9911796707
TMI Blog2018 (3) TMI 1553X X X X Extracts X X X X X X X X Extracts X X X X ..... ture without recording the findings which will bind the parties; that the function of the Commission to form an opinion under Section 26(1) is in a inquisitorial and regulatory power and therefore, the same is neither civil nor criminal but sui generis; that the jurisdiction of the Commission to act under Section 26(1) does not contemplate any adjudicatory function. Therefore, it is to be noted that the order passed under Section 26(1) itself does not give rise to a cause of action to subject the same to judicial interference, as the very challenge by way of statutory appeal against such order itself is barred under Section 53A, since such order does not result in civil consequences. When the very order passed under Section 26(1) is not appealable and the merits of the said order also cannot be questioned before this Court under Article 226, since it is administrative in nature, not deciding the rights of the parties in any manner and on the other hand, it is only in the form of preparatory, that too, at the preliminary stage, the petitioner and the supporting respondents are not entitled to question the said order by disputing or questioning the very reference made under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in turn, forwarded the same to erstwhile MRTP Commission, wherein the 4th respondent made an allegation that although prices of natural rubber had gone down, the tyre manufacturers have increased the prices and therefore, there was a cartel. (ii) The MRTP Commission, by order dated 13.02.2008 found that the allegation of Restrictive Trade Practice were not substantiated by the 4th respondent. However, by order dated 22.06.2010, investigation was ordered against the petitioner and respondents 6 to 8 herein. After enquiry, the 1st respondent, by order dated 30.10.2012, held that there was no sufficient evidence to hold a violation by the Tyre Companies of the provisions of Section 3(3) (a) and 3(3)(b) read with Section 3(1) of the Competition Act. The 4th respondent, once again, adopted the same modus operandi by sending a representation dated 28.1.2013 to the 1st respondent. The said representation was forwarded by the 1st respondent to the 2nd respondent on 16.12.2013. The said representation does not qualify to be a reference as per Section 19 (1)(b) of the Competition Commission Act, as it does not conform to Regulation 2(j) read with Regulation 10(2), 11(2) and 15 of the CCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the representation by the 4th respondent which were duly furnished later. On 09.07.2015, the Chairman cum Managing Director along with other Executive personnel attended the office of the 3rd respondent and the statement was recorded. The petitioner was issued with a notice on 23.09.2015 by the 3rd respondent requesting the petitioner to submit the travel details, both official and personal, including the overseas travel if any of Koshy K.Varghese, Executive Vice President (Marketing) of MRF from 01.01.2010 to 31.03.2014. The petitioner produced the official travel details. It was also stated that the Executive Vice President does not maintain any details of his personal travels. The 3rd respondent sent his email on 27.10.2015 to submit the information (e-mail dump) as sought for in notice dated 01.10.2015. Issuing such blank direction for producing all the e-mails for the purpose of conducting an investigation has a serious adverse impact on the constitutionally guaranteed right to privacy of the individual whose e-mail dump is sought. Thus, being aggrieved by the order dated 24.06.2014, the petitioner is constrained to approach this Court and file this Writ Petition. 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the fourth respondent for appropriate action. The said letter dated 16.12.2013 was signed by the then Director, MCA, after being duly approved by the then Joint Secretary. As per Regulation 11(2) of the CCI (General) Regulation 2009, a reference has to be signed and authenticated by an Officer not below the rank of Joint Secretary to Government of India. However, as per the prevalent practice, letters issued by the Central Government were issued under the signatures of Under Secretary/ Deputy Secretary/ Director, after approval of the competent authority, which in the present case is Joint Secretary. 5. The 2nd and 3rd respondents filed a common counter affidavit wherein it is stated as follows: The present writ petition is a gross abuse of process as it is an attempt to derail the process of investigation. The Director General is required to assist the Commission to conduct the enquiry into the contraventions of the Act. The information sought by the Director General is specific in nature and relates to general business of the petitioner, the disclosure of which is a statutory duty of the petitioner under the Act. The present case has been referred by the Ministry of Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of Competition Commission of India (General) Regulations, 2009, is bad in law. The 5th respondent is not filing a substantive Writ petition to avoid multiplicity of legal proceedings. A prima facie order passed by the Commission is non-est and without the authority of law in the absence of any legal and valid 'reference' in accordance with Section 19(1)(b) of the said Act and Regulation 2(j) read with Regulation 10 and 11 of the Competition Commission of India (General ) Regulations, 2009. Thus, issuance of various notices and further action taken by the Director General are also bad in law. The letter of the