on the DG.

(Relied on Excel Crop Care v. CCI)[4]

Counsel for RJIL: Harish Salve, Abhishek Manu Singhvi, Ramji Srinivasan & Amit
Sibal, Sr. Adv.

1) COAI was employing measures to prevent Reliance Jio from imposing

restrictions.

(Relied on FTC v. Supreme Court Trial Lawyers Association[5] to state no violation of

the Act can be predicated upon mere attempts to influence the passage or
enforcement of laws.)

2) COAI conduct was independent of the telecom companies.

Unilateral decisions like virtual boycott

(Relied on CCI v. Coordination Committee of Artists & Technicians of West Bengal

Film & Television & Ors.[6])

5. CONTENTION OF THE RESPONDENT:

Counsel for Idea Cellular: Darius J. Khambata, Senior Advocate.

Counsel for Bharti Airtel: Gopal Jain & Navroz Seervai. Senior Advocate.

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4/8/24, 1:15 AM Case Analysis Competition Commission of India v. Bharti Airtel India, (2019) 2 SCC 521

Counsel for Vodafone India: Sidharth Luthra, Senior Advocate.

Counsel for COAI: P. Chidambaram, Senior Advocate.

(CONSOLIDATED SUBMISSION IN JUDGMENT)

I) The TRAI Act, being a special law, ousts the jurisdiction of CCI to examine the
telecom sector. It was argued & submitted that; i) TRAI Act is a complete code; ii)
Exclusive Jurisdiction vests in TRAI to regulate the telecom sector including
competition related issues; iii) TDSAT has exclusive directions to examine the dispute
between licensees, raised by RJIL before CCI; iv) CCI has no jurisdiction to decide
disputes pertaining to the telecom sector. the dispute was being dealt with and was
addressed by the TRAI hence the jurisdiction of the CCI stands ousted.

II) Even if the CCI has the jurisdiction, TRAI’s jurisdiction will prevail.

It was argued that at the time RJIL filed its Information before the CCI on November 08,
2016, as also when the prima facie order was passed on April 21, 2017, TRAI was seized
of the matter pertaining to provisioning of POIs.

(Relied on Ashoka Marketing Ltd. v. Punjab National Bank[7])

III) Jurisdictional facts, in any case, had to be determined by the TRAI in the first
place.

Since there was absence of jurisdictional facts, the CCI could not have proceeded with
the matter and ordered the investigation. The facts pending adjudication before TRAI
are: i) Failure to provide adequate POIs in the test phase; ii) Delay in providing POIs iii)
Providing inadequate POIs. It was contended that when the law prescribes things to be
done in a particular manner, all other modes of action are prohibited. Thus, the CCI’s
order for carry out investigation is premature.

(Relied on Bhavnagar University v. Palitana Sugar Mill[8])

IV) The impugned order passed by the CCI under Section 26(1) of the
Competition was quasi-judicial in nature & subject to judicial review under Article
226 of Constitution of India. Thus, the writ petitions filed by the IDOs challenging
this order were maintainable.

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4/8/24, 1:15 AM Case Analysis Competition Commission of India v. Bharti Airtel India, (2019) 2 SCC 521

V) IDOs had provided sufficient POIs and given ample proof thereof, which was
not taken into consideration by the CCI while passing the impugned order under
Section 26(1) of the Competition Act, 2002 & valid ground of challenge under
Article 226 by filing Writ petition.

6. ISSUES FRAMED:

A) Whether the CCI had no jurisdiction in view of the TRAI Act, 1997 & the
authorities & regulations made thereunder

B) Whether the Writ petitions filed before the HC of Bombay were Maintainable?

C) Whether the High Court could give its findings on merits?

7. OBSERVATION OF THE SUPREME COURT:

1) Jurisdiction of the CCI: It was observed by the Apex court that, CCI is delegated
with an important role which is to curb anti-competitive practices in the relevant
markets of India and this responsibility
Articles carried
People outLearning
by CCI should
Jobs not beGet
washed
the app away
completely and “‘comity’ between the sectoral regulator (i.e. TRAI) and the market
regulator (i.e. the CCI) is to be maintained”. Therefore, the jurisdiction of the CCI is not
outset completely with regard to telecom sector but the CCIs jurisdiction is pushed out
to the later phase, once the issue is decided by the TRAI. TRAI has expertise to deal
with the issues in the telecom sector, which arise from the TRAI Act, 1997. Hence it is
empowered to look into the jurisdictional issue first & if there are evidences to prove
that the Anti-competitive practice exists the jurisdiction of the CCI can be enforced
according to the relevant provisions of the Competition Act.

