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TMI Blog2010 (9) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... competition laws to protect their free market economies - an economic system in which the allocation of resources is determined solely by supply and demand. The rationale of free market economy is that the competitive offers of different suppliers allow the buyers to make the best purchase. The motivation of each participant in a free market economy is to maximize self-interest but the result is favourable to society. As Adam Smith observed : "there is an invisible hand at work to take care of this". 3. As far as American law is concerned, it is said that the Sherman Act, 1890, is the first codification of recognized common law principles of competition law. With the progress of time, even there the competition law has attained new dimensions with the enactment of subsequent laws, like the Clayton Act, 1914, the Federal Trade Commission Act, 1914 and the Robinson-Patman Act, 1936. The United Kingdom, on the other hand, introduced the considerably less stringent Restrictive Practices Act, 1956, but later on more elaborate legislations like the Competition Act, 1998 and the Enterprise Act, 2002 were introduced. Australia introduced its current Trade Practices Act in 1974. 4. The ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corollary of this is that the Indian market should be geared to face competition from within the country and outside. The Bill sought to ensure fair competition in India by prohibiting trade practices which cause appreciable adverse effect on the competition in market within India and for this purpose establishment of a quasi-judicial body was considered essential. The other object was to curb the negative aspects of competition through such a body namely, the 'Competition Commission of India' (for short, the 'Commission') which has the power to perform different kinds of functions, including passing of interim orders and even awarding compensation and imposing penalty. The Director General appointed under section 16(1) of the Act is a specialized investigating wing of the Commission. In short, the establishment of the Commission and enactment of the Act was aimed at preventing practices having adverse effect on competition, to protect the interest of the consumer and to ensure fair trade carried out by other participants in the market in India and for matters connected therewith or incidental thereto. 7. The various provisions of the Act deal with the establishment, powers and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilty of formation of cartels. This is so, despite the fact that there are much larger violations of the provisions in India in comparison to the other two countries, where at the very threshold, greater numbers of cases invite the attention of the regulatory/adjudicatory bodies. Primarily, there are three main elements which are intended to be controlled by implementation of the provisions of the Act, which have been specifically dealt with under sections 3, 4 and 6 read with sections 19 and 26 to 29 of the Act. They are anti-competitive agreements, abuse of dominant position and regulation of combinations which are likely to have an appreciable adverse effect on competition. Thus, while dealing with respective contentions raised in the present appeal and determining the impact of the findings recorded by the Tribunal, it is necessary for us to keep these objects and background in mind. 8. Jindal Steel & Powers Ltd. ('informant') invoked the provisions of section 19 read with section 26(1) of the Act by providing information to the Commission alleging that M/s. Steel Authority of India Ltd. ('SAIL') had, inter alia, entered into an exclusive supply agreement with Indian Railways ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the order dated 8-12-2009 was challenged by SAIL before the Competition Appellate Tribunal (for short, the 'Tribunal'). The Commission filed an application on 28-1-2010 before the Tribunal seeking impleadment in the appeal filed by SAIL. It also filed an application for vacation of interim orders which had been issued by the Tribunal on 11-1-2010, staying further proceedings before the Director General in furtherance of the directions of the Commission dated 8-12-2009. It will be useful to refer to the order passed by the Commission on 8-12-2009 at this stage itself which reads as under :- "The meeting was held under the chairmanship of Sh. H.C. Gupta, Member. (2) The case was earlier considered by the Commission in its meetings held on 4-11-2009 and 10-11-2009. In the meeting of the Commission held on 10-11-2009, Mr. Suman Kr. Dey, VP and Head Legal and Mrs. Pallavi Shroff, Advocate (along with their fellow advocates) appeared before the Commission on behalf of the informant and made detailed admissions. As per decision taken during the meeting held on 10-11-2009, informant/his counsel was directed to file an affidavit regarding the current status of the writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y maintainability of the appeal before the Tribunal was also questioned by the Commission on the ground that the order under appeal before the Tribunal was a direction simpliciter to conduct investigation and thus was not an order appealable within the meaning of section 53A of the Act. The Tribunal in its order dated 15-2-2010, inter alia, but significantly held as under :- (a)The application of the Commission for impleadment was