IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BIREN VAISHNAV, J.
J.K. Paper Ltd. Through Santosh Wakhloo, Authorized Signatory Herein – Appellant
Versus
Competition Commissioner Of India – Respondent
R/Special Civil Application No. 12932 of 2019
Decided on : 03-04-2023
Competition Act, 2002 - Sections 3 and 4 - Service of notice of Rule – contravention of Act - Quantum of penalty - Challenged four orders – Held, This was argued with regard to the degree of interchangeability between all product - It was his case that there cannot be interchangeability between copier paper and printing and writing paper - Section 3 of Act was therefore necessarily to be kept in mind and delineation was mandatory - Reading provisions of Regulation 43 of CCI Regulations too also provide an insight to the fact that if Commission requires any document to be produced or any witness to be examined, it will give sufficient opportunity to adduce additional evidence - Petition dismissed
JUDGMENT :
1. Rule. Ms. Garima Malhotra, learned advocate waives service of notice of Rule for and on behalf of the respondent Nos.1 and 2.
2. The present petition, in all, challenges four orders passed by the Competition Commission of India (for short, hereinafter referred to as `CCI’). The impugned orders are as under:
(1) Order dated 2.5.2019 by which the petitioner has been directed to furnish certain documents and details and to make submissions on the quantum of penalty that may be levied in the event, the petitioner is held to have acted in contravention of the Competition Act, 2002 (for short, hereinafter referred to as `the Act’).
(2) Investigation Report dated 7.2.2019 prepared by the Office of the Director General, CCI in case No.30 of 2014 and case No.85 of 2015.
(3) Order dated 4.7.2019 rejecting the request of the petitioner to cross examine the informant of case No.30 of 2014 and informant in case No.85 of 2015.
(4) Orders dated 1.8.2014 and 17.11.2015 by the CCI under Section 26(1) of the Act by which the CCI has directed the Director General to file a joint investigation report in respect to the violations of the provisions of the Act in context of information case Nos.30 of 2014 and 85 of 2015.
3. The facts in brief are as under:
*The petitioner is a Public Limited Company engaged in the manufacture of paper and paper products such as Maplitho, Coated Paper/Art Paper, Virgin Fiber based packaging, Copier Paper and Specialty Paper MICR/Ledger/Parchment.
* It is the case of the petitioner that the respondent no.3, the Sivakasi Master Printers Association filed Information Petition No.30 of 2014. The petitioner was arrayed as opponent No.6. It was the case of Information Petitioner that there was a cartel amongst the paper mills which would get-together and facilitate price rise every month. It was the case of the informant that in order to stop this tendency and unfair trade practice to reduce this collusive increase in price, the Information Petitioner alleged contravention of Sections 3 and 4 of the Act. Similarly, the respondent No.4 – All India Federation of Masters and Printers filed Information Petition No.85 of 2015. The CCI clubbed the proceedings and by orders dated 1.8.2014 and 17.11.2015 directed the DG to undertake investigation prima facie opining that the petitioner seems to be indulging in contravention in the paper industry.
* Based on the orders so passed, the CCI carried out investigation and submitted a consolidated report dated 7.2.2019 which the petitioner received on 9.5.2019. Considering the report so filed, by the impugned order dated 2.5.2019, the CCI called upon the petitioner to file its objections/suggestions to the impugned report on or before 30.6.2019 and also issued directions to submit audited balance sheets and profit and loss account/turn over for the last three financial years i.e. 2015-16 to 2017-18. It also directed the petitioner to submit details of the profits/revenue generated from unquoted writing and printing papers during 2015-16 to 2017-18 by way of affidavit supported by certificate of the Chartered Accountant. These proceedings are therefore under challenge.
4. Mr. Mihir Thakore, learned Senior Counsel and Mr. Devang Nanavati, learned Senior Counsel assisted by Mr. Nirag Pathak, learned advocate for the petitioner made the following submissions:
* Inviting the Court’s attention to the provisions of Section 2 which defines the terms “agreement”, “cartel,” “relevant market,” and “relevant product market” together with the provisions of Section 3, Mr. Thakore would submit that reading the entire petition of the petitioners before the Commission, what is evident is that the concentration of the printers association was only to cartelisation in respect of writing paper and printing paper such as Maplitho, Cream Wove paper and Art Paper.
* Reading Section 19 of the Act, Mr. Th
Barium Chemicals Limited v. Company Law Board reported in AIR 1967 SC 295(1)
Commission of India v. Steel Authority of India Limited reported in 2010(10) SCC 744
Excel Crop Care Limited v. Competition Commission of India reported in 2017(8) SCC 47
G.B. Mahajan and others Vs. Jalgaon Municipal Council and others
Krishna Swami vs. Union of India [(1992) 4 SCC 605]
Rohtas Industries Limited v. S. D. Agarwal and another reported in AIR 1969 SC 707
State of Haryana and others v. Bhajan Lal and others
Sharma Prashant Raje v. Ganpatrao and others reported in 2000(7) SCC 522
Special Director vs. Mohd. Ghulam Ghouse (AIR 2004 SC 1467)
Samir Agrawal v. Competition Commission of India reported in 2021(3) SCC 136
State of U.P. vs. Brahm Datt Sharma (AIR 1987 SC 943)
T.C. Basappa Vs. T. Nagappa and Another
SupremeToday
An order under Section 26(1) of the Competition Act is administrative, only initiating an investigation without affecting parties' rights.
An error in the decision or determination itself may also be amenable to a writ of certiorari but it must be a manifest error apparent on the face of the proceedings, e.g. when it is based on clear i....
The Competition Commission of India must establish a prima facie case before ordering an investigation; failure to do so renders its orders void.
The judgment establishes that the CCI must have a principled prima facie basis to initiate an investigation under the Competition Act, failing which such directives lack jurisdiction and can be quash....
The CCI's order at the Section 26(1) stage is a preparatory measure and does not require elaborate reasons for clubbing information. The scope of the investigation covers all aspects arising from the....
The court established that a prima facie case of cartelisation can be inferred from parallel pricing among a limited number of suppliers, and that the CCI has the authority to initiate investigations....
The Commission's directive for investigation under Section 26(1) is administrative, requiring no detailed reasons and justifying clubbing of related matters if substantial similarity exists.
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