TaxTMI 
TaxTMI 
2015 (4) TMI 1234
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....to any party and shall be kept strictly confidential and not granting ad-interim stay of the investigation commenced by the DG, CCI in Case No. 06/2014 of the CCI against the appellants. The said appeal came up before us first on 10th November, 2014 when the counsel for the respondent No. 1 CCI appeared on advance notice; after hearing the counsels to some extent, it was felt that the writ petition itself could be decided along with this appeal; accordingly, with the consent of the counsels, we requisitioned the writ petition from the board of the learned Single Judge and listed the appeal as well as the writ petition for hearing on 20th November, 2014. Since the respondent No. 2 Vishal Gupta, on whose complaint under Section 19 of the Competition Act, 2002, Case No. 06/2014 aforesaid against the appellants had been registered, did not appear inspite of advance copy stated to have been given, notice was also directed to be served on him. 2. On 20th November, 2014, the counsels stated that since the matter involves pure question of law, counter affidavits in the writ petition would not be necessary. The counsel for the respondent No. 1 CCI on that date also assured that in the me....
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.... an application for recall of an order under Section 26(1) of the Competition Act is maintainable or not inasmuch as if this Court were to hold that such an application is maintainable, the matter would have to be remanded back to the CCI to decide the said application on merits. 6. We had however on that date enquired from the senior counsel for the appellants whether not holding such an application for recall of an order under Section 26(1) of the Competition Act to be maintainable would tantamount to conferring a right of hearing to the person/entity complained against or reference against whom had reached the stage of Section 26(1) of the Act and which right the Supreme Court in Competition Commission of India Vs. Steel Authority of India Ltd. (2010) 10 SCC 744 has held does not exist. 7. The counsel for the respondent No. 1 CCI, on that date, while opposing the said contention had drawn our attention to Section 37 of the Competition Act which Section prior to its repeal by the Competition (Amendment) Act, 2007 with effect from 12th October, 2007 conferred a power on the CCI to review its order. It was his contention that the application filed by the appellants for recall....
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....ns were automatically redirected to other domains targeted to users in USA and Canada and CCI thus lacked territorial jurisdiction. It was further the case of the appellants in the said recall application that there was no connection between the suspension of M/s. Audney's account by the appellants and the territory of India and the respondent No. 2 complainant had failed to demonstrate effect thereof on competition in the relevant market in India. 11. The respondent No. 1 CCI vide order dated 31st July, 2014 (supra) dismissed the said application of the appellants for recall as not maintainable observing, i) that the application is misconceived, ii) that the CCI vide order dated 15th April, 2014 had only prima facie formed a view after taking into consideration the material available on record, iii) when the investigations are pending before the DG, it would not be appropriate to deal with the issues raised by the appellants which can be effectively examined after the investigations are completed; iv) to accede to the prayers made in the application for recall would tantamount to review of the order dated 15th April, 2014 and which power had not been conferred upon the CCI,....
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....ts or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts will issue appropriate orders or directions to prevent such consequences. (b) Arun Kumar Vs. Union of India (2007) 1 SCC 732 laying down that the existence of a jurisdictional fact is sine qua non or condition precedent for the exercise of power by a Court of limited jurisdiction. (c) Judgment dated 13th April, 2012 of the Division Bench of this Court in W.P. (C) No. 4489/1995 titled Samir Kohli Vs. Union of India where it was held that sans a statutory empowerment, a statutory or quasi judicial Tribunal cannot review or alter its decision but since the powers exercised by the Central Government under Section 41 of the Delhi Development Act, 1957 are not judicial or quasi judicial in nature but supervisory over the DDA and akin to a regulatory power, the same are not spent or exhausted with the passing of an order and lack of an express power in the Act to review does not bar the Central Government from doing so if the circumstances so warrant (We may notice that SLP(C) No. 15378/2012 preferred thereagainst is found to have been entertained with an ad-interim ord....
