Companies & Sectors
Jet Airways & Etihad deal: The fiction of ‘time out’ in Combination Regulations

It is not really clear as the role the looming deadline of 210 days, barely 15 days away, had played in the majority decision of CCI clearing the Jet and Etihad deal and how much of it was shaped by the consideration of competitive concerns, or lack thereof

On 12 November 2013, the Competition Commission of India (CCI) gave a green signal to Etihad of their 24% acquisition of Jet Airways. The approval order is signed by five members including the CCI chairman. One member has given a dissenting order not agreeing with the majority and directing the Secretary to issue a show cause notice to the parties to the combination, in terms of section 29(1) of Competition Act, 2002 (the Act).


A very interesting component of the dissenting/minority order is contained in paragraph 7 of this minority order. For sake of convenience, paragraph 7 of this dissenting order is being reproduced below:


“As noted earlier, the notice u/s 6(2) of the Act was received by the Commission on 1st May, 2013. However, for the purposes of Section 31(11) (210 days) of the Act, and Regulation 28(6) (180 days) of the Combination Regulations, only 11 days have elapsed so far, in view of the application of Regulation 5(4) and 19(2) of the Combination Regulations, because of the time taken by the parties in furnishing requisite information.”


What is important is that it has been observed in the same paragraph that from the date of filing on 1 May, 2013 that only 11 days have elapsed till the date of order on account of the inordinate time (and ‘time outs’ allowed) taken by the parties to the combination in furnishing the requisite information. If taken to the logical conclusion in the case of combinations to come before CCI in future, this is a very worrisome impression. Because of the filing having been made on 1 May 2013, as given in this dissenting order, the 210 days are going to expire on 27 November 2013. The paragraph 56 of this dissenting order, being significant, is also being reproduced for a ready reference:


“In view of the above, I am of the prima facie opinion that the proposed combination is likely to cause an appreciable adverse effect on competition within the market of international air passenger transportation from and to India. A notice may, therefore, be issued to show cause to the parties to the combination calling upon them to respond within thirty days of the receipt of the notice, as to why investigation in respect of the proposed combination should not be conducted.”


On account of the provisions of ‘time out’ in the regulations and inordinately delay taken by the parties to the combination to furnish the required information which only could help the CCI reach a conclusion about the potential anti-competitive impact of this particular combination, only 11 days out of 210 days for the purposes of section 31(11) of the Act had passed. This order does mention that 210 days are available with CCI for passing an approval order but, almost within the same breath, it says that for the purposes of section 31(11) of the Act, only 11 days have elapsed so far. This is a very interesting formulation. At the end of the period of 210 days, any merger filing is deemed to have been cleared by CCI, if not cleared along with an approval order or otherwise before that. It would have implied that the filing of combination was cleared by default without CCI having to look into the details of the combination or such an examination having any value either.


The above dissent/minority order is right in the sense that the total time available to CCI for clearing any combination is 210 days as given in section 31(11 ) of the Act. It also clarifies that this period of 210 days is further sought to be curtailed to 180 days, as an act of self discipline, in terms of the provisions of the regulation 28(6) of the Combination Regulations. This is the correct position. However, the sanctity of 210 days given in the Act is much more than the limit of 180 days, given in the regulation 28(6). The latter being a part of the subordinate legislation whereas the limit of 210 days being given in the law itself.


Suppose the dissenting order was the majority order, in that event, CCI would have given 30 days to the parties in combination to furnish reply in terms of the show cause notice intended to be given in above paragraph 56 of this minority/dissenting order. It is obvious that by the time the replies of the parties would come before CCI, the time limit of 210 days would have been well over. The question arises, even if not questioned by the parties to the combination, if the replies of the parties to the combination are dealt with by the CCI in terms of the procedure provided under Combination Regulations and the outcome of the decision of the CCI is known only after 210 days, by calendar, having elapsed before the decision of the CCI becomes public, would the order of CCI be valid? What would be the fate of such an order passed by CCI either of approval or otherwise?


In my humble view, it would be extremely difficult to sustain such an order, received by the parties to combination, after 210 calendar days. Going by the trend that the court in the land have interpreted the implementing regulations to be of such a nature that they can mitigate the hardship but cannot be more burdensome, than the law, on the people to whom these were meant to serve.


