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TMI Blog2015 (4) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction of review/recall would be exercised only if without entering into any factual controversy, CCI finds no merit in the complaint/reference on which investigation had been ordered. The application for review/recall of the order under Section 26(1) of the Act is not to become the Section 26(8) stage of the Act. The respondent No. 1 CCI has the power to recall/review the order under Section 26(1) of the Act but within the parameters and subject to the restrictions - The respondent No. 1 CCI in the present case dismissed the application of the appellants for review/recall being of the opinion that it is not vested with such a power - The matter has thus to be remanded to the respondent No. 1 CCI for consideration of the application of the appellants for review/recall afresh - appeal allowed by way of remand. X X X X Extracts X X X X X X X X Extracts X X X X ..... d, iii) Google India Pvt. Ltd., Bangalore, filed the writ petition impugning, a) the order dated 15th April, 2014 of the respondent No. 1 CCI under Section 26(1) of the Competition Act directing investigation by DG, CCI into the Case No. 06/2014 filed by the respondent No. 2, b) order dated 31st July, 2014 of the respondent No. 1 CCI dismissing the application filed by the appellants for recall of the order dated 15th April, 2014 as not maintainable, and c) for restraining the respondent No. 1 CCI from carrying out any further proceedings against the appellants pursuant to the order dated 15th April, 2014. 5. It was the contention of the senior counsel for the appellants on 10th November, 2014 when the appeal had come up first before us that the investigation against the appellants ordered by the respondent No. 1 CCI in all probability would be concluded by 9th March, 2015 for which date notice of the writ petition had been issued by the learned Single Judge, making the writ petition infructuous. It was further his contention that since the order dated 15th April, 2014 of the CCI ordering investigation against the appellants had been passed without hearing the appellants, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to review/recall its order, even in the absence of a specific power of review being conferred on it. It was prima facie felt by us on that date that it is only a person/body exercising judicial/quasi-judicial power who/which in the absence of the power of review being expressly conferred, is disentitled from exercising the said power. 9. It was for this reason only that it was felt as aforesaid that only this aspect needs to be adjudicated in these proceedings and for which reason, no counter affidavits were filed. The arguments thereafter also proceeded on this limited question only i.e. whether CCI has the power to recall/review an order passed by it of directing/causing investigation in exercise of powers under Section 26(1) of the Act. 10. Though in the light of the legal question aforesaid for adjudication, facts become irrelevant but still for the sake of completeness and to give a flavour of the grounds on which the appellants had sought recall of the order dated 15th April, 2014, we may record that it was the case of the appellants in the application for recall that the respondent No. 2 complainant had procured the said order of investigation against the appellants by con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired 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 (CCI (General) Regulations, 2009) 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." (ii) that a power to recall is different from a power of review and merely because by deletion of Section 37 of the Act, the power of review has been taken away does not mean that the power to recall the order also has been taken away; (iii) that the power of recall exists irrespective of whether the jurisdiction being exercised is judicial, quasi-judicial or administrative; (iv) Reliance was placed on: (a) Calcutta Discount Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingle Judge of this Court) was whether the Central Government exercising power as an appellate authority under the Banking Regulation Act, 1949 has power of review. Reliance on Section 21 of the General Clauses Act, 1897 (providing that where by any Central Act or Regulations, a power to issue notifications orders, rules, or bye-laws is conferred, then that power includes a power to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued) was rejected by relying on Indian National Congress (I) Vs. Institute of Social Welfare (2002) 5 SCC 685 holding that the same was not applicable to quasi judicial authorities and Election Commission discharged quasi judicial power. It was held that in the absence of a rule authorizing Government to do so, reopening of closed proceedings was ultra vires and bad in law. It was however observed that the principle that the power to review must be conferred either specifically or by necessary implication is not applicable to decisions purely of an administrative nature as the Government must be free to alter its policy or its decision in administrative matters and cannot be hidebound by the rules and restrictions of judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rules rightly and in correcting the mistake. (l) United India Insurance Co. Ltd. Vs. Rajendra Singh (2000) 3 SCC 581 where it was held that the remedy of moving the Motor Accident Claims Tribunal for recalling the order on the basis of newly discovered facts amounting to fraud of high degree, cannot be foreclosed in such a situation--no Court or Tribunal can be regarded as powerless to recall its own order if it is convinced that the order was wangled through fraud or misrepresentation of such a dimension as would affect the very basis of the claim. 