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.... of Karnataka 1993 Supp (4) SCC 595 laying down that the power to rectify an order stems from the fundamental principle that justice is above all and is to be exercised to remove the error and not for disturbing finality and that even when there is no statutory provision in this regard such power is to be exercised to avoid abuse of process or miscarriage of justice. (i) State of Uttar Pradesh Vs. Maharaja Dharmander Prasad Singh (1989) 2 SCC 505 holding that the Development Authority had competence to initiate proceedings to revoke the permission on the ground that permission had been obtained by misrepresentation and fraud and that the view that in the absence of authorization, the authority could not revoke or cancel the permission once granted is erroneous. (j) Syngenta India Ltd. Vs. Union of India 161 (2009) DLT 413 laying down that administrative or statutory powers in aid of administrative functions imply flexibility and the need to review decisions taken and that unlike Courts, administrators and administrative bodies have to take decisions on the basis of broad, general policy considerations and that review as is understood in the functioning of the Cour....
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.... application for recall are wanting a complete hearing at the stage of Section 26(1) of the Act and which is impermissible; (d) contended that whatever the appellants are contending in their application for recall can be contended at a subsequent stage also; (e) contended that the appellants in the recall application have not taken any plea of fraud but only of suppression of facts by the respondent No. 2 complainant; (f) contended that the application for recall is in substance an application for review; (g) invited attention to Kapra Mazdoor Ekta Union Vs. Birla Cotton Spinning and Weaving Mills Ltd. (2005) 13 SCC 777, in the context of a Court or a quasi judicial authority having jurisdiction to adjudicate on merits, laying down that its judgment or order can be reviewed on merit only if the Court or the quasi-judicial authority is vested with the power of review by express provision or by necessary implication and it is only procedural illegality which goes to the root of the matter and invalidates the proceeding itself and consequently the order passed, which can be reviewed; on the basis thereof it was contended that a perusal of the application of the appellants ....
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....ower to set aside ex parte orders and the power of review and the powers which have not been expressly given by the statute cannot be exercised; (iii) Haryana State Industrial Development Corporation Ltd. Vs. Mawasi (2012) 7 SCC 200 laying down that a power of review is a creature of the statute and no Court or quasi-judicial body or administrative authority can review its judgment or order or decision unless it is legally empowered to do so (we may however note that the Supreme Court in the said case was concerned with power of review of High Courts and the Supreme Court and which in civil cases is confined to grounds specified in Order 47 Rule 1 of the CPC); (iv) Kalabharati Advertising Vs. Hemant Vimalnath Narichania (2010) 9 SCC 437 laying down that unless the statute/rules so permit, review application is not maintainable in case of judicial/quasi-judicial orders; (n) contended that since the Supreme Court in SAIL (supra) has held that the person/enterprise informed/complained/referred against has no right of hearing at the stage of Section 26(1) of the Act, the question of the appellants being denied the right of hearing at that stage or seeking review on that ground....
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....sdiction, has contended: (aa) that there is a distinction between exercise of administrative power and exercise of statutory power, even if administrative in nature; (bb) that the judgments cited by the senior counsel for the appellants, on decisions taken in exercise of administrative power being reviewable by the decision making authority even in the absence of any specific power, would not be applicable to exercise of statutory power inasmuch as the power of the authorities exercising statutory power is controlled by the statute itself; (cc) that the scheme of the Competition Act does not permit any review/recall; (dd) that the scheme of the Competition Act does not permit any interference in the investigation once set in motion pursuant to an order under Section 26(1) thereof, not even by the CCI itself; (ee) placed reliance on: (i) Lal Singh Vs. State of Punjab 1981 CriLJ 1069 where the question for consideration before the Full Bench of the Punjab and Haryana High Court was whether State Government can review or recall its decision under Section 378 of the Code of Criminal Procedure (Cr.P.C.), 1973 to prefer an appeal against an order of acquittal, before it....
