TaxTMI 
TaxTMI 
2021 (9) TMI 1569
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....verse Effect on Competition AAEC 5. Eaton Power Quality Pvt. Ltd. Eaton 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 herei....
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....easures to ensure that all the applicants including Eaton are treated at par in a fair and transparent manner. 7. Schneider being aggrieved by this 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 c....
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....ton also submits that the manner in which the parties were excluded shows that the entire intention was merely to exclude Eaton, as parties which had submitted incomplete documentation were 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 Combi....
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....he submits that the said judgment of the Division Bench of this court clearly lays down the principles and the conditions under which a Review of its own order can be entertained by the CCI. According to him, in paragraphs 46, 52 and 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 i....
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.... time, various other parties had already submitted their documents. He submits that one of the other parties which had not submitted the documents in time, being Elmex, was also not considered for the White Labelling Arrangements, and thus 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 ent....
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....aken by Schneider in order to proceed further with the White Labelling Arrangements. 26. He further submits that broadly, as per clause 109 of the Approval Order, while the Arrangements ought to have been concluded by February 2021, it is likely 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 t....
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....urther submits that if the purpose is to increase competition in the market, then the impugned order refusing Eaton to participate is completely untenable, and it makes the concern of the CCI quite spurious. He further submits that the closing date of the Combination 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....
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....ld of any deviation, appropriate action would be taken. He further states, under instructions, that the date of closing is as per clause 6.1 of the Business Transfer agreement, and the White Labelling Arrangements also have come into force in terms of the Approval order. 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 7^th 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 ....
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....tion 4 deals with the abuse of dominant position and prohibits any entity from indulging in practices which constitute the same. Sections 5 and 6 of the Act regulate Combinations. and outlines the scope of what constitutes a Combination, as also prohibit any person/entity from entering into Combinations which cause or are likely 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....
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....relating to Combinations, detailed Regulations have also been enacted by the Central Government, being the `Competition Commission of India (Procedure in Regard to the transaction of Business relating to Combinations) Regulations, 2011'. As per the said Regulations, a Combination means and includes any Combination as described in Section 5 of the Act. Combination includes one which is yet to come into existence 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 Comb....
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....ature of distribution network and innovation, etc., the Commission was of the prima facie view that the Proposed Combination is likely to result in appreciable adverse effect on Competition. The Commission directed the Secretary to issue notice to the Acquirers under Section 29(1) of the Act. Accordingly, a notice dated 3rd October 2019 was issued to the Acquirers to show cause in writing as why investigation should not be conducted in the matter." 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....
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....in every sale conducted by SEIPL, it is required to ensure that the average selling price of the six high market share products does not exceed the limit prescribed. The Acquirers have further offered remedies in relation to R&D, minimum export commitment and non- rationalisation of L&T products. The Acquirers have claimed that these remedies would supplement the objective and purpose of preserving effective competition in the relevant markets as was the case 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 mod....
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....tition, is concerned with two of the said remedies enumerated above i.e., White Labelling, and the consequential non- exclusive technology transfer licences which were to be given. The relevant paragraphs of the Approval Order relating to these obligations are set out below: "B. WHITE LABELLING 104. SEIPL undertakes to allocate to third-party LV switchgear manufacturers, which in the Commission's opinion need to be strengthened to compete more effectively in the Indian market (excluding ABB and Siemens and their 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 p....
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....ay be required by the Monitoring Agency; 109.4. SEIPL shall, under the guidance and supervision of the Monitoring Agency, activate an online portal for the management of the EOI process and to facilitate evaluation of the interests received from third-party LV switchgear manufacturers. The weblink to the online portal will be provided in the EOI. Interested third-party LV switchgear manufacturers shall have the option to submit their response to the EOI for the white labelling product manufacturing services at the online portal within a period of ** months from the date of publication 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 negot....
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....the expiry of the white labelling remedy period, to a single third-party that avails of white labelling for any of the Five Products owned and manufactured by L&T from SEIPL which: 111.1. Has white label offtake for at least 3 continuous years of the product for which it seeks the technology license; and 111.2. Has an average annual offtake of at least 10% of the installed capacity of such individual product for white labelling for the period of the white labelling remedy. 112. SEIPL shall to provide a mutually acceptable, non- transferable, non-sub licensable, royalty bearing non- exclusive technology license solely for manufacture and sale in India for 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 n....
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....n affix its own brand and logo and sell the said product, as its own. This mechanism ensures, purportedly, that the product of the same quality is being made available to the consumer from two different sources i.e., the manufacturer of the product and the second entity (latter manufacturer/ distributor), which is selling the product - so as to provide for the same level of competition. 58. White Labelling as a remedy in reducing the AAEC is expected to equalise the products from the dominant combined entity, with the products sold by various other entities in the relevant market. This is expected to ensure that when a Combination results in an unequal market share position for the combined entity, the said entity is 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 als....
