2015 (12) TMI 1893 - COMPETITION APPELLATE TRIBUNAL NEW DELHI

Cartelization by the manufacturers of cement and manipulation of prices - Section 19(1)(a) of Competition Commission Act, 2002 - constitutional validity of Rule 3 of the Competition Commission of India (Selection of Chairperson and other Members of the Commission) Rules, 2003 - violation of principles of natural justice.

HELD THAT:- In a number of decisions, the High Courts and Supreme Court have repeatedly ruled that the Commissions, Tribunals and other administrative bodies clothed with the power to adjudicate upon the rights of the parties or pass orders adversely affecting a person or a body of persons or imposing penalty for contravention of any statutory provision or otherwise are bound to act justly, fairly and in consonance with the principles of natural justice.

In Mahipal Singh Tomar v. State of Uttar Pradesh [2013 (5) TMI 1064 - SUPREME COURT], the Supreme Court examined the issue relating to violation of natural justice in a case where copy of the enquiry report was not furnished to the affected person and he was not given opportunity to represent his cause against the allegation of large scale irregularities in the placement of selected candidates in different colleges.

The Chairperson did not have the opportunity of hearing the arguments of the advocates for the parties, which lasted for three days i.e. 21st, 22nd and 23rd February, 2012 and yet he became party to the decision. Obviously, he did not know what are the nature and contents of the arguments of the seven Senior Advocates and other advocates, who appeared for the parties. The minutes of the meetings recorded on those dates do not show that the remaining six Members had recorded the arguments advanced by the learned advocates, as was done by the officer who heard the arguments in Ossein and Gelatine Manufacturers' Association of India v. Modi Alkalies and Chemicals Limited and Another [1989 (8) TMI 347 - SUPREME COURT]. The Chairperson's participation in the decision making process had salutary effect on the final verdict.

The arguments of Respondents that no prejudice has been caused to the appellants due the participation of the Chairperson in the decision-making process cannot be accepted. It is not possible to make a guesswork of what would have been the fate of the case if the Chairperson had not taken part in the decision-making process. One does not know whether the remaining six Members would have reached a positive conclusion that the appellants are not guilty of violating Sections 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act and/or they would not have imposed the particular penalty under Section 27 of the Act.

The impugned order is vitiated due to the violation of one of the facets of the principles of natural justice, we do not consider it necessary to deal with and decide other points argued by the learned counsel for the appellants for assailing the order under challenge - The impugned order is set aside and the matter is remitted to the Commission for fresh adjudication of the issues relating to alleged violation of Sections 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act by the appellants. The appellant shall be entitled to withdraw the amount deposited by them in compliance of the interim order passed by the Tribunal.

Appeal allowed.