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....s. Central Bureau of Investigation MANU/SC/0989/1994MANU/SC/0989/1994 : 1994 Supp (2) SCC 116 where the question for consideration was whether it is permissible to withdraw the consent given by the State Government under Section 6 of the Delhi Special Police Establishment Act, 1946. It was held that even if Section 21 of the General Clauses Act was held to be applicable, the same did not enable issuance of an order having retrospective operation and the revocation of consent could be prospective in operation only and would not affect matters in which action had been initiated prior to the revocation. It was further held that the investigation which was commenced by Central Bureau of Investigation (CBI) prior to withdrawal of consent had to be completed and it was not affected by the said withdrawal of the consent order and that the CBI was competent to complete the investigation and submit the report under Section 173 Cr.P.C. in the competent Court. On the basis of this judgment, it was contended that the investigation by the DG, CCI once ordered, has necessarily to be completed. (v) Barpeta District Drug Dealers Association Vs. Union of India where a Single Judge of the Gauhati....
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....ndent No. 2/complainant also contains copies of judgments in (i) New Central Jute Mills Co. Ltd. Vs. Deputy Secretary, Ministry of Defence AIR 1966 Calcutta 151; (ii) Rohtas Industries Vs. S.D. Agarwal 1969 (1) SCC 325; (iii) Emperor Vs. Khwaja Nazir Ahmad AIR (32) 1945 PC 18; (iv) Clariant International Ltd. Vs. Securities & Exchange Board of India (2004) 8 SCC 524; (v) T.N. Seshan, Chief Election Commissioner of India Vs. Union of India (1995) 4 SCC 611; (vi) Indian Bank Vs. Satyam Fibres (India) Pvt. Ltd. (1996) 5 SCC 550; and (vii) Shaikh Mohammedbhikhan Hussainbhai Vs. The Manager, Chandrabhanu Cinema AIR 1986 Gujarat 209 but neither was any reference thereto made during the hearing nor is any reference thereto found in the written synopsis filed and it is not clear as to in what context these have been included. We thus do not feel the need to go into the same. 15. The counsel for the respondent No. 1 CCI added that Section 26(1) of the Competition Act is a unique provision and order whereunder has not even been made appealable and is merely a preparatory stage and the Supreme Court in SAIL (supra) has held that there is no right of hearing also to the person/enterprise co....
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....ment or a statutory authority or on the basis of the information/complaint under Section 19 or on the basis of its own knowledge, form an opinion that there exists a prima facie case of contravention of Section 3(1) or Section 4(1) of the Act. Without forming such an opinion, no investigation by the DG can be ordered to be made. However, while forming such an opinion, as per SAIL (supra), CCI is not mandated to hear the person/enterprise referred/informed against. (B) The statute does not provide any remedy to a person/enterprise, who/which without being afforded any opportunity, has by an order/direction under Section 26(1) been ordered/directed to be investigated against/into. Though ComPAT has been created as an appellate forum against the orders of CCI but its appellate jurisdiction is circumscribed by Section 53A of the Competition Act and no appeal is prescribed against the order of CCI under Section 26(1) of the Act. The said person/enterprise, in the absence of any remedy, has but to allow itself to be subjected to and participate in the investigation. (C) The DG, during the course of such investigation, by virtue of Section 41(2) read with Section 36(2) of the Act ha....
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....urse of investigation has powers far wider than of the Police of investigation. Para 29 of the judgment also notices that the counsels had addressed arguments on issues not strictly arising for adjudication in the facts of that case; however since it was felt that the said questions were bound to arise in future, the Supreme Court proceeded to deal with the said contentions also. (G) The investigation by the DG ordered by the CCI thus stands on a different pedestal from a show cause notice, the scope of judicial review whereof, though lies, is very limited and from investigation/inquiry pursuant to an FIR by the Police which in some cases has been held to be not causing any prejudice and thus furnishing no cause of action for a challenge thereto. (H) Before registration of an FIR the concerned Police Officer is not to embark upon an inquiry and is statutorily obliged (under Section 154(1) of the Cr.P.C.) to register a case and then, if has reason to suspect (within the meaning of Section 157(1) Cr.P.C.) to proceed with the investigation against such person. Per contra, as noticed above, investigation by the DG under the Competition Act commences not merely on the receipt of r....