13. The counsel for the respondent No. 1 CCI: (a) contended that though earlier CCI had been conferred a power to review its order but the said power has been taken away with effect from 12th October, 2007; (b) invited attention to our judgment in South Asia LPG Company Private Limited Vs. Competition Commission of India (it was informed that till then no appeal thereagainst had been preferred to the Supreme Court) holding that reasons given by the Supreme Court in SAIL (supra) for holding that no notice or hearing is required to be given to the person/enterprise informed/referred against before forming a prima face opinion and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetition Act or not is different from the question whether CCI has territorial jurisdiction over the appellants or not; (j) contended that the issue of jurisdiction is a mixed question of law and fact; (k) contended that the prejudice if any to the enterprise from being investigated against has to necessarily yield to larger public good; (l) invited attention to Section 38 of the Competition Act conferring the CCI with the power to rectify any mistake apparent from the record in the orders passed by it, stipulating that while rectifying the mistakes, the order shall not amend any substantial part of the order and therefrom contended that it follows that the power of substantial review is expressly prohibited; (m) to controvert the contention of the appellants that recall is different from review, placed reliance on: (i) Asit Kumar Kar Vs. State of West Bengal (2009) 2 SCC 703 laying down that there is a distinction between a review petition and a recall petition; while in review petition the Court considers on merits where there is an error apparent on the face of the record; in a recall petition, the Court does not go into the merits but simply recalls an order which was pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to decide and that the matter being still at the stage of further inquiry and CCI yet to take a decision in the matter, there was no reason to interfere; on the basis thereof contended that same is the position here; (q) placed reliance on Ramesh B. Desai Vs. Bipin Vadilal Mehta (2006) 5 SCC 638 to contend that a mixed question of law and fact cannot form a preliminary objection and on D.P. Maheshwari Vs. Delhi Administration (1983) 4 SCC 293 to contend that the Supreme Court had deprecated the practice of entertaining challenge under Article 226 of the Constitution of India on preliminary objections and held that all questions should be allowed to be decided first; (r) contended that investigation under Section 26(1) of the Act has been ordered against the appellants in as many as three other cases and the appellants have not assailed the said orders and there is no reason for the appellants to in the subject complaint case raise objection; (s) invited attention to the definition of "consumer" in Section 2(f) of the Competition Act to contend that the respondent No. 2 is a consumer of the appellants and the situs of the customers of the respondent No. 2 is irrelevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their source-if such a provision provides expressly or by necessary intendment for a review and recall, then alone and in accordance therewith can the earlier exercise of the statutory power be reconsidered-in the absence of such a provision, there is no inherent power to repeatedly review or recall such a statutory administrative order or decision as the power once exercised exhausts itself. (D) exercise of statutory power must be necessarily governed by the provisions of the statute itself and must carry with it a degree of finality; (ii) State of Madras Vs. C.P. Sarathy AIR 1953 SC 53 and State of Bihar Vs. D.N. Ganguly AIR 1958 SC 1018 laying down that the power of the Government under Section 10 of the Industrial Disputes Act, 1947 (I.D. Act) is administrative in nature and since the said Act does not expressly confer any power on the Government to cancel or supersede a reference, no such power exists. It was further held that Section 21 of the General Clauses Act cannot be attracted and on a perusal of the provisions of the I.D. Act it was held that once a reference had been made, it is the Labour Court/Industrial Tribunal only which can exercise jurisdiction over the disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no power to recall his order. (vii) State of Madhya Pradesh Vs. Ajay Singh (1993) 1 SCC 302 holding that the power under Section 21 of the General Clauses Act cannot permit replacement or reconstitution of a Commission under the Commissions of Inquiry Act, 1952; (ff) that prior to the amendment with effect from 12th October, 2007 creating the Competition Appellate Tribunal (CompAT), the powers exercised by CCI were judicial; however with the creation of the CompAT, the powers exercised by CCI are purely administrative; hence the legislature did not deem it necessary to vest a power of review in the CCI exercising administrative powers only; reference in this regard is made to Brahm Dutt Vs. Union of India MANU/SC/0054/2005MANU/SC/0054/2005 : (2005) 2 SCC 431; (gg) that provisions in the form of Sections 43A, 44 and 45 exist in the Competition Act for penalizing the complainant/informant for making a misleading/false statement; (hh) that once investigation has been ordered in exercise of power under Section 26(1) and till the submission of the report by the DG, CCI under Section 26(3) of the Act, there is no power with the CCI to interfere with the investigation; (ii) S. Nagraj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punjab High Court in Lal Singh (supra) is contrary to the judgment of the Division Bench of this Court in Samir Kohli (supra). (iv) that a statutory administrative power remains administrative in nature and cannot take a different hue. 17. We have weighed the position in law in the light of contentions aforesaid and particularly in the light of the judgment of the Supreme Court in SAIL (supra). The position which emerges may be thus crystallized. (A) In the light of the judgment of the Supreme Court in SAIL (supra), the power exercised by CCI under Section 26(1) is administrative. (B) A decision taken in exercise of administrative powers can be reviewed/recalled by the person/authority taking the said decision even in the absence of any specific power in that regard. The only question is, whether the said rule is not applicable to decisions taken, though in exercise of administrative power, but conferred under a statute. The ancillary question is, whether there is anything in the statute which indicates that an order under Section 26(1) ought not to be reviewed/recalled. 