It may be recalled that the Act is sought to be amended and the time limit of 210 days for deemed approval is sought to be brought down to 180 days as promised in the regulations. The amendment bill is lying before the Parliament. However, till it is done, the black letter law is that the time period of 210 days which certainly has the force of law and not necessarily 180 days. This means that chances of a party succeeding in getting a deemed clearance, if the order of CCI is passed after 180 days are quite high, compared to the chances of an order being upheld by the Competition Appellate Tribunal (COMPAT), if an order blocking any combination is passed by CCI after 210 days.


For a moment, let’s assume this to be a majority order and the show cause notice to be issued. As a consequence of this order, this would be issued on or after 12 November 2013. The replies of the parties to the combination would, in any case, only come by 12 December 2013. On that day, 15 more days beyond the statutory time limit of 210 days would have been passed. As an attorney for the parties to the combination, one can comfortably argue that the time limit for CCI to clear the combination was already over and, therefore, CCI was not having any jurisdiction over the filing of the combination as the combination, in question, already stood approved by virtue of the provisions of section 31(11) of the Act.


It is not really clear as the role the looming deadline of 210 days, barely 15 days away, had played in the majority decision of CCI clearing this deal and how much of it was shaped by the consideration of competitive concerns, or lack thereof. One thing is certain, if the first 30 days are not utilised in careful forming of the prima facie opinion of the CCI before giving public its due in the next 180 days (150 days, if the amendments are cleared by the Parliament), combinations would continue to be as smoothly sailing in India as they were before 1 June 2011—more by default.


(After completing more than two decades as a Commissioner in IRS of India, KK Sharma  was appointed as the first Director General of the functional Competition Commission of India (CCI). He has also been a very active member of International Competition Network (ICN), Merger Working Group. Mr Sharma was also nominated to one of the handful positions of an individual member of the Research Project Partnership (RPP) Platform of UNCTAD. A Ph.D. fellow in competition law from Bangor University, UK, Mr Sharma did masters in engineering from IIT, Roorkee, before doing graduation in law. Later, he completed PG Diplomas in Economics for Competition Law from King’s College, London, and IPR Laws from NLSU, Bangalore, respectively after doing Masters in Economics.)


Campa Cola: ‘Battling the bulldozers’ is an eye-opener for home buyers

While builders, developers, govt officials and politicians manage to get away with blue murder, it is the innocent residents that bear the brunt of the burden in actually witnessing their hard-earned savings being bulldozed

Two leading newspapers on 17 November 2013 – Sunday Times of India, Mumbai and The Hindu Business Line, coincidentally carried reports with a common theme but different perspectives - “Battling the Bulldozers and “Lessons from Campa Cola” respectively. The reports ought to be eye-openers to all citizens more particularly those living in the growing metros.

Flagrant violations of the land use norms with the active and passive connivance of the neta-babu-builder mafia nexus has become the order of the day. While the perpetrators manage to get away with blue murder, it is the innocent residents that bear the brunt of the burden in actually witnessing their hard-earned savings being bull dozed for no fault of theirs by unwittingly falling victims to the sweet promises of the shelter of roof over their heads of a Home-Sweet-Home.

Though there are many clusters of the juggi-jhopdis in and around the National Capital Region of New Delhi and its surrounding areas, residents of Mumbai are mute witness day-in-and-day out to the blatant wrongdoings both for the numerous high-rise luxurious apartments essentially on mill lands bang in the heart of the city, as well as the proliferating slums coming up all over the metropolis, making over 60% of Mumbaikars slum residents. Being great vote banks, the slum clusters are seen to be actively supported by the parties and netas of all hues and colours who tacitly acquiesce by supporting their initial setting up but conveniently put on the disappearance act when the bull dozers raise them down.

According to an RTI (Right to Information) response in Delhi’s Lutyen’s bungalow zone, the UPA government has allowed BSP supremo, Mayawati, whose support is crucial for its existence, to retain and merge three Type VI bungalows 12, 14 and 16 on Gurudwara Rakab Ganj Road, also allowed one Type VIII bungalow 4 on the same road and another number 3 on Tyagraj Marg by according approval to the Bahujan Samaj Prerna Trust to merge into mega buildings. Initially the Government’s Directorate of Estate had raised various objections on account of numerous violations and to also to their amalgamation a single unit to construct a 32 bedroom complex. Though there is a complete ban of constructions in the bungalow zone, these and five other charitable trusts – Nehru Memorial Museum, Lal Bahadur Shastri Memorial, Babu Jagjivan Ram Memorial, Indira Gandhi National Centre for Arts and Rajiv Gandhi Foundation are allowed to operate in the zone.  All these are cases of “official violations” conveniently approved, just because they concern VVIPs!  