dismissed, as in the opinion of the Tribunal the Commission was neither a necessary nor a proper party in the appellate proceedings before the Tribunal. Resultantly, the application for vacation of stay also came to be dismissed. (b)It was held that giving of reasons is an essential element of administration of justice. A right to reason is, therefore, an indispensable part of sound system of judicial review. Thus, the Commission is directed to give reasons while passing any order, direction or taking any decision. (c)The appeal against the order dated 8-12-2009 was held to be maintainable in terms of section 53A of the Act. While setting aside the said order of the Commission and recording a finding that there was violation of principles of natural ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties to submit objections and suggestions to such documents. After consideration of objections and suggestions, if the Commission agrees with the recommendations of the Director General that there is no offense disclosed, it shall close the matter forthwith, communicating the said order to the person/authority as specified in terms of section 26(6) of the Act. If there is contravention of any of the provisions of the Act and in the opinion of the Commission, further inquiry is needed, then it shall conduct such further inquiry into the matter itself or direct the Director General to do so in accordance with the provisions of the Act. 13. In terms of section 26(7), the Commission is vested with the power to refer the matter to the Director General for further investigation, or even conduct further inquiry itself, if it so chooses. The Commission, depending upon the nature of the contravention, shall, after inquiry, adopt the course specified under sections 27 and 28 of the Act in the case of abuse of dominant position and the procedure under sections 29 to 31 of the Act in the case of combinations. The Commission is vested with powers of wide magnitude and serious repercussions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations which empowers the Commission to pass such orders as it may deem fit on the basis of the facts available, where a party refuses to assist or otherwise does not provide necessary information within the stipulated time. Further, according to the informant, there was no valid reason submitted by the SAIL which would justify grant of extension and as such the order passed by the Commission on merits was not liable to be interfered. 18. We may also notice that learned counsel appearing for the parties had addressed the Court on certain allied issues which may not have strictly arisen from the memorandum of appeal, but the questions raised were of public importance and are bound to arise before the Commission, as well as the Tribunal in all matters in which the proceedings are initiated before the Commission. Thus, we had permitted the parties to argue those allied issues and, therefore, we would proceed to record the reasons while dealing with such arguments as well. 19. In order to examine the merit or otherwise of the contentions raised by the respective parties, it will be appropriate for us to formulate the following points for determination :- (1)Whether the directi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an investigation to be made into the matter. However, the Commission, being a statutory body exercising, inter alia, regulatory jurisdiction, even at that stage, in its discretion and in appropriate cases may call upon the concerned party(s) to render required assistance or produce requisite information, as per its directive. The Commission is expected to form such prima facie view without entering upon any adjudicatory or determinative process. The Commission is entitled to form its opinion without any assistance from any quarter or even with assistance of experts or others. The Commission has the power in terms of Regulation 17(2) of the Regulations to invite not only the information provider but even 'such other person' which would include all persons, even the affected parties, as it may deem necessary. In that event it shall be 'preliminary conference', for whose conduct of business the Commission is entitled to evolve its own procedure. (3)The Commission, in cases where the inquiry has been initiated by the Commission suo moto, shall be a necessary party and in all other cases the Commission shall be a proper party in the proceedings before the Competition Tribunal. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed different expressions in regard to exercise of jurisdiction by the Commission. The Commission may issue directions, pass orders or take decisions, as required, under the various provisions of the Act. The object of the Act is demonstrated by the prohibitions contained in sections 3 and 4 of the Act. Where prohibition under section 3 relates to anti-competition agreements there section 4 relates to the abuse of dominant position. The regulations and control in relation to combinations is dealt with in section 6 of the Act. The power of the Commission to make inquiry into such agreements and the dominant position of an entrepreneur, is set into motion by providing information to the Commission in accordance with the provisions of section 19 of the Act and such inquiry is to be conducted by the Commission as per the procedure evolved by the Legislature under section 26 of the Act. In other words, the provisions of sections 19 and 26 are of great relevance and the discussion on the controversies involved in the present case would revolve on the interpretation given by the Court to these provisions. 