AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1553
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....n is filed challenging the order dated 24.06.2014 passed by the 2nd respondent under Section 26(1) of the Competition Act, 2002, in Reference Case No.8/2013. 2. The case of the petitioner is as follows: (i) The petitioner is a tyre manufacturing Company, engaged in the manufacture and sale of various types of automobile tyres. The 4th respondent herein had send a representation to the 1st respondent, who in turn, forwarded the same to erstwhile MRTP Commission, wherein the 4th respondent made an allegation that although prices of natural rubber had gone down, the tyre manufacturers have increased the prices and therefore, there was a cartel. (ii) The MRTP Commission, by order dated 13.02.2008 found that the allegation of Restrictive Trade Practice were not substantiated by the 4th respondent. However, by order dated 22.06.2010, investigation was ordered against the petitioner and respondents 6 to 8 herein. After enquiry, the 1st respondent, by order dated 30.10.2012, held that there was no sufficient evidence to hold a violation by the Tyre Companies of the provisions of Section 3(3) (a) and 3(3)(b) read with Section 3(1) of the Competition Act. The 4th respond....
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....t respondent and the representation made by the 4th respondent . On 17.04.2015, the petitioner sent a detailed reply to the 3rd respondent furnishing information and document . The 3rd respondent called upon the Chairman and Managing Director and other managerial persons to personally attend the office of the 3rd respondent on 09.07.2015. The petitioner applied for certified copies of the reference made by the 1st respondent and the representation by the 4th respondent which were duly furnished later. On 09.07.2015, the Chairman cum Managing Director along with other Executive personnel attended the office of the 3rd respondent and the statement was recorded. The petitioner was issued with a notice on 23.09.2015 by the 3rd respondent requesting the petitioner to submit the travel details, both official and personal, including the overseas travel if any of Koshy K.Varghese, Executive Vice President (Marketing) of MRF from 01.01.2010 to 31.03.2014. The petitioner produced the official travel details. It was also stated that the Executive Vice President does not maintain any details of his personal travels. The 3rd respondent sent his email on 27.10.2015 to submit the information (e-m....
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....s follows: A copy of the representation dated 28.11.2013 from All India Tyre Dealers Federation addressed to the Ministry of Corporate Affairs was forwarded to Competition Commission of India under Section 19(1)(b) of the Competition Act on 16.12.2013. The role of the first respondent is to the extend of forwarding a letter dated 16.12.2013 to the second respondent forwarding therewith a copy of the representation dated 28.11.2013 received from the fourth respondent for appropriate action. The said letter dated 16.12.2013 was signed by the then Director, MCA, after being duly approved by the then Joint Secretary. As per Regulation 11(2) of the CCI (General) Regulation 2009, a reference has to be signed and authenticated by an Officer not below the rank of Joint Secretary to Government of India. However, as per the prevalent practice, letters issued by the Central Government were issued under the signatures of Under Secretary/ Deputy Secretary/ Director, after approval of the competent authority, which in the present case is Joint Secretary. 5. The 2nd and 3rd respondents filed a common counter affidavit wherein it is stated as follows: The present writ petition is a gross ....
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....ed a counter affidavit wherein it is stated as follows: The 5th respondent is a tyre manufacturing Company. The 5th respondent was also a party to the enquiry conducted by the 2nd respondent in RTPE No.28 of 2008 and was exonerated of all the charges of alleged cartelization inquired/ investigated under the Competition Act, 2002. The 'reference' made by Ministry of Corporate Affairs in terms of Section 19(1)(b) of the Act and the provisions of Competition Commission of India (General) Regulations, 2009, is bad in law. The 5th respondent is not filing a substantive Writ petition to avoid multiplicity of legal proceedings. A prima facie order passed by the Commission is non-est and without the authority of law in the absence of any legal and valid 'reference' in accordance with Section 19(1)(b) of the said Act and Regulation 2(j) read with Regulation 10 and 11 of the Competition Commission of India (General ) Regulations, 2009. Thus, issuance of various notices and further action taken by the Director General are also bad in law. The letter of the Ministry of Corporation Affairs dated 16.12.2013 and the representation of the 4th respondent dated 28.11.2013 do not c....
