Disclaimer: This has been reported after the availability of the order of the Court and not on media reports so as to give an accurate report to our readers.
Kerala High Court: In an intra-court appeal was filed by Jiostar (Star India) under Section 5 of the Kerala High Court Act, challenging the Competition Commission of India’s order directing investigation into Jiostar, a Division Bench of Sushrut Arvind Dharmadhikari* and Syam Kumar V.M., JJ., refused to interfere with CCI’s order and held that the Competition Act operates unhindered by the Telecom Regulatory Authority of India Act, 1997 (TRAI Act) in matters of anti-competitive conduct.
Factual Matrix
The Star/Disney group (SIPL) is the largest broadcaster in India with several channels including the Malayalam channel Asianet, which “enjoyed the highest rating” in 2021. Asianet Digital Network Pvt. Ltd. (ADNPL) is an MSO providing digital TV services in Kerala.
The ADNPL alleged that Jiostar/SIPL abused its dominant position by “discriminatory pricing, conduct and denial of market access” through excessive discounts and marketing agreements with Kerala Communicators Cable Ltd. (KCCL). It was contended SIPL allegedly routed these discounts through “sham marketing agreements,” which were said to be “nothing but a sham arrangement to route back the money”. ADNPL asserted that due to SIPL’s preferential treatment to KCCL, it suffered “colossal loss/ migration of its subscriber base.” SIPL argued that the dispute concerns only violations of TRAI Regulations and therefore TRAI/TDSAT alone has jurisdiction, relying heavily on CCI v. Bharti Airtel Ltd., (2019) 2 SCC 521. However, the Jiostar-appellant argued that issues fall exclusively under TRAI and that Bharti Airtel (Supra) mandates that TRAI must determine jurisdictional facts before CCI can act.
The CCI formed a “prima facie opinion of violation of the provisions of Sec. 4(2)(a)(ii) r/w 4(2)(c)” and ordered investigation. The Single Bench of this Court dismissed the writ petition, challenging the CCI’s order dated 28-02-2022 passed under Section 26(1) of the Competition Act, 2002, directing the Director General to investigate information filed by ADNPL and held that CCI possesses jurisdiction to investigate abuse of dominance allegations.
Moot Point
-
Whether CCI has jurisdiction to direct an investigation under Section 26(1) when the allegations also involve the TRAI Act and its Regulations?
-
Whether Bharti Airtel (Supra) mandates that TRAI must first determine jurisdictional facts before CCI can act?
-
Whether the complaint before CCI is merely a disguised TRAI complaint amounting to “forum shopping”?
-
Whether an order under Section 26(1) causes civil consequences warranting interference?
Court’s Analysis
-
Competition Act and TRAI Act operate simultaneously
The Court rejected Jiostar’s argument that ADNPL must approach TRAI first. The Court noted that the Competition Act is a “specially enacted sui-generis legislation for regulating open market competition,” such as dominance, market access, and anti-competitive practices and are outside the regulatory mandate of TRAI, whose role is limited to technical compatibility, pricing parameters set by regulation, interconnect issues, and licensing obligations.
The Court held that both enactments are “parallel legislations” and that Parliament intended both the TRAI Act and the Competition Act to operate “unhindered and unobstructed by each other”. The Court held that there is inbuilt restriction preventing CCI from exercising its powers merely because TRAI also regulates the sector.
-
CCI has exclusive competence to examine abuse of dominance
The Court stressed that determining dominance involves evaluation of “market structure, relevant market, product market and geographical market”, matters that “clearly cannot happen under the provisions of the TRAI Act.” The Court asserted that the TRAI is “handicapped statutorily” in determining dominance under Section 19(4) of the Competition Act. The Court held that CCI, therefore, has exclusive competence to investigate allegations of abuse of dominant position, denial of market access, discriminatory pricing and excessive or disguised discounts.
“CCI has been conferred even suo motu powers to act on its own motion if it finds that a cause of action is constituted to exercise its powers under the Act. The vesting of suo motu powers is another indication of comprehensive sweep of powers vested with the CCI to address the menace of anti-competitive practices which may be adopted by dominant market players.”
-
Marketing agreements fall outside TRAI’s domain
The Court rejected argument that TRAI must first adjudicate these issues before CCI. The Court cited Explanation 101 of the TRAI Regulations and stated that the TRAI “doesn’t regulate marketing agreements”.
Since ADNPL’s allegations involved “back-to-back extra discounts” given to KCCL through such marketing agreements, the Court held that only CCI can examine such conduct, as these agreements “are not covered within the ambit of the TRAI Regulations.” Therefore, CCI alone can scrutinize the alleged disguised discounts.
-
Bharti Airtel judgment is factually distinguishable
The Court held that the ratio in CCI v. Bharti Airtel Ltd., (2019) 2 SCC 521 “cannot be telescoped to be treated as a universal proposition of law” but the CCI must always wait for TRAI.
The Court noted that in Bharti Airtel (Supra), the dispute involved technical interconnect issues and RJIL had itself approached TRAI first. The Court stated that in the present case, no complaint is pending before TRAI, and the allegations relate to abuse of dominance not licensing compliance, an area where CCI has a “niche role carved out for itself,” which cannot be eclipsed by the TRAI Act. Thus, the Court held that the requirement that the TRAI should first determine the jurisdictional facts is not attracted in the present case.
-
Nature of a Section 26(1) order
The Court affirmed that a Section 26(1) order is “an administrative order in rem”, which does not entail civil consequences, and does not require a hearing before issuance. The Court emphasised that the principles of natural justice do not apply at this preliminary stage. Therefore, the Court held the writ petition to be premature, as all jurisdictional and substantive objections may be raised before the CCI after the DG’s report.
-
Existence of Jurisdictional Facts in favour of CCI
The Court rejected the appellant’s argument that CCI lacked jurisdiction even to form a prima facie view.
The Court held unequivocally held that the “jurisdictional facts in the present case were existing for the CCI to have entertained the information… and form a prima facie opinion under Section 26(1).”
Court’s Decision
The Court upheld the Single Bench on not finding “fault or any error, much less perversity” and dismissed the writ appeal. The Court issued the following directions —
-
The CCI must provide full hearing and pass a “reasoned and speaking order” after receiving the DG report.
-
The CCI should first decide the appellant’s objection regarding jurisdiction in view of Regulation 7 of the TRAI Regulations. The CCI must pass a “separate reasoned order” on jurisdiction.
-
CCI was directed to complete the exercise within 8 weeks.
[Jiostart India (P) Ltd. v. CCI, W.A. No. 1551 of 2025, Decided on 03-12-2025]
*Judgment by Justice Sushrut Arvind Dharmadhikari
Advocates who appeared in this case:
Shri. Mathew Nevin Thomas, Sri. Arun Thomas, Shri. Saikrishna Rajagopal, Shri. Sidharth Chopra, Smt. Sneha Jain, Smt. Ruby Singh Ahuja, Kum. Swikriti Singhania, Shri. Ranjeet Singh Sidhu, Shri. Kuber Mahajan, Smt. Veena Raveendran, Smt. Karthika Maria, Sri. Anil Sebastian Pulickel, Shri. Shinto Mathew Abraham, Shri. Kurian Antony Mathew, Smt. Aparnna S., Shri. Karthik Rajagopal, Smt. Leah Rachel Ninan, Shri. Noel Ninan Ninan, Shri. Arun Joseph Mathew and Shri. Adeen Nazar, Counsel for the Appellants
N. Venkataraman, ASG; Shri. Jaishankar V. Nair, Senior Panel, Cristy Theresa Suresh, Avinash Amarnath and Ritin Rai, Counsel for the Respondents