22. Thus, we may reproduce provisions of sections 19 and 26 which read as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gations and social costs; (l)relative advantage, by way of the contribution to the economic development, by the enterprise enjoying a dominant position having or likely to have an appreciable adverse effect on competition; (m)any other factor which the Commission may consider relevant for the inquiry. (5) For determining whether a market constitutes a "relevant market" for the purposes of this Act, the Commission shall have due regard to the "relevant geographic market" and "relevant product market". (6) The Commission shall, while determining the "relevant geographic market", have due regard to all or any of the following factors, namely :- (a)regulatory trade barriers; (b)local specification requirements; (c)national procurement policies; (d)adequate distribution facilities; (e)transport costs; (f)language; (g)consumer preferences; (h)need for secure or regular supplies or rapid after-sales services. (7) The Commission shall, while determining the "relevant product market", have due regard to all or any of the following factors, namely :- (a )physical characteristics or end-use of goods; (b )price of goods or service; (c )consumer preferences; (d )exclusion of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and pass such orders as it deems fit and communicate its order to the Central Government or the State Government or the statutory authority or the parties concerned, as the case may be. (7) If, after consideration of the objections or suggestions referred to in sub-section (5), if any, the Commission is of the opinion that further investigation is called for, it may direct further investigation in the matter by the Director General or cause further inquiry to be made by in the matter or itself proceed with further inquiry in the matter in accordance with the provisions of this Act. (8) If the report of the Director General referred to in sub-section (3) recommends that there is contravention of any of the provisions of this Act, and the Commission is of the opinion that further inquiry is called for, it shall inquire into such contravention in accordance with the provisions of this Act." The Tribunal has been vested with the power to hear and dispose of appeals against any direction issued or decision made or order passed by the Commission in exercise of its powers under the provisions mentioned in section 53A of the Act. The appeals preferred before the Tribunal under section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y it to the Commission and the parties to the appeal. (5) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal within six months from the date of receipt of the appeal." 23. As already noticed, in exercise of its powers, the Commission is expected to form its opinion as to the existence of a prima facie case for contravention of certain provisions of the Act and then pass a direction to the Director General to cause an investigation into the matter. These proceedings are initiated by the intimation or reference received by the Commission in any of the manners specified under section 19 of the Act. At the very threshold, the Commission is to exercise its powers in passing the direction for investigation; or where it finds that there exists no prima facie case justifying passing of such a direction to the Director General, it can close the matter and/or pass such orders as it may deem fit and proper. In other words, the order passed by the Commission under section 26(2) is a final order as it puts an end to the proceedings initiated upon receiving the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat final decision (judgment in Case 60/81 IBM v. Commission [1981] ECR 2639, at p. 2651, paragraph 8 et seq.). It follows that the fact that the contested act is a preparatory measure constitutes one of the barriers to the admissibility of an action for annulment which the Court may consider of its own motion, as the Court of Justice acknowledged in its judgment in Case 346/87 Bossi v. Commission [1989] ECR 303, especially at p. 332 et seq." 25. The provisions of sections 26 and 53A of the Act clearly depict the legislative intent that the framers never desired that all orders, directions and decisions should be appealable to the Tribunal. Once the Legislature has opted to specifically state the order, direction and decision, which would be appealable by using clear and unambiguous language, then the normal result would be that all other directions, orders etc., are not only intended to be excluded but, in fact, have been excluded from the operation of that provision. The presumption is in favour of the legislation. The Legislature is deemed to be aware of all the laws in existence and the consequences of the laws enacted by it. When other orders have been excluded from the scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpretation." 27. To us, the language of the section is clear and the statute does not demand that we should substitute 'or' or read this word interchangeably for achieving the object of the Act. On the contrary, the objective of the Act is more than clear that the Legislature intended to provide a very limited right to appeal. The orders which can be appealed against have been specifically stipulated by unambiguously excluding the provisions which the Legislature did not intend to make appealable under the provisions of the Act. It is always expected of the Court to apply plain rule of construction rather than trying to read the words into the statute which have been specifically omitted by the Legislature. 