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TMI Blog2015 (12) TMI 1893X X X X Extracts X X X X X X X X Extracts X X X X ..... natural justice. In Mahipal Singh Tomar v. State of Uttar Pradesh [ 2013 (5) TMI 1064 - SUPREME COURT] , the Supreme Court examined the issue relating to violation of natural justice in a case where copy of the enquiry report was not furnished to the affected person and he was not given opportunity to represent his cause against the allegation of large scale irregularities in the placement of selected candidates in different colleges. The Chairperson did not have the opportunity of hearing the arguments of the advocates for the parties, which lasted for three days i.e. 21st, 22nd and 23rd February, 2012 and yet he became party to the decision. Obviously, he did not know what are the nature and contents of the arguments of the seven Senior Advocates and other advocates, who appeared for the parties. The minutes of the meetings recorded on those dates do not show that the remaining six Members had recorded the arguments advanced by the learned advocates, as was done by the officer who heard the arguments in Ossein and Gelatine Manufacturers' Association of India v. Modi Alkalies and Chemicals Limited and Another [ 1989 (8) TMI 347 - SUPREME COURT] . The Chairperson's pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty of having acted in violation of Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act and penalty @ 0.5 times of net profit for 2009-2010 (from 20.05.2009) and 2010-2011 was imposed on ten appellants (manufacturers of cement) and penalty of 10% on total receipts for two years was imposed on the Cement Manufacturer's Association. 2. The record of the case reveals that after about two months of the presentation made by Respondent No. 2- Builders' Association of India (BAI) and the Competition Commission of India (for short 'the Commission') before the Parliamentary Standing Committee in the context of allegation of cartelization by the manufacturers of cement and manipulation of prices by them, BAI filed information dated 26.07.2010 under Section 19(1)(a) of the Act, against the Cement Manufacturer's Association and 11 cement manufacturers with the allegation that they had formed a cartel and did not undertake production as per their installed capacity resulting in exorbitant rise in the price of cement. It was also alleged that the cement manufacturers had deliberately manipulated the price of cement affecting the public at large. 3. After consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made during the course of investigation. 8.6 The investigation has revealed that the top cement manufacturers and CMA are violating the provisions of Section 3(1), 3(3)(a), 3(3)(b) of the Competition Act, 2002. The circumstantial evidences as well as the oral evidences gathered during the course of inquiry have established that the cement manufacturers are indulging in collusive price fixing. The circumstantial evidences clearly indicate the meeting of mind and coordinated activities. 8.7 In Chapter 6 of this report, the price parallelism is proved on the basis of analysis of price data of all the companies. The economic analysis of price data established that the price of all the companies are moving in the same direction in all the states. The analysis shows that the coefficient of correlation of price changes in terms of absolute price data as well as price change data was very high and close to 1 which establishes the strong correlation among the companies. 8.8 The analysis of cost to sales ratio of all the top cement companies shows that the companies are charging super normal profit by eliminating the competition. The data relating to cost of sales and sales reali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to lessening the competition in the cement industry. 8.13 In view of investigation conducted by this office, as discussed in detail in chapters 6 and 7 of this report, the allegations leveled against the opposite parties i.e. the top cement manufacturers, have been found to be substantiated and hence the conduct of opposite parties are anti-competitive and in violation to section 3(1), 3(3)(a), 3(3)(b) of the Competition Act, 2002 6. Volume-II of the report comprises of documents marked as Annexures 1 to 18, the statements marked as S-1 to S-21, data of costing of different companies and working of margins marked as Annexure 'C and State-wise price data and economic analysis marked as Annexure 'E' 7. The report of the Jt. DG was considered by the Commission in its ordinary meeting held on 08.06.2011 and a decision was taken to supply copies thereof to the parties to enable them to file their replies/objections. After receiving copies of the report, most of the appellants filed applications for inspection of documents and supply of copies thereof. The Commission accepted the requests for inspection and also extended the time for filing replies/objections. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of 2010 respectively, decided to grant confidentiality to the stated documents under regulation 35 of the General Regulations. However, as mentioned above, since no application was moved by ACL under and in accordance with regulation 35 of the General Regulations seeking confidentiality of the information, no decision was taken by the DG in this regard. 13. From the averments made in the applications and on examining the entire material on record, it appears that certain information which was decided to be granted confidential treatment by the DG vide notings in the order sheets dated 20.05.2011 was incorporated in the reports of the DG, as detailed later in this order, which were supplied to the other parties in these cases. 14. At the outset, it needs to be highlighted that the information supplied by enterprises which are granted confidential treatment need to be kept confidential as prescribed by the Act and the regulations framed thereunder. The Act recognizes that information obtained under the Act could be commercially sensitive and its disclosure could result in harm to the enterprise. This is expressly provided in section 57 of the Act which shall be dealt with in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entiality: (a) the extent to which the information is known to outside public; (b) the extent to which the information is known to the employees, suppliers, distributors and others involved in the party's business; (c) the measures taken by the party to guard the secrecy of the information; (d) the ease or difficulty with which the information could be acquired or duplicated by others. 18. In the instant case, ACC has made a grievance regarding breach of the provisions relating to confidentiality in disseminating the reports of the DG to the parties which contain inter alia data on capacity utilization, pricing, costs, dispatch details and margins that had been claimed to be confidential by ACC before the DG. 19. Before delving into the matter, it may be clarified that in the present proceedings the Commission is not sitting in appeal over the decisions made by the DG granting confidentiality treatment to the documents claimed to be confidential by ACC. However, looking at the factual aspects of the present matter, the Commission deems it appropriate, for the limited purpose of disposal of the present applications, to examine the issue of dissemination of info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities prevails. 24. However, as mentioned above, it is to be noted that it is not the intent of the Commission in these proceedings to sit in appeal over the decisions of the DG to grant confidentiality to the documents. Nor does the Commission wish to revisit or review the said decisions in exercise of its plenary and supervisory powers conferred upon it under the scheme of the Act and in particular vested in it under regulation 3 of the General Regulations. 25. Since the DG has already decided to grant confidential treatment to the information which was disseminated through the reports of the DG and therefore it is imperative that such information is kept confidential. 26. On considering the totality of the circumstances, we pass the following order(s): (i) It is ordered that each of the parties to whom the reports of the DG have been supplied by the Commission in Case No. 29 of 2010 and RTPE No. 52 of 2006 shall destroy such reports including any copies thereof that may have been made by the parties. It is further ordered that the parties shall not use, part with, disseminate or otherwise transmit in any manner whatsoever the information in the reports of the DG. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which are reproduced below: 8. At the outset, it may be noted that in the present matters, the information was collected from about 37 cement manufacturers by the DG. From the records it appears that only three parties Viz., Associated Cement Company Ltd. (ACC), Jaiprakash Associates Ltd., (Jaypee) and Lafarge India Ltd. (Lafarge), had claimed confidentiality under regulation 35 of the General Regulations with regard to some of the information supplied to the DG. However, the applicant did not make any request for confidential treatment of the information furnished by it during the course of the investigation in these cases much less any application in accordance with the provisions contained in regulation 35 of the General Regulations. 9. The Commission in its order dated 08.08.2011 observed that the DG had granted confidentiality treatment to the information under regulation 35 of the General Regulation with respect to the three parties viz. ACC, Jaypee and Lafarge. Further, the Commission also noted certain significant facts and peculiar features which needed to be taken into account while dealing with the applications seeking confidentiality treatment of the informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Competition Act was based on comparison of price data of different cement manufacturers and price parallelism apart from other factors based on data collected by DG from different cement manufacturers regarding pricing, costing and utilization of the installed capacity. The Commission found that different cement manufacturers would not be able to argue the case about price parallelism, other comparative factors relevant for the purpose of deciding cartelization issue unless the data collected by DG was made available to the parties in the matter about the prices in different periods, in different regions. Factors like cost per unit, the capacity utilization and the demand in the market were equally important. The Commission therefore, considered that the confidentiality earlier granted to the parties in respect of pricing data could not be allowed to continue to the parties in respect of pricing data could not be allowed to continue, if the case was to be effectively argued by all the opposite parties about cartelization and other relevant issues. It would be relevant to mention that only ACC and Lafarge requested for the confidentiality of price data. 5. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secrets and revealing of the data to opposite party was not necessary for the purpose of the Act. 15. The present enquiry is being done by the commission into issue of cartelization in industry for the purpose of increasing prices, non-utilization of capacities and thereby killing competition and keeping high profit margins. Cartelization, if proved, invites heavy penalties on the parties involved. It is mandatory for the Commission to give an opportunity to all the parties facing allegation of cartelization to discredit the allegation and argue that the same were not established. The Commission cannot tell the opposite parties that they should argue their case without knowing and referring to pricing data of each other. In the issue of cartelization pricing data, the profit margin, cost of per unit of the material are the relevant factors which would reflect whether the was a cartelization or not. As in a conspiracy the direct evidence of meeting of minds is not available, so is the case in cartelization, direct evidence of agreement between different parties to a cartel is normally not available and it is to be inferred from price parallelism and other factors. 16. In orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an withdraw the concession if necessary. If the commission granted confidentiality to a party without realizing that the data about which confidentiality was granted would be necessary to be provided to other parties for effective hearing, Commission can always withdraw the confidentiality. There is no legal bar in the Act, or in the Regulations on the Commission disabling it to withdraw the confidentiality over particular data as and when necessary. What is to be seen is that withdrawing this confidentiality must be in consonance with the objective of the Act. The Commission considers that the alternate method of indexing suggested by the counsel is not an effective method of arguments. The arguments on price parallelism can be addressed by the parties only by comparing the prices per unit of cement in view of demand in different geographical region. The concerns shown by Lafarge about divulging business secrets are misplaced and unfounded. Most of the pricing data is either known or can be easily collected from market. 