The (competition) appeal tribunal takes umbrage at "forum shopping"

India's competition appeal tribunal, the NCLAT,1 dismissed an appeal filed against the Competition Commission of India's (CCI) refusal to initiate investigation for an alleged abuse of dominant position by an educational institution, NIIT Limited (NIIT).2

Background and facts

A franchisee of NIIT complained that NIIT had abused its dominance by, among other things, adopting differential and predatory pricing in relation to its courses. The CCI did not find NIIT to be dominant in the relevant computer education market in India. Therefore, the allegations did not warrant investigation and the CCI closed the matter.

Instead of approaching the NCLAT, (i.e., the specialised competition appeal tribunal) the franchisee challenged the CCI's order before the High Court of Telangana (High Court). However, the franchisee was unsuccessful because the Competition Act, 2002 (Competition Act) already provides an appeal mechanism at the NCLAT. The franchisee then challenged the High Court's dismissal, seeking remedy before the Supreme Court of India (Supreme Court).

Thereafter, the franchisee withdrew the challenge and approached the NCLAT. The delay in approaching the NCLAT was determined to be 708 days.

Without reviewing the merits of the appeal, the NCLAT dismissed it for being time-barred.

Franchisee's submissions

In terms of the Competition Act, the limitation period of 60 days to lodge an appeal is extendable if an appellant provides "sufficient cause". The franchisee justified the time spent in litigation before the High Court on the basis that the CCI's order had been fraudulently obtained3 and could therefore, be challenged before any court. The franchisee also claimed to have been daunted by the fact that the NCLAT was located in a different city.

NCLAT's observations

Meaning of "sufficient cause" for condonation of delay

The NCLAT rejected the franchisee's explanation for the delay in approaching the correct forum for appeal. It noted that the franchisee sought relief under the provisions of the (Indian) Limitation Act, 1963 (Limitation Act) and the criteria for establishing sufficient cause therein. However, the Competition Act has a separate timeline and criteria for approaching the appeal tribunal. Therefore, the provisions of the Limitation Act and the time period prescribed therein, are not intended to apply to the Competition Act which specifically provides a limitation period for matters under its purview. Accordingly, the NCLAT opined that the applicable standards for justifying delay in filing an appeal before it, are those laid down in the Competition Act.4

The NCLAT decided that, given the existence of a statutory remedy of appeal in the Competition Act, it was out of place for the franchisee to circumvent it and approach the High Court. The NCLAT emphasised the efficacy of the existing statutory remedy and denounced the practice of approaching alternative forums. Specifically, the NCLAT noted that litigating before any court under the garb of fraud or violations of natural justice principles constituted forum shopping.

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1 The NCLAT, or the National Company Law Appellate Tribunal, is a specialised tribunal that hears appeals from the National Company Law Tribunal (for company law matters), and from the Competition Commission of India (for competition law matters).

2 Maj. Pankaj Rai v Secretary, Competition Commission of India and Others (Competition Appeal (AT) No 01/2020) of 29 May 2020.

3 The franchisee attempted to demonstrate that the order was obtained by the interference of a former chairperson of the CCI who was representing one of the defendants in the case. Thus, the franchisee claimed that the order was "obliquely influenced".

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