Summary
The CCI investigated alleged cartelisation and bid rigging in selection of Mizoram lottery distributors. The Court held that lottery regulation and its possible character as res extra commercium did not exclude competition scrutiny of that tender process. Selling agents provided services within the Act’s expansive definition. The High Court’s intervention before a final CCI decision was premature. Proceedings against private parties were allowed to continue, while the State’s petition was closed on the CCI’s assurance that it would not proceed against the State.
Issues
- Whether the Competition Act applied to alleged bid rigging in a state-lottery distributor tender.
- Whether the High Court should have stopped proceedings before the CCI reached a final decision.
Provisions considered
- Section 2(u), Competition Act, 2002Lottery selling agents provided services to potential users within the expansive definition; its illustrative inclusions did not restrict the opening words. (¶¶ 24, 34, 39)
- Section 3(1) and (3), including clause (d), Competition Act, 2002The CCI could examine alleged cartelisation and bid rigging in selection of lottery agents notwithstanding separate regulation of lotteries. (¶¶ 6, 38-39)
- Section 26(1), Competition Act, 2002Investigation and the subsequent opportunity to respond should have been permitted to reach a conclusion; no final infringement decision had yet been made. (¶¶ 8-13, 40-42)
Held
- The inquiry concerned possible collusion in the tender for appointment of distributors and selling agents, rather than authority to conduct or regulate lotteries. There was no conflict requiring exclusion of the Competition Act in that limited field. (¶ 36-39)
- The purchaser of a lottery ticket was a potential user receiving a service from the selling agent. The broad service definition covered that activity. Separate regulation and the res extra commercium argument did not immunise anti-competitive tender conduct. (¶¶ 34, 38-39)
- The DG’s adverse investigation report was followed by a notice giving affected parties an opportunity to respond. The High Court prematurely stopped the CCI from deciding; the parties could invoke the statutory appellate remedy if aggrieved by the ultimate decision. The Court did not finally determine cartel liability. (¶ 40-43)
- The State’s Section 4 matter had already been closed and the CCI disclaimed any intention to proceed against it. Its writ petition was closed on that assurance; the private parties’ petitions were dismissed and the CCI proceedings against them were to continue according to law. (¶¶ 37, 41-44)
Result
Appeals allowed; High Court judgment set aside, State’s writ closed and private parties’ writ petitions dismissed; CCI proceedings to continue; parties to bear their own costs.