Ministry of Corporation Affairs dated 16.12.2013 and the representation of the 4th respondent dated 28.11.2013 do not conform to Regulation 10(2), 11(2) 15 of the said Regulations. The 1st respondent has merely forwarded the representation letter of 4th respondent for appropriate action which does not amount to a reference. The Commission failed to follow the stipulated process for initiating an enquiry for the purposes of the reference. The Commission, while passing the order under Section 26(1), has arbitrarily chosen the parties for investigation, even th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5th respondent, the information sought for by the Director General was beyond the mandate of prima facie order by not permitting a counsel or legal representative to be present during the deposition before the Director General and by not granting opportunity for oral hearing. 7. The 6th respondent filed a counter affidavit wherein it is stated as follows: The 6th respondent is engaged in the manufacture and marketing of tyres, tubes and flaps. The impugned order of the 2nd respondent is illegal as the same has been passed in the absence of any legal or valid reference as required under Section 19(1)(b) of the Act read with regulation 2(j) 10 11 of the said Regulations. The reference does not even satisfy one of the requirements mentioned in the General Regulations. Therefore, the prima facie order of the 2nd respondent is bad in law and consequently, the entire investigation undertaken by the 3rd respondent also has to be set aside. The 2nd respondent has chosen the opposite parties in arbitrary manner without any rhyme or reason, even though they were not named in the complaint made by the 4th respondent or in the so called reference made by the 1st respondent. The compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a press statement issued by the 4th respondent filed an application on 30.01.2014 under Regulation 50 of the said Regulations for inspection of documents. The 2nd respondent granted permission to undertake the inspection of documents. The 9th respondent filed intervention application on 14.02.2014 before the 2nd respondent. The said request was allowed by the 2nd respondent. The 9th respondent and the 4th respondent were directed to appear before the 2nd respondent on 05.03.2014 and both the parties were directed to file their written submissions. The 4th respondent has been making bald allegation time and again without any investigation whatsoever to prove the allegation and they are trying to misuse the precious time and resource of the courts and other forums by making such bald claims. 9. The petitioner filed a rejoinder affidavit to the counter affidavit filed by the first respondent, wherein it is stated as follows: The first respondent has clearly and specifically admitted of having merely forwarded the representation dated 28.11.2013 through their letter dated 16.12.2013 to the Competition Commission of India. The first respondent has also admitted that the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iterating the contentions raised by the petitioner once again in support of the case of the petitioner, wherein it is stated as follows: The first respondent in gross violation of the requirements enlisting under Regulation 10, did not provide details of the alleged contraventions of the Act or list of all documents, affidavits and evidence in support of outcome of the alleged contravention during the hearing before the Commission on 18.02.2014 and on the other hand, sought exemption from the future proceedings before the 2nd respondent, thereby recusing from the proceedings. The first respondent did not conduct its own detailed examination of the representation dated 28.11.2013. There is no evidence or proof that an examination / analysis into the facts of the representation dated 28.11.2013 was conducted by the Ministry of Corporation Affairs before they desire to forward the same to the CCI. 11. The 5th respondent filed a rejoinder affidavit reiterating the very same contentions as raised by the petitioner and the 9th respondent. 12. Mr.T.R.Rajagopalan, learned senior counsel appearing for the petitioner made his submissions extensively. The learned counsel for the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state any reasons. Therefore, the same passed mechanically with non-application of mind and thus it cannot be the basis for action by CCI namely, taking cognizance of the same under Section 26(1) of the Act. In this aspect, the decision of the Supreme Court in 1990(4) SCC 594 is relied on. iv) Before making a reference under Section 19(1)(b), the Government must form a prima facie view that there is a case for such reference. Regulations 10, 11 15 imposed that elaborate details have to be furnished in order to make a valid complaint or a reference. v) The withdrawal of the 1st respondent from the proceedings before the CCI also by clearly stating that they have no further submission to make, would show that the 1st respondent has no interest in the matter except to act as a forwarding agency of the complaint made by the 4th respondent. The purpose of the Regulation prescribing the Joint Secretary to sign the reference is to show that the whole process is not being done in a casual or mechanical manner. Therefore if the reference made by the1st respondent fails, the subsequent proceedings automatically fail. The note file filed by the 1st respondent as annexed to the coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed under Section 26(1) was asked for for DG CCI furnished an order under Section (1) vide letter dated 