High rises in the metros

Flats in Mumbai are sold and taken possession of and fully occupied despite the absence of the mandatory Occupation Certificate (OC). According to an expert, there are over 55,000 buildings without OC from the Municipal Corporation for non-compliance with and in violations of deviations from the approved plans, non-compliance with sanction conditions, building-byelaws including exceeding FSI norms, illegally covered projections, flouting of CRZ and Air Space regulations, Fire safety and building stability norms, illegal utilization of mandatory open and parking spaces, margins and set backs, land use, zoning laws, green belt/mangroves, construction on roads, pavements, water bodies, pipelines and near hazardous industries.

In the case of Campa Cola alone, as against the approved 5 floors the builder had 17 floors in one tower and 20 in another. In the other scam tainted Adarsh, a VVIP building in Mumbai’s tony down town, Colaba, with a sanctioned plan for just six stories had ended up in constructing 31 stories when completed! There were wholesale violations from the word go – no prior clearances for use of defence lands, no environmental clearances, encroachment on roads and foot paths, no air space clearance and floors built far in excess of those sanctioned. The allottees were all VVIPs including service chiefs, ministers’ kith and kin, and topmost serving bureaucrats. The joke goes – every top babu who touched the Adarsh file was rewarded with an illegal flat – from the city’s Municipal Commissioner to the City Collector!

Jayant Tipnis (70) one time the Campa Cola Society’s long time (since 1985) architect has publicly gone on record to say that he had cautioned the builders of irregularities on various occasions. He asserts that everyone, repeat, ever one of the residents, was very well aware of the irregularities when they acquired the flats at throw away prices. Despite BMC from time to time issuing stop work notices, the developers just went ahead even to the extent of covering and selling the stilt area to a reputed ad agency. The BMC engineers all along preferred to look the other way rather than initiate demolition. Four successive chief ministers of Maharashtra rejected the applications for regularisation that was subsequently confirmed by the Bombay High Court and upheld by the Supreme Court. Consequently the Campa Cola residents cannot now claim that were unaware of the blatant irregularities, believing that   by throwing money can bring about regularisations.

On 18 November 2013, the chief minister of Maharashtra had sought the President’s assent to the Maharashtra Housing (Regulation & Development) Bill, 2012 that was passed by the State Legislature last year. This is stated to be a “Comprehensive legislation seeking to ensure full disclosure by promoters and developers and compliance of agreed terms and conditions through registration, monitoring and regulating real estate projects by a Housing Regulatory Authority, by seeking to usher transparency, remove information asymmetry and bring discipline in real estate transactions. It aims at promoting planned development and construction, sale, transfer and management of flats in residential buildings and other real estate projects and protects the interests of home buyers. Help in substantially curbing violations in the DC Rules including adherence to FSI norms.”     

Now the lessons from Campa Cola:

  • Flat buyers should bear in mind the age old golden rule – caveat emptor customers beware! To avoid disruption of life when demolition becomes inevitable
  • Going in for completed buildings is a far safer option than under-construction flats that may sound comparatively cheaper
  • Before putting signature on the dotted line on initial agreement and at every stage in the process thereafter, according top priority should carry out Due Diligence of the Builder and the Project.  Even some reputed builders have been found to be not above board on the land use issues
  • Inspection of the original title to the plot,  conformity to its exact land use under-developed plan and zoning requirements by visiting the BMC Building Proposals Department to ascertain the authenticity of the copies of approvals, NOC from CRZ, air space, defence and proximity to hazardous industries
  • The agreement given by the builders need to be vetted by an experienced independent attorney to ensure that it includes adequate guarantees to title and approvals and also provide for compensation for non-compliance

Bull dozing slum clusters

It needs to be pointed out that in both Adarsh and Campa Cola, no bulldozer was ordered to move in. But authorities do not hesitate to put them into ruthless use for mowing down slums that the poor have shelled out thousands out of the sale proceeds of their farm lands as also their hard-earned sweat and labour in Mumbai’s sun and rains. At times the slum lords go to the extent of setting fire to the entire slum cluster to bring about forcible evictions.  

