Regulatory actions are not amenable to the jurisdiction of Competition Commission #indianlaws

Issue of abuse of dominance by IRDA did not arise and no case of contravention of the provisions of section 4 of the Act was made out against IRDA.

Informant in the present case sought direction from the Commission to direct the Insurance Regulatory and Development Authority (IRDA) to repeal the IRDA (Licensing of Bancassurance Agents) Regulations, 2002 which allows grant of corporate agency license to banks to sell insurance products. It was alleged that grant of such license lead to concentration of power in hands of bank conglomerates in insurance product retailing market which drive out other insurance brokers and independent insurance agents from competition and as a result they are losing their jobs and business.

IRDA was set-up under the Insurance Regulatory and Development Authority Act, 1999 to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected or incidental.

The Court also referred to the term ‘enterprise’ as defined in section 2(h) of the Competition Act as per which an entity to fall within the definition of the term enterprise must be engaged in any activity which is relatable to the economic and commercial activities specified therein.

In the present case, IRDA while discharging its regulatory and statutory mandate was held to be as not falling within the purview of the term enterprise as defined in section 2(h) of the Act. It was observed that regulatory actions are not per se amenable to the jurisdiction of the Commission.

It was held that even other allegations made in the information against unknown entities were general in nature besides being unsubstantiated and misconceived due to misreading of statutory scheme by alleging collective dominance and as such held to be as not falling within the mischief of sections 3 and 4 of the Competition Act.

Accordingly it was held that the issue of abuse of dominance by IRDA did not arise and no case of contravention of the provisions of section 4 of the Act was made out against IRDA.

[Dilip Modwil vs. IRDA]
(CCI, 12.09.2014)