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....he Act seeking for production of documents is limited that pertains to the 'trade' of the relevant party. Therefore, compelling a party to produce the entire email dump is beyond the powers of the Director General and amounts to breach of privacy of the parties. The investigation by the Director General was carried out in a manner violative to principles of natural justice, since the notice of information not made available to the 5th respondent, the information sought for by the Director General was beyond the mandate of prima facie order by not permitting a counsel or legal representative to be present during the deposition before the Director General and by not granting opportunity for oral hearing. 7. The 6th respondent filed a counter affidavit wherein it is stated as follows: The 6th respondent is engaged in the manufacture and marketing of tyres, tubes and flaps. The impugned order of the 2nd respondent is illegal as the same has been passed in the absence of any legal or valid reference as required under Section 19(1)(b) of the Act read with regulation 2(j) & 10 & 11 of the said Regulations. The reference does not even satisfy one of the requirements mentioned....
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.... 2nd respondent by order dated 30.10.2012. The 1st respondent, during the course of hearing before the 2nd respondent had indicated that they have no further submissions to make with regard to the reference and also sought exemption from future proceedings before the 2nd respondent. It clearly indicates that the said reference was made on the basis of unsubstantiated evidence and without application of mind. The 9th respondent pursuant to a press statement issued by the 4th respondent filed an application on 30.01.2014 under Regulation 50 of the said Regulations for inspection of documents. The 2nd respondent granted permission to undertake the inspection of documents. The 9th respondent filed intervention application on 14.02.2014 before the 2nd respondent. The said request was allowed by the 2nd respondent. The 9th respondent and the 4th respondent were directed to appear before the 2nd respondent on 05.03.2014 and both the parties were directed to file their written submissions. The 4th respondent has been making bald allegation time and again without any investigation whatsoever to prove the allegation and they are trying to misuse the precious time and resource of the courts a....
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..... The Government of India has no jurisdiction to give any direction to the Competition Commission. The 2nd subject is only requesting the Government's intervention for immediate tyre price roll back. The said request is unrelated to the powers conferred under the Competition Commission of India. Therefore, there is no reference as contemplated under section 19(1)(b) of the Act. 10. The 9th respondent filed a rejoinder affidavit reiterating the contentions raised by the petitioner once again in support of the case of the petitioner, wherein it is stated as follows: The first respondent in gross violation of the requirements enlisting under Regulation 10, did not provide details of the alleged contraventions of the Act or list of all documents, affidavits and evidence in support of outcome of the alleged contravention during the hearing before the Commission on 18.02.2014 and on the other hand, sought exemption from the future proceedings before the 2nd respondent, thereby recusing from the proceedings. The first respondent did not conduct its own detailed examination of the representation dated 28.11.2013. There is no evidence or proof that an examination / analysis into t....
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....criminate increase in the prices of tyres. The 1st respondent also failed to take note of the fact that an order was passed by the Competition Appellate Tribunal dated 23.04.2013 dismissing the Appeal filed by the 4th respondent as not maintainable. None of the above vital factors were taken into consideration by the 1st respondent before forwarding the representation of the 4th respondent dated 28.112013. iii) The order of reference does not state any reasons. Therefore, the same passed mechanically with non-application of mind and thus it cannot be the basis for action by CCI namely, taking cognizance of the same under Section 26(1) of the Act. In this aspect, the decision of the Supreme Court in 1990(4) SCC 594 is relied on. iv) Before making a reference under Section 19(1)(b), the Government must form a prima facie view that there is a case for such reference. Regulations 10, 11 & 15 imposed that elaborate details have to be furnished in order to make a valid complaint or a reference. v) The withdrawal of the 1st respondent from the proceedings before the CCI also by clearly stating that they have no further submission to make, would show that the 1st....
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....y investigated as per its earlier proceedings in RTPE 20/2008. The order of the CCI is discriminatory as it has not given any clear reason for proceeding only against Indian manufacturers of tyres by exempting the foreign players. ix) There is no delay on the part of the petitioner in filing the present writ petition before this Court. The petitioner had received the representation on 11.03.2015 which was replied to by the petitioner on 13.03.2015 wherein a copy of the order passed under Section 26(1) was asked for for DG CCI furnished an order under Section (1) vide letter dated 17.03.2015. The petitioner by letter dated 24.03.2015, asked for a copy of reference made by the 1st respondent and representation of AITDF dated 28.11.2015 which was not furnished. The petitioner, on 13.04.2015, once again made the said request but no copy of the reference or representation was furnished by DG CCI. The petitioner replied by letter dated 14.08.2015 and mentioned that they had to obtain the reference after inspecting the case file on 02.07.2015 and submitted that the reference was not a valid reference under Section 19(1)(b) of the Competition Act. Inspite of the said objection, th....