Around the same time as the media frenzy over Campa Cola Society the media conveniently ignored the plight of 323 households of the 46 member Ganesh Kripa Society at Golibar, Khar. Half of the residents refused to budge, choosing to live in the midst of rubble in a neighbourhood now resembling a war zone. The conditions in the transit camp are most unsanitary, built on illegal Air Force Land with the builder forging signatures.  According to a victim, BMC/MMRDA/SRA/CIDCO demolition crews tend to have an uncanny knack of turning up only during board examinations when hall tickets are forcibly moved to transit camps.

One dislodged slum dweller rightly laments the soft treatment accorded to Campa Cola residents who mocked the authorities by locking the gates and parking their cars saying, “Run the bulldozers over us and the BMC authorities and police do nothing just because they are rich. On the contrary, when we protest they just shove us in to the police vans. How come they can violate the Supreme Court rulings when we are required to abide by the 2010 Bombay High Court orders?”

According to a well known civic activist, it is only after the state government places an absolute ban on registering irregular real estate transactions by collecting hefty stamp duty on flat transfers in Non-OC buildings can these violations  be put to an effective end.

The government by collecting huge stamp duty virtually accords its official stamp of approval to the sale and purchase of illegal/ irregular constructions that continue unabated. On the other hand it also unjustifiably chooses to maintain that the poor slum dwellers do not warrant protection just because they do not hold state authenticated documents of title that the state confers on the rich and denies to the poor. A case of absolutely perverted logic! In the recent past buildings built as late as 30 years back have started crashing like pack of cards.  

It is time the society wakes up to rectify this widespread blatant discrimination between the so-called haves and the have nots practised right in our midst today.  


Those seeking help or advice on CHS issues can contact
Moneylife Foundation’s Legal Resource Centre (LRC) ( )


(Nagesh Kini is a Mumbai-based chartered accountant turned activist.)


Charu Deshpande suicide: Tata Steel's Prabhat Sharma booked by Vasai police

Prabhat Sharma, the head for corporate affairs at Tata Steel has been booked by Vasai police for allegedly abetting the suicide of Charu Deshpande, the steelmaker’s former PR chief

Vasai police, who are investigating the alleged suicide of Charudutta (Charu) Deshpande, former chief of corporate communication of Tata Steel, has booked Prabhat Sharma, the steelmaker's head for corporate affairs.


This follows a complaint by Forbes India's former editor Indrajit Gupta against the Tata Steel official for allegedly abetting the suicide of Charu Deshpande.


57-year-old Deshpande, was found hanging at his Vasai home on 28th June this year. No suicide note was found. His friends and former colleagues alleged that he had been harassed.


Police have registered a first information report (FIR) and booked Sharma under Section 306 (abetment of suicide) of the Indian Penal Code (IPC).


According to Gupta’s complaint, Charu, a senior official at Tata Steel, was constantly humiliated and harassed between May 2012 and May 2013 following which he took the drastic decision to end his life.


Soon after Mumbai crime branch began the probe, the investigating team had laid their hands on a piece of evidence from Charu's another residence in Borivili.


Two diaries of 2012 and 2013 were found in which Charudatta Deshpande had mentioned about the happenings in office. And in one of the pages, he had even written notes and named some Tata Steel officials.


The content of the pages clearly depicted the mood of Charu, and it indeed reflects that he committed suicide due to unhappiness and frustration at work place, a police official had said.


In July, nine journalists, including the Forbes India ex-editor and president of the Press Club of Mumbai wrote a letter to Ratan Tata and Cyrus Mistry, chairman of the Tata group, alleged that there was a concerted attempt by “Tata Steel officials and the PR agency to pass off his (Charu's) death as a heart attack, and not a suicide.” (Death of a PR Man)


The letter says that Charu was accused of ‘leaking’ confidential documents to journalists for a Cover Story titled “Remoulding Tata Steel”; that he was confined under virtual ‘house arrest’ for two weeks in Jamshedpur and repeatedly threatened.


Charu (as he was known) joined Tata Steel a year ago after a long stint with ICICI Bank and Mahindra & Mahindra. He had resigned from Tata Steel a month before his suicide on 28th June.


It was discovered that Charu Deshpande was the first person in Tata Steel who, despite being appointed at a very senior level, was not confirmed in service after completion of his probation.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)