28. We may usefully refer to similar interpretation given by this Court in the case of Super Cassettes Industries Ltd. v. State of U.P. [2009] 10 SCC 531, wherein the Court was dealing with cancellation of a notice issued under section 9(2) of the U.P. Imposition of Ceiling of Land Holdings Act, 1960, requiring submission of a statement by the tenure holder for determination of surplus land in accordance with law. Sub-section (1) of section 13 of the said Act read as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amria Zurana Pereira Pinto [1979] 1 SCC 92, this Court held as under :- "5 ...It is no doubt well-settled that the right of appeal is a substantive right and it gets vested in a litigant no sooner the lis is commenced in the Court of the first instance, and such right or any remedy in respect thereof will not be affected by any repeal of the enactment conferring such right unless the repealing enactment either expressly or by necessary implication takes away such right or remedy in respect thereof." 32. The principle of 'appeal being a statutory right and no party having a right to file appeal except in accordance with the prescribed procedure' is now well settled. The right of appeal may be lost to a party in face of relevant provisions of law in appropriate cases. It being creation of a statute, Legislature has to decide whether the right to appeal should be unconditional or conditional. Such law does not violate Article 14 of the Constitution. An appeal to be maintainable must have its genesis in the authority of law. Reference may be made to M. Ramnarain (P.) Ltd. v. State Trading Corpn. of India Ltd. [1983] 3 SCC 75 and Gujarat Agro Industries Co. Ltd. v. Municipal Corpn. of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. As observed in Crawford v. Spooner Courts cannot aid the Legislatures' defective phrasing of an Act, we cannot add or mend, and by construction make up deficiencies which are left there. (See State of Gujarat v. Dilipbhai Nathjibhai Patel). It is contrary to all rules of construction to read words into an Act unless it is absolutely necessary to do so. [See Stock v. Frank Jones (Tipton) Ltd.] Rules of interpretation do not permit Courts to do so, unless the provision as it stands is meaningless or of a doubtful meaning. Courts are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself. (Per Lord Loreburn, L.C. in Vickers Sons and Maxim Ltd. v. Evans, quoted in Jumma Masjid v. Kodimaniandra Deviah." 35. The Law Commission of India, in its 183rd Report, while dealing with the need for providing principles of interpretation of statute as regards the extrinsic aids of interpretation in General Clauses Act, 1897, expressed the view that a statute is a Will of Leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant, or to exclude the words, or over emphasize language of the provision where it is plain and simple. The provisions of the Act should be permitted to have their full operation rather than causing any impediment in their application by unnecessarily expanding the scope of the provisions by implication. 37. We are unable to persuade ourselves to agree with the reasoning given and view taken by the Tribunal in this regard, in the impugned order. Even though the Tribunal referred to the dictum of the Court in the case of Tek Chand Bhatia (supra), it still concluded that the use of the words 'any' and 'or' were the expressions of wide magnitude and that 'any' being an adjective qualifies the nouns under the relevant provisions, i.e., directions, decisions and orders, all were appealable without exception. 38. The expression 'any', in fact, qualifies each of the three expressions 'direction issued or decision made or order passed'. It cannot be said that it signifies any one of them and, particularly, only 'direction issued'. All these words have been used by the Legislature consciously and with a purpose. It has provided for complete mechanism ensuring their implementation under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37 SCL 425 (SC). 41. It is always important for the Court to keep in mind the purpose which lies behind the statute while interpreting the statutory provisions. This was stated by this Court in Padma Sundara Rao's case (supra) as under :- "11. ...The first and primary rule of construction is that the intention of the legislation must be found in the words used by the Legislature itself. The question is not what may be supposed and has been intended but what has been said. "Statutes should be construed, not as theorems of Euclid", Judge Learned Hand said, "but words must be construed with some imagination of the purposes which lie behind them". (See Lenigh Valley Coal Co. v. Yensavage, 218 FR 547). The view was reiterated in Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama (AIR 1990 SC 981)." 42. Applying these principles to the provisions of section 53A(1)(a), we are of the considered view that the appropriate interpretation of this provision would be that no other direction, decision or order of the Commission is appealable except those expressly stated in section 53A(1)(a). The maxim est boni judicis ampliare justiciam, non-jurisdictionem finds application here. