TaxTMI 
TaxTMI 
2015 (3) TMI 547
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....e the witnesses of the appellant) on the ground that the said order was passed without issuing notice to and without hearing the appellant. Summons issued to the witnesses of the appellant for cross examination, in pursuance to the said order of the CCI, were also impugned in the writ petition. 2. The learned Single Judge dismissed the writ petition holding that as per the judgment of the Supreme Court in Competition Commission of India v. Steel Authority of India Limited [2010] 10 SCC 744, no notice of hearing was required to be given and the appellant was not required to be heard by the respondent no.1 CCI before passing the order on 1st July, 2013. 3. Though this appeal came up first before this Court on 18th November, 2013 but was taken up for hearing on 4th March, 2014 when notice thereof was issued and the operation of the 'impugned order' was stayed. The respondent no.3/informant on the next date of hearing i.e. 15th April, 2014 informed this Court that the appellant, while securing the interim order, had not brought to the notice of the Court that in the interregnum the cross examination etc. of the witnesses of the appellant in terms of the order dated 1st July, ....
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.... we are unable to hold the matter to have become infructuous so as to be able to dispose of this appeal on the said ground alone. There is merit in the contention of the counsel for the appellant that if indeed the appellant succeeds, what has happened in pursuance to the impugned order dated 1st July, 2013 would be non est; without the appellant agreeing to our suggestion aforesaid, the appeal cannot be dismissed as infructuous. 8. We have also considered whether the appellant is disentitled to be heard on the appeal itself on the ground for which the interim order was vacated as aforesaid. We are however unable to hold so also, firstly for the reason that the appellant has already been punished for the said lapse if any in as much as the interim order earlier granted was vacated and cannot be punished again therefor and secondly for the reason that the stay granted by this Court was only of the order of the learned Single Judge dismissing the writ petition of the appellant; this Court did not grant any interim order staying the proceedings being conducted by the respondent no.2 DG or the proceedings before the respondent no.1 CCI. The counsel for the appellant in this regard has....
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....nt no.2 DG during the investigation. The respondent no.1 CCI however vide order dated 12th February, 2013 asked the respondent no.3/informant to specify the issues and areas of cross examination sought, by filing questions and interrogatories for the witnesses of the appellant and others. The respondent no.3/informant so delivered the interrogatories for discovery and production of certain documents from the appellant and other witnesses examined by the respondent no.2 DG during investigation. (d) The respondent no.1 CCI vide impugned order dated 1st July, 2013 noted that the witnesses of the appellant examined by the respondent no.2 DG had given testimony in respect of several technical and safety concern aspects and the respondent no.3/informant was not provided an opportunity to cross examine the said witnesses and therefore the testimonies of those witnesses and the contentions of the appellant regarding several aspects had gone unrebutted. The respondent no.1 CCI was of the opinion that the respondent no.2 DG should have allowed the respondent no.3/informant to cross-examine the witnesses so that a complete picture was there in respect of ....
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....ima facie case, it shall direct the Director General to cause an investigation to be made into the matter: Provided that if the subject matter of an information received is, in the opinion of the Commission, substantially the same as or has been covered by any previous information received, then the new information may be clubbed with the previous information. (2) Where on receipt of a reference from the Central Government or a State Government or a statutory authority or information received under Section 19, the Commission is of the opinion that there exists no prima facie case, it shall close the matter forthwith and pass such orders as it deems fit and send a copy of its order to the Central Government or the State Government or the statutory authority or the parties concerned, as the case may be. (3) The Director General shall, on receipt of direction under sub-Section (1), submit a report on his findings within such period as may be specified by the Commission. (4) The Commission may forward a copy of the report referred to in sub Section (3) to the parties concerned: Provided that in case the investigation is caused to be made based on reference received from the Centra....
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....son against whom the complaint is made, Section 26(5), instead of using the word 'or' would have used the word 'and' between the words "....statutory authority....." and the words "....the parties concerned, as the case may be..." in Section 26(5); (d) incase investigation is ordered on receipt of a reference from the Central Government/State Government/Statutory Authority and the DG recommends that there is no contravention of provisions of the Act, CCI will have to invite objections or suggestions from the Central Government/State Government /Statutory Authority as the case may be before it takes a view on such report; had the intention of the legislature been that in such a case, besides hearing the Central Government/State Government/ Statutory Authority which had made the reference under Section 19(1), the CCI should also hear the person against whom the reference is made, it would not have used the word 'or' and would have used the word 'and' in Section 26(5) as aforesaid; (e) therefore the contention of the appellant/writ petitioner that Section 26(5) envisages notice not only to the informant but also to the person against whom information ....
