2021 (12) TMI 1405 - HC - Indian Laws

Abuse of dominant positions - sale of electricity in the relevant market within the meaning of section 4(2)(a)(i) of the Competition Act, 2002 - whether a prima facie case is made out by the 3rd respondent for initiation of proceedings under the Competition Act or not? - whether there is any scope for the Tamil Nadu Electricity Regulatory Commission to conduct an investigation or impose penalty on the TANGEDCO under the provisions of the Electricity Act or not? - HELD THAT - In the present case, the Competition Commission of India, considering the allegations raised by the 3rd respondent against the writ petitioner, formed an opinion that it is evident prima facie for the purpose of entertaining a complaint under Section 4 of the Competition Act and ordered for an investigation by the Director General and issued a notice to the TANGEDCO to submit their objections - The impugned notice categorically states that the Commission after considering the available information, is of the opinion that a prima facie case exists and has directed in its order dated 08.10.2013 that investigation be made in the matter by the Competition Commission of India. Thus, in order to enable the Directorate to investigate the matter, in exercise of powers conferred under Section 41(2) read with Section 36(2) of the Competition Act, the informations along with supporting documents were sought for from the writ petitioner/TANGEDCO. In the present case, perusal of the allegations raised by the 3rd respondent would reveal that there is a prima facie case that the TANGEDCO/writ petitioner enjoys dominant position in respect of electricity in the State of Tamil Nadu. This factum is not disputed. When the writ petitioner/TANGEDCO is in dominant position, the allegations set out in the complaint indicates certain abuses and therefore, the said abuse of dominant position warrants any further action or not, is to be investigated and all appropriate proceedings are to be allowed for the purpose of forming a final opinion - This Court is not inclined to step-in to the nature of the allegations or its veracity or otherwise, which is yet to be investigated by the Director General under the provisions of the Competition Act. The allegations, which all are not yet investigated by the competent authority, it would be unnecessary for the Court to appreciate such allegations or made a finding, which would cause prejudice to either of the parties, either to proceed with the investigation or to form an opinion for initiation of further actions under the provisions of the Competition Act or to refer the matter to the Electricity Regulatory Commission under the Electricity Act by invoking Section 21-A of the Competition Act. Once an anti-competitive practices are brought to the notice of the Competition Commission of India by way of complaint and such allegations are falling under Section 4 of the Competition Act, then the Competition Commission of India is empowered to conduct investigation and form a final opinion for the purpose of initiation of actions. In the present case, the Electricity Act does not provide any power to the Tamil Nadu Electricity Regulatory Commission to conduct investigation, more specifically, with reference to the allegations of abuse of dominant position, which is a specific provision under Section 4 of the Competition Act. In the present case, the notice issued to the writ petitioners, calling upon to furnish the informations and documents to conduct investigation is under challenge. Undoubtedly, it is in premature stage, wherein, the authority competent yet to form final opinion with reference to the allegations of abuse of dominant position as contemplated under Section 4 of the Competition Act. When the Competition Act provides jurisdiction to the authorities to entertain complaint, more specifically, when there is no such investigating power contemplated under the Special Act, then there is no impediment for the Competition Commission of India for entertaining a complaint in the present case submitted by the 3rd respondent and thus, there is no infirmity or perversity. Thus, the case on hand is not a fit case for the purpose of quashing the notice. Contrarily, the writ petitioner is at liberty to avail the opportunities provided under the provisions of the Act by the respondents 1 and 2 and defend their case. This being the factum established, the writ petition is not only premature, but not entertainable as the challenge made is a notice issued, providing an opportunity to the writ petitioner to defend their case under the provisions of the Competition Act, 2002. The writ petitioner is at liberty to submit their explanations or objections along with the informations and documents to the respondents 1 and 2 within a period of four weeks from the date of receipt of a copy of this order. On receipt of such materials, informations, explanations from the writ petitioner, the respondents 1 and 2 are directed to proceed with the investigations, by affording opportunity to the writ petitioner/TANGEDCO and conclude the investigation and all further proceedings within a period of four months from the date of receipt of a copy of this order. The writ petitioner is directed to co-operate for the investigation for early disposal of the case. The writ petition stands dismissed.

Summary

Issues Involved:
1. Jurisdiction of the Competition Commission of India (CCI) versus the Tamil Nadu Electricity Regulatory Commission (TNERC).
2. Maintainability of the writ petition under Article 226 of the Constitution of India.
3. The applicability of the Competition Act, 2002, vis-à-vis the Electricity Act, 2003, in cases of alleged abuse of dominant position.

Detailed Analysis:

1. Jurisdiction of the CCI versus the TNERC:
The primary issue was whether the CCI had the jurisdiction to entertain a complaint against TANGEDCO for alleged abuse of dominant position, given the existence of the TNERC under the Electricity Act, 2003. The court noted that the CCI received a complaint from the Southern India Engineering Manufacturers' Association, alleging that TANGEDCO was abusing its dominant position by imposing discriminatory conditions in the sale of electricity, thus violating Section 4(2)(a)(i) of the Competition Act, 2002. The CCI found a prima facie case and ordered an investigation by the Director General. The petitioners contended that the TNERC, empowered under Section 23 of the Electricity Act, 2003, should adjudicate such complaints, not the CCI. However, the court clarified that while the Electricity Act is a special statute, it does not provide for the investigation of abuse of dominant position, a specific provision under Section 4 of the Competition Act. Therefore, the CCI was within its jurisdiction to investigate the complaint.

2. Maintainability of the Writ Petition under Article 226:
The court emphasized that writ petitions against notices should not be entertained routinely. A writ could be entertained only if the notice was issued by an incompetent authority, lacked jurisdiction, or if allegations of mala fides were raised. In this case, the court found that the writ petition was premature and not maintainable, as the CCI had merely issued a notice for investigation, and the petitioner had the opportunity to present their case before the CCI. The court stated, "This Court is not inclined to step-in to the nature of the allegations or its veracity or otherwise, which is yet to be investigated by the Director General under the provisions of the Competition Act."

3. Applicability of the Competition Act, 2002, vis-à-vis the Electricity Act, 2003:
The court examined whether the provisions of the Competition Act could apply in the presence of the Electricity Act. The petitioners argued that the Electricity Act, being a special statute, should prevail over the Competition Act. The court referred to the Supreme Court's judgment in the Bharti Airtel case, which held that sectoral regulators like TRAI should first address jurisdictional issues before the CCI could proceed. However, the court noted that the Electricity Act did not have provisions for investigating abuse of dominant position, unlike the Competition Act. Therefore, the CCI was empowered to investigate the complaint under Section 4 of the Competition Act. The court concluded, "When the Electricity Regulatory Commission is not vested with the power of investigation under the Electricity Act... then the Competition Commission of India is empowered to deal with the complaint with reference to Section 4 and initiate further proceedings."

Conclusion:
The writ petition was dismissed as premature, and the court directed the petitioner to cooperate with the CCI's investigation. The court affirmed the CCI's jurisdiction to investigate the complaint under the Competition Act, given the absence of a specific investigative mechanism under the Electricity Act for abuse of dominant position. The court emphasized that the petitioner had the opportunity to present their case during the CCI's investigation and could raise jurisdictional issues if necessary.