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....made out of great injustice, perversity, illegality, hardship and prejudice to the legal rights of the affected parties. (e) Assuming without admitting that the impugned order is an administrative order even then judicial review of such administrative order is permissible as held in 1969 (2) SCC 262 (AK Kraipak v. UOI). (f) It is an admitted fact that selective parties namely 4th respondent and 9th respondent herein alone were heard by the CCI before passing the impugned order and not a single tyre manufacturer was heard. Therefore, it is evident that the impugned order is violative of principles of natural justice insofar as the affected parties are concerned. iii) The 2nd respondent does not have jurisdiction to order investigation based on the compliant or reference as none of the ingredients either under Section 3 or under Section 4 of the said Act have been made out therein. Both the letter of the 4th respondent and the so called reference made by the first respondent do not confirm to Regulation 10(2), 11(2) and 15 of the said Regulations. Regulation 15 provides for procedure for scrutiny for information/reference and provides for rejection of the r....
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....In any event when there is no prima facie case made out in the impugned order it has to go and thus consequential investigation conducted by the Director general also is to be set aside. 14. Mr.AR.L.Sundaresan, learned senior counsel appearing for the 9th respondent made his submission supporting the case of the petitioner as well as the sailing respondents. He again made extensive submissions touching upon all the points already raised and submitted on behalf of the petitioner and other supporting respondents. In order to avoid multiplicity, his submissions made on similar lines are not reiterated once again herein. 15. Per contra, the learned Additional Solicitor General Mr.G.Rajagopal, appeared for the 2nd & 3rd respondents and opposed the writ petition with elaborate submissions. A written submission is also filed by the learned counsel for the 2nd and 3rd respondents. The sum and substance of the submissions made on behalf of the 2nd and 3rd respondents are as follows: i) The petitioner is estopped from questioning the impugned order. There were several correspondence between the petitioner and the CCI after passing the impugned order and when the investigation ....
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.... 19(1)(b). Even otherwise, if the Competition Commission is satisfied that there is no proper reference, it would have returned the same to the Government for compliance. On the other hand, the Commission was satisfied that there was proper reference and acted upon the same. Therefore, the requirement under Regulations have been complied with. Even otherwise, the Regulation is in the nature of subordinate legislation which cannot control the power of the Commission under the main statute. In this aspect, 2015(2) MLJ 5 para 56 is relied on. iv) The jurisdiction of Competition Commission is wide as contemplated under Section 18 of the said Act. Therefore, the protection of the interest of the consumers is one of the duties of the commission and if any of the manufacturer/ company affects the consumers, it amounts to abusing the dominant position as referred to under Section 4(2)(a). Sub section 2 and 3 of Section 19 would show that the commission can issue any order that will protect the interests of the consumers encouraging competition etc. Even assuming without admitting that there is any error in making the reference, the representation of the aggrieved persons could be ....
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....unsel appearing for the 9th respondent. 17. The petitioner and the respondents, 5, 6, 7 and 8 are the tyre manufacturing Companies. The 9th respondent is an association having the tyre manufacturers as its members. The petitioner and the respondents 5 to 8 along with other tyre manufacturers are members of the 9th respondent Association. The 4th respondent is an All India Federation consisting of dealers in tyres. The 4th respondent herein has been periodically agitating an issue in respect of pricing of the tyre and tubes by the manufacturers by contending that 90% of the tyre production in India is controlled by certain tyre manufacturing Companies which are engaged in abusing their dominant position in fixing the price of tyre and tubes. In one such complaint dated 28.11.2013 addressed to the Ministry of Commerce and Industries and Ministry of Corporate Affairs, Government of India, the 4th respondent sought for Competition Commission of India to take suo muto action against domestic tyre manufacturers by contending, apart from other allegations, that none of the leading domestic tyre manufacturers rolled back their tyre prices even after steep drop in raw material prices. Th....