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....ion whereof the Supreme Court in Steel Authority of India Limited (supra) has held that the person against whom information is given or reference is made has no right to be heard, is materially different from the language of Section 26(7); while Section 26(1) does not provide for any hearing to the person against whom information is received or reference is made, Section 26(7) expressly requires the CCI to, only after consideration of the objections or suggestions referred to in sub Section (5), if of the opinion that further investigation is called for, direct further investigation by the DG. It is further argued that Section 26(5) also expressly requires the CCI to invite objections or suggestions from "the parties concerned" if the report submitted by the respondent no.2 DG recommends that there is no contravention of the provisions of the Act. It is thus argued that the judgment of the learned Single Judge is against the language of the statute. Attention is also invited to paragraphs 23 and 71 of the judgment of the Supreme Court in Steel Authority of India Limited and it is argued that the Supreme Court in the said judgment has itself held that in contradistinction to Section....
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....is to be served upon the other party, it has specifically so stated and we see no compelling reason to read into the provisions of Section 26(1) the requirement of notice, when it is conspicuous by its very absence. Once the proceedings before the Commission are completed, the parties have a right to appeal under Section 53-A(1)(a) in regard to the orders termed as appealable under that provision. Section 53-B requires that the Tribunal should give, parties to the appeal, notice and an opportunity of being heard before passing orders, as it may deem fit and proper, confirming, modifying or setting aside the direction, decision or order appealed against." 16. It is further argued by the counsel for the appellant that the learned Single Judge has also erred in holding that the appellant, from the order dated 1st July, 2013, is not visited with any civil consequences or that the same does not impair any legal right of the appellant. It is contended that since the appellant, in terms of the said order is subjected to further investigation, it is visited with civil consequences and its rights are impaired. 17. Per contra, the counsel for the respondent no.1 CCI and the respondent no.2....
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...., to be afforded with the opportunity of being heard and since the law does not require it, the Court need not be burdened with such an obligation. The proposition of law which thus emerges is that an investigation report in favour of the accused does not vest the accused with a right of hearing before the Court/authority, to which the investigation report is submitted, orders further investigation. 22. Per contra, it is also the settled legal position that before closing a case on the basis of investigation report of no case for proceeding further having been made out, issuance of notice and hearing the informant/complainant is necessary/mandatory. Reliance in this regard can be placed on Bhagwant Singh v. Commissioner of Police [1985] 2 SCC 537 laying down that in case the Magistrate, to whom an investigation report is forwarded under Section 173(2)(i) of the Cr.P.C., decides not to take cognizance of the offence and to drop the proceedings or takes a view that there is no sufficient ground for proceeding against some of the persons mentioned in the FIR, the Magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of t....
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....rogramme; (b) by holding in para 21 of the judgment that Section 19 does not suggest that any notice is required to be given to the affected party and thus the affected party cannot claim the right to notice or hearing; (c) by holding in para 31(1) of the judgment that the order by which the CCI forms a prima facie view and issues a direction to the DG for investigation would not be appealable; (d) by holding in para 31(2) of the judgment that no duty has been cast on the CCI to issue notice or grant hearing to the person against whom information is given, at the stage of formation of opinion by the CCI in terms of Section 26(1) of the Act and issuing a direction to the DG to cause an investigation to be made in the matter; (e) by holding in para 71 of the judgment that Section 26(1) also does not require the CCI to issue notice to the party against whom information is given; (f) by holding in para 77 of the judgment that issuance of notice to a party at the initial stage of the proceeding, which is not determinative in nature and substance, can hardly be implied; (g) by holding in para 78 of the judgment that the scheme of the Competition Act suggests that it will not be in ....