18. We therefore, direct the DG that the data in respect of pricing of the cement provided by different opposite parties be not treated as confidential and non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the matter and no adjournment of hearing argument will be granted. 3. The Commission considered the applications filed on behalf of ACC Ltd. and Ambuja Cements Ltd. seeking confidential treatment to their reply/objections filed with the Commission. The Commission directed them to file nonconfidential version of their reply/objections at the earliest in hard and soft copy. 4. The Commission considered the application filed on behalf of Jaiprakash Associates requesting for an electronic/coloured copy of the report. The Commission decided that the Vol. I [i.e. Main Report of 204 pages without Annexures (as available in the CD)] of the investigation report (non-confidential version) be provided in the electronic form, in accordance with the CCI (General) Regulations. 5. The parties shall file sufficient number of soft copies of reply so that a copy each may be given to other opposite parties as agreed by the parties during hearing. 6. The matter be listed for hearing in the ordinary meeting to be held on 21.02.2012, 22.02.2012 and 23.02.2012. 7. Secretary is directed to inform the parties accordingly. 13. In the meanwhile, Ambuja Cement Limited filed another ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the arguments were advanced by the advocates representing Ambuja Cements Limited, ACC Limited and Ultratech Cement Limited. On the second day, the arguments were advanced by the counsel representing Lafarge India Pvt. Limited, Jaiprakash Associates Ltd., Madras Cement, India Cement, Century Cement, J.K. Cement, Binani Cement and Cement Manufacturers' Association. On the last day, the Commission heard the advocates for BAI and granted two weeks' time to the parties to file written arguments. 15. In furtherance of the liberty given by the Commission, nine of the appellants, namely, Builders Association of India, Cement Manufacturers' Association, ACC Ltd., Ambuja Cement Ltd., Ultratech Cement Ltd., Jaypee Cement (Jai Prakash Associates Ltd.), J.K. Cements Ltd., Century Textiles Industries and Madras Cements Ltd., filed their written arguments. The same were considered in the ordinary meeting of the Commission (comprising the Chairperson and six Members) held on 14.03.2012 and it was decided to pass an appropriated order. The decision taken in that meeting was reduced in the form of an order, which reads as under: The Commission considered the matter in the ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which have some bearing on the decision of these appeals are reproduced below: 3. It may be noted here that due to the involvement of confidentiality aspect in this case, the Commission passed two versions of the final order dated 20.06.2012 i.e. confidential and public versions. In public version of the order, certain data relating to pricing and production was redacted by the Commission and the public version was forwarded to the parties for compliance. The applicant has sought a copy of the order which contains necessary data regarding pricing and production so as to enable the applicant to prepare an effective appeal against the order. 4. The factual matrix leading to this application is that on 15.09.2010, the Commission passed an order under section 26(1) of the Act directing the DG to conduct an investigation into the matter. Accordingly, after conducting an investigation, DG filed its investigation report on 01.06.2011. In between, on 07.07.2011, ACC and Ambuja Cement Limited filed applications before the Commission, inter alia, stating that confidential information of ACC and Ambuja (and every other Opposite Party in the case) has been disseminated in the DG Report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price data of Ultra Tech cannot be treated as confidential. The Commission also directed ACC and Lafarge to show cause as to why the confidential treatment given by DG to their price data, be not revoked. After hearing these parties, the Commission vide order dated 29.11.2011 directed the DG that the data in respect of pricing of the cement provided by different Opposite Parties be not treated as confidential, holding that the Opposite Parties who are facing the charge of cartelization, need to show by comparison of pricing data of their company and other companies that there was no cartelization and non-confidential version of the report be prepared accordingly and furnished to the Opposite Parties. Also the application of the Ambuja Cements Limited, seeking confidential treatment to certain information furnished to the DG during investigation was dismissed by the Commission by its order dated 27.12.2011. Final order (public version) in this case passed by the Commission on 20.06.2012, however, inadvertently redacted some of the information which was earlier declared by the Commission as nonconfidential. 9. After careful perusal of all the relevant record on the subject and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. When the appeals were taken up for final hearing, learned counsel for the parties pointed out that the records have not been received from the Commission. Thereupon, the Tribunal passed order dated 26.11.2014 and directed the Registry to send for the records of the Commission and that of the Jt. DG. The Tribunal further directed that the parties shall be free to inspect the record once the same is received from the office of the Commission and the DG. However, the parties could not inspect the record because the same was in total disarray. Therefore, the Registry was directed to return the records to the Commission for arranging the same methodically. On 25.02.2015, 22.04.2015, 20.07.2015 and 03.08.2015, the Tribunal gave directions that the records be arranged properly and copies of the documents be made available to the parties. In the intervening period, the appellants in Appeals Nos. 108, 110, 132 and 133 of 2012 filed applications for supply of specified documents. Those applications were disposed of by the Tribunal vide order dated 20.07.2015, which reads as under: This order shall dispose of the applications filed by the appellants for issue of a direction to the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the counsel for the parties to inspect the record and, if necessary, take copies of the documents, I direct the learned counsel appearing for Competition Commission of India to ensure that the record is arranged methodically within a period of two days. Learned counsel for the Applicant may inspect the record and take copies of documents from the Tribunal within four weeks. List the appeals for final arguments on 22.04.2015.... 6. As per the directions of the Hon'ble Tribunal, the record was sent back to the Commission for arranging the same in a methodological manner. Upon following up with the Registry, the Applicant was orally informed that the Commission records had been received on 16 March 2015. The Applicant filed a request for inspection, and conducted an inspection of the documents on 18 March 2015, and discovered that the record was not complete and the DG records were still missing. The only records received from the Commission related to (a) pleadings of the parties, (b) the DG Report and the Annexures thereto, (c) Confidential and Non-confidential copy of the Order of the Commission order dated 20 June 2012, (d) orders passed by the Commission, (e) letters f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 and had no idea about the contentions raised by the counsel appearing for the parties, not only became a party to the final order but also authored the same. According to the learned senior counsel, this amounts to gross violation of the rule of fairness and impartiality and casts a shadow on the integrity of the process adopted by the Commission for adjudicating the issues raised in the information filed by BAI. (b) The procedure adopted by the Commission is vitiated due to bias and lack of fairness. Learned counsel submitted that even before receipt of the information from BAI, the Commission had already expressed its views before the Parliamentary Standing Committee on the issue of cartelization by cement industry and, therefore, the entire exercise undertaken for conducting investigation and inquiry culminating into the passing of final order will be deemed to have been undertaken with a pre-determined mind to hold the appellants guilty of having formed a cartel. Shri Subramanium pointed out that the Members of the Commission, who participated in the decision making process had entertained private communications dated 12.02.2011 and 20.02.2011 sent by a former member of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order of the Competition Appellate Tribunal dated 27.04.2015 in All India Organisation of Chemists and Druggists v. Competition Commission of India, (xi) Cement Workers Karamchari Sangh v. Jaipur Udyog Ltd., (2008) 4 SCC 701 (xii) Nagarjuna Construction Company Ltd. v. Govt. of A.P. (2008) 16 SCC 276 (xiii) Bryan Finlay QC Richard Ogden, Consistence in Tribunal Decision Making: Mini LLB for Regulators, September 10, 2012 (xiv) Bharti Airtel Ltd. v. Union of India, judgement and order dated 28.09.2012 in Petition No. 444 of 2011. (xv) Doyle v. Canada (Restrictive Trade Practices Commission), 1985 Carswell Nat 26 : (1985) IFC 362 (c). Shri Subramanium further argued that the impugned order is liable to be set aside because the entire exercise for deciding the information filed by BAI was conducted with a pre-determination to penalize the cement manufacturers and give publicity to the role of the Commission. In support of this assertion, he relied upon the interviews given by the Chairperson and Member of the Commission on 30.06.2012 to the correspondent of 'Business world', in 'Walk The Talk' show on NDTV 24x7 on 03.07.2012 and 'Mint' dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the judgment of the Supreme Court in Rangi International v. Nova Scotia Bank [(2013) 7 SCC 160] to show that the adjudicatory functions of the Commission are quasi-judicial in nature and argued that it is bound to act in consonance with the principles of natural justice. He also relied upon the judgment of Karnataka High Court in M/s. Blaze and Central (P) Ltd. v. Union of India, AIR 1980 Karnataka, 186 in support of the argument that a person, who is interested in the subject which he is required to decide is not competent to do so. 26. Sarva/Shri Harman Singh Sandhu, learned counsel appearing for Associated Cement Companies Limited (Appeal Nos. 108 and 132 of 2012), P.K. Bhalla, learned counsel appearing for J.K. Cement Ltd. (Appeal Nos. 112 and 128 of 2012), G.R. Bhatia, learned counsel appearing for Jai Prakash Associates Ltd. (Appeal Nos. 107 and 129 of 2012), T. Srinivasa Murthy, learned counsel appearing for the Ramco Cements Ltd. (Appeal Nos. 111 and 123 of 2012), Aditya Verma, learned counsel appearing for M/s. India Cement Limited (Appeal Nos. 106 and 134 of 2012), Raghunatha Sethupathy, learned counsel appearing for Binani Cements (Appeal Nos. 109 and 125 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not accepted by the Commission and, therefore, the repeat of that argument should not be entertained. He then submitted that natural justice cannot be put into straight jacket formula and applicability thereof is required to be considered in the light of the relevant statute, regulatory nature of the functions performed by the Commission, its powers and duties and if that is done, the Chairperson's participation in the final order cannot be considered as having affected the merits of the case. Shri Shishodia referred to Section 22 of the Act, which regulates the meetings of the Commission and argued that participation of the Chairperson and all Members in each and every meeting is not sine qua non and the absence of Chairperson in the meetings held for hearing the arguments of the Advocates for the parties has not adversely affected the validity of the final order. He pointed out that the Commission is required to discharge several functions other than making an enquiry into the cases relating to violation of Sections 3, 4 or 5 and it is quite possible that the Chairperson or some Member who may be overseeing cases of mergers and combinations or who may be discharging functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the findings recorded by the Jt. D.G. and Commission are based not only on the information/material furnished by the appellants themselves on the issues of price parallelism, limiting of production for the particular period and availability of cement in the market at a given point of time but also from various other sources and argued that the detailed analysis conducted by the experts in the field of economics etc., do not call for interference by the Tribunal. He also invoked the doctrine of 'useless or empty formality' and argued that if the appellants are not able to show any legal infirmity in the findings recorded by the Joint D.G. and Commission on the question of violation of Section 3(3)(a) and 3(3)(b) of the Act, then the Tribunal should not nullify the impugned order by accepting the hyper technical argument relating to violation of principles of natural justice. In support of his arguments Shri Shishodia relied upon the following judgments of the Supreme Court: 1. Lala Shri Bhagwan and another v. Shri Ram Chand and Another- [AIR 1965 SC 1767]. 