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....ission, after considering the matter in its meeting held on 07.01.2014, directed the Ministry of Corporation Affairs and All India Tyre Dealers Federation to address their preliminary arguments. At that point of time, the 9th respondent filed an application on 30.01.2014 seeking for inspection of the documents. By an order dated 11.02.2014, the Competition Commission of India allowed the request of the 9th respondent for inspecting the documents filed in the matter. Thereafter, the matter was taken up by the Commission on 18.01.2014 for hearing. The representative for the Ministry of Corporate Affairs stated that they have no further submissions to make and sought exemption from further proceedings. The same was allowed by the Commission. Thereafter, the matter was taken up on 05.03.2014 for hearing the 4th and the 9th respondents. The Commission also granted them liberty to present their written submissions. Consequently, the respective parties placed their submissions. Thereafter, the Commission, after considering the submissions and on perusal of the material available on record, proceeded to pass an order under Section 26(1) of the said Act on 24.06.2014 finding that the Commis....
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....aged in identical or similar trade of goods or provision of services, which- (a)directly or indirectly determines purchase or sale prices; (b)limits or controls production, supply, markets, technical development, investment or provision of services; (c)shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way; (d)directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition: Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services. Explanation.- For the purposes of this sub-section, "bid rigging" means any agreement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating o....
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....ion of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to- (i)operate independently of competitive forces prevailing in the relevant market; or (ii)affect its competitors or consumers or the relevant market in its favour; (b) "predatory price" means the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors. 24. As the above said provisions of law clearly speak as to what are the agreements which are prohibited and what is the abuse of dominant position which is to be prohibited, I am not reiterating the same once again herein. 25. Chapter IV of the said Act deals with the duties, powers and functions of the Commission. Under the said Chapter Section 18 deals with the duties of Commission which reads as follows: 18. Duties of Commission - Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of....
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....ervice network of such enterprises; (f)dependence of consumers on the enterprise; (g)monopoly or dominant position whether acquired as a result of any statute or by virtue of being a Government company or a public sector undertaking or otherwise; (h)entry barriers including barriers such as regulatory barriers, financial risk, high capital cost of entry, marketing entry barriers, technical entry barriers, economies of scale, high cost of substitutable goods or service for consumers; (i) countervailing buying power; (j)market structure and size of market; (k)social obligations and social costs; (l)relative advantage, by way of the contribution to the economic development, by the enterprise enjoying a dominant position having or likely to have an appreciable adverse effect on competition; (m)any other factor which the Commission may consider relevant for the inquiry. 27. Argument was advanced on both sides elaborately on the scope and ambit of the above provision of law. A careful perusal of Section 19 would indicate the following: (a) Inquiry contemplated under the above provision of law is in respec....
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.... in sub-section (3) to the Central Government or the State Government or the statutory authority, as the case may be. (5) If the report of the Director General referred to in sub-section (3) recommends that there is no contravention of the provisions of this Act, the Commission shall invite objections or suggestions from the central Government or the State Government or the statutory authority or the parties concerned,a s the case may be, on such report of the Director General. (6) If, after consideration of the objections or suggestions referred to in sub-section (5),if any, the commission agrees with the recommendation of the Director General, it shall close the matter forthwith and pass such orders as it deems fit and communicate its order to the Central Government or the state Government or the statutory authority or the parties concerned, as the case may be. (7) If, after consideration of the objections or suggestions referred to in sub-section (5), if any, the commission is of the opinion that further investigation is called for, it may direct further investigation in the matter by the Director general or cause further inquiry to be made in the matt....
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....of the Director General, it shall close the matter forthwith. (c) On the other hand, after considering the objections or suggestions from the parties as stated supra, if the Commission is of the view that further investigation is called for, it may order further investigation by the Director General or further enquiry to be made itself in accordance with the provisions of the Act. 30. Section 27 deals with the orders by Commission after enquiry into agreements or abuse of dominant position which reads as follows: 27. Orders by Commission after inquiry into agreements or abuse of dominant position.-Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the following orders, namely:- (a) direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be; (b) im....
