Background

On October 19, 2023, a Division Bench of the Gauhati HC dismissed a Writ Appeal filed by Dalmia Cement (Bharat) Ltd. (‘Dalmia Cement/ Appellant’) (‘Appeal’) ^[1]. The Appeal impugned the Single Bench’s Order (dated June 28, 2023) (‘Impugned Order’) dismissing a challenge (by way of a Writ Petition (‘Writ Petition’)) to the CCI’s Order dated November 18, 2020, directing an investigation (‘CCI Order’) into the allegations of cartelisation in bidding for the tenders floated by Oil and Natural Gas Corporation of India (‘ONGC’) for supply of Oil Well Cement (‘OWC’).

Proceedings in Writ Petition

Dalmia Cement challenged the CCI Order inter alia on the following grounds:

i.    There existed only a few suppliers of OWC in India and thus, price parallelism could not be the basis for passing the Investigation Order;

ii.   The investigation conducted by the DG exceeded the scope of the CCI Order; and

iii.  The investigation notice calling for information (‘Investigation Notice’), did not satisfy the standards of legality on account of non-supply of certain documents relied upon in the CCI Order to the Appellants.

The Impugned Order dismissed the Writ Petition inter alia on the basis that the CCI Order was a well-reasoned with and that the DG’s investigation ought not to be interfered with.

HC’s Decision in Appeal

i.    The DG had not gone beyond the scope of the Impugned Order. It was not a ‘fishing and roving inquiry’ and listed specific questions for investigation;

ii.   The prima facie opinion and Investigation Order was formed by the CCI based on the information received from ONGC. This information had not been specifically denied by the Appellant. Interference into the merits of the case without specific denial by the Appellant is not warranted at the investigation stage. In case the Appellant’s company is exonerated from the allegation of rigging and cartelization, it can regain its reputation, which it had expressed concerns about in the Appeal and Writ Petition;

iii.  At the premature stage of investigation, an opinion cannot be formed that the Investigation Notice does not satisfy the standards of legality; and

iv.   Relying on the SC of India’s judgment in Competition Commission of India Bharti Airtel Limited & Ors.,^[2] it was not deemed fit to assess the validity of the Investigation Order on merits. However, the HC directed the CCI to provide Dalmia Cement with copies of the complete documents set, except for those for which confidentiality was claimed by ONGC, so that a proper opportunity of defense was ensured in subsequent proceedings.

[1] Dalmia Cement v. The Union of India & Ors., WA 281/2023.

[2] Competition Commission of India v. Bharti Airtel, (2019) 2 SCC 521.