2. Madhya Pradesh Industries Ltd. v. Union of India and others-[ AIR 1966 SC 671]. 3. State of Jammu and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record is such a power contemplated which is exercised only under grave circumstances. However, the suo moto power of CCI is a provision of general and routine application. e) The CCI has no power of review its own orders while the COMPAT has been vested with the right to review its own orders, which is in tune with a judicial proceedings. f) No powers of contempt with the CCI while the same have been provided with the COMPAT. g) The DG, CCI in order to conduct a raid would require a search warrant from a CMM under section 41(3) of the Act. If the CCI was to be treated as any other judicial body, it would not be requiring to seek any such permission as they are incidental to any judicial process. h) There is a deeming provision under section 53-0(3) of the Act that the proceedings before the COMPAT shall be judicial proceedings within the meaning of Sections 193, 196 and 228 IPC and a civil court for the purpose of section 195 and Chapter XXVI of Cr.P.C. while the said deeming fiction is conspicuously missing from section 35 of the Act which relates to the CCI. i) Courts require a mandatory deposit of penalty (or a portion of it) while filing an appeal. However, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and passed a detailed order in which the plea of violation of natural justice was not accepted. 27.5 In the end, Shri Shishodia argued that the defect/deficiency, if any, in the order of the Commission will be deemed to have been rectified because this Tribunal has afforded fullest possible opportunity of hearing to the advocates representing the parties. 28. Shri Ankush Walia, learned counsel appearing for Respondent No. 2, BAI adopted the arguments of Shri Shishodia. 29. Before dealing with the arguments of the learned counsel for the parties, we consider it necessary and proper to first determine whether in exercise of its adjudicatory functions, the Commission acts as a quasi-judicial body and as such, it is bound to comply with the principles of natural justice and whether noncompliance of an important facet of natural justice, namely 'only the one who hears should decide' has the effect of rendering the impugned order a nullity. 30. With the globalisation in economy, the adoption of the policy of liberalisation and technological developments in the fields of science, agriculture, communication etc., issues and disputes, which were hitherto unknown to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sues. 4. The Bill also aims at curbing negative aspects of competition through the medium of CCI. CCI will have a Principal Bench and Additional Benches and will also have one or more Merger Benches. It will look into violations of the Act, a task which could be undertaken by the Commission based on its own knowledge or information or complaints received and references made by the Central Government, the State Governments or statutory authorities. The Commission can pass orders for granting interim relief or any other appropriate relief and compensation or an order imposing penalties, etc. An appeal from the orders of the Commission shall lie to the Supreme Court. The Central Government will also have powers to issue directions to the Commission on policy matters after considering its suggestions as well as the power to supersede the Commission if such a situation is warranted. 5. The Bill also provides for investigation by the Director-General for the Commission. The Director-General would be able to act only if so directed by the Commission but will not have any suo moto powers for initiating investigations. 6. The Bill confers power upon the CCI to levy penalty for cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our sections. Section 3 deals with anti-competitive agreements. Section 4 deals with abuse of dominant position. Section 5 defines Combination and Section 6 deals with the issue of Regulation of Combinations. Chapter III contains provisions for establishment of Commission (Section 7), Composition of Commission (Section 8), Selection Committee for Chairperson and Members of Commission (Section 9), Term of office of Chairperson and other Members (Section 10), Resignation, removal and suspension of Chairperson and other Members (Section 11), Restriction on employment of Chairperson and other Members in certain cases (Section 12), Administrative powers of Chairperson (Section 13), Salary and Allowances and other terms and conditions of service of Chairperson and other Members (Section 14). Section 15 carries the heading 'Vacancy, etc., not to invalidate proceedings of Commission'. Section 16 provides for appointment of Director General by the Central Government for the purpose of assisting the Commission in conducting inquiry into contravention of any of the provisions of the Act. Section 17 empowers the Commission to appoint a Secretary and such officers and other employees as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 41) relates to investigation by the Director General into any contravention of the provisions of the Act or any rules or regulations made thereunder. Chapter VI of the Act contains nine sections. Section 42 provides for consequences of contravention of the orders of Commission. Section 43 enumerates the Commission's power to impose penalty for failure to comply with the directions of Commission and Director General. Section 44 provides for imposition of penalty for making false statement or omission to furnish material information. Section 45 provides for imposition of penalty for offences in relation to furnishing of information. Section 46 gives power to the Commission to impose lesser penalty in certain cases. Section 48 deals with the issue relating to contravention by companies. Chapter VII (Section 49) deals with competition advocacy. Chapter VIII contains provisions relating to Finance, Accounts and Audit. Chapter IX contains Miscellaneous Provisions. Section 54 empowers the Central Government to grant exemption from the application of the Act, or any provision thereof to any class of enterprise provided that such exemption is considered necessary in the interest of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsistent with the provisions of the Act and for carrying out the purposes of the Act. Section 65 empowers the Central Government to pass an order for removing difficulties. Section 66 provides for repeal and saving. 33. For appreciating the true nature, ambit and scope of the amendments made by Act 39 of 2007 and Act 39 of 2009, it will be useful to notice un-amended Sections 22 to 25, 26, 33, 36, 42 and 43, which read as under: Sec. 22. Benches of Commission - (1) The jurisdiction, power and authority of the Commission may be exercised by Benches thereof. (2) The Benches shall be constituted by the Chairperson and each Bench shall consist of not less than two Members. (3) Every Bench shall consist of at least one Judicial Member. Explanation.--For the purposes of this sub-section, Judicial Member means a Member who is, or has been, or is qualified to be, a Judge of a High Court. (4) The Bench over which the Chairperson presides shall be the Principal Bench and the other Benches shall be known as the Additional Benches. (5) There shall be constituted by the Chairperson one or more Benches to be called the Mergers Bench or Mergers Benches, as the case may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference, as the case may be, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the respondents, where there are more than one, at the time of the initiation of the inquiry or institution of complaint or making of reference, as the case may be, actually and voluntarily resides or carries on business or personally works for gain provided that in such case either the leave of the Bench is given, or the respondents who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. Explanation.--A respondent, being a person referred to in sub-clause (iii) or sub-clause (vi) or sub-clause (vii) or sub-clause (viii) of clause (1) of section 2, shall be deemed to carry on business at its sole or principal place of business in India or at its registered office in India or where it has also a subordinate office at such place. Sec. 26. Procedure for inquiry on complaints under Section 19. - (1) On receipt of a complaint or a reference from the Central Government or a State Government or a statutory authority or on its own kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he satisfaction of the Commission, by affidavit or otherwise, 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, grant a temporary injunction restraining any party from carrying on such act until the conclusion of such inquiry or until further orders, without giving notice to the opposite party, where it deems it necessary. (2) Where during the inquiry before the Commission it is proved to the satisfaction of the Commission by affidavit or otherwise that import of any goods is likely to contravene sub-section (1) of section 3 or sub-section (1) of section 4 or section 6, it may, by order, grant a temporary injunction restraining any party from importing such goods until the conclusion of such inquiry or until further orders, without giving notice to the opposite party, where it deems it necessary and a copy of such order granting temporary injunction shall be sent to the concerned authorities. (3) The provisions of rules 2A to 5 (both inclusive) of Order XXXIX of the First Schedule to the Code of Civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistrar or an officer authorised by it, such books, accounts or other documents in the custody or under the control of such person so directed as may be specified or described in the direction, being documents relating to any trade, the examination of which may be required for the purposes of this Act; (b) to furnish to the Director General or the Registrar or any officer authorised by it, as respects the trade or such other information as may be in his possession in relation to the trade carried on by such person, as may be required for the purposes of this Act. (6) If the Commission is of the opinion that any agreement referred to in section 3 or abuse of dominant position referred to in section 4 or the combination referred to in section 5 has caused or is likely to cause an appreciable adverse effect on competition in the relevant market in India and it is necessary to protect, without further delay, the interests of consumers and other market participants in India, it may conduct an inquiry or adjudicate upon any matter under this Act after giving a reasonable oral hearing to the parties concerned. Sec. 42. Contravention of orders of Commission. - (1) Without preju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Commission was essentially a Regulatory Body which requires expertise in the field and such expertise cannot be supplied by the members of judiciary alone and in any case, the power of judicial review is available with the High Courts and the Supreme Court. During the pendency of the writ petition, two additional counter-affidavits were filed on behalf of the Union of India, in which it was submitted that the Government was proposing to make certain amendments so as to enable the Chairman and the Members to be selected by a Committee presided over by the Chief Justice of India or his nominee. 