Home >Politics >Policy >CCI’s recovery of penalties may be higher with a newer definition of dues

New Delhi: Is it justified to criticize the Competition Commission of India (CCI) for low recovery of penalties?

The CCI has sought to redefine the dues it has recovered by way of penalties.

“There is a need to define what the dues to the CCI are," said Augustine Peter, member, CCI. “Not all the money that the CCI levies as penalty becomes due since parties have the legitimate right to exhaust all legal remedies beyond which the penalties become payable," he added.

In its annual report 2015-2016, the CCI acknowledged the small amount of penalty realised by it. Of the Rs13,981 crore imposed by it between 2011-12 and 2015-16, it only realized Rs95 crore till 31 March, 2016.

This is a result of appeals and stays on the CCI orders that firms obtain from its appellate tribunal and other courts.

However, the CCI is looking to ascertain the amount it can legally recover from firms. This will effectively improve the on-paper performance of the Commission, since this will exclude penalties with a legal stay.

According to a note in the CCI accessed by Mint, the legally recoverable amount for the Commission since inception (till 21 November 2016) was Rs50.1 crore. The Commission recovered 72%, or Rs36.1 crore of the same. Since inception, the CCI has levied a total of Rs14,060.3 crore penalties up to 21 November 2016.

The note, a copy of which Mint has, reflects that Rs11,172.2 crore in penalties have been stayed by a legal order and another Rs2,837.5 crore dismissed as of November 2016.

Experts see these stays as a sign of a larger issue of credibility of the CCI as an expert body.

“All the problems emanating from appellate tribunal are essentially a reflection on the credibility of the Competition Commission and that is directly relatable to the lack of expertise in the CCI. Without this credibility, the appellate tribunal second guesses almost everything the Commission does, which shows that they have no faith in the expertise of the CCI. The reason why the CCI would define legally recoverable amount is that they want to hide behind their own lack of expertise," said Rahul Singh, a research scholar at Balliol College, University of Oxford, who also teaches at the National Law School of India University, Bengaluru.

“In fact, this entire idea that they have not been able to recover much of the penalty should serve as a wake-up call for the CCI. It also poses a wider problem. The lesser the recovery, it means compliance also will be less than optimal because there isn’t enough deterrence. To me it sounds like an excuse that the Commission’s legally recoverable amount itself is different. It’s shifting goalposts for self review," Singh added.

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