17.03.2015. The petitioner by letter dated 24.03.2015, asked for a copy of reference made by the 1st respondent and representation of AITDF dated 28.11.2015 which was not furnished. The petitioner, on 13.04.2015, once again made the said request but no copy of the reference or representation was furnished by DG CCI. The petitioner replied by letter dated 14.08.2015 and mentioned that they had to obtain the reference after inspecting the case file on 02.07.2015 and submitted that the reference was not a valid reference under Section 19(1)(b) of the Competition Act. Inspite of the said objection, the Competition Commission proceeded to investigate the matter including asking for further particulars. Hence, the petitioner was constrained to approach this Hon'ble Court on 30.10.2015. The balance of convenience for allowing the writ petition is in favour of the petitioner. 13. Mr.A.L.Somaiyaji, learned senior counsel appeared for the 5th respondent and made his elaborate submissions. The learned counsel for the 5th respondent also filed a written submissions. The sum and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturer was heard. Therefore, it is evident that the impugned order is violative of principles of natural justice insofar as the affected parties are concerned. iii) The 2nd respondent does not have jurisdiction to order investigation based on the compliant or reference as none of the ingredients either under Section 3 or under Section 4 of the said Act have been made out therein. Both the letter of the 4th respondent and the so called reference made by the first respondent do not confirm to Regulation 10(2), 11(2) and 15 of the said Regulations. Regulation 15 provides for procedure for scrutiny for information/reference and provides for rejection of the reference in case the defects are not cured within 30 days. Having not done so in the present case, the so called reference made by the 1st respondent ought to have been treated as invalid as provided under Regulation 15(3). iv) The General Regulations are mandatory in nature and cannot be given a go-by merely because they are in the nature of delegated legislation. In this connection 1987(4) SCC 611 is relied on. v) It is evident from the purported reference dated 16.12.2013 and the impugned order that the present proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his submissions made on similar lines are not reiterated once again herein. 15. Per contra, the learned Additional Solicitor General Mr.G.Rajagopal, appeared for the 2nd 3rd respondents and opposed the writ petition with elaborate submissions. A written submission is also filed by the learned counsel for the 2nd and 3rd respondents. The sum and substance of the submissions made on behalf of the 2nd and 3rd respondents are as follows: i) The petitioner is estopped from questioning the impugned order. There were several correspondence between the petitioner and the CCI after passing the impugned order and when the investigation by the Director general was at an advanced stage, the present Writ petition is moved after one and half years . On 30.10.2015, the leaned single Judge of this Court, while entertaining the writ petition passed an order directing the CCI not to take the final decision until further orders. Hence, the Director general concluded the investigation, submitted the same to the Commission and the Commission, in turn circulated the investigation report to all the parties and they also participated in the enquiry before the Commission including the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Competition Commission is wide as contemplated under Section 18 of the said Act. Therefore, the protection of the interest of the consumers is one of the duties of the commission and if any of the manufacturer/ company affects the consumers, it amounts to abusing the dominant position as referred to under Section 4(2)(a). Sub section 2 and 3 of Section 19 would show that the commission can issue any order that will protect the interests of the consumers encouraging competition etc. Even assuming without admitting that there is any error in making the reference, the representation of the aggrieved persons could be entertained and enquiry could be proceeded based on the Commission suo-motu powers. Therefore, the question of lack of jurisdiction does not arise. If a power is not traceable to Section 19(1)(b), it is traceable to Section 19(1)or under sub-section 3 to 7 of section 19. In this context, 1974 (4) SCC 396 is relied on. The reasons for issuing direction under Section 26(1) is referred to in the order itself. Therefore, Mohinder Singh Gill case reported in AIR 1978 SC 851 is not applicable. Therefore, while determining the jurisdiction of Commission mischief rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tyre production in India is controlled by certain tyre manufacturing Companies which are engaged in abusing their dominant position in fixing the price of tyre and tubes. In one such complaint dated 28.11.2013 addressed to the Ministry of Commerce and Industries and Ministry of Corporate Affairs, Government of India, the 4th respondent sought for Competition Commission of India to take suo muto action against domestic tyre manufacturers by contending, apart from other allegations, that none of the leading domestic tyre manufacturers rolled back their tyre prices even after steep drop in raw material prices. Therefore, the 4th respondent contended that there is a need to dismantle the price control mechanism of domestic tyre makers who are working in unison in regulating the price of tyres. Thus, in the above said communication, they