35. The Supreme Court noticed the background in which the Act was enacted, referred to the statements contained in the additional affidavits filed on behalf of Union of India and observed: We find that the amendments which the Union of India proposes to introduce in Parliament would have a clear bearing on the question raised for decision in the writ petition essentially based on the separation of powers recognised by the Constitution. The challenge that there is usurpation of judicial power and conferment of the same on a non-judicial body is sought to be met by taking the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions would be based on simple majority 37. However, when the amendments were finally made in the Act, the Competition (Amendment) Act, 2007 (for short Act 39 of 2007), most of the provisions relating to adjudicatory functions of the Commission were retained with minor modifications in some sections and the provision contained in paragraph 3(b) of the Competition (Amendment) Bill, 2006 was dropped. By Act 39 of 2007, Sections 8, 9, 10, 12, 13, 16, 17, 19, 20, 22, 26, 27, 28, 29, 30, 33, 36, 42, 43, 46, 49, 51, 52, 58, 61, 63, 64 and 66 were amended and Sections 23, 24, 25, 37 and 40 were repealed. Simultaneously, Sections 17(3), Sections 21-A, 42-A and 43-A were inserted. Chapter VIII-A (Sections 53-A to 53-U) was also inserted by Act 39 of 2007 to provide for establishment of the Appellate Tribunal, its composition, jurisdiction, powers, procedure etc. 38. In terms of amended Section 13, all administrative powers of general superintendence, directions and control in respect of all administrative matters came to be vested with Chairperson, who has also been empowered to delegate powers relating to administrative matters of the Commission to any other Member or officer. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serted to provide for 'Compensation in case of contravention of orders of Commission'. Section 43A was inserted to empower the Commission to impose penalty for non-furnishing of information on combinations. The amended Sections 22, 26, 33 and 36 and new Sections 42A and 43A read as under: Sec. 22. Meetings of Commission.--(1) The Commission shall meet at such times and places, and shall observe such rules and procedure in regard to the transaction of business at its meetings as may be provided by regulations. (2) The Chairperson, if for any reason, is unable to attend a meeting of the Commission, the senior-most Member present at the meeting, shall preside at the meeting. (3) All questions which come up before any meeting of the Commission shall be decided by a majority of the Members present and voting, and in the event of an equality of votes, the Chairperson or in his absence, the Member presiding, shall have a second or/casting vote: Provided that the quorum for such meeting shall be three Members.] Sec. 26. Procedure for inquiry under section 19.--On receipt of a reference from the Central Government or a State Government or a statutory authority or on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns referred to in sub section (5), if any, the Commission is of the opinion that further investigations 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.] Sec. 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. Sec. 36. Power of Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or order of the Commission issued under sections 27, 28, 31, 32 and 33 or any condition or restriction subject to which any approval, sanction, direction or exemption in relation to any matter has been accorded, given, made or granted under this Act or delaying in carrying out such orders or directions of the Commission. [43A. Power to impose penalty for non-furnishing of information on combinations.--If any person or enterprise who fails to give notice to the Commission under sub- section(2) of section 6, the Commission shall impose on such person or enterprise a penalty which may extend to one percent, of the total turnover or the assets, whichever is higher, of such a combination. 39. After about two years, Legislature again amended the Act by Act 39 of 2009. By these amendments, Section 66 was amended and proviso to the Explanation appearing in sub-section 2(a) was omitted. Simultaneously, certain substitutions/insertions were made in sub-sections (3), (4), (5) and (7) of Section 66. 40. In exercise of its power under Section 63 (unamended and amended), the Central Government has framed the following Rules. THE COMPETITION COMMISSION OF INDIA (SELECTION OF CHA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) The Commission may, on an application made by the Director General, giving sufficient reasons extend the time for submission of the report by such period as it may consider reasonable. (4) The report of the Director General shall contain his findings on each of the allegations made in the information or reference, as the case may be, together with all evidences or documents or statements or analyses collected during the investigation. Provided that when considered necessary, the Director General may, for maintaining confidentiality, submit his report in two parts. One of the parts shall contain the documents to which access to the parties may be accorded and another part shall contain confidential and commercially sensitive information and documents to which access may be partially or totally restricted. (5) Ten copies of the report of the Director General, along with a soft copy in document format, shall be forwarded to the Secretary within the time specified by the Commission: Provided that the Secretary may ask for more copies of the report as and when required. (6) If the Commission, on consideration of the report, is of the opinion that further investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of this sub-regulation, the word officer shall include the experts and professionals mentioned under sub-section (3) of section 17 or sub-section (3) of section 36 of the Act. (6) On receipt of the report of the Director General on further investigation or report of the authorized officer on further inquiries, as the case may be, the Secretary shall with the approval of the Chairperson fix the meeting of the Commission within seven days for consideration thereof. (7) If the report of the Director General mentioned under sub-regulation (1) finds contravention of any of the provisions of the Act, the Secretary shall obtain the orders of the Commission for inviting objections or suggestions from the Central Government or the State Government or the statutory authority or the parties concerned, as the case may be. (8) On consideration of the objections or suggestions from the Central Government or the State Government or the statutory authority or the parties concerned, or the report of further investigation or further inquiries, as the case may be, if the Commission is of the opinion that further inquiry is called for, the Secretary shall fix the meeting of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties before Commission. (1) Without prejudice to sub-section (1) of section 36 of the Act, the parties to the proceedings or their authorized representatives, as the case may be, shall declare to the Commission at the earliest opportunity whether they would make oral submissions or file written arguments during the course of an inquiry under section 26 of the Act: [1 proviso omitted] (2) Subject to sub-regulation (1), the Commission may fix or limit the time during which the oral submissions or written arguments shall be addressed or filed by 13 the parties or their authorized representatives, as the case may be, before it and may proceed to decide a matter in the absence of the party which does not abide by such timings as per regulation 30. 30. Power of the Commission to continue proceedings in absence of party. (1) Where on the day fixed for any particular matter during an ordinary meeting, including the day of the meeting re-fixed on adjournment, if any party or parties to the proceeding do not appear even after service of notice or having noted the date, the Commission may decide to continue proceedings in the absence of party or parties, as the case may be, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a Notary appointed under the Notaries Act, 1952 (53 of 1952) or the Secretary of the Commission; (c) admit the entries in the books of account, including those maintained in an electronic form, regularly kept in the course of business, including entries in any public or other official book, register or record or an electronic record, made by a public servant in the discharge of his official duty, or by any other person in performance of a duty specially enjoined by the law of the country in which such book, register or record or an electronic record is kept, as documentary evidence; (d) admit the opinion of any person acquainted with the handwriting of the person by whom a document is supposed to have been written or signed, as relevant fact to prove the handwriting of the person by whom the document was written or signed; (e) admit the opinion of the handwriting experts or the experts in identifying finger impressions or the persons specially skilled in interpretation of foreign law or of science or art; (f) take notice of the facts of which notice can be taken by a court of law under section 57 of the Indian Evidence Act, 1872 (1 of 1872); (g) accept the facts, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (6) The Commission or the Director General, as the case may be, may, if considered necessary or expedient, direct that the evidence of any of the parties to be recorded by an officer or person designated for the said purpose. (7) The Commission may direct the parties to file written note of arguments or submissions in the matter. 42. Supporting of facts by filing of affidavit. (1) The Commission or the Director General, as the case may be, may at any time, for sufficient reason, order that any particular fact or facts may be supported by affidavit. (2) Every affidavit shall be typed in Arial 12 fonts on one side of A4 size (210 x 297 mm or 8.27 x 11.69 ) white bond paper in double space with 2 margin on the left and 1 margin on all other sides. (3) Every affidavit shall clearly state the cause or matter in which it is sworn. (4) Every affidavit shall be drawn up in the first person, and shall be divided into paragraphs to be numbered consecutively, and shall state the description, occupation and the true place of residence of the deponent. (5) Affidavits for the purposes of any cause or matter before the Commission may be sworn before any Court or Magis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause, or if the Director General has not given sufficient opportunity to the party to adduce evidence, the Commission, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. (2) Such document may be produced or such witness examined or such evidence adduced either before the Commission or before such authority as the Commission may direct. (3) If the document is directed to be produced or witness examined or evidence adduced before any authority, he or she shall comply with the direction of the Commission and after compliance send the document, the record of the deposition of the witness or the record of the evidence adduced, to the Commission. (4) Additional evidence/document shall be made available by the Commission to the parties to the proceedings other than the party adducing the evidence and they may be afforded an opportunity to rebut the contents of the said additional evidence. 44. Power of Commission to call for information etc. (1) The Commission may, at any time before passing orders in a proceeding, require any of the parties or any other person whom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be, either on its or his own motion or on an application made by a party to any proceeding before the Commission or the Director General, may also issue a commission for the examination on questionnaires or otherwise of any witness residing at any place not within India if satisfied that the evidence of such witness is necessary and may issue a letter of request to the Indian High Commission or the Indian Embassy to facilitate the execution of the commission, under this regulation. (3) Subject to the provisions of sub-regulations (1) and (2), the Commission or the Director General, as the case may be, either on its or his own motion or on an application made by a party to any proceeding before the Commission or the Director General, may also issue a commission for the examination of specific document(s) whether available in any place situated within or without India and whether or not held in the custody of any witness being examined on questionnaires as per sub-regulations (1) and (2). (4) A commission for the examination of a witness on questionnaires or otherwise or for examination of a document issued under sub-regulation (1) or (2) or (3) may be issued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) It shall be the duty of the Secretary to publish the orders or decisions referred to in this regulation. 