Competition reference defects do not defeat inquiry when no prejudice is shown and Section 26(1) remains a preliminary order.

Procedural defects in a reference to the Competition Commission do not invalidate the inquiry where the Commission can still assess the material, the parties have been heard, and no prejudice or miscarriage of justice is shown. A direction under Section 26(1) is only a preliminary, prima facie and non-adjudicatory step, so it is not liable to be quashed at that stage. The Court also held that a later reference concerning a different period is not barred by res judicata, Regulation 15(3) is directory in this context, and approaching another High Court to bypass existing directions amounts to forum shopping and abuse of process.

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Issues: (i) Whether the reference made under Section 19(1)(b) of the Competition Act, 2002 was invalid and non est in law; (ii) Whether the order under Section 26(1) of the Competition Act, 2002 was liable to be quashed; (iii) Whether the complaint or reference was hit by res judicata; (iv) Whether Regulation 15(3) of the Competition Commission of India (General) Regulations, 2009 was mandatory or directory; (v) Whether the subsequent proceedings before the Delhi High Court amounted to forum shopping.

Issue (i): Whether the reference made under Section 19(1)(b) of the Competition Act, 2002 was invalid and non est in law.

Analysis: The challenge to the reference was based on alleged non-compliance with the procedural requirements in the General Regulations. The Court read Regulation 15 as a whole, including sub-regulations (3), (5) and Regulation 40, along with Section 15(c) of the Competition Act, 2002. It held that procedural defects in the form of reference do not automatically invalidate the proceedings where the Commission can still examine the material and where no prejudice or miscarriage of justice is shown. The Court also found that the reference had in fact been acted upon and the parties were heard at length.

Conclusion: The reference was held not to be invalid or non est in law.

Issue (ii): Whether the order under Section 26(1) of the Competition Act, 2002 was liable to be quashed.

Analysis: The Court treated a direction under Section 26(1) as a preliminary, inquisitorial and administrative order based on a prima facie opinion. Such an order does not determine any right or obligation finally and does not cause civil consequences. The Commission had recorded reasons for directing investigation into the alleged cartelisation and price parallelism, and the Court held that interference at that stage would defeat the statutory scheme.

Conclusion: The order under Section 26(1) was not liable to be quashed.

Issue (iii): Whether the complaint or reference was hit by res judicata.

Analysis: The earlier proceeding related to a different period, whereas the present reference concerned subsequent years and alleged a fresh course of cartelisation. The Court held that the Competition Act permits inquiry and adjudication year-wise in cartel matters and that an earlier rejection for one period does not bar inquiry into a later and distinct period.

Conclusion: The plea of res judicata was rejected.

Issue (iv): Whether Regulation 15(3) of the Competition Commission of India (General) Regulations, 2009 was mandatory or directory.

Analysis: The Court construed Regulation 15(3) with Regulation 15(5), Regulation 40 and Section 15(c), and held that the scheme shows the defect-curing mechanism is not intended to defeat substantive inquiry. Regulation 15(3) was held to be directory in the context of a reference that had already been examined, acted upon and proceeded with without demonstrated prejudice.

Conclusion: Regulation 15(3) was held to be directory and not mandatory.

Issue (v): Whether the subsequent proceedings before the Delhi High Court amounted to forum shopping.

Analysis: The Court held that approaching another High Court after this Court had already directed the final order to be kept in a sealed cover amounted to an attempt to bypass the existing directions. Such conduct was treated as an abuse of process and inconsistent with the duty to approach the Court with clean hands.

Conclusion: The conduct was held to amount to forum shopping and abuse of process.

Final Conclusion: The appeal failed in entirety, the order directing investigation was sustained, and the parties were left to pursue remedies according to law after the final order of the Commission.

Ratio Decidendi: A procedural defect in a reference to the Competition Commission does not invalidate the inquiry where the Commission can still form a prima facie opinion, the parties have been heard, and no prejudice or miscarriage of justice is shown; a direction under Section 26(1) is only a preliminary and non-adjudicatory order.

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