sought action as follows: ( a) The Competition Commission of India (CCI) should be requested by the Government to immediately initiate SUO MOTO action against the restrictive trade practices of domestic tyre majors so that they are stopped from indulging in strangulating free and fair play of market forces and our earlier plea for this action i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try of Corporate Affairs stated that they have no further submissions to make and sought exemption from further proceedings. The same was allowed by the Commission. Thereafter, the matter was taken up on 05.03.2014 for hearing the 4th and the 9th respondents. The Commission also granted them liberty to present their written submissions. Consequently, the respective parties placed their submissions. Thereafter, the Commission, after considering the submissions and on perusal of the material available on record, proceeded to pass an order under Section 26(1) of the said Act on 24.06.2014 finding that the Commission is prima facie of the opinion that the case requires investigation by the Director General to find out the presence of any agreement of understanding within the meaning of Section 3 of the Act between the market players and the role of the Association to maintain/increase the prices. Before arriving at such prima facie view, the Commission elaborately discussed the facts and circumstances warranting the formation of such prima facie opinion. Challenging the said order, the present writ petition is filed before this Court. 19. Thus, the point for consideration in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have an appreciable adverse effect on competition: Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services. Explanation.- For the purposes of this sub-section, bid rigging means any agreement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding. 4.Any agreement amongst enterprises or persons at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provision of services, including- ( a)tie-in arrangement; ( b)exclusive supply agreement; ( c)exclusive distribution agreement; ( d)refusal to deal; ( e)resale price maintenance, shall be an agreement in contravention of sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be prohibited, I am not reiterating the same once again herein. 25. Chapter IV of the said Act deals with the duties, powers and functions of the Commission. Under the said Chapter Section 18 deals with the duties of Commission which reads as follows: 18. Duties of Commission Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by participants, in marketing in India: Provided that the commission may, for the purpose of discharging its duties or performing its functions under this Act, enter into any memorandum of arrangement with the prior approval of the Central Government, with any agency of any foreign country. 26. Section 19 deals with enquiry into certain agreements and dominant position of enterprises which reads follows: 19. Inquiry into certain agreements and dominant position of enterprise.- 1.The Commission may inquire into any alleged contravention of the provisions contained in sub-section (1) of section 3 or sub-section (1) of section 4 either on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erprise 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. 27. Argument was advanced on both sides elaborately on the scope and ambit of the above provision of law. A careful perusal of Section 19 would indicate the following: (a) Inquiry contemplated under the above provision of law is in respect of any alleged contravention of the provisions contained in Section 3(1) or Section4(1). (b) Such enquiry may be held by the Competition Commission either on its own motion or on receipt of any information from any person, consumer or their association or trade association or on a reference made to the commission by the Central Government or the State Government or a statutory authority. (c) While determining the allegation of contravention of provision contained in Section 3(1), the Commission shall have due regard to all or any of the factors referred to under sub-section (3) of Section 19. 28. Section 26 deals with the procedure of enquiry under Section 19 which reads as follows: 26. Procedure for inquiry on complaints under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. 29. Since the impugned order is the one passed under Section26(1) and both parties have placed much reliance on the above said provision of law in support of their case, the scope of the above said provision needs to be dealt with elaborately as follows: (a) Once a reference from the Central Government or State Government or a statutory authority or an information from any person, consumer or their as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the following orders, namely:- (a) direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be; (b) impose such penalty, as it may deem fit which shall be not more than ten per cent. of the average of the turnover for the last three preceding financial years, upon each of such person or enterprises which are parties to such agreements or abuse: Provided that in case any agreement referred to in section 3 has been entered into by any cartel, the Commission shall impose upon each producer, seller, distributor, trader or service provider included in that cartel, a penalty equivalent to three times of the amount of profits made out of such agreement by the cartel or ten per cent. of the average of the turnover of the cartel for the last preceding three financial years, whichever is higher; (c)award compensation