TaxTMI 
TaxTMI 
2021 (9) TMI 1569
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....6. Electrical and Automation Business E&A Business 7. Larsen and Toubro Ltd. L&T 8. Schneider Electric India Pvt. Ltd. Schneider 9. Acquisition of the E&A Business of L&T by Schneider Combination 10. Monitoring Agency - M/s. Moore Singhi Advisors LLP MA 11 Approval Order dated 18th April 2019, approving the Combination Approval Order 12. Expression of Interest EOI 13. Low Voltage Switchgear LV Switchgear Prathiba M. Singh, J. 1. This judgment has been pronounced through video conferencing. 2. The present writ petition has been filed by Eaton Power Quality Pvt. Ltd. (hereinafter, "Eaton") challenging the impugned order dated 11th August, 2020, passed by Respondent No. 1/ Competition Commission of India (hereinafter 'CCI'). Brief Facts 3. The genesis of the present dispute is the acquisition of the electrical and automation business (hereinafter, "E&A Business) of Larsen and Toubro Ltd. (hereinafter, L&T) by Respondent No.2 - Schneider Electric India Pvt. Ltd. (hereinafter, 'Schneider'). This acquisition shall hereinafter be referred to as the "Combination". 4. A notice seeking approval of the Combination was filed before the CCI on 25th May 2018 by Schn....
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.... decision of the CCI, both on the ground that it was not heard prior to the decision being made, as also the fact that Eaton's EOI was non-compliant/ non-responsive, sought Review of the said order before CCI. The application seeking Review of the order dated 7th January 2020, was filed by Schneider on 31st January 2020. The said Review application was heard by the CCI on 12th March, 2020. Post this, the matter was reserved for orders. 8. Thereafter, vide the impugned order dated 24th August, 2020, the direction to include Eaton in the White Labelling process has been recalled by the CCI. 9. It is this order passed by the CCI which is under challenge in the present writ petition. 10. The prayers in the present writ petition are as under: "(a) call for the record of Respondent No.1, examine the same and issue a Writ of Certiorari and/or any other similar writ to quash the Impugned Order dated 11.08.2020 passed by Respondent No.1; (b) issue a writ in the nature of Mandamus directing that the Petitioner to be considered in the WL process and be allowed a fair opportunity to negotiate a reasonable arrangement with Respondent No.2 to procure WL services; (c) order costs; and"....
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....e considered, however Eaton has yet been excluded. She further submits that though the first order of the CCI, in favour of inclusion of Eaton, was passed on 7th January, 2020, up till August, 2020 when the impugned order was passed, Schneider never even contacted Eaton. This conduct, according to her, itself shows that there was a specific intention to exclude Eaton right from inception. Submissions on behalf of the Respondent No. 1- CCI 14. Mr. Avishkar Singhvi, ld. Counsel, submits that the CCI is the sector regulator and is supposed to ensure that there is no AAEC whenever any Combination is approved. In the present case, L&T, which is a company having an enormous market share, was hiving off one of its units, and accordingly, in order to ensure that the Combination was not anti- competitive, vide the Approval Order dated 18 April 2019, some remedies were proposed by CCI to reduce the AAEC, including the remedy of entering into White Labelling Arrangements, while approving the said Combination and takeover of the said unit of L&T by Schneider 15. Mr. Singhvi, ld. Counsel, further submits that the MA appointed was continuously looking over the manner in which the Combination....
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....nd 54 of the Cadila (supra), the Division Bench of this Court has laid down that under certain circumstances, despite the omission of Section 37 from the Act, Review/Recall orders can be passed. He submits that if there is fraud, or if there is no detailed hearing which was given to parties, a Review/Recall is maintainable. He further submits that the same is also maintainable in order to correct a mistake, as is stipulated under Section 38 of the Act. He submits that there is a difference in the nature of the disputes between Sections 3 & 4 of the Act on the one hand, and Sections 5 & 6 of the Act on the other. According to him, while Sections 3 & 4 are ex post inquiries, Sections 5 & 6 are ex ante inquiries wherein certain broader powers can be conferred upon the CCI. 20. He finally submits that the allegations made by Eaton against the CCI, to the effect that CCI had an intention to prejudice Eaton in these proceedings, are completely baseless and in bad spirit. He also takes vehement objection to the language used by the Petitioner in its rejoinder to the counter affidavit filed by the CCI, where, according to him, completely baseless and unverified allegations have been level....
