CCI invokes doctrine of necessity to bypass the quorum to clear six deals

The Competition Commission of India (CCI) on Thursday invoked the doctrine of necessity to bypass the quorum to clear six deals. 

The deals, approved by the CCI, include acquisition of up to 25 per cent shareholding in Hindustan Ports Private Limited (HPPL) by the National Investment and Infrastructure Fund, and the proposed merger of Hindustan Infralog Private Limited into HPPL. 

The watchdog, in a meeting held after four months, also approved the subscription of compulsorily convertible preference shares of Hero Future Energies Global Limited by UK-based Ardor Holdings. The commission approved the acquisition of the textile effects business of the US-based chemical products maker Huntsman International, by Archroma Operations. 

"It’s great to finally see the approvals after such a long waiting period. The invocation of doctrine and the government springing back in action is a sigh of relief," said Anshul Jain, partner, PwC India.

The CCI also gave its nod to the acquisition of 20 per cent equity share capital of Keimed, the distributor of medical and surgical materials, by Shobana Kamineni through Prime Time Logistics Technologies Private Limited. Kamineni is executive vice-chairperson - Apollo Hospitals Group. The internal restructuring, involving certain subsidiaries of Keimed Private Limited, has also received CCI approval. 

Acquisition of 100 per cent equity and preference shares of Lanco Anpara Power Limited by Megha Engineering and Infrastructures Limited Group was also approved by the Commission.

The next meeting of the CCI is scheduled for Tuesday. The watchdog may take a call on some of the remaining 14 deals which are awaiting nod. 

AGI Greenpack and Hindustan National Glass, Cummins and Meritor, and Dalmia Cement and certain businesses of Jaiprakash Associates are some of the deals hoping to get CCI’s green flag. 

The law ministry had earlier advised the corporate affairs ministry that the CCI can invoke the doctrine of necessity to take decision on the pending applications without the full strength of the three-member quorum. Since former chairperson Ashok Gupta’s retirement, only two members remain in the CCI quorum. 

The deals have been pending since September, a month before Gupta retired. Legal experts are concerned that invoking the doctrine of necessity to clear the merger applications might lead to more uncertainty as other parties could challenge these decisions in courts.

Section 22 of the Competition Act says, “...All questions which come up before any meeting of the commission shall be decided by a majority of the members presiding and voting … ptovided that the quorum for such meeting shall be three members.”