to parties in accordance with the provisions contained in section 34; (d)direct that the agreements shall stand modified to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( ii) received in the Commission from a statutory authority under section 21 of the Act for opinion, or ( iii) sent to a statutory authority for opinion by the Commission under section 21A of the Act, or ( iv) received in the Commission from the Central Government or a State Government for opinion under sub-section (1) of section 49 of the Act. 35. Regulation 10 deals with contents of information or reference which reads as follows: 10. Contents of information or the reference- (1) The information or reference (except a reference under sub-section (1) of section 49 of the Act) shall, inter alia, separately and categorically state the following seriatum- (a) legal name of the person or the enterprise giving the information or the reference; (b) complete postal address in India for delivery of summons or notice by the Commission, with Postal Index Number (PIN) code; (c) telephone number, fax number and also electronic mail address, if available; (d) mode of service of notice or documents preferred; (e) legal name and address(es) of the enterprise(s) alleged to have contravened the provisions of the Act; and (f) legal name and address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiny of information or reference - (1) Each information or reference received in the Commission shall be scrutinized by the Secretary to check whether it conforms to these regulations and the defects, if any, shall be communicated to the party within a reasonable time not exceeding,- (a) fifteen days in case of an information or reference received under clause (b) of sub-section (1) of section 19 of the Act; or (b) seven days in case of a reference received under section 21 or sub-section (1) of section 49 of the Act. (2) The information provider referred to in clause (a) of sub-section (1) of section 19 of the Act or the Central Government or the State Government or the statutory authority referred under clause (b) of subsection (1) of section 19 or in sub-section (1) of section 49 of the Act, as the case may be, shall, on receipt of the communication about the defects under subregulation (1), remove the defects within:- (a) thirty days of receiving the intimation in case of an information or reference under clause (b) of subsection (1) of section 19 of the Act; or (b) fifteen days of receiving the intimation in case of a reference under section 21 or sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary for the preliminary conference. (3) A preliminary conference need not follow formal rules of procedure. 40. The crux of the contentions of the petitioner and the other supporting respondents based on the above provisions of law is as follows: (a) The writ petition is maintainable against the order made under Section 26(1) since there is no appealable remedy available under the said Act. (b) Assuming that the order passed under Section 26(1) is more administrative in nature, still the same is amenable for judicial scrutiny if the mandatory procedures contemplated under the statutory regulations were not followed either before or at the time of passing the said order. (c) The writ is maintainable since the very jurisdiction of the CCI is questioned, as there is no valid reference made under Section 19(1)(b) and consequently, an order passed under Section 26(1) resulting out of such invalid reference cannot be sustained. (d) The regulations are made by exercising the power conferred under Section 64 of the said Act. Hence, the Regulations are statutory in nature and consequently, the procedures contemplated therein are also mandatory and not directory or discr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. 41. Per contra, the crux of the contentions raised by the contesting respondents namely, the respondents 1 to 3 is summarised as follows: (a) The writ petition is not maintainable as against the order made under Section 26(1), since no appeal has been provided, against the said order, as no rights of the parties are affected by ordering investigation. (b) The various issues raised in this writ petition are covered in the order passed in SAIL case. (c) Mere issue of a direction for investigation does not involve any civil consequences and therefore, there is no cause of action. (d) The order passed under Section 26(1) is administrative in nature and thus, the same cannot be questioned. (e) The reference made under Section 19(1)(b) is valid and the same is in accordance with law and in compliance of the Regulations. (f) The Joint Secretary of the Ministry of Corporate Affairs also signed the minutes and therefore, the forwarding letter of the 1st respondent dated 16.02.2013 was validly made under Section 19(1)(b). The Competition Commission was satisfied w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal order and on the other hand, it is administrative in nature, not affecting the interest of the parties and not involving any civil consequences. It is also their contention that the law makers at their wisdom thought it fit not to give an appeal remedy against the said order, since it is not affecting the interest of the parties instantaneously. In support of the above contentions, the decision of the Apex Court made in SAIL case and the order of the learned single Judge made in CHETTINAD case are relied on. 44. On the other hand, it is the contention of the petitioner and the supporting respondents that in the absence of valid reference, the consequential order passed under Section 26(1), cannot be sustained and therefore, the writ is maintainable. It is their further contention that the reference made by the first respondent is not a valid reference and therefore, the second respondent Commission does not have jurisdiction to proceed, based on such invalid reference. It is also their contention that neither the SAIL nor the CHETTINAD held that no writ petition is maintainable against the order made under Section 26(1). 