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may harm the interest of free and fair market and economy. Finally, we see no ambiguity in the language of the provision, but even if, for the sake of argument, we assume that the provision is capable of two interpretations then we must accept the one which will fall in line with the legislative intent rather than the one which defeat the object of the Act. 45. For these reasons, we have no hesitation in holding that no appeal will lie from any decision, order or direction of the Commission which is not made specifically appealable under section 53A(1)(a) of the Act. Thus, the appeal preferred by SAIL ought to have been dismissed by the Tribunal as not maintainable. Submissions made and findings in relation to Point Nos. 2 & 5 46. The issue of notice and hearing are squarely covered under the ambit of the principles of natural justice. Thus, it will not be inappropriate to discuss these issues commonly under the same head. The principle of audi alteram partem, as commonly understood, means 'hear the other side or hear both sides before a decision is arrived at'. It is founded on the rule that no one should be condemned or deprived of his right even in quasi-judicial proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , let us examine whether in terms of section 26(1) of the Act read with Regulations in force, it is obligatory upon the Commission to issue notice to the parties concerned (more particularly the affected parties) and then form an opinion as to the existence of a prima facie case, or otherwise, and to issue direction to the Director General to conduct investigation in the matter. 49. At the very outset, we must make it clear that we are considering the application of these principles only in light of the provisions of section 26(1) and the finding recorded by the Tribunal in this regard. The intimation received by the Commission from any specific person complaining of violation of section 3(4) read with section 19 of the Act, sets into the motion, the mechanism stated under section 26 of the Act. Section 26(1), as already noticed, requires the Commission to form an opinion whether or not there exists a prima facie case for issuance of direction to the Director General to conduct an investigation. This section does not mention about issuance of any notice to any party before or at the time of formation of an opinion by the Commission on the basis of a reference or information receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to the members of the Commission who constitute 'preliminary conference' as they alone have to decide about the existence of a prima facie case. Then, it has to convey the direction of the Commission to the Director General. After the receipt of the report of the Director General, it has to issue notice to the parties concerned. 51. Regulation 17(2) empowers the Commission to invite the information provider and such other person, as is necessary, for the preliminary conference to aid in formation of a prima facie opinion, but this power to invite cannot be equated with requirement of statutory notice or hearing. Regulation 17(2), read in conjunction with other provisions of the Act and the Regulations, clearly demonstrates that this provision contemplates to invite the parties for collecting such information, as the Commission may feel necessary, for formation of an opinion by the preliminary conference. Thereafter, an inquiry commences in terms of Regulation 18(2) when the Commission directs the Director General to make the investigation, as desired. 52. Regulation 21(8) also indicates that there is an obligation upon the Commission to consider the objections or suggestions f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 under the Customs Tariff Act, 1975. Rule 5(5) provides that while dealing with an application submitted by aggrieved domestic producers accounting for not less than 25 per cent of total production of the like article, the designated authority shall notify the government of exporting country before proceeding to initiate an investigation. Rule 6(1) also specifically requires the designated authority to issue a public notice of the decision to initiate investigation. In other words, notice prior to initiation of investigation is specifically provided for under the Anti-Dumping Rules, whereas, it is not so under the provisions of section 26(1) of the Act. 57. Cumulative reading of these provisions, in conjunction with the scheme of the Act and the object sought to be achieved, suggests that it will not be in consonance with the settled rules of interpretation that a statutory notice or an absolute right to claim notice and hearing can be read into the provisions of section 26(1) of the Act. Discretion to invite, has been vested in the Commission, by virtue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut, is not by itself determinative of the exclusion of hearing, but the consideration that the decision was purely an administrative one and a full-fledged inquiry follows is a relevant - and indeed a significant - factor in deciding whether at that stage there ought to be hearing which the statute did not expressly grant. 