TaxTMI 
TaxTMI 
2018 (6) TMI 1086
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....stence of a bid-rigging cartel in the Conveyor Belt Sector in India. On 06.11.2013, based on the information, the CCI found that there was an apparent prima facie case of contravention of Section 3 of the Competition Act, 2002 (hereafter "the Act") and in suo-motu Case No. 06 of 2013 directed the Director General ("DG") to undertake an exhaustive investigation into the matter against the parties for all kinds of violation of the Act, under an order issued under section 26(1) of the Act. 3. Pursuant to the CCI's order, the DG on 27.05.2015, issued Notice to Oriental Rubber Industries Private Limited ("Respondent"), mentioning that its office was conducting investigation in the case and in terms of the powers vested in the DG as per Sections 36(2) and 41(2) of the Act, and asking the respondent to furnish information which inter alia included information with respect to the company and its business activities, plant addresses, names of the entire sales and marketing team and other persons responsible for tendering/bidding for contracts, explanation in detail with respect to process of supply of fabric conveyor belts in different market segments, etc. 4. On 04.06.2015, in furthe....
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....he Respondent to cross-examine the witnesses and allowing the officers of the Respondent to be accompanied by legal counsel when giving their statements under oath. On 11.12.2015, the CCI stated in proceedings before the Court that the copies of the documents to be used against the respondent would be supplied and the Respondent would be allowed the right to cross-examine the witnesses whose evidence is intended to be used. However, the CCI declined the request that the officials of the respondent whose statements were to be recorded by the DG, be accompanied by advocates. On this issue, the parties, therefore, differed and advanced arguments before the learned Single Judge. By decision, dated 22.04.2016, the learned Single Judge held that the officials of the Respondent summoned by the CCI would be entitled to be accompanied by advocates. Aggrieved by this order, CCI has filed this appeal. Contentions 9. Assailing the correctness of the impugned decision, learned senior counsel appearing for the Appellants/CCI, Mr. Prashanto Sen, argued that the learned Single Judge failed to appreciate the decision of the Supreme Court in N.K. Bajpai v. Union of India, AIR 2012 SC 1310, whe....
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....ma facie opinion is a direction simplicitor, to the DG to cause an investigation into the matter. Therefore, urged counsel, at this stage of investigation, the Respondent would not be vested with any consequence and accordingly, its officials could not claim the right to be accompanied or represented by advocates at this stage. The CCI further argues that during the course of investigation and recording of evidence of a witness, the active participation of a counsel may not be conducive to the larger public interest in promoting competition, because the likelihood of a counsel cautioning (either orally, or through non verbal communication) a witness from making or refraining from making a statement is real. It is urged that there is no real lis at this stage (of investigation) when evidence gathering in primary form takes place. In the event, any statement is seen to be adverse, the company or concern facing investigation may seek cross-examination before the commission. However, the mere recording of statement of a witness - which is an important and crucial part of the fact finding done by the DG to be taken note of later by the commission does not result in any adverse consequen....
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....nt (the petitioner in the original writ petition), Mr. Sandeep Sethi argues that at the stage of Section 41 investigations, the DG would be recording evidence, by summoning persons and documents. Therefore, all statements recorded by the DG during investigations are evidence in the subsequent proceedings before the Commission. As such, it would not be in the form of an enquiry report. The evidence so recorded in the investigations would be placed before the Commission, which would give then give its report. In this regard he relies on Regulation 41(4) and 41(6) of the CCI General Regulations. Counsel also drew the Court's attention to Regulation 43 which bars a party from producing any additional evidence before the CCI and which was not produced before the DG. These Regulations state: "41. Taking of evidence (4) The Commission or the Director General, as the case may be, may call for the parties to lead evidence by way of affidavit or lead oral evidence in the matter. (6) The Commission or the Director General, as the case may be, may, if considered necessary or expedient, direct that the evidence of any of the parties to be recorded by an officer or per....
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.... same provides for a right of cross-examination and as such, it cannot be said that the presence of an advocate is contrary to the letter and intent of the Act and the Rules. Regulation 41(5) provides: "(5) If the Commission or the Director General, as the case may be, directs evidence by a party to be led by way of oral submission, the Commission or the Director General, as the case may be, if considered necessary or expedient, grant an opportunity to the other party or parties, as the case may be, to cross examine the person giving the evidence." 16. Finally, Mr. Sethi took us through the relevant provisions of antitrust laws in the US, UK and the EU, to contend that even in those jurisdictions, a person who is called for giving evidence in an ongoing investigation by the relevant antitrust authorities, has the right to be accompanied by counsel. Thus urged Mr. Sethi, that this Court should follow a similar approach. Analysis and Conclusion 17. The right of a party to be represented through counsel in legal proceedings, and the corresponding right of an Advocate to practice are so well entrenched as to not require further analysis. This right is provided under S....
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....the competent Legislature. Thus, the right to practice is not an absolute right which is free of restriction and is without any limitation. There are persons like Mukhtiars and Ors. who were earlier entitled to practice before the Courts, but the Advocates Act itself took away the right to practice which was available to them prior to its coming into force. Thus, the Advocates Act placed a complete prohibition upon the right to practice of those persons who were not advocates enrolled with the State Bar Council." 19. Under the regime of the Competition Act, there can be no doubt that the DG is authorized to record evidence. Section 36(2) of the Act provides the DG powers similar to that of a Civil Court and allows him to take evidence. Section 36 is given further content through Regulation 41 and 43 of the CCI Regulations (reproduced in relevant part above), which also clarifies that the DG is authorized under the Competition Act to take evidence. That being the case, the DG would fall under Section 30(ii) of the Advocates Act, as being a person "legally authorized to take evidence". Therefore, advocates under Section 30 would have the right to practice before such individual. T....
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....n. If such person refuses to answer any question, the antitrust investigator conducting the examination may petition the district court of the United States pursuant to section 1314 of this title for an order compelling such person to answer such question." In the European Union, in the landmark case of Hoechst v. Commission, Case No. 46/87 and 227/88, with respect to antitrust proceedings at the stage of investigation, the ECJ held: "Consequently, although certain rights of the defence relate only to the contentious proceedings which follow the delivery of the statement of objections, other rights, such as the right to legal representation and the privileged nature of correspondence between lawyer and client (recognized by the Court in the judgment of 18 May 1982 in Case 155/79 AM & S v Commission [1982] ECR 1575) must be respected as from the preliminary-inquiry stage." 21. The matter can be viewed from a different compass as well. A Division Bench of this Court in Google (supra) held that the powers of the DG are very wide and extensive under the Competition Act, and the consequences of an investigation by the DG are also drastic. It was held by the Court: ....