2) Maintainability of Writ petitions: It was observed by the Apex Court that in the
case of Steel Authority of India Limited[9] nature of the order passed by the CCI
under S. 26(1) of the Competition Act, 2002 was gone into. The Apex court held that
such an order would be an administrative order and not a quasi-judicial order.
However, it was noted that the issue before HC of Bombay was in terms of the fact that
CCI did not have the jurisdiction to entertain any such request or Information which
was furnished by RJIL & 2 Others. Therefore, the HC was dealing with as to whether the
jurisdiction of the CCI is entirely excluded or to what extent the CCI can exercise its
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4/8/24, 1:15 AM Case Analysis Competition Commission of India v. Bharti Airtel India, (2019) 2 SCC 521

jurisdiction in these cases when the matter could be dealt with by another regulator,
namely, the TRAI. Apex Court has answered the same while observing that the
jurisdictional issue is to be decided by TRAI & then the matter be remanded to CCI for
dealing with the Anti-Competitive effects of the agreement, if any.

3) Findings on Merits: It was observed by the Apex Court that under the scheme of
the Competion Act, 2002 the order of Investigation of DG was in nature of an
administrative Order. It was also laid down that merely the fact that the present case
deals with the Telecom sector does not change the nature of the order that is passed
by the CCI under S. 26(1) of the Competition Act, 2002. Hence, findings on merit in
relation to alleged offences of Cartelization under S. 3(3)(b) of the Competition Act,
2002 will not be taken into consideration since the same will not survive in the context
of the S.26(1) Order of CCI.

8. FINDINGS & RATIO DECIDENDI:

1) Hence Apex Court ruled that TRAI would have first instance jurisdiction in the matter
the same in consideration of the aspect that the CCI could exercise jurisdiction only
Like Comment Share 30
after proceedings under the TRAI Act had concluded/attained finality, i.e. only after the
TRAI returns its findings on the jurisdictional aspects which are mentioned above by us,
the ultimate direction given by the High Court quashing the order passed by the CCI is
not liable to be interfered with as such an exercise carried out by the CCI was
premature.

2) The High Court was competent to deal with and decide the issues raised in exercise
of its power under Article 226 of the Constitution. However, the Apex court held that
the order U/S. 26(1) of the Competition Act is administrative in nature and further that
it was merely a prima facie opinion directing the DG to carry the investigation. Thus,
the High Court will not be competent to adjudge the validity of such an order on
merits. Thus, observations & findings of the High Court on merits are not possible in
this regard.

9. CONCLUSION

The Apex Court settled the issues of jurisdiction with respect to TRAI & CCI setting the
dilemma to rest. Apex Court while trying to strike balance between the conflicting
jurisdiction of the two regulatory bodies attempts to harmoniously construct & balance
the powers of two regulators. Thus, the decision of the Court in this regards was to

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4/8/24, 1:15 AM Case Analysis Competition Commission of India v. Bharti Airtel India, (2019) 2 SCC 521

give primacy to the respective jurisdictions of the two regulators under their respective
enactments. Since the matter pertains to the telecom sector which is statutorily
regulated by the TRAI Act, balance is maintained by permitting TRAI in the first
instance to decide the jurisdictional aspects which can be more competently handled
by it. Once that exercise is done and there are findings returned by the TRAI which lead
to the prima facie conclusion that the service providers have indulged in anti-
competitive practices, the CCI can be referred to investigate the matter going by the
criteria laid down in the relevant provisions of the Competition Act. This balanced
approach in construing the two Acts will serve as an excellent example to the courts in
future. It is also imperative to highlight the scope of judicial review under Article 226
which can be solely exercise on matter of answering the question of jurisdiction of the
2 regulators but cannot be exercised to extend & give opinion on merits/findings of
the case since the same is not possible especially when the order under consideration
is an administrative order. Hence this case would serve as a precedent akin/similar to
the case of Carona Limited v. Parthaswamy Srinivasan.[10]

[1] Case C-280/08 P, Judgment dated 14.10.2010.

[2] Case T-336/07, Appeal dated 10 July, 2014.

[3] (2010) 10 SCC 744.

[4] (2017) 8 SCC 47.

[5] 493 US 411 (1990).

[6] (2017) 5 SCC 17.

[7] (1990) 4 SCC 406.

[8] (2003) 2 SCC 111.

[9] Supra 3.

[10](2007) 8 SCC 559.

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4/8/24, 1:15 AM Case Analysis Competition Commission of India v. Bharti Airtel India, (2019) 2 SCC 521

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