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....and, after enquiry, if the Commission finds that there is a contravention, it will issue appropriate direction and impose penalty on the erring party. Thus, the said order is again a final order passed under Section 27. 33. Section 64 of the said Act empowers the commission to make regulations by notification. Accordingly, the Competition Commission of India (General) Regulations, 2009, was made and published in the gazette of India dated 25.05.2009. 34. Regulation 2 sub clause (j) defines what is a 'reference' which reads as follows: (2) Definitions: (1) In these regulations, unless the context otherwise requires, - ..... ..... (j) "reference" means a reference- (i) received in the Commission from the Central Government or a State Government or a statutory authority under clause (b) of sub-section (1) of section 19 of the Act, or (ii) received in the Commission from a statutory authority under section 21 of the Act for opinion, or (iii) sent to a statutory authority for opinion by the Commission under section 21A of the Act, or (iv) received in the Commission from the Central Government or a Stat....
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....ociety or similar body or the person so authorized by the legal instrument that created the association or the society or the body; (e) a partner in the case of a partnership firm; (f) the chief executive officer in the case of a cooperative society or local authority; (g) in the case of any other person, by that person or by some person duly authorized to act on his behalf. (2) A reference shall be signed and authenticated by an officer not below the rank of a Joint Secretary to the Government of India or equivalent in the State Government or the Chief Executive Officer of the Statutory Authority if the same has been received from the Central Government or State Government or Statutory Authority. (3) Without prejudice to the provisions of this regulation, the counsel may also append his or her signature to the information or reference as the case may be. 37. Regulation 15 deals with the procedure for scrutiny of information or reference which reads as follows: 15.Procedure for scrutiny of information or reference - (1) Each information or reference received in the Commission shall be scrutinized by the Secretary to ....
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....tion on existence of prima facie case which reads as follows: 16. Opinion on existence of prima facie case. (1) The Secretary, after scrutiny and removal of defects, if any, in an information or reference, as the case may be, shall place the same before the Commission to form its opinion on existence of a prima facie case. (2) In cases of alleged anti-competitive agreements and/or abuse of dominant position, the Commission shall, as far as possible, record its opinion on existence of a prima facie case within sixty days. (3)The Commission shall, as far as possible, hold its first ordinary meeting to consider whether prima facie case exists, within fifteen days of the date of placement of the matter by the Secretary under subregulation (1). 39. Regulation 17 deals with preliminary conference which reads as follows: 17. Preliminary conference - (1) The Commission may, if it deems necessary, call for a preliminary conference to form an opinion whether a prima facie case exists. (2) The Commission may invite the information provider and such other person as is necessary for the preliminary conference. (3) A preliminary c....
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....tes the principles of natural justice. Consequently, the impugned order is liable to be interfered with on the ground of violation of principles of natural justice as well. (i) Neither the SAIL case before the Apex Court nor the Chettinad case before the learned single Judge of this Court has considered the question regarding the validity of the reference under Section 19(1)(b) and therefore, those two decisions are not applicable to the facts and circumstances of the present case. Likewise, in SAIL case, the Apex Court has only held that the order under Section 26(1) is not an appealable order and an administrative one. However, in the said case, it was not held that an order under Section 26(1) can never be questioned at all. (j) Likewise, in Chettinad's case, the learned single Judge of this Court has specifically observed that there is no general embargo against the invocation of the jurisdiction under Article 226 of the Constitution of India against every order made under Section 26(1). The learned Judge also observed that the petitioner therein has not raised the plea of violation of principles of natural justice which would entitle them to invoke the ex....
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.... (k) Whether there is a contravention of Section 3 or Section 4 is a matter which can be considered and decided by the Commission only after the investigation and therefore, they cannot be a subject matter of enquiry under Article 226 of the Constitution of India. (l) The powers of the Commission under the said Act is exercisable from time to time as provided under Section 14 of General Clause Act, 1997 and therefore, as and when an occasion arises, it is open to the Commission to invoke its jurisdiction. (m) While passing the order for investigation under Section 26(1), the Commission is not bound to issue notice to all or any of the parties as there is no statutory obligation to do so. Therefore, the petitioner and other supporting respondents are not entitled to raise the ground of violation of principles of natural justice as a matter of right. 42. Upon hearing both sides and considering their contentions, it is evident that this Court has to first decide the preliminary objection raised against the maintainability of the writ petition. Therefore, I proceed to decide the same as hereunder. 43. The main contention of the respondents 1 to 3 on this ....
