Competition Act investigations must stay within the Commission's prima facie reference; unauthorised DG findings cannot be acted upon.

A Director General investigation under the Competition Act is confined to the information or reference on which the Commission formed its prima facie opinion, and the Director General has no suo motu power to expand the inquiry. A report that travels beyond the authorised reference, including a Section 4 allegation not covered by the prima facie direction, is ultra vires and cannot be acted on under the same inquiry. The Commission cannot proceed under Sections 26(8) or 27 on that unauthorised portion, though it may treat the material as fresh information and act afresh in accordance with law.

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Issues: (i) Whether the Director General could investigate and report on an alleged contravention of Section 4 of the Competition Act, 2002 when the Commission's prima facie order directing investigation was confined to alleged contraventions under Section 3(3). (ii) Whether the Commission could act upon that part of the Director General's report which travelled beyond the scope of the Commission's prima facie direction.

Issue (i): Whether the Director General could investigate and report on an alleged contravention of Section 4 of the Competition Act, 2002 when the Commission's prima facie order directing investigation was confined to alleged contraventions under Section 3(3).

Analysis: The statutory scheme makes the Commission's formation of a prima facie opinion under Section 26(1) the foundation for any investigation by the Director General. The Director General has no suo motu power and can investigate only the information or reference which the Commission has considered while directing investigation. Regulations 18 and 20 reinforce that the report must confine itself to the allegations referred for investigation. If the Director General travels into a distinct allegation not considered by the Commission, the inquiry is beyond jurisdiction and contrary to the Act's structure. The availability of a later inquiry before the Commission does not cure the defect, because the affected enterprise is entitled to a defence at the investigation stage itself.

Conclusion: The Director General could not validly investigate or report on the Section 4 allegation when that allegation was not part of the Commission's prima facie reference.

Issue (ii): Whether the Commission could act upon that part of the Director General's report which travelled beyond the scope of the Commission's prima facie direction.

Analysis: A Director General's report does not bind the Commission, but the Commission cannot forward, proceed upon, or base action under Sections 26(8) and 27 on a part of the report that arose from an investigation outside the authorised reference. The Commission may, if it so chooses, treat that material as fresh information under Section 19 and proceed afresh in accordance with the Act, but it cannot adopt the impugned portion of the report as if it were a lawful report under the existing reference.

Conclusion: The Commission could not proceed under Sections 26(8) or 27 on the impugned part of the report, though it could treat it as fresh information and act according to law.

Final Conclusion: The writ petition succeeded to the extent that the Director General's finding on Section 4 was held to be outside the authorised scope of investigation, and the Commission was restrained from acting on that part of the report under the existing inquiry.

Ratio Decidendi: An investigation by the Director General under the Competition Act, 2002 is confined to the information or reference on which the Commission has formed a prima facie opinion under Section 26(1), and any report travelling beyond that authorised scope is ultra vires and cannot be acted upon in the same inquiry.

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