43. An analysis of the provisions noticed hereinabove gives a clear indication of the nature of powers and functions exercisable by the Commission and the Director General. The inquiry envisaged by Section 19(1) into any alleged contravention of Section 3(1) or Section 4(1) can be initiated by the Commission either on its own motion or on receipt of any information from any person, consumer or their association or trade association or a reference made by the Central or State Government or a statutory authority. After the information or reference received in the office of the Commission is scrutinized by the Secretary of the Commission and if the same is found to be fulfilling all the requirements of the Regulation 14, then the same is placed before the Commission for consideration whether a prima facie case has been made out for investigation. In terms of Regulation 17, the Commission can hold preliminary conference for that purpose. The Commission can invite the information provider and such other person, as may be considered necessary for the preliminary conference. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the facts of which notice can be taken by a court of law under Section 57 of the Indian Evidence Act, 1872; accept the facts, which parties to the proceedings admit or agree in writing as proved; presume that any document purporting to be a certified copy of any record of any authority, court or government of any country not forming part of India as genuine and accurate, if the document purports to be certified in any manner which is certified by any representative of the National Government of such country including certification by the Embassy or the High Commission of that country in India and admit such documents including electronic records in evidence as may be considered relevant and material for the proceedings. Clause (3) of Regulation 41 makes Sections 22A, 47A, 65B, 67A, 73A, 81A, 85A 85B, 85C, 88A, 89 and 90A of the Evidence Act applicable for the purpose of investigation by the Director General, subject, of course, to clause (2) of Regulation. 44. In terms of clause (4), the Director General can call for the parties to lead evidence by way of affidavit or lead oral evidence in the matter. In terms of clause (5), the Director General can give an opportunity to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of the Director General recommends that there is contravention of any of the provisions of the Act and the Commission forms the view that further inquiry is called for then it shall inquire into such contravention in accordance with the provisions of the Act [Regulation 26(8)]. Regulations 21 to 27 and Regulations 41 to 44 contain the procedure for conducting inquiry by the Commission. Under Regulation 35, the Commission can make a reference to any statutory authority for opinion under Section 21A. Regulation 35 empowers the Commission to grant confidentiality in certain situations. Regulation 43 empowers the Commission to take additional evidence. Regulation 46 postulates representation of the parties by their representatives before the Commission. Regulation 52 empowers the Commission to invite experts of eminence to assist the Commission in discharging of its functions under the Act. Section 36(2) lays down that the Commission shall have, for the purposes of discharging its functions under the Act, the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 in respect of the matters relating to summoning and enforcing the attendance of any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 6(2). The extent of such penalty may be upto 10% of the total turnover or the assets of the wrong doer, whichever is higher. Section 44 provides for imposition of penalty for making a false statement or omission to furnish material information in combination case. Section 45 contains a general provisions for imposition of fine upto rupees one crore for making false statement or omission to state any material fact knowing it to be a material or willful alteration, suppression or destruction of any document, which is required to be furnished. 46. From what we have mentioned above, it is clear that the procedure required to be followed by the Director General for conducting investigation and by the Commission as a prelude to the passing of orders/issue directions under Section 27 and/or the various provisions contained in Chapter-VI of the Act and corresponding regulations is akin to the procedure required to be followed by the Civil Court for deciding a suit except that the Director General and the Commission are not bound by the technicalities of the procedure contained in the Code of Civil Procedure, 1908 and rules embodied in the Evidence Act except to the extent ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge of adjudicatory functions by the Commission. Under the scheme of the Act, this Commission is vested with inquisitorial, investigative, regulatory, adjudicatory and to a limited extent even advisory jurisdiction. Vast powers have been given to the Commission to deal with the complaints or information leading to invocation of the provisions of Sections 3 and 4 read with Section 19 of the Act.... The Bench then referred to Sections 19, 26, 53A and 53B and held that an appeal against the direction given by the Commission under Section 26(1) to the Director General to hold investigation is not appealable. 49. In Rangi International Limited v. Nova Scotia Bank and others [(2013) 7 SCC 160], a two-Judge Bench of the Supreme Court considered the question whether the Commission and the Appellate Tribunal should record reasons in support of their orders and observed: The Competition Commission as well as the Competition Appellate Tribunal are exercising very important quasi-judicial functions. The orders passed by the Commission and the Appellate Tribunal can have far-reaching consequences. Therefore, the minimum that is required of the Commission as well as the Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be her correct date of birth determined on the basis of a preliminary enquiry. The respondent succeeded in convincing the High Court that the order made by the State Government was violative of the principles of natural justice because she had not been given opportunity of hearing. In the appeal preferred by the State Government, it was argued that the order refixing the age of Dr. Binapani Dei was purely an administrative action and the High Court did not have the power to sit in appeal over the decision of the State Government. While rejecting the argument and approving the order of the High Court, the Supreme Court made the following significant observations: An order by the State to the prejudice of a person in derogation of his vested rights may be made only in accordance with the basic rules of justice and fairplay. The deciding authority, it is true, is not in the position of a Judge called upon to decide an action between contesting parties, and strict compliance with the forms of judicial procedure may not be insisted upon. He is however under a duty to give the person against whom an enquiry is held an opportunity to set up his version or defence and an opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... competitors. The selections were challenged in a petition filed under Article 32 of the Constitution of India. On behalf of the respondents, it was argued that the selection of members for promotion to Indian Forest Service was purely an administrative matter and as such the rule of natural justice were not applicable. While rejecting the plea, the Supreme Court observed: The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. For determining whether a power is an administrative power or a quasi-judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised. Under our Constitution the rule of law pervades over the entire field of administration. Every organ of the State under our Constitution is regulated and controlled by the rule of law. In a Welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Underlining is ours] 54. The Court then considered the question whether the principles of natural justice are applicable in such matters, referred to the Queen's Bench judgement in re H.K. (An Infant) - [(1967) 2 QB 617] and answered the same in the affirmative. The observations made in that regard are extracted below: This takes us to the question whether the principles of natural justice apply to administrative proceedings similar to that with which we are concerned in these cases. According to the learned Attorney General those principles have no bearing in determining the validity of the impugned selections. In support of his contention he read to us several decisions. It is not necessary to examine those decisions as there is a great deal of fresh thinking on the subject. The horizon of natural justice is constantly expanding. The question how far the principles of natural justice govern administrative enquiries came up for consideration before the Queen's Bench Division In re H.K. (An Infant). [(1967) 2 QB 617 at p. 630] Therein the validity of the action taken by an Immigration Officer came up for consideration. In the course of his judgment Lord Park ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a causa) and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially there was no room for the application of the rules of natural justice. The validity of that limitation is now questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... administrative action.... The inquiry must, therefore, always be: does fairness in action demand that an opportunity to be head should be given to the person affect? 57. In Mohinder Singh Gill v. Chief Election Commissioner - [(1978) 1 SCC 405], the Constitution Bench explained the Indian origin of principles of natural justice in the following words: Indeed, natural justice is a pervasive facet of secular law where a spiritual touch enlivens legislation, administration and adjudication, to make fairness a creed of life. It has many colours and shades, many forms and shapes and, save where valid law excludes, it applies when people are affected by acts of authority. It is the hone [Ed.: The word hone is usually used as a verb, meaning to sharpen . Rarely, it is also used a noun, as here, meaning whetstone .] of healthy government, recognised from earliest times and not a mystic testament of Judge-made law. Indeed from the legendary days of Adam--and of Kautilya's Arthasastra--the rule of law has had this stamp of natural justice which makes it social justice. We need not go into these deeps for the present except to indicate that the roots of natural justice and its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . For making the aforesaid observations, the Supreme Court relied upon paragraph 6 of the European Convention on Human Rights and Fundamental Freedoms of 1950, and a number of decisions including A.K. Kraipak v. Union of India (supra), State of Orissa v. Binapani Dei (supra), Sayeedur Rehman V. State of Bihar-[(1973) 3 SCC 333], Sirsi Municipality v. Ceclia Kom Francis Tellis-[(1973) 1 SCC 409], Maneka Gandhi v. Union of India- [(1978) 1 SCC 248], Mohinder Singh Gill v. Chief Election Commissioner- [ (1978) 1 SCC 405], Union of India v. Tulsiram Patel - [(1985) 3 SCC 398], Inderpreet Singh Kahlon v. State of Punjab -[(2006) 11 SCC 356] and Onkar Lal Bajaj v. Union of India - [(2003) 2 SCC 673]. 59. In Manohar v. State of Maharashtra and another - [(2012) 13 SCC 14], the Supreme Court explained the applicability of the principles of natural justice to the State Information Commission performing adjudicatory functions in the following words: The State Information Commission has been vested with wide powers including imposition of penalty or taking of disciplinary action against the employees. Exercise of such power is bound to adversely affect or bring civil consequences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Institute replied that the Council had appointed a Sub-Committee for considering the ethical problems arising out of the functioning of the Institute's members in the area of Management Consultancy Service and the firm was requested to wait for the recommendations of the Sub-Committee. On December 8, 1971, Ratna issued a circular to the partners and principals of the firm setting forth guidelines on bringing the Management Consultancy Service brochures to the attention of their respective clients. Meanwhile, Ferguson Co. also referred the matter to their solicitors, and the solicitors advised that making available of printed informative material in the form of a brochure would not be in contravention of clauses 6 and 7 in Part I of the First Schedule to the Act or otherwise amount to professional misconduct. A few days later the Council published an exposure draft , setting forth the proposals under consideration by the Council regarding the regulations and ethical rules in respect of Management Consultancy Services by Chartered Accountants and invited members to send their suggestions on the proposals. It was pointed out further that the recommendations to be m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members of the Institute, who were members of the Disciplinary Committee, were disqualified from participating in the proceedings of the Council when it considered the report of the Disciplinary Committee. The Division Bench dismissed the appeal filed by the Institute. The Supreme Court referred to the relevant provisions of the Act and observed: The Council is empowered