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....he present case: One Jindal Steel and Powers Ltd. provided information to the Competition Commission by invoking the provision of Section 19 read with Section 26(1) of the said Act, alleging that M/s. Steel Authority of India Limited (SAIL), had, interalia, entered into an exclusive supply agreement with Indian Railways for supply of rails. Thus, the said informant contended that SAIL had abused its dominant position in the market and deprived others in fair competition and therefore, acting contrary to Section 3(4) and Section 4(1) of the said Act. The Commission registered the information and directed SAIL to submit its comments in respect of the information. SAIL requested for extension of six weeks time to file its comments. The Commission declined such request for extension of time and also passed an order on 08.12.2009 simultaneously forming an opinion that a prima facie case exists against SAIL and directed the Director General to make investigation in terms of Section 26(1). The said order of the Commission dated 08.12.2009 was challenged by SAIL before the Competition Appellate Tribunal. The Commission filed an application before the Tribunal seeking impleadment i....
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....arned single Judge of this Court. 50. The short facts of the said case as as follows: The petitioner therein entered into a licence agreement with the 3rd respondent Port therein for establishing the common user coal terminal. The 2nd respondent therein is registered Association of power producers in Tamilnadu. The 2nd respondent therein filed an information before the Competition Commission of India, the 1st respondent therein under Section 19(1)(a) of the said Act against the petitioner therein to inquire into the alleged abusive practices of the petitioner therein that violates the provisions of Section 4(1)(a)(i) etc. On notice from the Commission, the petitioner and the 3rd respondent therein filed their replies and after hearing the parties, the Commission, by order dated 04.01.2016, found that, prima facie, the petitioner therein appears to be abusing its dominant position in contravention of provision to section 4 of the Act and accordingly, directed the Director General to investigate under Section 26(1). The said order passed by the Commission under Section 26(1) was challenged by the petitioner therein in the above writ petition. A preliminary objection was raised ....
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....he affected party can very well approach the Court under Article 226 of Constitution of India, provided the other parameters such as the jurisdiction, status of the respondent as a 'State' within the meaning of Article 12 etc. are satisfied, apart from satisfying that the order under challenge discloses a cause of action for challenge warranting judicial interference. 53. Further in this case, as already pointed out, the petitioner questioned the very validity of the reference by contending that it is invalid and consequently, no further proceedings can be initiated based upon the same. This was not the issue before the learned single Judge in the CHETTINAD case or before the Apex Court in SAIL case. Therefore, I find that the petitioner is entitled to maintain the present writ petition before this Court and consequently, the power of this Court to exercise its jurisdiction under Article 226 of the Constitution of India is not ousted in any way since a statutory appellate remedy is not provided against the impugned order. It is also relevant to note, at this juncture that even in cases where an alternative remedy is available, the power of this Court to exercise jurisdic....
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....othing stated in this order shall tantamount to a final expression of opinion on merit of the case and the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein. 55. Before proceeding to discuss this issue in detail, the first and foremost factor to be borne in mind is about the nature of the order passed under Section 26(1) and its scope. A perusal of the said provision would make it very clear that such an order is only to direct the Director General to cause investigation into the matter and that such direction is issued after formation of an opinion by Commission that there exists a prima facie case. Therefore, two things emerge as to what is the nature of the order under Section 26(1). Firstly, it is simple process of forming an opinion by the Commission with regard to the existence of a prima facie case. Needless to say that a prima facie opinion, however strong it may be, does not mean or be construed as binding on the Commission, at the time of passing the final order under Section 27. Secondly, the Commission only seeks the assistance of the Director General to conduct an investigation, based upon such prima fac....
