Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Del) 553

IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, J.
EATON POWER QUALITY PVT LTD – Appellant
Versus
COMPETITION COMMISSION OF INDIA & ORS - Respondents
W.P.(C) 6797 of 2020
Decided on : 10-09-2021

Advocate Appeared:
For the Appellant :Mr. Harish N. Salve, Senior Advocate, with Ms. Anuradha Dutt, Mr. Vivek Agarwal, Mr. Haaris Fazili, Mr. Kunal Dutt, Mr. Divyansh Prasad, Mr. Bhushan Gokhale and Mr. Chaitanya Pendse, Advocates.
For the Respondent:Mr. Avishkar Singhvi, Mr. Rahul Arya and Mr. Nipun Katyal, Mr. Somasekhar Sundaresan, Ms. Nisha Kaur Uberoi, Mr. Gautam Chawla, Mr. Sarthak Pande, Ms. Yugandhara Khanwilkar, Ms. Shivangi Chawla and Ms. Aditi Khemani, Advocates

Point of Law: Competition Commission of India - Power of Review - CCI is not required to hear 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.

Headnote:
Competition Act, 2002 - Section 31 - Competition Commission of India (Procedure in Regard to the transaction of Business relating to Combinations) Regulations, 2011 - Regulation 27 - Acquisition of the electrical and automation business - Share holders - Whether CCI has power of Review or not, is no longer res integra and the same has been considered in various decisions of this Court - Schneider and L&T were the topmost market shareholders in the E&A business, the CCI, came to a prima facie opinion that the said Combination was likely to have an Appreciable Adverse Effect on Competition in the LV Switchgear business. Thereafter, CCI conducted its market investigation and proposed various modifications to the Combination, after taking into account the proposals of the parties to the Combination.
Finding of the court: During 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 CCI - Since CCI does not enjoy the power of Review, impugned order is not sustainable in law. Further, as observed in paragraph 106, even the order passed by the CCI, is vitiated and is also not in accordance with law - To put the clock back and to remand entire matter to CCI would not be in accordance with the spirit of the Approval Order itself, inasmuch as the Combination has already been concluded, and Date of Closing has already passed - 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 Closing Date of the Combination has been in place for more than a year, strict timelines would have to be imposed for implementing White Labelling Arrangements, in terms of the Approval Order - Directions issued
Result: Petition disposed of

JUDGMENT :

GLOSSARY OF TERMS:

S. No.	Term	Abbreviation
1.	The Competition Act, 2002	Act
2.	The Competition Commission of India (Procedure in Regard to the transaction of Business relating to Combinations) Regulations, 2011	Combination Regulations
3.	Competition Commission of India	CCI
4.	Appreciable Adverse 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 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 Schneider and MacRitchie Investments Private Limited, which were the acquirers in the proposed Combination. On this notice, considering the fact that Schneider and L&T were the topmost market shareholders in the E&A business, the CCI, came to a prima facie opinion that the said Combination was likely to have an Appreciable Adverse Effect on Competition (hereinafter, “AAEC”) in the LV Switchgear business. Thereafter, CCI conducted its market investigation and proposed various modifications to the Combination, after taking into account the proposals of the parties to the Combination. It passed the Approval Order under Section 31 of the Competition Act, 2002 (hereinafter, “The Act”), encompassing the said modifications, as also the timelines thereto, on 18th April 2019 (hereinafter referred to as “Approval Order”). Upon the said approval, it also appointed a Monitoring Agency- Moore Singhi Advisors LLP (Respondent No. 3) (hereinafter, “MA”), as per Regulation 27 of the Competition Commission of India (Procedure in Regard to the transaction of Business relating to Combinations) Regulations, 2011 (hereinafter, “Combination Regulations”) to monitor the implementation of the said modifications to the Combination, among other functions.

5. The present petition concerns the implementation of two of the said modifications or remedies that were proposed by the CCI in its Approval Order, being the remedy of `White Labelling’, and the consequential `Non-exclusive technology transfer’ licences which were to be given.

6. Pursuant to the Approval Order, invitation for Expression of Interest (hereinafter, “EOI”) was published, upon which various entities filed their registrations on a particular portal, provided for availing of the remedies. The Petitioner- Eaton is one of these entities, however due to the non-submission of required supporting documentation, Eaton was ousted by Schneider from availing of the White Labelling remedy. Aggrieved by the same, Eaton filed an application before the CCI for its inclusion in the said process, qua which, the CCI, in its decision dated 7th January 2020, as communicated on 13th January, 2020, directed Schnei

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2021 Supreme(Del) 553

IN THE HIGH COURT OF DELHI AT NEW DELHIPRATHIBA M. SINGH, J.EATON POWER QUALITY PVT LTD – AppellantVersusCOMPETITION COMMISSION OF INDIA & ORS - RespondentsW.P.(C) 6797 of 2020Decided on : 10-09-2021

Point of Law: Competition Commission of India - Power of Review - CCI is not required to hear 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.

Cases Referred (7)

IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, J.
EATON POWER QUALITY PVT LTD – Appellant
Versus
COMPETITION COMMISSION OF INDIA & ORS - Respondents
W.P.(C) 6797 of 2020
Decided on : 10-09-2021