45. There is no dispute to the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appeal and also for vacating the interim orders granted by the Tribunal stating further proceedings before the Director General. The Commission also questioned the very maintainability of the Appeal before the Tribunal against the order passed under Section 26(1). The Tribunal, by its order dated 15.02.2010, dismissed the application filed by the Commission for impleadment holding that it is not a necessary party and that the appeal filed against the order made under Section 26(1) was maintainable in terms of Section 53B. The Tribunal also set aside the order of the Commission on the reason that it violated the principles of natural justice. Thus, the Tribunal granted further time to SAIL to file reply before the Commission in addition to the reply already filed. The said order of the Tribunal dated 15.02.2010 was challenged before the Apex Court. 47. Thus, under the above facts and circumstances, the Honourable Supreme Court found that the Appeal before the Tribunal will lie only against such direction, decision, orders passed by the Commission which have been specifically stated under Section 53A(1)(a) and that orders which have not been specifically made appealable cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as raised by the Commission before the learned single Judge that a writ petition is not maintainable in view of the finding rendered in SAIL and that the impugned order was only a prima facie finding as no civil consequence arises on account of ordering investigation. The learned Judge, dismissed the writ petition on the ground that an order under Section 26(1) is only a prima facie view and that neither the petitioner nor the 3rd respondent has raised the plea of violation of principles of natural justice or any other plea which would entitle them to invoke the extraordinary jurisdiction under Article 226 of the Constitution. While specifically dealing with the issue with regard to the maintainability, the learned Judge has observed at paragraph No.21 that the said objection raised by the respondents 1 and 2 therein cannot be stated to canvass a contention that the writ petition is not maintainable as against an order passed by the Commission and that there can be no such general embargo as the facts of each case has to be gone into, as essentially, a writ remedy is an extraordinary power vested with the High Courts to examine the correctness of the orders passed by the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court to exercise jurisdiction under Article 226 is not taken away and on the other hand, only on its discretion, it can either entertain the writ petition or reject the same and drive the party to avail the alternative remedy, based upon the facts and circumstances of each case. Therefore, I find that the preliminary objection raised by the respondents 1 to 3 against the maintainability of the writ petition is liable to be rejected. 54. At the same time, it is to be stated at this juncture that holding a writ petition maintainable does not mean that the merits of the matter are also sustainable. In other words, finding a writ petition maintainable under Article 226 of the Constitution, is only to permit the petitioner to contest the matter on merits of challenge and certainly, not to indicate that merits of such contest itself are sustainable. Therefore, this Court has to now proceed to find out as to whether the merits of the contest in this writ petition are sustainable and consequently, warrant interference by this Court against the impugned order passed under Section 26(1). Paragraph Nos.16 to 18 of the impugned order, which are the penultimate conclusion of the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed upon such prima facie view or opinion in order to take a final decision, based upon the report filed by the Director General, as to whether a contravention of Section 3 or Section 4 is there and consequently, to pass the penalty and directions as provided under Section 27, in case, if the Commission finds that there is contravention of those provisions of law. Further the Commission in this case, has specifically and categorically observed that nothing stated in the order shall tantamount to final expression on merit and that the Director General should conduct investigation uninfluenced by any of the observations made therein. 56. At this juncture, it is relevant to quote the following findings made by the Honourable Supreme Court in SAIL case , while dealing with the nature of the order passed under Section 26(1). 37. 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 receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wami vs. Union of India [(1992) 4 SCC 605] explained the expression inquisitorial'. The Court held that the investigating power granted to the administrative agencies normally is inquisitorial in nature. The scope of such investigation has to be examined with reference to the statutory powers. In that case the Court found that the proceedings, before the High Power Judicial Committee constituted, were neither civil nor criminal but sui generis. .... .... 