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....s there could not be any differentiation between Eaton and Elmex, both of which failed to adhere to the deadlines that were provided in the invitation of EOI. 23. Mr. Sunderesan, ld. Counsel, thirdly submits that it was under some misconception that CCI passed its original order dated 7th January 2020, vide which Eaton was allowed to participate in the White Labelling Arrangements. Eaton being a global competitor of Schneider, was using every method possible to become a part of the White Labelling Arrangements, which could clearly not have been agreed to by Schneider as Eaton had violated the guidelines and terms of the invitation. He further submits that a perusal of the Approval Order itself shows that the said Arrangements are to continue for a period of five years from the closing date. Accordingly, he submits that the Petitioner cannot be given a march over other parties, who had completed the documentation within the deadlines, and the entire issue being reopened would create hurdles in the White Labelling Arrangements being finalized, which is contrary to the purpose expressed in the Approval Order. He also submits that the delay in filing the required documents was primari....
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....ly that the same would conclude by mid-September. He submits that considering the pandemic and the various extensions which were sought by the applicants, it is a reasonable time within which the first White Labelling Arrangement would conclude, and hence there is no apprehension in respect of the bona fides of Schneider, in concluding the Arrangement. In response to a query from the court, he further submits, on instructions, that the five-year period would therefore commence approximately from mid-September 2021 and shall go on till September 2026. 27. The next submission of Mr. Sunderesan, ld. Counsel, is that White Labelling Arrangement is just one facet of the entire approval which has been granted by the Approval Order, although it is one of the essential measures that has been prescribed by the CCI for approving the Combination. In respect thereof, emphasis is laid on the exclusive technology transfer license agreement which has to be entered into in terms of paragraph 111 of the Approval Order, the publications relating to exports, the various conditions which have been imposed in respect of the distribution agreements, the pricing remedies which have to be followed, the i....
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....ombination approval was 31st August 2020 and despite almost a year having gone by, White Labelling Arrangements have not been put in place. He submits that this entire delay, in fact, ought to have been noticed by CCI which should have asked questions from Schneider, which it did not. He further submits that the purpose of White Labelling was to ensure that competition simultaneously exists along with the Combination, which has been clearly defeated. Reliance is placed upon paragraphs 82 to 87 of the Approval Order to urge that it was Schneider which had suggested the White Labelling Arrangement, and having suggested the same to the CCI, after receiving approval in respect of its implementation, it is merely dragging its feet. 32. Mr. Salve further submits that the first year of White Labelling Arrangements is quite crucial inasmuch as this would be the period during which the Combination would consolidate itself and eliminate competition. Moreover, on the date when the impugned order was passed, the date of closing was around the corner and, therefore, there was no major impediment in allowing Eaton's proposal. He submits that the White Labelling Arrangements were quite delayed b....
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....er. 37. He moreover submits that the allegations made against the CCI by Eaton, to the effect that CCI is colluding with Schneider, are completely baseless, and since it is admitted that Eaton itself fudged up in submitting the documents initially, it cannot raise allegations against the CCI. Once the deadline had passed for submitting documents, the stand taken by CCI in the impugned order which is fully reasoned, is justified. Sur-Rejoinder Submissions on behalf of Respondent No. 2- Schneider 38. On a query from the Court, Mr. Sunderesan, ld. Counsel submits that since a Review application had already been filed to the order dated 7th January 2020 passed by CCI, Schneider did not deem the inclusion of Eaton as being required, inspite of there being no stay of the previous order. Finally, Mr. Sunderesan, ld. Counsel submits that the delay which has been caused post the Approval Order, are due to events that transpired post the passing of the said order. He submits that such events cannot be considered for the purposes of deciding the tenability of the impugned order and so long as due process was followed by CCI, the jurisdiction of the writ court ought not to be exercised in ....