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....te into the offences is legitimately exercised in strict compliance with the provisions falling under Chapter XII of the Code of Criminal Procedure and the Courts are not justified in obliterating the track of investigation when the investigating agency is well within its legal bounds; though a Magistrate is not authorized to interfere with the investigation or to direct the Police how that investigation is to be conducted but if the Police transgresses the circumscribed limits and improperly and illegally exercises investigatory powers in breach of any statutory provision causing serious prejudice to the personal liberty and also property of a citizen, then the Court on being approached has to consider the nature and extent of the breach and pass appropriate orders without leaving the citizens to the mercy of Police since human dignity is a dear value of our Constitution; (vii) no one can demand absolute immunity even if he is wrong and claim unquestionable right and unlimited powers exercisable up to unfathomable cosmos-any recognition of such power will be tantamount to recognition of divine power which no authority on earth can enjoy; (viii) if the FIR discloses no cognizable o....
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.... once petitions under Article 226 for quashing of investigation under the Cr.P.C. have been held to be maintainable, on the same parity a petition under Article 226 would also be maintainable against an order/direction of the CCI of investigation under Section 26(1) of the Competition Act particularly when the powers of the DG, CCI of investigation are far wider than the powers of Police of investigation under the Cr.P.C. (L) However, a petition under Article 226 of the Constitution of India against an order under Section 26(1) of the Act would lie on the same parameters as prescribed by the Supreme Court in Bhajan Lal (supra) i.e. where treating the allegations in the reference/information/complaint to be correct, still no case of contravention of Section 3(1) or Section 4(1) of the Act would be made out or where the said allegations are absurd and inherently improbable or where there is an express legal bar to the institution and continuance of the investigation or where the information/reference/complaint is manifestly attended with mala fide and has been made/filed with ulterior motive or the like. (M) Just like an investigation by the Police has been held in Bhajan Lal (....
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....ation when called for is required to be passed expeditiously and without spending undue time. The view which we are taking, does not impinge on the said reasoning of the Supreme Court. Moreover, if there is found to be a right to approach the High Court under Article 226, the said right cannot be defeated on the ground of the same causing delay; human failings cannot be a ground for defeating substantive rights. The Supreme Court in Madhu Limaye Vs. State of Maharashtra (1977) 4 SCC 551 held that the bar introduced by sub-section (2) of Section 397 of the Cr.P.C. limiting the revisional power of the High Court, to bring about expeditious disposal of the cases finally would not be a bar to the exercise of the inherent power under Section 482 of the Cr.P.C. by the High Court. The same principle was reiterated in B.S. Joshi Vs. State of Haryana (2003) 4 SCC 675, though subsequently in Manoj Sharma Vs. State (2008) 16 SCC 1 it was stated that the same is permissible in rare and exceptional cases. (R) Again, as aforesaid, CCI can order/direct investigation only if forms a prima facie opinion of violation of provisions of the Act having been committed. Our Constitutional values and ju....
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....er/direction for investigation by the DG under the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) (which the Competition Act repeals vide Section 66 thereof), of course in cases of inherent lack of jurisdiction or abuse of process of law or jurisdictional issues. (W) One of the modes in which an inquiry under Section 19 read with Section 26 can be set in to motion is on receipt of reference from the Central Government or State Government or a statutory authority. Under Section 31 of the erstwhile MRTP Act also the Government was empowered to make a reference to the MRTP Commission. A Division Bench of this Court in Colgate Palmolive India (P) Ltd. Vs. Union of India though held that the Government before making such a reference was not required to give an opportunity of hearing to the party against whom reference was made but also held that it did not mean that reference could be made on any whimsical ground and will be immune from challenge. It was held that if it can be shown that there was no material before the Government on the basis of which it could appear that a monopolistic trade practice was being practiced, the order of reference would be bad. (X) ....
