Muthoot Finance Limited Vs Trustees’ Association of India (Competition Commission of India)
Summary: Muthoot Finance Limited, a listed company that had raised working capital through non-convertible debentures with IDBI Trusteeship Services Limited as debenture trustee, challenged a revised fee structure introduced from 1 April 2021. For a proposed INR 982 crore secured NCD issue, the quoted fees were INR 9.82 lakh as an initial fee and INR 14.73 lakh annually, plus applicable GST. The Informant alleged that the revised pricing had been fixed by the Trustees’ Association of India (OP-1) and was being enforced by its member trustees. It alleged contraventions of Sections 3 and 4 of the Competition Act, 2002.
The Commission initially formed a prima facie view that the collective pricing decision could fall foul of Section 3(3)(a) read with Section 3(1), while it did not find a case of abuse of dominance against OP-1. The matter was referred to the Director General (DG). Jurisdiction was subsequently contested on the ground that debenture trustees were regulated by SEBI. The Bombay High Court required the jurisdictional issue to be decided by the Commission. SEBI later stated that CCI was the competent authority to pass an order. In its jurisdiction order dated 14 March 2024, the Commission relied on the principle stated in Competition Commission of India v. Bharti Airtel Ltd., (2019) 2 SCC 521 and held that the existence of a sectoral regulator did not completely oust CCI jurisdiction.
