The Ministry of Railways recently filed a writ petition challenging the order of the Competition Commission which had held that Indian Railways was an 'enterprise' and hence fell under the commission's jurisdiction. Through its order dated February 23 2012, the Delhi High Court rejected the government's petition and held that Indian Railways was indeed an enterprise under the act and that the commission can therefore hear complaints against it for alleged abuse of its dominant position in the goods transportation sector.
The petition argued that operating Indian Railways was a 'sovereign function' of the state, under the Industrial Policy 1991, and it should thus be excluded from being called an enterprise under the act. Rejecting this contention, the court held that the services rendered by Indian Railways have a commercial angle. It is therefore not an inalienable function of the state, but is capable of being performed by private enterprises, as in other developed countries. The court also noted that although in 2010 the Railway Ministry had petitioned the central government seeking exemption from the ambit of the Competition Act under the relevant provisions of the act, the government had not yet issued any such notification.
Indian Railways has since challenged this decision of the single bench and has filed a letter patent appeal challenging the order of a single judge of the high court before the division bench of the Delhi High Court.
For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4929 2525), fax (+91 11 2332 0484) or email ([email protected]).