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.... a right to appeal against such closure of case under Section 26(2) of the Act. On the other hand, mere direction for investigation to one of the wings of the Commission is akin to a departmental proceeding which does not entail civil consequences for any person, particularly, in light of the strict confidentiality that is expected to be maintained by the Commission in terms of Section 57 of the Act and Regulation 35 of the Regulations. 39. Wherever, in the course of the proceedings before the Commission, the Commission passes a direction or interim order which is at the preliminary stage and of preparatory nature without recording findings which will bind the parties and where such order will only pave the way for final decision, it would not make that direction as an order or decision which affects the rights of the parties and therefore, is not appealable. .... .... 87. Now, let us examine what kind of function the Commission is called upon to discharge while forming an opinion under Section 26(1) of the Act. At the face of it, this is an inquisitorial and regulatory power. A Constitution Bench of this Court in the case of Krishna Swami vs. Un....
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....ommission to form an opinion under Section 26(1) is in a inquisitorial and regulatory power and therefore, the same is neither civil nor criminal but sui generis; that the jurisdiction of the Commission to act under Section 26(1) does not contemplate any adjudicatory function. 58. Likewise, the findings rendered by the learned single Judge of this Court in CHETTINAD case at paragraph Nos.33, 34 and 35 are relevant to be quoted wherein the plea raised by the petitioner therein that the order passed under Section 26(1) results in civil consequences was rejected. Paragraph Nos. 33, 34 and 35 reads as follows: 33. As rightly pointed out by the learned counsel for the second respondent, the arguments advanced by the learned Senior counsel for the petitioner and the third respondent appears to be on the premise that the Commission has taken a decision in the matter and such decision is contrary to the factual position when the Commission has only formed a prima facie opinion and issued a direction to cause investigation by the DG who is part of the Commission appointed by the Central Government to assist the Commission and there was no final view of the matter. Hence, the ple....
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....on of the fourth respondent does not furnish the mandatory details as required under Regulation 10 and that the signing of the reference was not in accordance with Regulation 11. It is also contended that the Secretary of the Commission before placing the reference before the Commission for forming its prima facie opinion, failed to scrutinise the reference to check whether it confirms to the Regulations as required under Regulation 15; that as the reference made by the first respondent is a defective one, the same ought to have been treated as invalid as required under Regulation 15(3). It is further contended that the impugned order was passed in violation of principles of natural justice as the petitioner and other supporting respondents, except the 9th respondent, were not given an opportunity of hearing. 62. Before answering the above contentions with regard to the allegation of invalid reference, let me first consider the issue raised on the question of violation of principles of natural justice. In my considered view the said issue was already answered against the petitioner and the supporting respondents by the Apex Court in the SAIL case itself wherein it is held as fol....
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....ous consequence, but it is only upon application of mind by the authorities concerned that notice is expected to be issued. .... .... 78. Cumulative reading of these provisions, in conjunction with the scheme of the Act and the object sought to be achieved, suggests that it will not be in consonance with the settled rules of interpretation that a statutory notice or an absolute right to claim notice and hearing can be read into the provisions of Section 26(1) of the Act. Discretion to invite, has been vested in the Commission, by virtue of the Regulations, which must be construed in their plain language and without giving it undue expansion. 63. From the above categorical pronouncement made by the Honourable Supreme Court, neither the petitioner nor the supporting respondents are justified in their contention that they are bound to be heard before passing the direction under Section 26(1). It is observed by the Apex Court that it is for the Commission to consider as appropriate to issue such notice to such of those person. Thus, in the absence of mandatory statutory obligation for issuing such notice on the part of the Commission and when such obligati....
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....equence and consequently, the same does not give a cause of action for the parties to challenge such proceedings. They cannot be termed as aggrieved parties at this stage. No doubt, it is contended that in the absence of a valid reference, the Commission should have held the reference as invalid as contemplated under Regulation 15(3). But the fact remains that the Commission did not do so and on the other hand, has chosen to proceed further. 65. A statutory power conferred on the Commission to form a prima facie opinion is exclusively within its domain and none of the parties can either insist or dictate as to "this is how the opinion should be". A prima facie view is certainly a preliminary view normally taken after hearing one side of the story. Thus, such view, is always open for change at the time of passing the final order after hearing all the parties and considering all the materials, depending upon the facts and circumstances of each case. When such being the position, the question as to how such opinion could be taken; what are the materials to be considered for arriving at such opinion; whether the 'reference', in this case, could be treated as a valid referenc....