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....to be based upon the installed capacity of L&T, for the said 5 products, as contained in the Approval Order. 61. To implement the White Labelling remedy, EOIs were to be called from various interested entities, in this case LV Switchgear manufacturers. A portal was to be activated for the purpose of management of the EOI process and to facilitate evaluation upon the third-party manufacturers submitting their responses, and upon the same being evaluated, negotiations would commence with the said manufacturers. A Draft White Labelling Agreement was to then be prepared along with the list of the interested third party manufacturers. After execution of the White Labelling Agreements, the products manufactured would be supplied by Schneider to the third-party 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 int....
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....t on this page, and registering there; Step 2: Submitting the documents as mentioned on the portal via email to [email protected]. 67. The direction for submitting documents was specifically mentioned on the portal, which reads as under: "Kindly email following documents to [email protected]: 1. Annual Audited financial statement (P&L and Balance Sheet, Cash flow, Schedules and Notes) for the preceding 3 (Three) years 2016,2017 and 2018. 2. GST registration certificate 3. PAN number of the company 4. Solvency Certificate. The above-mentioned documents should be sent latest by 5th Oct 2019 to successfully complete the registration process. Missing documents can result in incomplete applications and may result in disqualification. To submit the documents, 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.....
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.... Eaton did not submit any of the supporting documents required for completion of the registration process, Eaton cannot be considered as a valid Applicant and stands disqualified from availing the White Labelling Remedy from Schneider in terms of the Order." 70. Thus, Eaton was informed by Schneider that it was disqualified as it had not submitted all the relevant documents, in terms of the EOI and as required on the portal. It is not in dispute that the said documents had not been submitted, at that stage, at all. 71. On the same day i.e., 27th November, 2019 - Eaton sought to submit the required documents, now for the first time, by email. Interestingly, in the email dated 27th November, 2019 the reasons given by Eaton for not submitting the required documents are as under: "This has reference to your response dated 27th Nov 2019 to our mail dated 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 docume....
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....idly admitted by Eaton in its correspondence, and an impression was sought to be given that there was a glitch in the portal, because in none of these emails and correspondences did Eaton clarify as to where the technical glitch was. The clear picture that has now emerged is that Eaton merely registered and did not submit the documents in time, for no justifiable cause. The effect of the non-submission of these documents would be considered later hereunder. (v) Progress in White Labelling Arrangements on Schneider's part, post the grant of Approval Order, leading to the CCI's impugned order 78. Under the original Approval Order, specific timelines were provided in respect of the remedy of White Labelling. As discussed in issue no. (iii) above, White Labelling was one of the remedies that was approved by the CCI as a precondition for granting the approval for the Combination. The CCI was clearly of the 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....
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....019, provided the said clarifications and also gave all the details in respect of the applications received qua the White Labelling arrangements. Schneider submitted to the MA that the negotiations for the White Labelling Arrangements were taking place in different phases. Overall, Schneider gave a deadline of 5th March, 2020 for finalising the eligible applicants, and of 5th April 2020, for signing of the Draft White Labelling Agreement. 84. In respect of the MA's specific query qua Eaton, Schneider submitted to the MA that Eaton had submitted only some documents on 4th December, 2019, and since it was grossly in violation of the timelines prescribed, the MA ought not to permit Eaton to participate in the White Labelling Arrangements. Schneider also argued that it had already proceeded to the next stage of the remedy of providing access to a tool called "ARIBA tool" to all the valid applicants, who were seven in number. Thus, since, 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 discrimina....
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....stances of the case, the Commission is of the view that wider participation in the white labelling process is desirable as the same is likely to result in better outcome and serve the cause of competition. Thus, Schneider is directed to allow participation of Eaton in the white labelling process. 8. MA is directed to take appropriate measures to ensure that all the applicants including Eaton are treated at par in a fair and transparent manner to arrive at appropriate commercial arrangements between Schneider and successful buyers. 9. The Secretary is directed to inform Schneider, Eaton and the MA, accordingly." By this order the CCI permitted Eaton's inclusion in the White labelling process on two broad grounds - (i) to enable wider participation and (ii) in the interest of competition. CCI had taken this decision merely on the written stand of the parties and the recommendation of the MA. 88. Schneider was clearly aggrieved by this order passed by the CCI 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....
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....d 7th January, 2020. On the other hand, Eaton has submitted that it was never its case that there was a technical glitch on the part of Schneider that restricted them from submitting the relevant documents. It has further stated that neither Eaton nor the Commission have ever imputed the blame for the technical error to Schneider and it is Eaton's admitted position that the technical error was at its end. 16. The Commission notes that any issue in implementation of combination modifications cannot be viewed merely as adversarial, as the purpose of regulation of combinations and imposing remedies modifications to address harm to competition are with the larger objective of preserving competition and consumer welfare. Interpretation and interventions in implementation of modifications are to be necessarily guided by the purpose of imposing them. The Commission had observed this position in the Order itself and reiterated the same again in its directions dated 24th October, 2019 and 7th January, 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 cl....
