The Competition Commission of India must establish a prima facie case before ordering an investigation; failure to do so renders its orders void.

JUDGMENT :

Kaushik Goswami, J.

Heard Dr. A. Saraf, learned Senior Counsel assisted by Mr. P. Das learned counsel appearing for the petitioner. Also heard Mr. T.J. Mahanta, learned Sr. Counsel assisted by Mr. D. Das, learned counsel for respondent Nos. 1, 4 and 5 (the Competition Commission of India) and Mr. D. Nath, learned Sr. Government Advocate for the State respondents.

2. In WP(C) 6343 of 2018, the petitioner company is seeking inter alia quashing of the proceedings of Case No. 77 of 2016 with Reference Case No. 4/2016 registered with the Competition Commission of India (herein after referred to as the CCI) and the impugned Order dated 06.12.2016 passed by the CCI under Section 26(1) of the COMPETITION ACT , 2002 (herein after referred to as the said Act, 2002) and the impugned Order dated 08.08.2018 passed by the CCI rejecting the application seeking review/recall of the Order dated 06.12.2016 passed by the CCI on 08.09.2016 and 15.09.2016 respectively filed by the petitioner.

3. Whereas, in WP(C) No. 6342/2018, the writ petitioner company is assailing the impugned Order dated 27.08.2018 passed by the CCI in Case No. 77/2016 with Reference No. 4/2016 imposing a penalty of Rs. 5,00,000/- (Rupees Five Lakhs) under Section 4 3 of the said Act, 2002 to the petitioner for non-compliance with the direction of the Director General pursuant to the impugned Order dated 06.12.2016, which is the subject matter in WP(C) 6343/2018.

4. Both the writ petitions are taken up together for hearing as the consequential action of the CCI in levying penalty upon the petitioner company for non-compliance of the direction passed by the Director General, pursuant to the direction of the CCI under Section 26(1) of the said Act, 2002 to the Director General to cause an inquiry which is under challenge in WP(C) No. 6343/2018 is challenged in WP(C) 6342/2018.

5. The facts of the instant case are as follows:-

6. The petitioner is a company registered under the provisions of the COMPANIES ACT , 1956 and is engaged in the manufacture and sell of clinker and cement.

7. On 08.09.2016, the respondent No. 2, i.e., Assam Real Estate and Developer Association filed information under Section 19(1)(a) of the said Act, 2002 before the CCI, alleging inter alia that the petitioner company alongwith some other cement manufacturing companies have been indulging in cartelization and abuse of dominants to manipulate the prices of their respective brands of cement in North East Region of India. Accordingly, a case was registered being Case No. 77/2016. Thereafter, on 15.09.2016, similar information was filed under Section 19(1)(b) of the said Act, 2002 before the CCI by one Shri Rajesh Prasad, IAS, Commissioner & Secretary, Govt. of Assam (respondent No. 3) alleging inter alia that three major cement manufacturing companies including that of the petitioner company had been indulging in anti-competitive activities by entering into Anti-Competitive Agreements in contravention of Section 3 of the said Act, 2002. Accordingly, the said information was registered and numbered as Reference Case No. 4/2016.

8. Thereafter, the CCI by impugned Order dated 06.12.2016 in terms of Section 26(1) of the said Act, 2002 prima facie formed an opinion that the petitioner company and some other cement manufacturing companies by seeking stifle competition in the market through coll