18. We, for the following reasons conclude that order of the CCI/direction to the DG, CCI in exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preserve all books and papers which are in their custody and power. (D) Failure to comply, without reasonable cause, with any direction of the DG, under Section 43 of the Act has been made punishable with fine extending to rupees one lakh for each day of failure, subject to a maximum of rupees one crore. (E) It would thus be seen that the powers of the DG during such investigation are far more sweeping and wider than the power of investigation conferred on the Police under the Code of Criminal Procedure. While the Police has no power to record evidence on oath, DG has been vested with such a power. Our experience of dealing with the matters under the Competition Act has shown that not only statement on oath of witnesses summoned during the course of investigation is being recorded but the said witnesses are being also permitted to be cross-examined including by the informant/claimant and which evidence as part of the report of the DG forms the basis of further proceedings before the CCI. Thus while in investigation by Police under the Cr.P.C., the rule of audi alteram partem does not apply, there is no such embargo on the DG, CCI. (F) Thus, investigation by DG, CCI tantamount t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (ii) that serious consequences flow when there is non-observance of procedure by the Police while exercising their unfettered authority; (iii) in appropriate cases an aggrieved person can always seek a remedy by invoking the power of the High Court under Article 226 of the Constitution under which, if the High Court is convinced that the power of investigation has been exercised by a Police Officer mala fide, the High Court can always issue a writ of mandamus restraining the Police Officer; (iv) the fact that the Cr.P.C. does not contain any provision giving power to a Magistrate to stop investigation by the Police, cannot be a ground for holding that such power cannot be exercised under Article 226; (v) the gravity of the evil to the community resulting from anti-social activities can never furnish an adequate reason for invading the personal liberty of a citizen except in accordance with the procedure established by the Constitution and the laws-the history of personal liberty is largely the history of insistence on observance of procedure-observance of procedure has been the bastion against wanton assaults on personal liberty over the years-under our Constitution, the only gua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is disclosed, an investigation cannot be permitted as any investigation, in the absence of offence being disclosed, will result in unnecessary harassment to a party whose liberty and property may be put to jeopardy for nothing; (xii) where there is an express legal bar engrafted in any of the provisions of the Cr.P.C. or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Cr.P.C. or the concerned Act, providing efficacious redress for the grievance of the aggrieved party, power under Article 226 could be exercised to prevent abuse of the process of any Court or otherwise to secure the ends of justice; (xiii) Similarly, where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge, power under Article 226 of the Constitution of India can be exercised; (xiv) whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case; (xv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the very appointment of Inspector (in that case under Section 237(b) of the Companies Act to investigate the Company's affairs) is likely to receive much press publicity as a result of which the reputation and prospects of the Company may be adversely affected. (O) When the effect of, an order of investigation under Section 26(1) of the Competition Act can be so drastic, in our view, availability of an opportunity during the course of proceedings before the CCI after the report of the DG, to defend itself cannot always be a ground to deny the remedy under Article 226 of the Constitution of India against the order of investigation. Though we do not intend to delve deep into it but are reminded of the principle that in cases of violation of fundamental rights, the argument of the same causing no prejudice is not available (see A.R. Antulay Vs. R.S. Nayak (1988) 2 SCC 602). (P) Though the Supreme Court in Para 30 of SAIL (supra) has observed that an order of investigation does not entail civil consequences for any but had no occasion to consider the effect of such an order or the aspect of challenge under Article 226 of the Constitution to an order under Section 26(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 226 can still be entertained where the order under challenge is wholly without jurisdiction or the like. (T) A Division Bench of the Madras High Court also recently in The Tamil Nadu Film Exhibitors Association Vs. Competition Commission of India held that the bar in Section 61 of the Competition Act to the jurisdiction of Civil Courts in respect of any matter which the CCI or CompAT is empowered to determine does not apply to the jurisdiction of the High Court under Article 226 of the Constitution and which has been held to be part of the basic structure. (U) We find a Division Bench of the Bombay High Court also, in Kingfisher Airlines Limited Vs. Competition Commission of India , to have held a writ petition under Article 226 of the Constitution of India to be maintainable against an order/direction for investigation under the Competition Act albeit for compelling reason or when the reference/information/complaint does not disclose any contravention of Section 3(1) or Section 4(1) of the Act. However in the facts of that case no case for quashing of the order/direction for investigation was found to have been made out. We may notice that SLP(C) No. 16877/2010 preferred by Ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the first instance by the