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.... to cause an AAEC within the relevant market in India. 42. Section 5 of the Act of 2002, lays down the conditions as to when an acquisition would become a Combination. In order for any Combination to be valid and legal it should not have any AAEC within the relevant market in India. If any Combination is contrary to Section 6(1) of the Act, it would be held to be void. Section 6(1) reads as under: "6. Regulation of combinations - (1) No person or enterprise shall enter into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India and such a combination shall be void." 43. In order to ensure that a process, by which a Combination is effected, is not interdicted in any manner, notice shall be given by the acquirer to the Commission for Approval under Section 6(2) of the Act. According to Section 6(2A), the Combination, would come into effect either after 210 days have lapsed since the date of notice, or upon an order being passed by the CCI under Section 31 of the Act, whichever is earlier. 44. Upon receiving notice of the Combination, the CCI conducts its investigation under Sections 29 and 30 of the Act.....
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....tence as also one which has already taken effect. However, those Combinations or categories of transactions covered by Schedule I of the Combination Regulations of 2011, are ordinarily deemed to be not likely to have an AAEC. Such Combinations and are also termed as `Green Channel Combinations'. 47. Under Reg. 27 of the Combination Regulations, the CCI can appoint an independent agency, usually known as the Monitoring Agency, to oversee the working of the combination, as also the implementation of any modifications which may be directed by it. The Agency appointed under Reg. 27 is required to submit its report to the CCI upon completion of the actions required for carrying out the modification. 48. A conjoint reading of the provisions of the Act of 2002, relating to the Combinations, as also the Combination Regulations of 2011, shows that all Combinations would require to be approved by the CCI, unless they fall in the exempted categories specified. In respect of a Combination, the CCI has three options, i.e., (i) to approve the Combination; (ii) to reject the Combination; or (iii) to suggest modifications. In respect to the third category, the CCI can appoint a Monitoring....
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....er." 51. Various solutions were then proposed by the parties in order to remedy the apprehensions raised by CCI. The details of the same were also published for public comments. The CCI, after analysing the comments and market investigation that was conducted, as also the various remedies proposed by the companies, directed that further modifications would have to be carried out in the Combination, for it to be approved, vide letter dated 16th January 2019. In response, amendments were filed by acquirers under section 31(6) of the Act of 2002, stating that the modifications proposed by the Commission are disproportionate and the potential concerns of competition could be addressed by alternative remedies. 52. On 18th April 2019, the CCI considered the alternative remedies proposed by the parties and allowed the said modification proposed by Schneider, in terms of their submissions, in order to address the AAEC. The CCI passed the Approval Order on the said date holding that: "91. The Commission notes that the primary purpose of remedy is to preserve the present independent economic options/ choices available to the consumers that would be lost because of the Proposed Combinati....
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....before the proposed combination. The details of the remedies and monitoring mechanism is enclosed as Annexure A. 93. It is observed that the Proposed Combination has been approved subject to the Compliance of the modifications offered by the Acquirers that are aimed at alleviating the appreciable adverse effects on competition discussed in the foregoing section. Thus, the remedial modifications offered and accepted are to be interpreted purposively to give effect to the objectives of offering them. Thus, SEIPL and /or its affiliates shall not make any commercial offer or engage in a dealing with respect to any or all of the LV switchgear products that has the effect of diluting the effect and /or objectives of the modifications offered by the Acquirers. Such conduct besides attracting proceedings for breach of modifications would also render the concerned person(s) liable to be proceeded against under the relevant provisions of the Act including Section 4 of the Act." 53. The remedies which were offered also required constant monitoring, and accordingly, in terms with Regulation 27 of the Combination Regulations, M/s. Moore Singhi Advisors LLP was appointed as the independent ....