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....person/enterprise informed/referred against, by the CCI before forming a prima facie opinion and directing investigation under Section 26(1) of the Act, apply also to the stage under Section 26(7) of the Act. The stage of Section 26(7) is also an "initial stage" which is not determinative in nature and substance; "further investigation" is also a pre-cognizance stage; issuance of notice to the person/enterprise informed/referred against, at that stage cannot be implied. Besides the judgments cited above, reference can also be made to K. Chandrasekhar v. State of Kerala [1998] 5 SCC 223 in support of the proposition that there is no difference between 'investigation' and 'further investigation'. The Supreme Court in the said judgement, relying on the dictionary meaning of "further" when used as an adjective, held 'further investigation' to be a continuation of the earlier investigation and not a fresh investigation or re-investigation to be started ab initio, wiping out the earlier investigation altogether. Secondly, just like Section 26(1) does not contemplate any adjudicatory function and the function of the CCI thereunder has been held to be of a prelimina....
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....s and Exchange Board of India 186 (2012) DLT 145 and an appeal being LPA No.100/2012 to the Division Bench whereagainst was dismissed vide judgment dated 20th November, 2012 has held, (i) that since the Securities and Exchange Board of India Act, 1992 provides the mode of inquiring into the complaint of, first, investigations conducted prior to ordering investigation, second, investigation by the investigating authority and finally adjudication, the exercise of inquisitorial power to determine whether an investigation is to be conducted, in fact does not require hearing the affected parties; and, (ii) that at the stage of inquiry by the authority/body (in that case SEBI) of examining whether or not the facts disclosed the material for entertainment of a reasonable belief to cause an investigation which is an inquisitorial and not an adjudicatory exercise, no notice of hearing is required to be given to the party sought to be investigated against. 28. However, the Supreme Court in Steel Authority of India Limited and this Court in DLF Ltd. (supra) were concerned with Section 26(1) of the Competition Act and Section 11C(1) of the SEBI Act (and which are not pari materia to the provi....
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....mendment w.e.f. 20.05.2009, in Sub-Section (5) thereof, provided for giving of an opportunity to the "complainant" to rebut the findings of the DG of there being no contravention. Similarly, Section 26(7) as it stood prior to the said amendment, provided for hearing the complainant before further investigation. We wondered whether the amendment, substituting giving of notice and hearing to the 'complainant' with inviting objections/ suggestions of the 'parties concerned' and consideration thereof was with the intent of including therein the person/enterprise informed/referred against also. In this regard, we perused The Competition (Amendment) Bill, 2007 (Bill No.70/2007), which led to the amendment with effect from 20th May, 2009. However, the Statement of Objects and Reasons given for the amendment does not list any such reason. It thus appears that the reason which prevailed with the legislature to so amend Section 26 was not to provide for notice or hearing to the person/enterprise informed/referred against, before directing further investigation. In the absence of any such reason having been given by the Legislature, we have to interpret the language of the sta....
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....final order is passed by the CCI. We find the CCI also in its order in All India Tyre Dealers' Federation v. Tyre Manufacturers MANU/CO/0097/2012 to have so understood the difference between "investigation" and "inquiry", with 'inquiry' leading to determination of rights of the parties and levy of penalty on those contravening the law, through adjudication or decision and in which principles of natural justice have to be complied with and 'investigation' as not conferring any rights and leading to no penalties. The Supreme Court in Directorate of Enforcement v. Deepak Mahajan [1994] 3 SCC 440 held that term "investigation" cannot be limited only to police investigation but has a wider connotation and is flexible, so as to include inter alia investigation carried out under the direction of a Magistrate. 32. In our opinion, 'investigation' includes all proceedings for collection of evidence, to form an opinion whether any law has been contravened or not. Per contra, an 'inquiry' is akin to prosecution i.e. a proceeding to adjudicate after hearing the accused whether the opinion formed after investigation, of law having been contravened, is establi....
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....eficiencies in the report of the DG, may give directions for 'further investigation'. For issuing such directions, no hearing has to be given to the person/enterprise informed/referred against. (V) A direction, under Section 26(7), of "further investigation", within the meaning of (IV) above, is distinct from "causing further inquiry to be made in the matter or itself proceed with further inquiry....". While at the time of ordering "further investigation", CCI has not formed an opinion of the statute having been contravened, before "causing further inquiry" to be made, formation of opinion (as distinct from prima facie opinion under Section 26(1)) by the CCI of the statute having been contravened, is a must. It was so held by the Supreme Court in para 24 of the Steel Authority of India Limited by observing that if the CCI is of the opinion that there is contravention of any of the provisions of the Act, it may order further inquiry into the matter. 35. The order dated 1st July, 2013 of the CCI does not record any satisfaction having been reached or opinion having been formed by the CCI, of contravention having been committed by the appellant. The same is indicative of the....