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....elling Arrangements which was directed by the said order (vi) Power of Review of the CCI under the Act, post the Amendments in 2007 92. The primary contention raised on behalf of the Petitioner- Eaton is that CCI does not have the statutory power of Review and hence the impugned order, which seeks to Review the earlier order dated 7th January, 2020, is bad in law. 93. The question as to whether the CCI has the power of Review or not, is no longer res integra and the same has been considered in various decisions of this Court. Before proceeding to these decisions, the provisions relating to the power of Review/Recall, in the Act of 2002, are relevant to be considered and are set out below: " Section 37 prior to the Competition (Amendment) Act, 2007: Any person aggrieved by an order of the Commission from which an appeal is allowed by this Act but no appeal has been preferred, may, within thirty days from the date of the order, apply to the Commission for review of its order and the Commission may make such order thereon as it thinks fit: Provided that the Commission may entertain a review application after the expiry of the said period of th....
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....ion Commission of India and Anr. (2015) 150 DRJ 192 (DB)., by the ld. Division Bench of this Court. 97. In Google (supra), the Division Bench, framed a question as to whether at the stage of Section 26(1) of the Act of 2002, the CCI has the power to Recall/Review an order directing/causing investigation. The Division Bench, after considering in detail the submissions made on behalf of the parties, held that even though while making an order under Section 26(1), as held in Competition Commission of India v. Steel Authority of India Ltd. (2010) 10 SCC 744, the CCI is not required to hear the person, there can be no inference that even if a party approaches the CCI for Recall or Review, such party is not to be heard. The observations on the power of Review/ Recall of an order read as under: "(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. (ZQ) Just like it is in the discretion of the CCI to hear or not to hear the person/enterprise complained/ referred ag....
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....estations of the inherent power (Ref. Budhia Swain v. Gopinath Deb, (1999) 4 SCC 396). Vinod Kumar (supra) cited in Google was a case where the original power was exercised plainly and manifestly contrary to the rules (an adverse confidential report of which review was sought after over 9 years, was entertained by an officer incompetent to do so; the Government set it at naught). That was a case of nullity of the original order. Similarly, the cases cited in Google (R.R. Verma v. Union of India, (1980) 3 SCC 402 and S. Nagaraj v. State of Karnataka, 1993 Supp (4) SCC 595) cannot be read divorced from their context. In RR Verma the court had stated: "We do not think that the principle that the power to review must be conferred by statute either specifically or by necessary implication is applicable to decisions purely of an administrative nature. To extend the principle to pure administrative decisions would indeed lead to untoward and startling results." 100. The Court in Cadila (supra) also went on to express concerns about the exercise of powers by the CCI for Reviewing/Recalling its own order. The relevant portion reads as under: "52. In the Google decision,....
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....tions, is unfair or tainted with mala fides. Therefore this court holds that the impugned order which held that Google has no application to the facts of this case because in Google the DG had not filed any report; the investigation was ongoing when the petitioner applied for recall and when this court was approached. Here, the recall application was filed after the DG's report to CCI. The finding in the impugned judgment therefore is unexceptionable; it was held by the Single Judge that the - "conclusion of this Court in Google (supra) has to be read/understood to mean a recall/review application can be filed during investigation and not after the submission of the report by the DG. This I say so once report is submitted, then an action/procedure under Section 26(5) or 26(8) gets triggered, taking the case out of the realm of 26(1) or 26(2) of the Act, [which was the position in Google (supra)]. The only remedy for the parties is to argue the report before the Commission and not on the order u/s. 26(1) as was sought to be done in the case in hand. The same is impermissible in law, inasmuch as procedure as contemplated/provided must be allowed to be gone through." 1....
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....olely discharging judicial powers of the state; it is rather, a body that is in parts administrative, expert (having regard to its advisory and advocacy roles) and quasi- judicial -when it proceeds to issue final orders, directions and (or) penalties. xxx 141. This Court has already, for reasons elaborated in the preceding section of this judgement, held that the CCI does not perform purely adjudicatory functions like in the case of deciding a list between two competing parties. It is tasked with investigating into complaints received and information provided to it by individual entities and those aggrieved by patterns of behaviour perceived to be barriers in the course of trade and business, which would have the undesirable effect of injecting anti-competitive elements. Now, this task is not a straight forward adjudicatory one. The Commission has to, through an administrative process, sift the complaint or information and arrive at an opinion which the Supreme Court has characterized in SAIL (supra) to be of ―administrative nature‖. With that, the CCI directs investigation into the complaint or information, by the DG. In the course of this investigation and in....
