Trustees Association of India moves Bombay High Court challenging CCI investigation order

The Trustees Association of India, an association of Debenture Trustees (DTs) has approached the Bombay High Court challenging orders passed by the Competition Commission of India (CCI) which had directed investigation into the conduct of the association..The association has contended that such investigation is within the domain of the Securities Exchange Board of India (SEBI) alone.CCI had passed an order directing investigation on February 15, 2022. After this, it issued notice in furtherance of the order. Subsequently, the association filed an application praying that the matter be referred to the specialised sectoral regulator SEBI, which was also rejected by CCI. .The association cited the following grounds for challenging the order:CCI has no jurisdiction as SEBI was the specialised sectoral regulator which was investigating the issue;Assuming without admitting that CCI had jurisdiction, it is after SEBI returned findings that the association indulged in anti-competitive activity could CCI have initiated its jurisdiction.The petition prayed for quashing and setting aside of the orders since the same are illegal and without jurisdiction.The plea stated that the association would be gravely prejudiced if the reliefs prayed are not granted..The factual matrix leading to this petition was a complaint filed by Muthoot Finance Limited filed with SEBI alleging cartelisation by the Debenture Trustees, prior to filing of complaint with CCI. The grievance pertained to the DTs raising their fees charged for issuers without providing any specific background to substantiate such raise. While the complaint was pending adjudication, Muthoot also filed a complaint before the CCI alleging violation of Competition Act. The plea by the association said the same was with the objective of deliberately circumventing SEBI jurisdiction. The investigation order came to be passed on December 23, 2021 by which the CCI assumed jurisdiction and directed the office of Director General to investigate the conduct of the association on the ground the DTs and DT association contravened provision of the Competition Act. On February 8, 2022, CCI also passed an order rejecting the application filed by the association requesting that a reference be made to SEBI to get its opinion. On February 15, 2022, CCI issued notice to the association seeking detailed information about the office bearers of the petitioner without having provided the association with a copy of the orders under challenge.