89. Applying the above principle, it may be held that when the investigating officer is not deciding any matter except collecting the materials for ascertaining whether a prima facie case is made out or not and a full inquiry in case of filing a report under section 173(2) follows in a trial before the Court or Tribunal pursuant to the filing of the report, it cannot be said that at that stage rule of audi alteram partem superimposes an obligation to issue a prior notice and hear the accused which the statute does not expressly recognise. The question is not whether audi alteram partem is implicit, but whether the occasion for its attraction exists at all." 59. The exclusion of principles of natural justice by specific legislative provision is not unknown to law. Such exclusion would either be specifically provided or would have to be imperatively inferred from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be void. Now, it is true that no specific order is made setting out the reason for refusal to renew the licence. But the action taken of sealing the premises for carrying on the business without a licence clearly implies that there was refusal to renew the licence and the reasons are now disclosed. And the action disclosing the decision being in violation of the principle of natural justice, deserves to be quashed." 61. Wherever, this Court has dealt with the matters relating to complaint of violation of principles of natural justice, it has always kept in mind the extent to which such principles should apply. The application, therefore, would depend upon the nature of the duty to be performed by the authority under the statute. Decision in this regard is, in fact, panacea to the rival contentions which may be raised by the parties in a given case. Reference can be made to the judgment of this Court in the case of Canara Bank v. Debasis Das [2003] 4 SCC 557. We may also notice that the scope of duty cast upon the authority or a body and the nature of the function to be performed cannot be rendered nugatory by imposition of unnecessary directions or impediments which are not postul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge or charges and would communicate the same together with a statement of the facts in support thereof sought to be relied on and would call upon the delinquent officer to submit his explanation or written statement of defence etc. At the trial/inquiry the person is entitled to reasonable opportunity to defend himself........" 63. The exceptions to the doctrine of audi alteram partem are not unknown either to civil or criminal jurisprudence in our country where-under the Code of Civil Procedure ex parte injunction orders can be passed by the court of competent jurisdiction while the courts exercising criminal jurisdiction can take cognizance of an offence in absence of the accused and issue summons for his appearance. Not only this, the Courts even record pre-charge evidence in complaint cases in absence of the accused under the provisions of the Code of Criminal Procedure. Similar approach is adopted under different systems in different countries. Reference in this regard can be made to the case of Azienda Colori Nazionali - ACNA S.P.A. v. Commission of the European Communities [1972] ECR 0933, where the argument was raised that the Commission had infringed the administrative p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 26(1) of the Act. However, Regulation 17(2) gives right to Commission for seeking information, or in other words, the Commission is vested with the power of inviting such persons, as it may deem necessary, to render required assistance or produce requisite information or documents as per the direction of the Commission. This discretion is exclusively vested in the Commission by the Legislature. The investigation is directed with dual purpose; (a) to collect material and verify the information, as may be, directed by the Commission, (b) to enable the Commission to examine the report upon its submission by the Director General and to pass appropriate orders after hearing the parties concerned. No inquiry commences prior to the direction issued to the Director General for conducting the investigation. Therefore, even from the practical point of view, it will be required that undue time is not spent at the preliminary stage of formation of prima facie opinion and the matters are dealt with effectively and expeditiously. 65. We may also usefully note that the functions performed by the Commission under section 26(1) of the Act are in the nature of preparatory measu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the reasons for grant or rejection of his prayer. Reasons are the soul of orders. Non-recording of reasons could lead to dual infirmities; firstly, it may cause prejudice to the affected party and secondly, more particularly, hamper the proper administration of justice. These principles are not only applicable to administrative or executive actions, but they apply with equal force and, in fact, with a greater degree of precision to judicial pronouncements. A judgment without reasons causes prejudice to the person against whom it is pronounced, as that litigant is unable to know the ground which weighed with the Court in rejecting his claim and also causes impediments in his taking adequate and appropriate grounds before the higher Court in the event of challenge to that judgment... 