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....ir successors) white labelling product manufacturing services for the Five Products of L&T owned and manufactured by L&T solely for products to be sold in the Indian market, for product ranges existing as of the date of Closing. 105. SEIPL undertakes to allocate for a period of 5 years from the date of Closing up to *** of the installed capacity for each of the Five Products of L&T, for the product ranges existing as on the date of Closing, which are owned and manufactured at L&T's plants as on the date of Closing. Further, in the event SEIPL increases the installed capacity for the Five Products of L&T at L&T's plants, then SEIPL undertakes to proportionately allocate up to *** of the increased installed capacity towards the white labelling remedy (which includes proportionate export increase for the maximum extent of *** of the increased installed capacity), for a period of 5 years from the date of Closing. 106. If SEIPL exports up to ***of the installed capacity for each of the Five Products of L&T which are owned and manufactured at L&Ts plants as on the date of Closing, then the annual installed capacity allocated for white labelling above will be reduced proportionately....
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....ion of the EOI, Further, the Monitoring Agency shall be provided access to the online portal. 109.5. The interested third-party LV switchgear manufacturers are required to respond to the EOI within a period of * months from the date of the EOI being published. Thereafter, SEIPL shall within a period of ** months from the expiry of the period provided to the third party LV switchgear manufacturers to respond to the EOI, negotiate the terms of the white labelling agreement with the interested third party LV switchgear manufacturers. 109.6. Within *** month post the period of negotiation of the terms of the white labelling agreement (as set out 109.5 above) and prior to execution of the white labelling agreement, SEIPL shall submit to the Commission the draft of the white labelling agreement along with the details of interested third party LV switchgear manufacturers. 109.7. SEIPL will provide a copy of such executed agreement to the Monitoring Agency within a period of ** days from the date of the execution. 109.8. Submit details of receipt and fulfilment of orders for white labelling product manufacturing services received from third-party LV Switchgear manufacturers inc....
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....or the relevant products. The technology license shall be for product applicable patents and copyrights. No technical assistance or manufacturing assistance will be provided by SEIPL throughout the duration of the technology license. 113. Such non-exclusive technology license will be provided for only those particular product ranges and SKU's for which the licensee had white labelled from SEIPL and provided that the licensee meets the stipulated conditions mentioned above. SEIPL, shall provide the non-exclusive technology license at a reasonable commercial royalty rate. 114. In this regard, SEIPL shall- 114.1. Include in the EOI that any single third-party will be eligible to be considered for a non-exclusive technology license at the end of the 5-year period provided for white labelling in accordance with the terms and conditions mentioned above; 114.2. At the expiry of the 5-year period provided for white labelling product manufacturing services, enter into a mutually acceptable, non-transferable, non- sublicensable, royalty bearing non-exclusive technology license agreement for a period of 5 years with a single third-party based on the eligibility requirements as set....
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.... not able to control the market by completely eliminating the other competing manufacturers. 59. White Labelling (also termed as Brand Labelling) as a measure to reduce AAEC, found a mention, in the case involving ABB / General Electric Industrial Solutions, Case: M.8678, which was before the European Commission. The said case also involved a Combination of switchgear makers which included the companies involved in the present case, namely, Schneider, Eaton as also ABB and Siemens, which was excluded in the present case. The European Commission referred to Brand- Labelling arrangements, which are prevalent in the LV market, and observed as under: "(34). It is indeed common industry practice for manufacturers of LV products to engage in brand label agreements to source certain specific products from other manufacturers in order to fill gaps in their portfolio and be able to offer the widest range of products to downstream customers under their own brand(s) ..... (104) However, the Notifying Party submits hat the Proposed Transaction will not give rise to conglomerate concerns for the following reasons: (i) the majority of LV products offered by GEIS in the EEA are already p....
