2015 (4) TMI 1234 - HC - Law of Competition

Jurisdiction - power of CCI to recall/review an order u/s 26(1) of Competition Act 2002 - Whether CCI has the power to recall/review an order passed by it of directing/causing investigation in exercise of powers under Section 26(1) of Competition Act 2002? - Held that - Order of the CCI/direction to the DG CCI in exercise of power under Section 26(1) of the Act to cause investigation is capable of review/recall - Such a power though found to exist has to be sparingly exercised. Such a power has to be exercised on the well recognized parameters of the power of review/recall and without lengthy arguments and without the investigation already ordered being stalled indefinitely. In fact it is up to the CCI to also upon being so called upon to recall/review its order under Section 26(1) of the Act to decide whether to pending the said decision stall the investigation or not as observed hereinabove also. The jurisdiction of review/recall would be exercised only if without entering into any factual controversy CCI finds no merit in the complaint/reference on which investigation had been ordered. The application for review/recall of the order under Section 26(1) of the Act is not to become the Section 26(8) stage of the Act. The respondent No. 1 CCI has the power to recall/review the order under Section 26(1) of the Act but within the parameters and subject to the restrictions - The respondent No. 1 CCI in the present case dismissed the application of the appellants for review/recall being of the opinion that it is not vested with such a power - The matter has thus to be remanded to the respondent No. 1 CCI for consideration of the application of the appellants for review/recall afresh - appeal allowed by way of remand.

Issues Involved:
1. Maintainability of an application for recall of an order under Section 26(1) of the Competition Act.
2. Jurisdiction of the Competition Commission of India (CCI) to review or recall its orders.
3. The impact of the Supreme Court's judgment in the Steel Authority of India Ltd. (SAIL) case on the right of hearing and the maintainability of recall applications.
4. The scope of judicial review of administrative actions under Article 226 of the Constitution of India.
5. The procedural requirements and powers of the Director-General (DG) of the CCI during investigation.

Detailed Analysis:

1. Maintainability of an Application for Recall of an Order under Section 26(1) of the Competition Act:
The appellants challenged the order of the CCI directing an investigation without providing them a hearing. They contended that the application for recall of the order was justified since the order was passed without their input. The CCI dismissed the recall application as not maintainable, arguing that the power of review had been expressly removed by the repeal of Section 37 of the Competition Act.

2. Jurisdiction of the CCI to Review or Recall its Orders:
The court examined whether the CCI, despite the repeal of Section 37, retains an inherent power to review or recall its orders. The court concluded that while the CCI exercises administrative power under Section 26(1), it inherently possesses the power to review or recall its orders to prevent abuse of process or miscarriage of justice. The court noted that the absence of a statutory provision for review does not negate the inherent power of administrative bodies to correct their own errors.

3. Impact of the Supreme Court's Judgment in SAIL on the Right of Hearing and Maintainability of Recall Applications:
The Supreme Court in the SAIL case held that there is no right of hearing at the stage of forming a prima facie opinion under Section 26(1). However, the court in this case distinguished that the lack of a hearing does not preclude the CCI from exercising its inherent power to review or recall its orders if the initial order was based on incorrect or incomplete information.

4. Scope of Judicial Review of Administrative Actions under Article 226 of the Constitution of India:
The court held that a writ petition under Article 226 is maintainable against an order of the CCI under Section 26(1) on limited grounds, such as the order being without jurisdiction, based on mala fide, or causing unnecessary harassment. The court emphasized that the powers of the DG during the investigation are extensive and can cause significant prejudice to the parties involved, justifying judicial intervention in appropriate cases.

5. Procedural Requirements and Powers of the DG of the CCI during Investigation:
The court noted that the DG, during the investigation, has powers akin to those of a civil court, including summoning witnesses, requiring document production, and recording evidence on oath. The court highlighted that the investigation by the DG is not merely a preliminary inquiry but can have significant consequences, necessitating a mechanism for review or recall of the order initiating such an investigation.

Conclusion:
The court concluded that the CCI has the power to review or recall its orders under Section 26(1) of the Competition Act within the parameters of preventing abuse of process or miscarriage of justice. The matter was remanded to the CCI to reconsider the application for recall afresh. The court directed that the investigation should not be concluded until the CCI decides on the recall application. The parties were instructed to appear before the Secretary, CCI, for scheduling a hearing.

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