13. The principle of natural justice has twin ingredients; firstly, the person who is likely to be adversely affected by the action of the authorities should be given notice to show cause thereof and granted an opportunity of hearing and secondly, the orders so passed by the authorities should give reason for arriving at any conclusion showing proper application of mind. Violation of either of them c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain terms that it is of the view that prima facie case exists, requiring issuance of direction for investigation to the Director General. Such view should be recorded with reference to the information furnished to the Commission. Such opinion should be formed on the basis of the records, including the information furnished and reference made to the Commission under the various provisions of the Act, as afore referred. However, other decisions and orders, which are not directions simpliciter and determining the rights of the parties, should be well reasoned analyzing and deciding the rival contentions raised before the Commission by the parties. In other words, the Commission is expected to express prima facie view in terms of section 26(1) of the Act, without entering into any adjudicatory or determinative process and by recording minimum reasons substantiating the formation of such opinion, while all its other orders and decisions should be well reasoned. 69. Such an approach can also be justified with reference to Regulation 20(4), which requires the Director General to record, in his report, findings on each of the allegations made by a party in the intimation or reference subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officers to act as presenting officers before the Tribunal. 72. Section 53T grants a right in specific terms to the Commission to prefer an appeal before the Supreme Court within 60 days from the date of communication of the decision or order of the Tribunal to them. 73. The expression 'any person' appearing in section 53B has to be construed liberally as the provision first mentions specific government bodies then local authorities and enterprises, which term, in any case, is of generic nature and then lastly mentions 'any person'. Obviously, it is intended that expanded meaning be given to the term 'persons', i.e., persons or bodies who are entitled to appeal. The right of hearing is also available to the parties to appeal. The above stated provisions clearly indicate that the Commission a body corporate, is expected to be party in the proceedings before the Tribunal as it has a legal right of representation. Absence of the Commission before the Tribunal will deprive it of presenting its views in the proceedings. Thus, it may not be able to effectively exercise its right to appeal in terms of section 53 of the Act. Furthermore, Regulations 14(4) and 51 support the view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings and their addition or deletion thereof. Wide discretion is vested in the Court/appropriate forum in regard to impleadment of necessary and proper parties to the proceedings. Of course, such discretion has to be exercised in accordance with provisions of law and the principles enunciated by various judicial pronouncements. The consideration before the Court, while determining such a question, is whether the said party is a necessary or a proper party and its presence before the Court is essential for complete and effective adjudication of the subject-matter, inter alia, it should also be kept in mind that multiplicity of litigation is to be avoided and that the necessary or proper party should not be left out from the proceedings, particularly, before the Tribunal or the forum. 76. These principles were stated by this Court in Udit Narain Singh Malpaharia v. Addl. Member, Board of Revenue AIR 1963 SC 786, wherein this Court has held as under :- "7. To answer the question raised it would be convenient at the outset to ascertain who are necessary or proper parties in a proceeding. The law on the subject is well settled : it is enough if we state the principle. A nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive effect of the above reasoning is that the Commission would be a necessary and/or a proper party in the proceedings before the Tribunal. Submissions made and findings in relation to Point No. 4 80. Under this issue we have to discuss the ambit and scope of the powers vested in the Commission under section 33 of the Act. In order to objectively analyze the content of the submissions made before us, it will be appropriate to refer to the provisions of the said section, which read as under : "33. Power to issue interim orders.-Where during an inquiry, the Commission is satisfied that an act in contravention of sub-section (1) of section 3 or sub-section (1) of section 4 or section 6 has been committed and continues to be committed or that such act is about to be committed, the Commission may, by order, temporarily restrain any party from carrying on such act until the conclusion of such inquiry or until further orders, without giving notice to such party, where it deems it necessary" 81. A bare reading of the above provision shows that the most significant expression used by the Legislature in this provision is 'during inquiry'. 