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....ty manufacturers, at a fixed price. As per the agreement, such supply would continue for a period of five years. 62. At the end of the five-year period, Schneider would have to enter into a non-transferable, non-sub-licensable, non-exclusive technology transfer license agreement for a period of five years from the date when the White Labelling remedy period comes to an end. Such a technology transfer license would be entered into with only one third party, who would have availed of the White Labelling remedy for any of the five products and would have implemented the White Labelling Arrangement for a period of three continuous years, in terms of paragraph 111 of the Approval Order. The said technology transfer license agreement is meant to enable the said third party to also acquire capabilities in respect of the latest technology and the implementation thereof, within its own manufacturing plant. 63. Thus, White Labelling Arrangements for a period of five years, coupled with a technology transfer license agreement with at least one party, are the initial remedial measures that were put in place vide the Approval Order, to neutralise the AAEC upon approving the Combination in que....
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....uments, kindly use the same email id as filled in the form by the applicant." 68. The Petitioner, in terms of the EOI, registered itself on the portal, however, the documents as required on the portal were not submitted. The deadline of 5th October, 2019 passed and Eaton did not even check as to whether its EOI was registered and was taken on record or not. Almost 50 days later, on 25th November 2019, an email was written by Eaton at the EOI support email address. The said email when perused, clearly, gives the impression that the EOI was fully completed and submitted on 26th August, 2019. The extract of the said email reads as under: "My name is Rajesh Kumar responsible for Strategy and Marketing function for Eaton Electrical Sector. Apropos the snap shot below on white labelling for L& T LV Swgr, we are eager to hear next course of action against our request for White labelling which was submitted on 26thAug 2019. Please do get in touch with the undersigned or let me know the right contact for further follow up. Thanks in advance." 69. On 27th November, 2019, Schneider replied to the said email and stated that all applicants had to respond to the EOI, and after completing....
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....25th Nov 2019 on EOI published on Schneider Electric Website for white labelling of L& T LV products. We regret due to technical issues the documents did not reach you within stipulated time." 72. Thus, the impression sought to be created at this stage was that there were some 'technical issues' due to which the documents did not reach on time. Eaton further claimed that the documents sought on the portal were basic documents which any organisation would have, and it therefore requested that the documents be accepted. This email proves, beyond any doubt, that Eaton had failed to respond to the EOI in the terms specified therein, and had for whatever reasons, merely stopped after registering itself and not submitted a single document as required. 73. Again, on 2nd December, 2019 Eaton wrote to Schneider arguing that due to a technical problem the required documents could not reach Schneider within the prescribed time limit, and reiterated its contention that documents required were basic documents and that its EOI be considered. This was followed up by reminders to Schneider and to the MA on 3rd December, 2019 as well. The MA responded on 4th December 2019, that the request was b....
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....e opinion that third party LV Switchgear manufacturers needed to be strengthened in order to enable them to compete effectively against the Combination. 79. According to the Approval Order, in respect of the five products of L&T that were being manufactured by the LV Unit which was being merged into Schneider, the White Labelling remedy was to be implemented, for a period of 5 years. The quantities were clearly mentioned in paragraphs 105 & 106 of the Approval Order which has been extracted above. The benefit of upgradation of the five products was also to be given during the said period of five years. The stages of the said remedy, as stipulated in the Approval Order, are as under: 80. Thus, as per the Approval Order, the entire White Labelling process was to be concluded in a timely manner, however, for whatever reasons which are not the subject matter of the present petition, there has been a delay. 81. Vide letter dated 9th October, 2019, Schneider's counsels had updated the CCI and MA about the details of all the parties who had submitted their responses to the EOI. As per the said communication there were three categories of entities: Category 1: Five entities who had re....
