2016 (5) TMI 882 - HC - Law of Competition

Rubber Manufacturer Wins Right to Document Access and Legal Support in Fair Investigation.

The court determined that the petitioner, a rubber product manufacturer, was entitled to inspect relevant documents and cross-examine witnesses whose ... Right to be accompanied by an advocate - right to inspect investigation documents - right to cross-examine witnesses recorded by the Director General - advocate's right to practise before a person legally authorised to take evidence - application of principles of natural justice in investigations by the DG, CCIRight to inspect investigation documents - right to cross-examine witnesses recorded by the Director General - application of principles of natural justice in investigations by the DG, CCI - Entitlement of the petitioner to receive documents of investigation relevant to it and to be afforded opportunity to cross-examine witnesses whose oral statements pertain to the petitioner. - HELD THAT: - The petition was disposed of in the terms recorded in earlier orders in Forech India Ltd., whereby the respondents undertook to furnish to the petitioner all documents of investigation available with the respondents that pertain to the petitioner, save those claimed confidential by other parties, and to afford the petitioner an opportunity to cross-examine any witness whose oral statement pertains to the petitioner. The Court recognised the practical difficulty of applying for cross-examination without access to the material and recorded the respondents' concession to make material available before recording the statements and to permit cross-examination and further statements thereafter. The petition was accordingly disposed keeping contentions open and granting liberty to apply if difficulties arise. [Paras 3, 16]Petitioner to be furnished investigation materials relevant to it and to be given opportunity to cross-examine witnesses whose statements pertain to it; petition disposed in terms of earlier orders with liberty to apply.Right to be accompanied by an advocate - advocate's right to practise before a person legally authorised to take evidence - application of principles of natural justice in investigations by the DG, CCI - Whether officials of the petitioner summoned by the Director General may be accompanied by advocates when their statements are recorded during the DG's investigation. - HELD THAT: - The Court held that Section 30 of the Advocates Act confers on advocates a right to practise before any person legally authorised to take evidence. The DG, under the Competition Act, is so authorised. In light of precedent recognising the right of advocates to practise and of the significant consequences of DG investigations, the Court concluded that officials summoned by the DG are entitled, if they so desire, to be accompanied by advocate(s). The Court rejected the respondents' reliance on pre-Section 30 authorities as inapplicable and observed that the DG retains discretion to regulate proceedings to avoid undue delay; however that regulatory power does not justify an absolute bar on advocates accompanying persons summoned. The respondents' objection was overruled and the entitlement declared. [Paras 12, 13, 15]Officials summoned by the DG are entitled to be accompanied by advocate(s) when their statements are recorded; respondents' objection overruled.Final Conclusion: The petition was disposed in terms of the earlier orders in Forech India Ltd.: the petitioner shall be furnished investigation materials relevant to it and shall have opportunity to cross-examine witnesses whose statements pertain to it; additionally, officials summoned by the DG are entitled to be accompanied by advocate(s) when their statements are recorded. Issues Involved:1. Denial of access to documents/evidence by CCI/DG.2. Right to cross-examine witnesses.3. Right to be accompanied by advocates during investigation.Detailed Analysis:1. Denial of Access to Documents/Evidence by CCI/DG:The petitioner, a manufacturer of rubber products, challenged the denial of access to documents and evidence by the Competition Commission of India (CCI) and the Director General (DG) during an investigation into alleged cartel/bid-rigging. The petitioner received a notice from the DG on 2nd June 2015, requesting detailed information but was not provided with the documents forming the basis of the investigation. Despite multiple requests for inspection of records, the petitioner's attempts were unsuccessful, and their application for information was rejected by the CCI on grounds of confidentiality. The petitioner argued that this denial violated the principles of natural justice under Section 36(1) of the Competition Act, as they could not present their case fairly without access to the relevant documents.2. Right to Cross-Examine Witnesses:The petitioner also sought the right to cross-examine witnesses whose statements were recorded by the CCI/DG. The petitioner cited Regulation 41(5) of the Competition Commission of India (General) Regulations, 2009, which provides for a right of cross-examination. The respondents contended that the right to cross-examine was discretionary and could be sought before the CCI after the DG submitted the report. The court, in the case of Forech India Ltd., had previously ruled that the petitioner should be given an opportunity to cross-examine witnesses whose oral statements pertained to the petitioner and that all relevant documents should be furnished before the statement of the petitioner's representatives was recorded.3. Right to be Accompanied by Advocates During Investigation:The petitioner argued for the right of their officials to be accompanied by advocates during the investigation by the DG. The respondents opposed this, citing precedents under economic offence laws like FERA and Customs Act, where individuals summoned for investigation do not have the right to be accompanied by lawyers. The petitioner relied on Section 30 of the Advocates Act, 1961, which confers the right to practice before authorities competent to take evidence. The court, referencing the Google Inc. case and Kingfisher Airlines Limited case, upheld that the DG, empowered to take evidence, must allow the officials to be accompanied by advocates, ensuring fair treatment and adherence to principles of natural justice.Conclusion:The court concluded that the petitioner was entitled to inspect relevant documents and cross-examine witnesses whose statements pertained to them. Additionally, it was ruled that the officials of the petitioner summoned by the DG had the right to be accompanied by advocates during the investigation. The petition was disposed of with these directives, ensuring compliance with the principles of natural justice and fair play in the investigation process.