Feb 12, 2024SC of India Refuses to Intervene in Order Passed by Madras HC Upholding CCI Probe
Background
By way of its decision dated October 19, 2023(‘Impugned Order’) [1], the Madras HC dismissed a Writ Petition[2] filed by Agni Steels Private Limited (‘Writ Petition’) impugning the Competition Commission of India’s (‘CCI’) directions issued under Order dated August 23, 2023 directing the Director General, CCI (‘DG’) to investigate allegations of cartelization between certain steel companies.[3] The ground raised in the Writ Petition inter alia was that the CCI cannot direct an investigation without first forming its prima facie opinion on the alleged contraventions under Section 26(1) of the Competition Act, 2002 (‘Competition Act’).
Impugned Order
i. The HC observed that since the CCI registered the case suo moto, and not on the reference or information received by any other person – the act of the CCI deliberating and registering a case as suo moto implies formation of a prima facie Thus, the course adopted by the CCI cannot be said to be illegal;
ii. The mere presence of the DG does not vitiate the proceedings, and as per Section 22 of the Competition Act which prescribes the quorum for the meetings, there is no embargo for presence of other officials; and
iii. Just because some companies have been questioned while others have not been, cannot be a ground for interference in the ongoing DG investigation. The question of arbitrariness is premature.
SC’s Decision
Subsequently, the petitioners moved a Special Leave Petition (‘SLP’) against the Impugned Order. However, the SC in its Order dated November 10, 2023, observed that it is not inclined to interfere in the decision passed by the Madras HC and accordingly dismissed the SLP.
[1] Petition for Special Leave to Appeal (C) No. 24796/2023.
[2] Agni Steels Pvt. Ltd. & Anr. v. UOI & Ors., W.P. (C) 11911 of 2023.
[3] On 6th March 2021, Coimbatore Corporation Contractors Welfare Association lodged a complaint with the Central Bureau of Investigations, New Delhi alleging that certain companies were cartelising to raise the prices of their products. The complaint was forwarded to the DG, Competition Commission of India.