91. The jurisdiction of the Commission, to act under this provision, does not contemplate any adjudicatory function. The Commission is not expected to give notice to the parties, i.e. the informant or the affected parties and hear them at length, before forming its opinion. The function is of a very preliminary nature and in fact, in common parlance, it is a departmental function. At that stage, it does not condemn any person and therefore, application of audi alteram partem is not called for. Formation of a prima facie opinion departmentally (Director General, being appointed by the Central Government to assist the Commission, is one of the wings of the Commission itself) does not amount to an adjudicatory f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plea raised by the petitioner that the impugned order results in civil consequences, is a plea stated to be rejected. 34. The Commission while passing the impugned order has been carefully enough to form a prima facie view without entering upon any adjudicatory or determinative process. If the plea raised by the petitioner and the third respondent is to be accepted and the Commission be directed to redo the exercise consider the submissions, it would fall foul of Section 26(1), which clearly places an embargo on the Commission not to adjudicate or determine the matter. Precisely for this reason, the Hon'ble Supreme Court held that an order under Section 26(1) is only a prima facie view and would not be an order appealable under Section 53A of the Act. 35. Thus, the Commission having clearly confined themselves to the restrictive role required to be exercised under Section 26(1) cannot be found fault of having not examined all issues, if done would have been an adjudicatory exercise, which the Commission was not entitled to do while forming a prima facie view under Section 26(1) of the Act. 59. Therefore, it is to be noted that the order passed under Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as follows: 69. In light of the above principles, 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. 70. 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. .... .... 74. Regulation 21(8) also indicates that there is an obligation upon the Commission to consider the objections or suggestions from the Central Government or the State Government or the Statutory Authority or the parties concerned and then Secretary is required to give a notice to fix the meeting of the Commission, if it is of the opinion that further inquiry is called for. In that provision notice is contemplated not only to the respective Governments but even to the parties concerned. The notices are to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the discretion of the Commission, the contesting parties herein cannot seek such notice as a matter of right. Consequently, the question of violation of principles of natural justice does not arise in this case. Even otherwise, the direction for investigation itself is not a finding rendered against the parties, more particularly, when a prima facie view or opinion need not necessarily to be affirmed in the final order, as it depends upon the outcome of the investigation and further consideration of the Commission, based on the report of the Director General. Therefore, at this stage, the parties cannot seek for compliance of the principles of natural justice. It is not in dispute that at the time of investigation, the parties concerned will be given proper notice and they will be allowed to take part in the investigation and thereafter before the Commission as well during the course of passing the final order. Therefore, I reject the above contention of the parties in respect of their claim on principles of natural justice. 64. Now let me look into the main contention of the parties regarding the reference made under Section 19(1)(b) . It is true that the first respondent for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re all the questions not to be raised at this stage, as the parties, if affected by the final order, can always raise the same as grounds of appeal under Section 53B. 66. At this juncture, it is to be noted that the Commission is also empowered to order investigation by suo motu action. When such power is vested under statute, proceeding to hear the matter further based on a defective reference will not make the proceedings itself invalid or void. At the maximum, it can be termed as irregular procedure and not an illegal procedure. 67. Even otherwise, all these submissions or objections raised against the reference and information can always be raised if an adverse order is passed by the Commission under Section 27, by filing an appeal before the Tribunal under Section 53B. Needless to say that the Appellate Tribunal being a fact finding authority as well, will consider all these contentions and decide the appeal accordingly. 68. In my considered view, when the very order passed under Section 26(1) is not appealable and the merits of the said order also cannot be questioned before this Court under Article 226, since it is administrative in nature, not deciding the rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the said decision, to the facts and circumstances of the present case, is not applicable. 