to find a member guilty of misconduct. The penalty which follows is so harsh that it may result in his removal from the Register of Members for a substantial number of years. The removal of his name from the Register deprives him of the right to a certificate of practice. As is clear from Section 6(1) of the Act, he cannot practice without such certificate. In the circumstances there is every reason to presume in favour of an opportunity to the member of being heard by the Council before it proceeds to pronounce upon his guilt. As we have seen, the finding by the Council operates with finality in the proceeding, and it constitutes the foundation for the penalty imposed by the Council on him. We consider it significant that the power to find and record whether a member is guilty of misconduct has been specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of justice, fairness, good conscience, equity and objectivity will be opposed to public policy. It follows that any rule, contract or arrangement that actually defeats or tends to defeat the high ideals of fairness and objectivity in the discharge of public functions no matter by a private non-governmental body will be opposed to public policy. Applied to the case at hand Rule 6.2.4 to the extent, it permits, protects and even perpetuates situations where the administrators can have commercial interests in breach or conflict with the duty they owe to BCCI or to the people at large must be held to be against public policy, hence, illegal. That is particularly so when BCCI has in the Anti-Corruption Code adopted by it recognised public confidence in the authenticity and integrity of the sporting contest as a fundamental imperative. It has accepted and, in our opinion rightly so, that all cricket matches must be contested on a level playing field with the outcome to be determined solely by the respective merits of the competing teams. The Anti-Corruption Code of BCCI does not mince words in accepting the stark reality that if the confidence of the public in the purity of the game is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, read with the public Premises (Eviction of Unauthorised Occupants) Rules, 1971. Rule 5 of the Rules provides that the Estate Officer shall record the summary of the evidence tendered before him and the summary of such evidence and any relevant documents filed before him shall form part of the record of the proceedings. Exercise of the power under the Act is undoubtedly quasi-judicial. The petitioner has a right to be heard before the Estate Officer and if the right to be heard is to be a real right which is worth anything, it must carry with it a right to know the evidence of the opposite side. The petitioner must therefore be told what evidence has been given or what statements have been made by the opposite side. In other words, to put it shortly, the petitioner must be given a fair opportunity to correct or contradict the statements recorded or the evidence collected in his presence or absence. This one principle uniformly appears in all the cases commencing from the celebrated judgment of Lord Loreburn L.C. in Board of Education in Rice [(1911) A.C. 179 at page 182.] wherein the following passage appears: Comparatively recent statutes have extended, if they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporation and Another (supra), and it was held that an order passed by a person who had not heard the arguments offends the principle of judicial procedure. The facts of that case were that the second and third ground on which the appellant has questioned the impugned order can be taken up simultaneously. The appellants were carrying on motor transport business for several years in Krishna District in the State of Andhra Pradesh, Shri Guru Pershad, styled as the General Manager of the State Transport Undertaking of the Andhra Pradesh Road Transport, published a scheme for nationalization of motor transport in the said State from the date to be notified by the State Government. Objections to the said proposed scheme were invited by the State Government, and the appellants among others, filed their objects. On December 26, 1957, the Secretary in charge of the Transport Department gave a person hearing to the objectors and heard the representations made on behalf of the State Transport undertaking. The entire material gathered by him was placed before the Chief Minister of the State in charge of transport who made the order approving the scheme. The approved scheme was published in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of the principles of natural justice. In appeal the Supreme Court reversed the order of the High Court and held: ...In the case of quasi-judicial proceedings, the authority empowered to decide the dispute between opposing parties must be one without bias towards one side or other in the dispute. It is also a matter of fundamental importance that a person interest in one party or the other should not, even formally, take part in the proceedings though in fact he does not influence the mind of the person, who finally decides the case. This is one the principle that justice should not only be done, but should manifestly and undoubtedly be seen to be done. The hearing given by the Secretary, Transport Department, certainly offends the said principle of natural justice and the proceedings and the hearing given, in violation of that principle, are bad. The second objection is that while the Act and the rules framed thereunder impose a duty on the State Government to give a personal hearing, the procedure prescribed by the Rules imposes a duty on the Secretary to hear and the Chief Minister to decide. This divided responsibility is destructive of the concept of judicial h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme of the Tariff Act read with the 1995 Rules on the touchstone of the aforenoted principles, particularly the first principle enunciated in Khushaldas S. Advani [AIR 1950 SC 222], we have no hesitation in coming to the conclusion that this is an obvious case where the DA exercises quasi-judicial functions and is bound to act judicially. A cursory look at the relevant Rules would show that the DA determines the rights and obligations of the interested parties by applying objective standards based on the material/information/evidence presented by the exporters, foreign producers and other interested parties by applying the procedure and principles laid down in the 1995 Rules. The Supreme Court then in Swadeshi Cotton Mills v. Union of India -[(1981) 1 SCC 664] took cognizance of the fact that the opportunity to file objections and adduce evidence as also opportunity of personal hearing was quoted by one officer and the final order was passed by another officer and held: In the present case, admittedly, the entire material had been collected by the predecessor of the DA; he had allowed the interested parties and/or their representatives to present the relevant in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d having been passed in violation of the principles of natural justice. 67. We may now revert to the factual matrix necessary and relevant for deciding the question posed in the opening paragraph of this order. It is not in dispute that even though the Chairperson of the Commission did not participate in the meetings held on 21st, 22nd and 23rd February, 2012 and did not hear the arguments of seven Senior Advocates namely- S/Shri Ashok Desai, K.K. Venugopal, Ramji Srinivasan, Aspi Chinoy, Parag Tripathi, Shri Anant Haksar and Shri O.P. Dua and other learned counsel, he joined six remaining Members in passing the final order. As noted earlier, two orders were recorded on 20.06.2012. The fact that the Commission has passed two orders is clearly born out from order dated 04.09.2012, the relevant portions of which have been extracted hereinabove but what is interesting and intriguing to note is that even though in paragraph 10 of that order, the Commission comprising Chairperson and six Members had directed the Secretary to get the required portions of the final order dated 20.06.2012 (public version) amended and supply the same to the parties after due approval and signatures of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion), who did not have the opportunity to hear the arguments of the Advocates for the parties (for three days), who included eminent lawyers like S/Shri Ashok Deasi, K.K. Venugopal, Anant Haksar, Parag Tripathi, Ramji Srinivasan, Aspi Chinoy and O.P. Dua could decide the matter. How could he know the nature and contents of the arguments made by the Advocates representing the parties. For anybody, who has not heard the Advocates for the parties, it will be nothing more than a wild guess as to what they may have argued. The learned counsel may have pointed out several infirmities in the procedure adopted by the Jt. Director General in conducting the investigation and the conclusion recorded by him. They might have pointed out that the report of the Jt. Director General is contrary to the record or is otherwise laconic in several respects. They might have argued that the Jt. Director General did not take into consideration the relevant material or considered the irrelevant material. For us, it is not possible to imagine as to what the learned counsel representing the parties might have argued. It is a matter of mystery that without having any idea about the arguments advanced by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enables the authority concerned to watch the demeanour of the witnesses and clear-up his doubts during the course of the arguments, and the party appearing to persuade the authority by reasoned argument to accept his point of view. If one person hears and another decides, then personal hearing becomes an empty formality. In Rasid Javed's case (supra), this rule was reiterated in the following words: A person who hears must decide and that divided responsibility is destructive of the concept of judicial hearing. Such a procedure defeats the object of personal hearing is to fundamental proposition to be doubted. The same view was has been reiterated in Automative Tyre Manufacturers Association v. Designated Authority and Others (supra) and Union of India v. Shiv Raj and others (supra). 72. Although no concrete evidence can possibly be produced by any person other than the Members of the Commission as to what extent the Chairperson influenced their views on the merits of the case but there can be no doubt that his presence in the decision-making process must have had telling effect. Even though, while discharging adjudicatory functions of the Commission, all Members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for investigation and for dealing with the applications filed by the parties or even by the Jt. DG for extension of time, but he did not participate in the most crucial meetings held on 21st, 22nd and 23rd February, 2012 when the arguments of the advocates representing the parties were heard. We may also observe that if the Chairperson had participated in all the meetings including those in which the arguments of the learned counsel for the parties were heard, then he would not have passed two orders, one containing public version and other containing confidential version ignoring the earlier detailed order passed on 29.11.2011 substantially diluting two earlier orders whereby the prayer of ACC Ltd., Ambuja Cement Ltd. and Ultratech Cement Limited for grant of confidentiality to pricing data was accepted and another order passed on 02.12.2011 refusing to grant confidentiality to certain information/documents furnished by Ambuja Cement Limited along with its objections. How could the Chairperson and other Members of the Commission be oblivious of the detailed order passed on the issue of confidentiality of the pricing data and record two orders on the same date (public version and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right to a fair trial and the right of appeal, why should he be told that he ought to be satisfied with an unjust trial and a fair appeal? Even if the appeal is treated as a hearing de novo, the member is being stripped of his right to appeal to another body from the effective decision to expel him. I cannot think that natural justice is satisfied by a process whereby an unfair trial, though not resulting in a valid expulsion, will nevertheless have the effect of depriving the member of his right of appeal when a valid decision to expel him is subsequently made. Such a deprivation would be a powerful result to be achieved by what in law is a mere nullity; and it is no mere triviality that might be justified on the ground that natural justice does not mean perfect justice. As a general rule, at all events, I hold that a failure of natural justice in the trial body cannot be cured by a sufficiency of natural justice in an appellate body. The view taken by Megarry, J. was followed by the Ontario High Court in Canada in Re Cardinal and Board of Commissioners of Police of City of Cornwall [(1974) 42 DLR (3d) 323]. The Supreme Court of New Zealand was similarly inclined in Wisla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pting a liberal view, for as has been observed by the late Professor S.A. de Smith in his Judicial Review of Administrative Action [Fourth Edn., p. 261]. 