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.... Schneider had already moved on and had reached an advanced stage of negotiations with the eligible entities, which had submitted valid applications, it submitted to the MA that permitting Eaton at this stage would have been unfair and discriminatory, as Eaton was itself to blame for its non-submission of documents. 85. The MA, having considered Schneider's position and Eaton's position, recommended to the CCI, vide an email dated 26th December 2019, as under: "An extension upto 5th March 2020 may be given to SEIPL to comply with all stipulated actions. SEIPL should allow Eaton to participate in the process provided Eaton submits all necessary documents immediately" 86. Thus, the MA recommended that the extension ought to be granted to Schneider till 5th March 2020. Secondly it recommended that Eaton should also be allowed to participate in the process, provided the necessary documents were submitted by Eaton immediately. Therefore, the CCI now had to consider both, the request for extension by Schneider as also the representation of Eaton, in the light of the recommendations made by the MA. 87. After considering MA's recommendations, CCI, vide its first order dated 7th J....
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....and according to Schneider the said order was passed ex parte and it was not given a hearing. Accordingly, it preferred a Review of the said order before the CCI, vide its application dated 31st January, 2020. The prayer in the Review application was for seeking an oral hearing in respect of the time schedule for the White Labelling remedy, as also in respect of Eaton's inclusion. According to Schneider, Eaton was guilty of misleading the CCI, and its EOI was clearly non-compliant/ non-responsive. It accordingly sought recall of the earlier direction. 89. The CCI entertained the Review application and directed the parties to appear for an oral hearing on 12th March, 2020. After hearing the parties, the CCI also directed the parties to file their written submissions by 20th March 2020. Post this, the matter was reserved for orders. The lock-down owing to the pandemic came into effect immediately thereafter. With some delay, may be owing to the lockdown, vide the impugned order dated 24th August, 2020, CCI decided to recall its earlier order and allowed Schneider to proceed with the White Labelling process, without Eaton. The operative portion of CCI's impugned order reads as under:....
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...., 2020 where Schneider was even allowed to consider any eligible third parties, for the purpose of white labelling, outside the process arrangement stipulated in the Order. It is clarified that the purpose of modifications is to preserve competition rather than specifically identifying player(s) who should succeed, which is an outcome of market forces. 17. Schneider has submitted that the white labelling process is actively underway in terms of negotiations of terms with eligible participants and the various commercials issues are being ironed out with the oversight and under intimation to and /or supervision of the Monitoring Agency. Allowing Eaton at this stage would further delay the implementation of the white labelling arrangement. Considering the material on record including the Affidavit, the, Commission allows Schneider to proceed further in the white-labelling process without considering Eaton, at this stage. However, it is clarified that Schneider and the Monitoring Agency shall closely monitor the supplies under the white labelling arrangement and take proactive measures to ensure that the capacities reserved for white-labelling process are utilised to the full extent....
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....ch order thereon as it thinks fit: Provided that the Commission may entertain a review application after the expiry of the said period of thirty days, if it is satisfied that the applicant was prevented by sufficient cause from preferring the application in time: Provided further that no order shall be modified or set aside without giving an opportunity of being heard to the person in whose favour the order is given and the Director General where he was a party to the proceedings." Further, Section 38 of the Act, which allows for the rectification of orders, reads as under: "Section 38: (1) With a view to rectifying any mistake apparent from the record, the Commission may amend any order passed by it under the provisions of this Act. (2) Subject to the other provisions of this Act, the Commission may make- (a) an amendment under sub-section (1) of its own motion; (b) an amendment for rectifying any such mistake which has been brought to its notice by any party to the order." Explanation.-- For the removal of doubts, it is hereby declared that the Commission shall not, while rectifying any mistake apparent from record, amend substantive part of its order pas....
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....etion of the CCI to hear or not to hear the person/enterprise complained/ referred against at the stage of Section 26(1) of the Act, CCI cannot be held to be without jurisdiction to recall/ review the order. (ZR) Notice in this regard may also be ta ken of Section 36 which empowers the CCI to in the discharge of its functions regulate its own procedure. The same also permits CCI, even if were to be held to be inspite of exercising administrative power under Section 26(1) having no inherent power of review/ recall, to if so deems it necessary, entertain an application for review/re call. (ZT) In our view, a mere filing of an application for review/recall would not stall the investigation by the DG, CCI already ordered. Ordinarily, the said application should be disposed of on the very first date when it is taken up for consideration, without calling even 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 ....