71. It is vehemently contended that the second respondent Commission lacks jurisdiction to pass the impugned order based on invalid reference. I do not think that such contention is either permissible or sustainable on the very reason that the act of considering the invalid reference, even assuming to be, cannot mean that the Commission lacks its jurisdiction under sections 19 and 26, more particularly, when Section 19 also empowers the Commission to take suo motu action. Certainly, an action taken on the alleged bereft of material details, cannot be construed as an action without jurisdiction. In other words, considering the sufficiency of such material details for forming a prima facie opinion is a matter for the Commission's satisfaction before ordering investigation and therefore, consideration of such sufficiency by the Commission cannot be questioned as the one without jurisdiction. 72. A decision rendered by the Bombay High Court in W.P.No.8594/2017 in Vodofone India Limited vs. Competition Commission of India and others was relied on by the petitioner and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(1). 73. Another decision of the Delhi High Court made in LPA.No.733/2014 dated 27.04.2015 was relied on in support of the maintainability of the writ petition as well as to interfere with the order impugned herein. The Division Bench of the Delhi High Court found that a petition under Article 226 of the Constitution against the order under Section 26(1) would lie on the same parameters with that of an investigation under Criminal Procedure Code. It is also observed therein, where treating the allegations in the reference/ information/ complaint to be correct, still no case of contravention of Section 3(1) or Section 4(1) of the Act would be made out or where the said allegations are absurd and inherently improbable or where there is an express legal bar to the institution and continuance of the investigation, a petition under Article 226 would lie against such order. Insofar as the maintainability issue is concerned, this Court has already observed in the same line as found in Vodofone case . However, insofar as the finding with regard to the interference against the order on merits is concerned, I find that the decision of the Delhi High Court is also factually distinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cretion and entertain the matter as has been done by the Delhi and Bombay High Courts in the above referred cases. The facts and circumstances of the present case as discussed supra, would show that there is no jurisdictional error involved in this matter, as projected by the parties. 76. Power to go into the merits of the allegation in the reference as well as the information is within the domain of the Commission as the original adjudicating authority, with which, this Court is not expected to interfere, at this stage. It does not mean that this Court is powerless under Article 226 of the Constitution of India, but it is needless. The fact finding authority being the original authority is to be left free to find out the truthness of the allegation and pass orders after conducting due enquiry. Interference at the stage of the investigation would certainly amount to meddling with or usurping the original jurisdiction of such authority, unless such interference is so warranted for want of very jurisdiction itself. Otherwise such interference at the stage of investigation would only defeat the object sought to be achieved by the special enactment. 77. Needless to say that any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es made to facilitate the Commission to look into the matter and decide as to whether further investigation is required or not. No doubt, it is seriously contended that those procedures are mandatory and non-compliance of the same will make the reference void. When the Commission itself has proceeded to order investigation after forming an opinion that a prima facie case exists in this matter and when the rights of the parties are not affected in any manner, at this stage, as the order for investigation does not attract any civil consequences nor it determines the issue raised against the parties finally, certain procedural lapses taken place while arriving at such prima facie view itself will not make the entire proceedings invalid. On the other hand, the parties are given opportunity to take part in the investigation and thereafter to submit their objection before the Commission so as to enable the Commission to arrive at a just and proper conclusion and pass a final order under Section 27, if the report of the investigating authority, namely, the Director General goes against the parties. 80. Needless to say, receiving a complaint in the form of reference or information and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be noted that the present writ petition itself was filed after such a long time. No doubt, the delay is sought to be explained by the petitioner. In any event, this Court has not considered such delay as the reason for rejecting the writ petition, since this Court has taken the view that the very order impugned herein does not give a cause of action to subject the same for interference. One more factor to be noted herein is that the other supporting respondents in this case have not chosen to challenge the impugned order and on the other hand, they have taken part in the investigation. However, when this writ petition is filed, these parties raised very many objections with regard to the manner, in which, the investigation has been conducted. I do not think that these parties can raise all these objections in this writ petition as these grounds are the matter to be raised and agitated before the Commission or before the Appellate Tribunal as the case may be. 83. This Court makes it very clear that it is not expressing any view on the merits of the allegations made either in the reference or in the complaint made by the 4th respondent and also on the prima facie opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
