Competition panel hiring on hold over litigation

The impasse over the appointment of a chairman to the Competition Commission of India (CCI) has taken its toll on the commission's functioning, so much so that there is a recruitment freeze.

"The commission cannot keep on hiring when its future is uncertain due to the litigation in the Supreme Court. If things go against the commission, then the government would be saddled with the problem of re-deploying the people already hired," an official said.

Moreover, if an appellate body was indeed put in place, its structure would need to be worked out. That will, however, depend on the Supreme Court decision.

He said the question mark over CCI's future and shortage of manpower meant that recruitment rules cannot be firmed up. Hence, most of the employees have been hired on a temporary basis.

The issue of retrenchment of the employees of the Monopolies and Restrictive Trade Practices Commission, also hinges on the Supreme Court decision.

The Competition Act, 2002, provides that workers displaced due to CCI taking over the functions of MRTPC, would be absorbed by the Centre.

However, the commission is following a wait-and-watch policy as it is neither aware of its capacity nor has been able to draft the necessary rules, according to the official.

The court case pending against the CCI pertains to the appointment of a bureaucrat as its chief, which the Supreme Court has viewed as an attempt to bypass the judiciary.

Attorney General Soli Sorabjee has assured the court that necessary amendments in the Competition Act would be made to ensure that it was possible to set up a separate appellate body, headed by a judge.

CCI's case is not a lone instance of the government's corporate reform initiatives starting off well but eventually hitting a wall.

Though the Companies (Amendment) Bill, 2003, was passed by the Rajya Sabha, it was stuck at the Cabinet with industry chambers reacting strongly to the new provisions.

The government was asked to redraft the Bill as it was felt that it was too confusing in its present form. The Bill had been strongly opposed by the corporates and industry chambers. Now, the government is busy drafting a concept paper, to make the Companies Act, 1956, much shorter.

The amended Clause 49 of the listing agreement of the Securities and Exchange Board of India, which dealt with corporate governance issues like constitution of the board, too met with the same fate.

The strong pressure from India Inc forced the NR Narayanamurthy panel to modify various provisions. The modified Clause 49 is now expected to be placed before the Sebi board after which regulations would be issued.