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....d that the CCI was compelled by the statute to adopt an unfair procedure (i.e. the absence of a second specific hearing before imposition of penalty) exposing Section 27 to the vice of arbitrariness and unconstitutionality." Thus, the CCI dons both hats - administrative and adjudicatory. Depending upon the nature of power being exercised, the concomitant safeguards would also have to be followed. 103. All the three decisions discussed above are in the context of proceedings under Section 26 for launch of an Inquiry by the DG. In the context of approval of a Combination, Section 31 of the Act of 2002 is the relevant provision which provides for various stages in which a Combination is to be approved. 104. In the present case, the Combination itself having been approved, no modification is being sought in the Combination itself. The issue that has arisen is in the implementation of the various steps, subject to which the Combination was approved. It is in the course of implementation of the Combination that certain difficulties have arisen due to the exclusion of Eaton, as it had failed to submit the requisite documents as required in the EOI. In order to decide the validity....
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....both Schneider and Eaton. Such a decision would also have implications on the entire timelines and the process of negotiations in respect of the White Labelling remedy, which was underway with third parties. Accordingly, the CCI, ideally, ought to have informed both parties, that it was considering the representation of Eaton. The CCI ought to have afforded an opportunity to the parties to make written or oral submissions. It, however, passed the order dated 7th January, 2020 without notice to either of the parties. This itself was procedurally faulty. In the present writ petition, though, there is no challenge to this order dated 7th January, 2020, the Court cannot but observe that it was this lack of opportunity to either of the parties, that led to the Review application filed by the Schneider, leading to the impugned order, which is under challenge in the present writ petition. 107. The CCI then exercised the Review power on the application filed by Schneider, and reviewed its order dated 7th January 2020, completely setting it at naught. The reasoning of the CCI i.e., delay in finalising the White Labelling arrangements, is in stark contrast with the earlier reasoning that ....
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....r shall abide by the final adjudication of this petition. In case any third party rights are being created by the respondent no. 2, the respondent no. 2 shall bring this order to the notice of such third party as well." 112. Thereafter, the matter was heard from time to time. The interim order granted vide order dated 23rd September 2020, was directed to continue till the final disposal of the petition, on 10th February, 2021. 113. At the conclusion of submissions on 15th July, 2021, there were queries which were raised by the Court as to the timelines within which the White Labelling Arrangements had to originally adhere, and the actual position in the relation to conclusion of the said Arrangements, specifically with reference to the Date of Closing. Accordingly, on 15th July, 2021 the following order was passed: "2. This is a part-heard matter. Mr. Avishkar Singhvi, ld. Counsel has made further submissions on behalf of Respondent No. 1. Mr. Somasekhar Sundaresan, ld. Counsel has also concluded his submissions on behalf of Respondent No.2, except on the issue as to the closing date and the details of parties with whom white labelling arrangements are being currentl....
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....ould be executed in six weeks from date of affidavit i.e., six weeks from 26th July 2021. However, orally, ld. Counsel for Schneider submitted that the reasonable expectation would be that by mid- September, White Labelling Agreements would be executed. 115. From the timelines, which have been stated in the said affidavit and the submissions made, it is clear that inspite of the passing of the Approval Order on 18th April, 2019, the date of closing of the Combination was only achieved on 31st August 2020, and till date, the White Labelling Agreements have not been finalized. However, negotiations appear to be at an advanced stage. 116. In the Approval Order, the CCI, clearly noted in its prima facie findings that the Combination would have an `Appreciable Adverse Effect on Competition'. Thus, modifications were directed and specific timelines which were provided for entering into the White Labelling arrangements ought to have been honoured by Schneider. However, this Court is of the opinion that the order dated 7th January 2020 leading to filing of the Review and the hearings before the CCI, just prior to the national lockdown in late March 2020, until the final order dated 2....
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....hat it had merely registered on the portal and had not submitted the documents. It also sought to initially disguise its defaults as a vague `technical glitch', which later on was revealed to be an alleged technical glitch at its own end. There is, in effect, no clarity as to why Eaton failed to submit the documents in time, when the EOI, as also the instructions on the portal were categorical and brooked no ambiguity. However, Eaton cannot also be indefinitely excluded as the intention of the Approval order is to expand and enlarge the number of players in the market, so as to increase competition. 120. Accordingly, the relief to be granted in this petition would have to be balanced keeping in mind - • the intent and spirit of the Approval Order dated 18th April 2019, of curbing Appreciable Adverse Effect on Competition due to the Combination; • the modifications suggested to the Combination and the element of public interest therein; • the defaults of Eaton in non-submission of documents and its characterisation of the same as being due to a `technical glitch'; • failure of CCI to issue notice prior to passing of order dated ....