76. The reliance placed by Shri Shishodia on Section 15 of the Act to defend participation of the Chairperson in the decision-making process is clearly misplaced. That section operates as a shield against the invalidation of the proceedings of the Commission only on the ground that there exists any vacancy in the Commission or any defect in its constitution or any defect in the appointment of a person acting as a Chairperson or as a Member or any irregularity in the procedure of the Commission not affecting the merits of the case. The present one is not a case of a vacancy or any defect in the constitution of the Commission. It is also not a case of any defect in the appointment of a Chairperson or a Member. The challenge to the impugned order is also not founded on any irregularity in the procedure of the Commission. Rather, one of the main grounds of attack is that the Chairperson, who did not hear the arguments could not have participated in the decision-making process and passed the impugned order and as we have held in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been disposed of by a single appellate order in form, in reality the appellate order consists of as many orders as there are appeals disposed of thereby. In this very case there were seven appeals before the Appellate Tribunal and the order says that the appeal of the appellant alone was allowed while the other appeals were dismissed. Now if none of the parties concerned in the seven appeals had come to the High Court in writ proceedings within a reasonable time, the order of the Appellate Tribunal would have become final, even though it might have been influenced by the Government Order in question. Therefore there seems to be no reason why when only one party brought the matter before the High Court by way of writ proceedings against another party, and the appellants in the other six appeals were content with the order passed by the Appellate Tribunal, the High Court should interfere in favour of those persons also who had not thought fit to challenge the order of the Appellate Tribunal. On principle therefore it does not appear right that the High Court should set aside orders in appeal passed by the Appellate Tribunal when the parties to those appeals do not bring up the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice in Milwaukee. On June 20, 1973, the Board sent a notice to the appellant that it would hold an investigative hearing under Wisconsin Statute Ann. 448.17 to determine whether he had engaged in certain proscribed acts. The appellant challenged the notice and sought preliminary and permanent injunctive relief and a temporary restraint order against the Board from investigating him and from conducting the investigative hearing. The District Court denied temporary injunction. He then filed an amended complaint in which among other reliefs, the appellant prayed for declaring the concerned Statute as unconstitutional on the ground that the same violates his constitutional rights. Initially, the District Court declared the Statute unconstitutional but subsequently modified its judgement to eliminate the declaration of unconstitutionality. While dealing with the contention that the combination of investigative and adjudicative functions necessarily create an unconstitutional risk of bias in administrative adjudication, the U.S. Supreme Court made a reference to an earlier decision in Murchison and observed: Plainly enough, Murchison has not been understood to stand for the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... United States v. Morgan, 313 U.S. 409, 421, 61 S.Ct. 999, 1004, 85 L.Ed. 1429(1941). We are of the view, therefore, that the District Court was in error when it entered the restraining order against the Board's contested hearing and when it granted the preliminary injunction based on the untenable view that it would be unconstitutional for the Board to suspend appellee's license 'at its own contested hearing on charges evolving from its own investigation.... The contested hearing should have been permitted to proceed. 79. Union of India v. Jyoti Prakash Mitter- [1971 (1) SCC 396] is an interesting case in which a Judge of the Calcutta High Court had approached the President for change of his recorded date of birth but could not succeed. While rejecting the contention of the appellant that the President had not given him an opportunity of oral hearing, the Supreme Court observed: The President had given ample opportunities at diverse stages to the respondent to make his representations. All evidence placed before the, President when he considered the question as to the age of the respondent was disclosed to him and he - respondent - was given an opportunity to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven an opportunity to put forward his case about the evidentiary value of the documents produced by him and any decision thereon would be arrived at by the President after affording him reasonable opportunities in that behalf. By his letter, dated April 28, 1965, to the Secretary, Ministry of Home Affairs, the respondent stated that he had no further evidence to produce on the subject of his age, beside the evidence he had already produced. By his telegram, dated September 1, 1965, the respondent requested the President to send for the papers and documents, if not already sent for and to grant him an audience if at all necessary . But in his letter addressed to the Secretary of the Ministry of Home Affairs on the same day he stated that all the papers may be placed before the President and the President may be pleased to grant an audience for the purpose of deciding the question of his age . Article 217(3) does not guarantee a right of personal hearing. In a proceeding of a judicial nature, the basic rules of natural justice must be followed. The respondent was on that account entitled to make a representation. But it is not necessarily an incident of the Rules of natural j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Ltd. v. Union of India and Others (supra), it was observed by the Supreme Court that the appellant's plea that denial of personal hearing had the effect of vitiating the final order passed by the Central Government under Rule 55 framed under Section 13 of the Mines and Minerals (Regulation and Development) Act, 1957 was untenable and that a written representation would effectively meet the requirements of the principles of natural justice. The relevant observations made in the judgement are extracted below: As regards the second contention, I do not think that the appellant is entitled as of right to a personal hearing. It is no doubt a principle of natural justice that a quasi-judicial tribunal cannot make any decision adverse to a party without giving him an effective opportunity of meeting any relevant allegations against him. Indeed Rule 55 of the Rules, quoted supra, recognizes the said principle and states that no order shall be passed against any applicant unless he has been given an opportunity to make his representations against the comments, if any, received from the State Government or other authority. The said opportunity need not necessarily be by personal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date or vitiate the decision arrived at fairly. This is more so when the party against whom an order has been passed does not dispute the facts and does not demand to test the veracity of the version or the credibility of the statement. 82. In General Manager, Eastern Railway and Another v. Jawala Prasad Singh (supra), the Supreme Court considered and answered in negative the question whether change of the personnel of the Inquiry Committee had the effect of vitiating the order of punishment by making the following observations: In our opinion, the above procedure does not leave any scope for the guidance of a member of an Inquiry Committee consisting of more than one person by the impression formed by him about the truthfulness or otherwise of a particular witness examined during the inquiry. From the stage antecedent to the framing of the charges everything is recorded in writing: the allegations on which the charges are based are made known to the railway servant and he is called upon to file his written statement after looking into all the relevant records. The oral evidence of all the witnesses tendered during the enquiry is recorded in writing. Whereas here the oral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by another. [Emphasis supplied] 83. In Ossein and Gelatine Manufacturers' Association of India v. Modi Alkalies and Chemicals Limited and Another- [(1989) 4 SCC 264], the Supreme Court ruled that where the final order granting approval for establishment of new undertaking was passed by the Government, the mere fact that the order was passed by an officer other than the one, who heard the parties will not make any difference because it did not cause any prejudice to the appellant. Some of the observations made in the judgement are extracted below: ...It is true that the order has been passed by an officer different from the one who heard the parties. However, the proceedings were not in the nature of formal judicial hearings. They were in the nature of meetings and full minutes were recorded of all the points discussed at each meeting. It has not been brought to our notice that any salient point urged by the petitioners has been missed. On the contrary, the order itself summarises and deals with all the important objections of the petitioners.... There was some discussion before us on a larger question as to whether the requirements of natural justice can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the date of meeting and observed: ...It is true that there is no further resolution passed to constitute quorum for taking a decision. It is common experience that in some of the High Courts there is no express resolution constituting quorum. Ex abundanticautela some High Courts pass such resolution as to the quorum. However, the practice has grown that generally majority of the Committee, when assembled, would transact the administrative business and take decisions. In the light of the settled legal position that the decision taken is that of the High Court and the Committee acted for and on behalf of the High Court, the majority of four Judges of the Committee, even in the absence of such express resolution, does constitute the quorum and is competent to transact the administrative business of the Court. Out of five, three members always constitute a quorum so as to be competent to take decision since even if it is assumed that all the five members were present and they decided against the respondent, the opinion of four Judges would constitute majority decision. It may be expedient that all the Judges sit or the record is circulated to all of them and they take decision. U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentation against the preliminary list published would have been sufficient to satisfy the requirements of law. But the extent and application of the doctrine of natural justice cannot be imprisoned within the straitjacket of a rigid formula. The application of the doctrine depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the persons affected, the scheme and policy of the statute and other relevant circumstances disclosed in the particular case (See the decision of this Court in Shri Bhagwan v. Ram Chand [1965] 3 SCR 218, 222]. In view of the special circumstances of the present case we think that the respondents were entitled to an opportunity to make a representation with regard to the two points urged by Mr. Asoke Sen before the final gradation list was published. As no such opportunity was furnished to the respondents with regard to these two matters we hold that the combined final gradation list dated April 6, 1962, so far as category 6 is concerned, is ultra vires and illegal and that part of the notification alone must be quashed by grant of a writ in the nature of certiorari. The rest of the notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled before the Gauhati High Court. The learned Single Judge dismissed the writ petition but the appeal was allowed by the Division Bench by invoking the doctrine of promissory estoppel. The Union of India challenged the order of the Division Bench by filing Special Leave Petition which was converted into Civil Appeals Nos. 8841 - 44 of 2003. During the pendency of the appeals, the withdrawal of the benefit of exemption was given with retrospective effect by Section 154 of the Finance Act, 2003, the validity of which was upheld by the Supreme Court in R.C. Tobacco (P) Ltd. v. Union of India -[(2005) 7 SCC 