CCI and this Court even if approached under Article 226, having the views of CCI before it. (Z) Reference in this regard may be made to Vinod Kumar Vs. State of Haryana (2013) 16 SCC 293 where it was held that if a wrong and illegal administrative act can in the exercise of powers of judicial review be set aside by the Courts, the same mischief can be undone by the administrative authority by reviewing such an order if found to be ultra vires and that it is open to the administrative authority to take corrective measure by annulling the palpably illegal order. (ZA) Deletion of Section 37 of the Competition Act as it stood prior to the amendment with effect from 12th October, 2007 cannot be a conclusive indication of the legislature having intended to divest the CCI of the power of review or an argument to contend that the power of review if found to be existing in the CCI de hors Section 37 has been taken away by deletion of Section 37. It is well nigh possible that the legislature deleted Section 37 finding the same to be superfluous in view of the inherent power of the CCI to review/recall its orders. The Supreme Court in K.K. Velusamy Vs. N. Palani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of the Punjab and Haryana High Court cannot be lost sight of; there, a political party in power had taken a decision to prefer an appeal against the order of acquittal of a leader of the opposite political party and which came in power and sought to recall the said decision. The Court stepped in to prevent such change in decision for political considerations; however legal reasons were given. (ZF) We have however considered whether even in the case of a decision under Section 378 of the Cr.P.C., converse would be true i.e. whether a decision not to prefer an appeal even if erroneous can attain finality. We shudder to think the consequences of holding so. The same would lead to a push and pull for having such a decision taken and thereby preventing the right minded in the Government from reversing the same. (ZG) Per contra, the Division Bench of this Court in Samir Kohli (supra) was directly concerned with the power of the Central Government to review an order/decision in exercise of powers under Section 41(3) of the Delhi Development Act, 1957 in the absence of any provision thereof in the said statute. One of the contentions there also was that once such power had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible that the CCI may finally reject the report of the DG, CCI. (ZK) The DG, CCI under Section 16 of the Competition Act, is only investigative arm of the CCI with the decision, whether there is any contravention of the provisions of the Act being required to be taken under Section 27 of the Act by the CCI. (ZL) It is also not as if the investigative powers of the DG are unlimited. The DG, CCI in conducting the investigation is bound by the confines of investigation set out in the order of the CCI under Section 26(1) of the Act and is not empowered to conduct a roving and fishing inquiry. This is also evident from Section 26(7) of the Act empowering the CCI to direct the Director-General to cause further investigation into the matter and from Regulation 20(6) of the Competition Commission of India (General) Regulations, 2009, empowering CCI to direct DG to make further investigation. It is thus not as if once an order under Section 26(1) of the Act of investigation has been made, the investigation goes outside the domain of CCI. (ZM) SAIL (supra) is a judgment only on the right of hearing of the person/enterprise complained/referred against at the stage of Section 26(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all/review the order. (ZR) Notice in this regard may also be taken of Section 36 which empowers the CCI to in the discharge of its functions regulate its own procedure. The same also permits CCI, even if were to be held to be inspite of exercising administrative power under Section 26(1) having no inherent power of review/recall, to if so deems it necessary, entertain an application for review/recall. (ZS) CCI having dismissed the application of the appellants for review/recall under the assumption that the same was not maintainable, we refuse to go into the question, whether while doing so it also made some observations on the merits of the grounds urged for review/recall. It is now for the CCI to consider whether the application of the appellants discloses any grounds to, without requiring any investigation dislodge the prima facie opinion earlier formed by the CCI, while ordering investigation. (ZT) In our view, a mere filing of an application for review/recall would not stall the investigation by the DG, CCI already ordered. Ordinarily, the said application should be disposed of on the very first date when it is taken up for consideration, without calling even for a reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 26(1) of the Act but within the parameters and subject to the restrictions discussed above. 22. The respondent No. 1 CCI in the present case dismissed the application of the appellants for review/recall being of the opinion that it is not vested with such a power. The matter has thus to be remanded to the respondent No. 1 CCI for consideration of the application of the appellants for review/recall afresh. 23. We have considered whether during the said time, the investigation already ordered should remain stayed. We intend to direct the respondent No. 1 CCI to dispose of the said application within a definite time schedule and since during the pendency of these proceedings, the respondent No. 1 CCI had assured that in the meanwhile investigation would not be concluded and no precipitative steps would be taken, we deem it appropriate that the said arrangement continues till the fresh decision of the said application for review/recall by the respondent No. 1 CCI. 24. We accordingly dispose of the appeal and the writ petition by directing the respondent No. 1 CCI to consider the application of the appellants for review/recall afresh, however within two months hereof. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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