'During inquiry', if the Commission is satisfied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 26(1) of the Act. The former is a definite expression of the satisfaction recorded by the Commission upon due application of mind while the latter is a tentative view at that stage. Prior to any direction, it could be a general examination or enquiry of the information/reference received by the Commission, but after passing the direction the inquiry is more definite in its scope and may be directed against a party. Once such satisfaction is recorded, the Commission is vested with the power and the informant is entitled to claim ex parte injunction. The Legislature has intentionally used the words not only 'ex parte' but also 'without notice to such party'. Again for that purpose, it has to apply its mind, whether or not it is necessary to give such a notice. The intent of the rule is to grant ex parte injunction, but it is more desirable that upon passing an order, as contemplated under section 33, it must give a short notice to the other side to appear and to file objections to the continuation or otherwise of such an order. Regulation 31(2) of the Regulations clearly mandates such a procedure. Wherever the Commission has passed interim order, it shall hear the parties against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As it appears from the contents of the judgment, there is no provision for passing ex parte interim orders under the Consumer Protection Act, 1986 but the Court nevertheless dealt with requirements for the grant of an ad interim injunction, keeping in mind the expanding nature of the corporate sector as well as the increase in vexatious litigation. The Court spelt out the following principles : "36. As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the court in the grant of ex parte injunction are- (a )whether irreparable or serious mischief will ensue to the plaintiff; (b )whether the refusal or ex parte injunction would involve greater injustice than the grant of it would involve; (c )the court will also consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented; (d )the court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction; (e )the court would expect a party applying for ex parte injunction to show utmost good faith in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of the process of law and the very purpose of the Act is not defeated. Submissions made and findings in relation to Point No. 6 87. In light of the above discussion, the next question that we are required to consider is, whether the Court should issue certain directions while keeping in mind the scheme of the Act, legislative intent and the object sought to be achieved by enforcement of these provisions. We have already noticed that the principal objects of the Act, in terms of its Preamble and Statement of Objects and Reasons, are to eliminate practices having adverse effect on the competition, to promote and sustain competition in the market, to protect the interest of the consumers and ensure freedom of trade carried on by the participants in the market, in view of the economic developments in the country. In other words, the Act requires not only protection of free trade but also protection of consumer interest. The delay in disposal of cases, as well as undue continuation of interim restraint orders, can adversely and prejudicially affect the free economy of the country. Efforts to liberalize the Indian Economy to bring it at par with the best of the economies in this er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs are sub-judice, so that the persons awaiting justice can receive the same in a most expeditious and effective manner. The approach of the Commission even in its procedural matters, therefore, should be macro level rather than micro level. It must deal with all such references or applications expeditiously in accordance with law and by giving appropriate reasons. Thus, we find it necessary to issue some directions which shall remain in force till appropriate regulations in that regard are framed by the competent authority. Findings on Merits 89. Having examined various legal issues arising in the present case, we will now revert back to the facts of the case in hand. It is clear that Jindal Steel, the informant, had made a reference to the Commission. The Commission had initiated proceedings and asked for further information from the informant and thereafter, had even issued notice calling upon SAIL to submit its views and comments. From the record it is clear that parties had appeared before the Commission. The SAIL had failed to file the reply and prayed for extension of time, which was declined by the Commission in its order dated 8-12-2009. The Director General was asked to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken on record and the Commission shall apply its mind to form a prima facie view in terms of section 26(1) of the Act, if the report of the Director General has not been received as yet. In the event the report prepared by the Director General during the period 8-12-2009 to 11-1-2010 has been received, the Commission shall proceed in accordance with the provisions of the Act and the principles of law enunciated in this judgment giving proper notice to the informant as well as to SAIL and pass appropriate orders. Conclusion and Directions 90. Having discernibly stated our conclusions/answers in the earlier part of the judgment, we are of the considered opinion that this is a fit case where this Court should also issue certain directions in the larger interest of justice administration. 91. The scheme of the Act and the Regulations framed thereunder clearly demonstrate the legislative intent that the investigations and inquiries under the provisions of the Act should be concluded as expeditiously as possible. The various provisions and the Regulations, particularly Regulations 15 and 16, direct conclusion of the investigation/inquiry or proceeding within a "reasonable time". The c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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