725]. Thereafter, Respondent No. 1 passed recovery order dated 03.06.2003 and demanded Rs. 2,93,43,244/- from the appellant. By another order, the appellant was directed to pay excise duty. The recovery orders were challenged by the appellant before the Gauhati High Court but the writ petition was dismissed by the learned Single Judge. During the pendency of the appeal before the Division Bench, a direction was given not to dismiss the appeals preferred by the appellant. The Commissioner (Appeals) set aside the orders for recovery on the ground that notice had not been given. Afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 281], this Court, while reiterating the position that rules of natural justice are to be followed for doing substantial justice, held that, at the same time, it would be of no use if it amounts to completing a mere ritual of hearing without possibility of any change in the decision of the case on merits. It was so explained in the following terms: (SCC pp. 309-10, para 64) 64. Right of hearing to a necessary party is a valuable right. Denial of such right is serious breach of statutory procedure prescribed and violation of rules of natural justice. In these appeals preferred by the holder of lands and some other transferees, we have found that the terms of government grant did not permit transfers of land without permission of the State as grantor. Remand of cases of a group of transferees who were not heard, would, therefore, be of no legal consequence, more so, when on this legal question all affected parties have got full opportunity of hearing before the High Court and in this appeal before this Court. Rules of natural justice are to be followed for doing substantial justice and not for completing a mere ritual of hearing without possibility of any change in the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Bakshi Ghulam Mohammad that the Rules of natural justice require that he should have a right to cross-examine all the persons who had sworn affidavits supporting the allegations made against him. 89. In M/s. Kanungo Company v. Collector of Customs and Others - [(1973) 2 SCC 438], a somewhat similar contention raised for challenging seizure of goods under the Sea Customs Act, 1878 was rejected by the Supreme Court by making the following observations: 12. We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the show-cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission should not be set aside because no prejudice has been caused to the appellants. The principal issue considered by the Constitution Bench in that case was whether supply of copy of enquiry report to the delinquent employee and giving of second show cause notice was sine qua non before an order of punishment could be passed. While answering the question in affirmative, the majority of the Court evolved a new procedure and held: 31. Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the Courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the Court/Tribunal and give the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court/Tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Court/Tribunal should not interfere with the order of punishment. The Court/Tribunal should not mechanically set aside the order of pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds taken by the appellants is that the investigation and the inquiry were conducted with pre-determined mind, we have not dealt with and decided the same. In Union of India v. Jyoti Prakash Mitter's case, the Supreme Court considered and answered in negative the plea of the respondent, which had found favour with the High Court that the President had decided the issue of his date of birth. The Supreme Court ruled that while determining the dispute as to the age of a Judge, the President is performing judicial function but he is not acting as a court and whether in a given case, the President should give a personal hearing is for him to decide. In Madhya Pradesh Industries Ltd. v. Union of India's case, the Supreme Court held that the opportunity to make representation does not necessarily include an opportunity of personal hearing. In K.L. Tripathi v. State Bank of India's case (supra), the Supreme Court ruled that denial of opportunity of cross-examination does not per se invalidate and vitiate the decision. Similar view has been expressed in State of Jammu and Kashmir and Others v. Bakshi Gulam Mohammad (supra), M/s. Kanungo Company v. Collector of Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r acting upon the recommendation made by the High Court is not vitiated because he had independently considered the record and came to the conclusion that the proposed punishment of the respondent's dismissal from service was warranted on the proved facts. In Securities and Exchange Board of India v. Askhya Infrastructure Private Limited (supra), K.L. Tripathi v. State Bank of India and others (supra), Managing Director, ECIL Hyderabad and other v. B. Karunakar and others (supra) and Dharampal Satyapal Limited v. Deputy Commissioner of Central Excise, Gauhati and Others (supra), the Court has emphasized that prejudice must be shown to have been suffered by the aggrieved person before he can seek invalidation of the impugned order. 94. In our view, the prejudice caused to the appellants is writ large on the face of the record. As mentioned above, the Chairperson did not have the opportunity of hearing the arguments of the advocates for the parties, which lasted for three days i.e. 21st, 22nd and 23rd February, 2012 and yet he became party to the decision. Obviously, he did not know what are the nature and contents of the arguments of the seven Senior Advocates and other ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... civil consequences...must be made consistently with the rules of natural justice . What are civil consequences? The question was posed and answered by this Court in Mohinder Singh Gill Anr. v. The Chief Election Commissioner, New Delhi Ors. Krishna Iyer J., speaking for the Constitution Bench said (at p. 308-309): But what is a civil consequence, let us ask ourselves, by passing verbal booby-traps? 'Civil consequence' undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary damages. In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a civil consequence . The learned Judge then proceeded to quote from Black's Legal Dictionary and to consider the interest of a candidate at a Parliamentary election. He finally said: The appellant has a right to have the election conducted not according to humour or hubris but according to law and justice. And so natural justice cannot be stumped out on this score. In the region of public law locus standi and person aggrieved, right and interest have a broader import . In Schmidt and Another v. Secreta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to intervene. Thirdly, when a right to intervene is proved, what sanctions in fact is the latter entitled to impose upon the other. It is only upon a consideration of all these matters that the question of the application of the principle can properly be determined . The Privy Council then proceeded to examine the facts of the case upon those considerations and said: 'As to the first matter it cannot be doubted that the Council of Jaffna was by statute a public corporation entrusted like all other municipal councils with the administration of a large area and the discharge of important duties. No one would consider that its activities should be lightly interfered with.... The legislature has enacted a statute setting up municipal authorities with a considerable measure of independence from the central government within defined local areas and fields of government. No Minister should have the right to dissolve such an authority without allowing it the right to be heard upon that matter unless the statute is so clear that it is plain it has no right of self defence. Upon the second matter it is clear that the Minister can dissolve the council on one of the three grounds: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been served by giving opportunity to the members of the Committee because the allegations which constituted the foundation of the decision to terminate their tenure were correct and the members had failed to offer any plausible explanation for the same. While dealing with the question, the Supreme Court observed: Linked with this question is the question whether the failure to observe natural justice does at all matter if the observance of natural justice would have made no difference, the admitted or indisputable facts speaking for themselves. Where on the admitted or indisputable facts only one conclusion is possible and under the law only one penalty is permissible, the Court may not issue its writ to compel the observance of natural justice, not because it approves the non observance of natural justice but because Courts do not issue futile writs. But it will be a pernicious principle to apply in other situations where conclusions are controversial, however, slightly, and penalties are discretionary. In Ridge v. Baldwin Ors., one of the arguments was that even if the appellant had been heard by the watch committee nothing that he could have said could have made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ships cannot accept this suggestion. If a domestic tribunal fails to act in accordance with natural justice, the person affected by their decision can always seek redress in the courts. It is a prejudice to any man to be denied justice . In Margarita Fuentes et al., v. Tobert L. Shevin, it was said (at p. 574): But even assuming that the appellants had fallen behind in their instalment payments, and that they had no other valid defenses, that is immaterial here. The right to be heard does not depend upon an advance showing that one will surely prevail at the hearing. 'To one who protest against the taking of his property without due process of law, it is no answer to say that in his particular case due process of law would have led to the same result because he had no adequate defense upon the merits' . In Chintepalli Agency Taluk Arrack Sales Cooperative Society Ltd., etc. v. Secretary (Food Agriculture) Govt. of Andhra Pradesh etc., there was a non-compliance with sec. 77(2) of the Cooperative Societies Act which provided that no order prejudicial to any person shall be passed unless such person had been given an opportunity of making his representation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Government. Such non-compliance with a mandatory provision gives rise to unnecessary litigation which must be avoided at all costs . The observations of this Court in Chintapalli Agency Taluk Arrack Sales Cooperative Society v. Secretary (Supra) are clearly against the submissions of the learned Attorney General. The matter has also been treated as an application of the general principle that justice should not only be done but should be seen to be done. Jackson's Natural Justice (1980 Edn.) contains a very interesting discussion of the subject. He says: The distinction between justice being done and being seen to be done has been emphasised in many cases. The requirement that justice should be seen to be done may be regarded as a general principle which in some cases can be satisfied only by the observance of the rules of natural justice or as itself forming one of those rules. Both explanations of the significance of the maxim are found in Lord Widgery C.J.'s judgment in R.V. Home Secretary, Ex. P. Hosenball (1977) 1 W.L.R. 766, 772, whereafter saying that the principles of natural justice are those fundamental rules, the breach of which will prevent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who has been denied justice is not prejudiced. As we said earlier where on the admitted or indisputable facts only one conclusion is possible and under the law only one penalty is permissible, the Court may not issue its writ to compel the observance of natural justice, not because it is not necessary to observe natural justice but because Courts do not issue futile writs. We do not agree with the contrary view taken by the Delhi High Court in the judgment under appeal. [Emphasis supplied] 96. In view of the above noted judgements, the arguments of Shri Shishodia that no prejudice has been caused to the appellants due the participation of the Chairperson in the decision-making process cannot be accepted. It is not possible to make a guesswork of what would have been the fate of the case if the Chairperson had not taken part in the decision-making process. One does not know whether the remaining six Members would have reached a positive conclusion that the appellants are not guilty of violating Sections 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act and/or they would not have imposed the particular penalty under Section 27 of the Act. 97. In view of our co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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