2013 (5) TMI 993 - AT - Indian Laws

Summary

Issues Involved:
1. Legality of the CCI's order and procedural defects.
2. Standard of proof required for quasi-criminal proceedings.
3. Selective investigation of cement manufacturers.
4. Denial of natural justice and cross-examination.
5. Role and function of the Competition Commission of India (CCI).

Summary:

1. Legality of the CCI's Order and Procedural Defects:
The appellants argued that the CCI's order was non-est as it was signed by the Chairman who had not attended the meetings during which oral arguments were made. This breached the principle of "he who hears decides," amounting to denial of natural justice. The CCI countered that the business was transacted in meetings as per Section 22, and the Chairman's participation in the final meeting where written submissions were considered validated his signature.

2. Standard of Proof Required for Quasi-Criminal Proceedings:
The appellants contended that since the CCI was inflicting penalties, it was acting as a quasi-criminal court and thus, the standard of proof required was "beyond reasonable doubt." However, the CCI adopted the civil standard of "preponderance of probability," which the appellants argued was incorrect.

3. Selective Investigation of Cement Manufacturers:
Several appellants argued that the CCI selectively investigated only a few cement manufacturers out of more than 40 in the country, without any justifiable reason. They claimed this selective approach was flawed and questioned the methodology used by the CCI.

4. Denial of Natural Justice and Cross-Examination:
The appellants claimed they were denied the opportunity to cross-examine witnesses and access necessary documents, which they argued resulted in grave injustice. The CCI responded that the refusal to allow cross-examination might at most amount to an irregularity in procedure, which did not affect the merits of the case.

5. Role and Function of the Competition Commission of India (CCI):
A significant issue raised was the exact role of the CCI post-amendment. The appellants argued that the CCI should adhere to judicial norms as it performs adjudicatory functions. The CCI, however, maintained that it transacts business in meetings and its decisions are based on a majority vote, per the amended Section 22.

Conclusion:
The Tribunal found a prima-facie case for granting a stay on the penalties, which were substantial, amounting to around Rs. 6000 crores. The appellants were ordered to deposit 10% of the penalties within one month, failing which the appeals would be dismissed. The order of 'cease' and 'desist' was not stayed. All stay applications were disposed of accordingly, and the matter was posted for further hearing.