CCI Will Soon Be Down To One Member-Chair. Here's What That Means

The Competition Commission of India is again staring at a lack of quorum with more retirements, putting it in a situation like last year when it delayed several mergers for nearly six months. Legal experts, however, say the shortage of members won't delay approvals this time.

Ravneet Kaur, who became the chairperson on May 23, initially restored the quorum at the CCI. But the retirement of Bhagwant Singh Bishnoi on Aug. 24 and the impending superannuation of Sangeeta Verma on Sept. 17 are expected to leave the CCI without the necessary quorum again. Until new members are appointed, that may persist in the foreseeable future.

The commission comprises a chairperson and a minimum of two but no more than six other members chosen by the central government. That means only Kaur remains after Sept. 17.

However, approvals for mergers and acquisitions are unlikely to be delayed for two reasons. The Doctrine of Necessity and the ruling of the Delhi High Court in Alliance of Digital India Foundation versus CCI and Others (ADIF Case). 

The doctrine of necessity allows an entity to go ahead with something that is otherwise illegal to avoid greater harm. Since the lack of quorum at the CCI previously halted major merger deals, in February 2023, the government invoked the doctrine to issue a notification allowing the CCI to review transactions that had already been notified. The commission then approved several pending transactions.

While this allowed the CCI to address merger cases, many of which were pending for months, the regulator's enforcement activity remained stalled, according to Rohan Arora, partner at Shardul Amarchnd Mangaldas & Co.

Then, in the ADIF case, the Delhi High Court ruled that the CCI's decision-making doesn't need a full team and that the absence of some members doesn't invalidate its proceedings.

This paved the way for the CCI to look at enforcement cases, and the government in May appointed the current chairperson, allowing the commission to operate with a full quorum, said Arora.

According to Ravisekhar Nair, partner at ELP, together with the ‘doctrine of necessity’, the high court's observations can be viewed as enabling the CCI to continue to at least approve combinations transactions that are currently under review.

The legal experts still said the commission would be overburdened without the prescribed strength, as it has to continue with enforcement functions. While the CCI is expected to continue clearing merger cases, Arora said it is not clear whether they will continue to take up enforcement activity.