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....on reads as under: "52. In the Google decision, the court had relied on several other decisions which dealt with pure administrative power, or power which was statutory for which no specific power was conferred, to recall (or review). In the latter category, the Supreme Court had consistently ruled that Section 21 of the General Clauses Act 1897 applied. That provision specifically states that where a statute does not enable the recall of an order or notification, or bye law (note that all are legislative or quasi legislative statutory powers) the power to recall those exists, provided it is exercised in the same manner as in the case of the exercise of original power. This power is quasi legislative; for instance it was held in Kamla Prasad Khetan v. Union of India, [1957] SCR 1052, this Court considered the scope of Section 21 of the General Clause Act. At page 1068, the Court observed thus: "The power to issue an order under any Central Act includes a power to amend the order; but this power is subject to a very important qualification and the qualification is contained in the words 'exercisable in the like manner and subject to the like sanction and conditions (if any)'.......
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....to be gone through." 101. Thus, the conclusion of the Division Bench in Cadila (supra) was that in proceedings under Section 26 of the Act of 2002, which was held to be administrative in nature, i.e., during the course of investigation, Review/Recall application can be filed, however, only if an egregious fraud or a mistake which is covered by Section 38 exists. Apart from these circumstances power to Review/Recall does not exist with the CCI. 102. Apart from the above two decisions cited by the parties, this Court also notes that in Mahindra Electricity Mobility Limited and Anr. v. Competition Commission of India and Anr. (WP(C) 11467/2018, decided on 10th April 2019), the ld. Division Bench again noticed that CCI has no power to Review its own orders post the repeal of Section 37 of the Act of 2002. The Division Bench also held that the functions performed by the CCI are administrative functions, expert functions, quasi-judicial functions as also adjudicatory functions. The Division Bench, further, held that if the parties have been heard once, even at the stage of imposition of penalty, it is not necessary for a hearing to be given, so long as broadly the procedure is fit and....
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....ain not an adjudicatory function, as no rights of any party are decided or determined, the representatives of the parties as well as the officials and employees of the concerned entities which are allegedly involved in the anti-competitive practices, are examined, and wherever necessary, depositions under oath are recorded. By virtue of decisions of the courts, in this fact-gathering exercise, wherever adverse evidence or deposition is collected, the opportunity of cross-examination is provided. The DG then analyses the material and evidence and prepares a report, stating whether the complaint is made out fully or in part. It is thereafter that the adjudicatory mode is launched, as it were. Even at this stage, the CCI may not proceed further and close the matter after hearing the parties. Conversely, if the DG in a given case reports that no further action or order is warranted after hearing the individual or the applicant as well as the parties who are alleged to be involved in the objectionable behaviour, the CCI can direct a further enquiry and thereafter proceed further in the matter with the hearing. It is only at this stage after the culmination of the investigation that the ....
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....is Court would have to first consider the nature of the order dated 7th January 2020, passed by the CCI on the representation of Eaton for being included in the White Labelling arrangement. Secondly the question is as to whether the said order could have been passed by the CCI, without giving notice or hearing to Schneider. The third question is whether the first order could have been Reviewed/ Recalled by the CCI, vide the impugned order dated 24th August 2020, without the specific statutory power vesting with the CCI. 105. In relation to the first question, as per Section 53A of the Act of 2002, certain orders of the CCI are appealable to the NCLAT. Orders under Section 31 and interim orders under Section 33 are also appealable orders. However, in order to adjudicate the nature of the orders passed in the present case, the parties would have to approach the NCLAT, which is currently not constituted. Thus, there is no equally efficacious remedy available to the Petitioner. 106. Secondly, the stage at which the present dispute has arisen is the stage of monitoring of the implementation of the Approval Order. The role of monitoring is primarily carried out by the MA under broad su....
