The saga of the Competition Commission is ample proof of the influence India's civil servants wield.
If you need any proof of how slow the government can be in framing and enforcing economic legislation, no example could be better than the Competition Act, 2002.
The National Democratic Alliance (NDA) government had mooted the idea of a statutory body that could prevent practices that had an adverse effect on competition, promote and sustain competition in markets, protect the interests of consumers and ensure freedom of trade carried on by all participants in markets. Such a body was long overdue, particularly after the economy opened up in the 1990s.
Thus, the Competition Act, 2002 received Parliament’s approval and the President’s assent in 2003. The NDA government even named its Commerce Secretary Dipak Chatterjee, as the chairman of the Competition Commission of India, and its Company Affairs Secretary Vinod Dhall as member. Within a few days of the constitution of the Commission, Dhall joined the new regulatory body and began preparatory work. Chatterjee was waiting for his tenure in the Commerce Ministry to get over (the all-important Cancun ministerial summit of the World Trade Organisation was being held at that time).
Indeed, all seemed to be on course till the judiciary questioned certain provisions in the new legislation over the status of its chairman, his selection process and the appellate mechanism. Should the CCI chairman be treated as a person equivalent to a sitting High Court judge? How should he be selected? And what should be the appellate body that should hear petitions against orders issued by the Commission?
Competition Act, 2002 had suggested that the chairman of the Commission should be a person of ability, integrity and standing and who has been or is qualified to be a judge of a High Court. It was also stipulated that the chairperson and other members would be selected in the manner as may be prescribed. And there was no reference to the appellate mechanism.
Clearly, there were many gaps in the legislation. It took four years to resolve this legal tangle. But this also meant that Dipak Chatterjee could not join the Commission as the chairman. Nor could the government appoint a new chairman till the issues raised by the judiciary were resolved. The Commission continued to function as a lame duck body with only one member (Vinod Dhall) in charge.
The Competition Act, 2002 was amended in 2007. That was a long wait. Apart from the many other procedural changes, the amended act provided the following: The chairperson and members shall be persons of ability, integrity and standing, but need not be qualified to be a judge of a High Court; the process of selecting the chairperson and members was clearly outlined with a selection committee headed by the Chief Justice of India or his nominee to recommend their appointment and; there was a provision for creating an appellate tribunal, which would be headed by a person who is or has been a judge of the Supreme Court or the chief justice of a high court.
Now, these issues were resolved in 2007. But there was no action in 2008. The Commission’s only serving member, Vinod Dhall, sought premature retirement in 2008 a few months before his five-year tenure came to an end. Thus, the Commission functioned without a single member for several months since Dhall’s departure.
The irony is that Dhanendra Kumar, who has now been named the chairman of the Commission, is also a retired IAS officer. Dipak Chatterjee, too, was an IAS officer. The judiciary was upset by the manner in which civil servants were being appointed in key regulatory positions that it felt rightfully belonged to its members, namely judges. The Competition Act was also suitably amended to address their grievances and it seemed the judiciary was satisfied by the changes in the statute.
But even after the amendments, the outcome of another long-drawn process to select the chairman of the Commission is not dissimilar to the one initiated before the changes in the legislation were effected. Not just the chairman, one of the four new members shortlisted now for the Commission, is also a former IAS officer. Of the three remaining members, one is a member of the Indian Revenue Service. Do we need any more proof of how influential India’s civil servants are?
