SC refuses to stay Bombay HC order in Kingfisher case

Kingfisher Airlines faces a probe by the Competition Commission of India over its two-year-old strategic alliance with market leader Jet Airways. CCI is examining whether the alliance amounts to cartelisation in the aviation industry.

A bench headed by Chief Justice S H Kapadia said that the CCI had begun investigating the issue after prima facie reaching a opinion, and it should not be stopped.

"We cannot stay it... Prima facie, they (CCI) have reached an opinion that probe should be ordered," said the bench, which also consisted of Justices K S Radhakrishnan and Swatenter Kumar.

The bench said that it is hearing another case where the CCI's authority to direct probes against companies, on the basis of complaints lodged by rivals, is being discussed.
It said that Kingfisher's plea would be heard after the court has passed an order and laid guidelines over the CCI's authority on that matter.

"We would hear your (Kingfisher's) plea after that," the court said after adjourning the matter for four weeks.

During the proceedings, senior advocate Fali S Nariman, appearing for the Vijay Mallya Group firm, said that CCI has no authority to probe its agreement with Jet Airways.
"Section 3 of the CCI Act was notified by the government much after our agreement," said Nariman.

Section 3 of the CCI Act, which gives the regulator the right to investigate such cases, was notified in 2009 and Kingfisher's agreement with Jet Airways was inked in 2008.
However, Additional Solicitor General Parag Tripathi, appearing for CCI, opposed it and requested the court to allow the regulator to continue its investigations.

"They are not cooperating with the CCI. Since April, they are saying that they have filed an SLP before the apex court (against the HC order). They are not coming forward to participate in the probe," said Tripathi.

According to the agreement, Kingfisher and Jet were to cooperate in matters relating to fuel management, ground handling and cross-selling of flight tickets to selected destinations. The current share of the two airlines in the domestic passenger traffic is around 45 per cent.

The CCI had started its probe in August after finding prima facie evidence on cartelisation. The inquiry was suspended for a while after Kingfisher moved the High Court.

However, the probe was taken up again after the High Court finally dismissed the petition.