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....e spirit of the Approval Order. This order too was clearly without jurisdiction as the CCI lacked the statutory power of Review, which was expressly taken away by the Legislature vide the Competition (Amendment) Act of 2007. Further, its action could not have been termed as a rectification under Section 38 of the Act of 2002, as it substantively affected the rights of the parties concerned. The order was not merely administrative in nature, but an adjudicatory order, qua which the power of Review could have not been exercised as the said power under Section 37, no longer existed in the statute book. In effect, therefore the impugned order was the first occasion when the CCI got the opportunity to hear both the parties and evaluate the respective merits, though under a completely incorrect exercise of the power of Review, which it did not possess. 108. The CCI, therefore, clearly adopted the wrong course of action in respect of both its orders, i.e., the order dated 7th January 2020 as well as the impugned order dated 24th August 2020. Though the CCI need not give personal hearings at every stage as held in Mahindra (supra), however, where the function being performed is adjudicato....
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....ugust 2020, one of the grounds on which the Competition Commission of India (hereinafter as 'CCI') has refused permission to the Petitioner- Eaton Power Quality Pvt. Ltd. from participating in the white labelling arrangement, is that there would be a delay in the process of finalizing such arrangements, if they are permitted at a late stage. Accordingly, Respondent No.2 is directed to place on record an affidavit setting out the chronology, as also the details of the white labelling arrangements which are currently being negotiated, and the timeline in respect thereof." 114. Pursuant to the said order, an affidavit has been placed on record by Schneider, on 26th July 2021, as per which, the following facts have emerged: i. After the Approval Order was passed, advertisements were issued in respect of the White Labelling Arrangements and applications were received from various parties. The same were categorised into three categories, as mentioned in paragraph 81 above. Eaton was excluded due to non-submission of supporting documents, and this exclusion was challenged. ii. Negotiations for the White Labelling Arrangements were conducted with four parties from March 2020 onwards....
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....cution of Agreements, possibly due to reasons beyond control of parties. 117. From the facts stated in the affidavit, it is clear that the negotiations are at an advanced stage with some parties. The exchange of correspondence, mentioned in the Affidavit dated 26th July 2021, shows that there are continuous talks going on between Schneider, MA and the four parties, however the White Labelling Agreements have not yet been finalized yet. Schneider claims that the applicants in the said Arrangements have repeatedly requested rescheduling and extensions. To the extent that it is relevant to the present writ petition, it is important to note is that while CCI sought to exclude Eaton vide the impugned order, on the ground of the delay in the conclusion of White Labelling Arrangements as in August, 2020, till date, i.e., after more than a year having passed since the date of closing, the said arrangements have not been concluded. 118. While, on the one hand, not ignoring the delay that has been caused in conclusion of the said Agreements, the Court also cannot ignore the advanced nature and stage of the negotiations today, and the complexities that are involved in entering into and exec....
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.... was finally decided on 24th August 2020 - a span of eight months; * the outbreak of the pandemic and the related lockdowns; and * the current advanced stage of negotiations qua the White Labelling Arrangements. (viii) Relief 121. Since CCI does not enjoy the power of Review, the impugned order is not sustainable in law. Further, as observed in paragraph 106, even the order dated 7th January, 2020 passed by the CCI, is vitiated and is also not in accordance with law. 122. To put the clock back and to remand the entire matter to the CCI would not be in accordance with the spirit of the Approval Order itself, inasmuch as the Combination has already been concluded, and the Date of Closing has already passed. 123. Thus, this Court would have to balance the interests of all the parties concerned, including the parties who have entered into advanced negotiations with Schneider and who are not before this Court. Further the Appreciable Adverse Effect on Competition also ought to be minimized in the spirit of the Approval Order dated 18th April, 2019, and it ought to be interpreted purposively. The entire exercise being of a time-sensitive nature, considering that the Closing D....