Natural justice in competition proceedings requires disclosure of adverse material and notice before departing from the director general's findings.

In quasi-judicial competition proceedings, if the Commission departs from the Director General's market definition on a material issue, it must give the affected party notice and a fair opportunity to respond; the relevant market finding was set aside for breach of audi alteram partem. Material relied on against the noticee that was not part of the Director General's report had to be disclosed, and newspaper or internet-derived material was not proof of the facts stated unless independently proved; the abuse of dominance finding was set aside. A clause not specifically put to the appellant in the inquiry could not form the basis of an adverse discussion or direction, and that part was also set aside.

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Issues: (i) Whether the finding on the relevant market was vitiated for want of notice and opportunity when the Commission departed from the Director General's market definition; (ii) Whether the finding of abuse of dominance was unsustainable because the Commission relied on material from public domain and newspaper reports without disclosing it to the appellant and without proper proof; (iii) Whether the discussion and direction concerning clause 9.1(c)(i) of the Media Rights Agreement could stand when that clause was not part of the Director General's adverse finding and was not specifically put to the appellant.

Issue (i): Whether the finding on the relevant market was vitiated for want of notice and opportunity when the Commission departed from the Director General's market definition.

Analysis: The proceedings under the Competition Act become adjudicatory once the Commission enters the stage of inquiry after the Director General's report. If the Commission proposes to differ from the Director General on a material issue, the affected party must be given notice of that proposed departure and a fair opportunity to meet it. Here, the Director General proceeded on one market definition, while the Commission adopted a different and broader market definition without indicating its disagreement beforehand.

Conclusion: The finding on relevant market was held to be vitiated by breach of audi alteram partem and was set aside.

Issue (ii): Whether the finding of abuse of dominance was unsustainable because the Commission relied on material from public domain and newspaper reports without disclosing it to the appellant and without proper proof.

Analysis: Any material not forming part of the Director General's report and proposed to be used against the noticee must be disclosed for rebuttal. Further, newspaper reports and internet-derived material are not evidence of the facts stated therein unless proved by admissible evidence. The Commission relied on TRP data, reports, and similar materials without putting them to the appellant or proving them through proper evidence.

Conclusion: The finding of abuse of dominance was held to be legally unsustainable and was set aside.

Issue (iii): Whether the discussion and direction concerning clause 9.1(c)(i) of the Media Rights Agreement could stand when that clause was not part of the Director General's adverse finding and was not specifically put to the appellant.

Analysis: The adverse use of the clause was beyond the specific findings contained in the Director General's report and was not the subject of a fair opportunity of defence before the Commission. A party cannot be held liable on the basis of a clause or issue not specifically raised against it in the inquiry stage.

Conclusion: The Commission's discussion of clause 9.1(c)(i) and the connected direction were held to be vitiated and were set aside.

Final Conclusion: The impugned order could not be sustained because the decisive findings were reached in violation of natural justice and on material not duly disclosed or proved, so the matter was sent back for fresh disposal in accordance with law.

Ratio Decidendi: In quasi-judicial competition proceedings, any material or issue on which adverse findings are proposed must be disclosed to the affected party and proved by admissible evidence; a finding reached on undisclosed material or without opportunity to meet a new basis of decision is liable to be set aside.

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