The Delhi High Court quashed the investigation of Competition Commission of India (CCI) against the Institute of Chartered Accountants of India (ICAI) and observed that the CCI has no power to review the Continuing Professional Education (CPE) programme of the ICAI.
The bench of Justice Vibhu Bakhru observed that the CCI has wide powers under the Competition Act but this Court is unable to accept that the said powers extend to reviewing all decisions made by statutory bodies or a foreign government, which are not relatable to a sovereign function of the Government.
The ICAI has filed the petition against the order passed by the Competition Commission of India under Section 26(1) of the Competition Act, 2002, whereby the CCI has directed the Director General to conduct an investigation into the matter relating to the Continuing Professional Education (CPE) program being conducted by ICAI.
The CPE program was conducted to enable its members to maintain the requisite professional competence and to ensure high quality and standards of the professional services that they render.
The informant submitted before the CCI that only ICAI and its organs are conducting the structured learning activities and ICAI has not affiliated or recognized any other body to conduct such learning activities. Accordingly, the CCI Issued the impugned order.
Further alleged that “the ICAI that is abusing its dominant position as a “Regulator” to create a monopoly in the service of providing CPE seminars, clearly violating Sec. 4(1) of the Competition Act”
The ICAI asserted that it is a non-profit organization, does not carry on any business, trade or commercial activity and therefore, the CCI does not have any jurisdiction over its activities. Also, the CPE program has been structured in exercise of its powers granted to it under the Chartered Accountants Act, 1949 and the CCI has no jurisdiction to review its decisions, policies or the manner in which it discharges its functions.
Additionally, the education program being conducted by it is pursuant to its statutory function and cannot be interfered with by the CCI. Moreover, it is a statutory function of regulating the profession of accountancy and its CPE program is a part of its functions to maintain the standards of the profession.
Mr. Haksar, senior counsel appeared for ICAI, submitted that ICAI was not an “enterprise” within the meaning of Section 2(h) of the Competition Act, since it is not carrying on any economic activity.
Conversely, Mr Gaggar and Mr Hossain, counsels appeared for CCI and the informant respectively denied the contentions of the ICAI and relied on the decision of the case Hemant Sharma & Ors. v. Union of India & Ors, where it was held that the Chess Federation, which was a non-profit organization, would also fall within the definition of “enterprise” under the Competition Act.
The CCI held that the ICAI was dominant in the relevant market – “the market for organizing recognized CPE seminars/workshops/conferences”.
The CCI further observed that there appeared to be “force in the allegations of the informant that the restrictions put in by ICAI in not allowing any other organization to conduct the CPE seminars for CPE credits created an entry barrier for other players in the relevant market.”
The bench observed that there is no other body or institution, which is engaged in the activity of providing professional training to acquire the classification of a chartered accountant or for the continuing education program other than ICAI. Thus, it is not abusing its dominant position but discharging its statutory functions.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