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....asons stated therein and not to be decided based on the supplemented reasons stated in an affidavit or otherwise I do not think that those decisions are helping the parties in any way in view of the categoric pronouncement made by the Apex Court in the SAIL case which is directly on the same subject matter. 70. 1997 (4) SCC 611 was relied on to contend that General Regulations are mandatory in nature and cannot given a goby. I have already pointed out that the non-compliance of the mandatory Regulations, if any, itself cannot make the order under Section 26(1) nullity as it is only an administrative order, that too, ordering further investigation, not affecting the interest of the parties, as such, in any manner. Therefore, when such order itself is not liable to be interfered with, either by this Court or the Appellate Tribunal, such grounds raised by these parties in respect of the non-compliance of mandatory Regulations can at the best be grounds of challenge, while filing the appeal against the order passed under section 27, assuming that the second respondent is going to decide against these parties. Therefore, at any event, these grounds cannot be raised at this stage. The....
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....ted and controlled by the concerned Department/Government under the TRAI Act and therefore, the order passed by the Competition Commission under Section 26(1) therein and all the consequential action/ notices of the Director General are under the wrong presumption of law and usurpation of jurisdiction. Under such circumstances, the Bombay High Court interfered with the order under Section 26(1) and other consequential action, by allowing the writ petition. Therefore, it is evident that the main reason for interfering with the said order is want of jurisdiction. In this case, the facts are totally different as discussed supra. Considering a defective reference or information is stated as an act without jurisdiction. Certainly, the act of considering such defective reference or information cannot make out a jurisdictional issue against the Commission. At the best, it could be considered as improper procedure. What the subject matter under reference alone would decide the jurisdiction and not the manner in which it was made. Therefore, I find that the above Vodofone case will not come to the rescue of the parties seeking for interference against the order under Section 26(1). 73. A....
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....inst the "reference" is attractive and forceful. However, this Court finds the same is not a fatal blow on the impugned order, in view of the above discussed facts and circumstances. 75. No doubt, the submissions made by the petitioner and the supporting respondents against the reference is one way of looking at the issue, but at the same time, it is to be noted that it is not the only way of looking at the issue. While considering the duties and responsibilities of the Commission vested on it under the statute, it should be borne in mind that such statutory obligation will always over weigh and over power the technical objections, since such duties and responsibilities are sought to be exercised for achieving the object of the Act, which is undoubtedly to benefit the public. Therefore, the Court should not step into the shoes of the Commission, at this stage, to find out whether the contentions as raised by the parties in this case will have a bearing on the final decision to be made by the Commission. Needless to say that only when this Court finds that the Commission itself lacks its jurisdiction wholly on the subject matter in issue, it can exercise its discretion and entert....
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....cal lapses would play a major role in deciding the sustainability of such order. In such cases, as the liberty of the person itself is curtailed instantaneously, interference based on such procedural violation or technical lapses is justifiable. It is not so in this case. It is only an order to investigate further. Therefore, the Court should show utmost restraint from interfering with such process of investigation. There are two types of procedural violations. One would result in affecting the rights of the parties at once, whereas the other is not so. Therefore, it has to be seen on the facts and circumstances of each case as to whether such procedural violation requires judicial scrutiny and consequently, the interference with the order under challenge. In this case, this Court finds that the procedural lapses raised by the parties do not fall under the first category. 79. It is to be noted further that the relevant Regulations are only procedures which are to be followed while filing the information or reference and also scrutinising the same for proceeding further to form an opinion on the existence of a prima facie case. Therefore, they are the procedures made to facilitat....
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....hat at this stage, this Court can interfere with the very preliminary order, that too, directing the investigation, even on the ground of procedural lapses, either in making the reference or entertaining the same. Needless to say that all these contentions even otherwise can be raised by the parties before the Commission or before the Appellate Tribunal, if an order is passed by the Commission against the parties. Therefore, the petitioner and the supporting respondents are not entitled to escape from the clutches of investigation. 81. In this case, admittedly, during the pendency of this writ petition, the investigation has already been completed and all the parties have taken part in the investigation. It is also stated that the report of the investigating officer was submitted before the Commission and all the parties have taken part in the proceedings before the Commission and have advanced their arguments. Therefore, the final order alone is to be passed by the Commission. When such being the factual position, it is for the parties to face the order and thereafter to work out their remedy, if the order goes against them. 82. At this juncture, it is to be noted that the p....