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....of the said provision does not mean that no evidence can be received at all after a party closes evidence and that it only means that the amended Civil Procedure Code found no need for such a provision. (ZB) The counsels for the respondents have not been able to controvert that an order/direction issued in the exercise of administrative powers (as the order of CCI under Section 26(1) has in SAIL (supra) been held to be) is inherently reviewable/recallable and have not brought to our notice/argued that there exists any specific bar in the Act or the Regulations framed thereunder to preclude the invocation of the inherent power to recall/review. (ZC) The judgment of the Full Bench of the Punjab and Haryana High Court in Lal Singh (supra) carving out a distinction between administrative powers conferred by a statute and administrative powers conferred by Article 162 of the Constitution of India is indeed contrary to the judgment of the Division Bench of this Court in Samir Kohli (supra). (ZD) The said judgment of the Full Bench of the Punjab and Haryana High Court is with reference to Section 378 of the Cr.P.C. and which is akin to Section 10 of the I.D. Act. The ....
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.... to the Central Government could not question the decision of the Central Government or refuse to obey it. It was however held: (i) that the power of the Central Government under the said provision was a supervisory one and not quasi-judicial in the sense traditionally understood. (ii) there can be no doubt that whatever be the character of the order, it would be reviewable under Article 226 of the Constitution of India. (iii) that the Supreme Court in U.P. Power Corporation Ltd. Vs. National Thermal Power Corporation Ltd. (2009) 6 SCC 235 had held that the power of regulation conferred upon an authority with the obligations and functions that go with it and are incidental to it are not spent or exhausted with the grant of permission. (iv) reliance was placed on R.R. Verma and Maharaja Dharmander Prasad Singh (supra). (v) reference was made to Section 21 of the General Clauses Act which empowers every authority clothed with any statutory power to issue orders rescinding, varying or altering previous orders or notifications. (vi) that lack of an express mention in the statute to review or modif....
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....tice to such a person/enterprise. The question whether CCI is entitled to recall/review the order so made did not arise for consideration therein. It is settled principle of law (see Bhavnagar University Vs. Palitana Sugar Mill P. Ltd. (2003) 2 SCC 11, Bharat Forge Co. Ltd. Vs. Uttam Manohar Nakate (2005) 2 SCC 489, Inderpreet Singh Kahlon Vs. State of Punjab AIR 2006 SC 2571) that a judgment is a precedent on what falls for adjudication and not what can be logically deduced or inferred therefrom. (ZN) The fact that said judgment holds that CCI is not required to hear the person complained/referred against before ordering investigation cannot lead to an inference that such a person even if approaches the CCI for recall/review of such an order is not to be heard. (ZO) The senior counsel for the appellant is correct in his contention that the Supreme Court also in the said judgment has recognized the jurisdiction of the CCI to if so deems necessary give notice to the person/enterprise complained/referred against and hear him also before ordering investigation. It is thus not as if there is any lack of power or jurisdiction in the CCI to hear the person/e....
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....for a reply and without elaborate hearing inasmuch as the grounds on which the application for recall/review is permissible as aforesaid are limited and have to be apparent on the face of the material before the CCI. Even if CCI is of the opinion that the application for recall/review requires reply/further hearing, it is for the CCI to, depending upon the facts order whether the investigation by the DG, CCI, is to in the interregnum proceed or not. (ZU) In the light of the view which we have taken, the judgment cited by the counsel for CCI carving out a distinction between review and recall are of no avail. (ZV) The existence of a provision in the Competition Act for penalizing the complainant/informant for making a misdealing/false statement leading to investigation being ordered cannot take away the right of the person/enterprise ordered to be investigated against/into to apply for review/recall of the order of investigation, if in law found to be entitled thereto. 19. However having said that, we are not to be understood as conveying that in every case in which CCI has ordered investigation without hearing the person/enterprise complained/referr....