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IN THE HIGH COURT OF JUDICATURE AT MADRAS
SANJAY V. GANGAPURWALA, D. BHARATHA CHAKRAVARTHY, JJ.
Agni Steels Private Limited Represented by its Managing Director, M. Chinnasami & Anr. - Appellants
Versus
Union of India Through Secretary, New Delhi & Ors.. - Respondent
W.P. No. 11911 of 2023
Decided On : 19-10-2023
Investigation - Competition Act - Section 26(1) - Summary: The court considered the investigation against the writ petitioner in Suo Moto Case No.2 of 2021 and ruled that the investigation was not vitiated for non-compliance of Section 26(1) of the Act. The court also addressed the presence of Director General and other officials in the meeting, and the issue of cherry-picking in the investigation, concluding that these were not grounds for interference at that stage.
Fact of the Case:
A complaint was lodged alleging cartel formation among steel companies. The Central Bureau of Investigation forwarded the complaint to the Competition Commission of India. The petitioners sought to quash the summons and investigation, citing non-compliance with Section 26(1) of the Competition Act, arbitrary selection of companies for investigation, and the presence of unauthorized officials in the Commission's meeting.
Finding of the Court:
The court found that the investigation was not vitiated for non-compliance of Section 26(1) of the Act. It also ruled that the presence of Director General and other officials did not render the meeting of the Commission illegal. The court concluded that the issue of cherry-picking in the investigation was premature at that stage and not a ground for interference.
Issues: 1. Compliance with Section 26(1) of the Competition Act. 2. Legality of the presence of Director General and other officials in the Commission's meeting. 3. Allegations of cherry-picking in the investigation.
Ratio Decidendi: The court held that the direction to investigate and the subsequent investigation were not in violation of Section 26(1) of the Act. It also ruled that the mere presence of the Director General and other officials did not render the meeting invalid. The court found that the issue of cherry-picking in the investigation was premature at that stage and not a ground for interference.
Final Decision: The Writ Petition was dismissed, and there was no order as to costs. The related Writ Miscellaneous Petitions were closed.
JUDGMENT
(Prayer: Writ Petition filed under Article 226 of the Constitution of India seeking a Writ of Certiorari to call for the records of Suo Motu Case No.02 of 2021 on the file of respondent No.3, summons, dated 14.03.2023 bearing No.DG/CCI/IW/1/05/2021/199, 28.03.2023 bearing no.DG/CCI/IW/05/2021 and the email dated 06.04.2023, all issued by respondent No.2 and quash the same being void ab initio.)
D. Bharatha Chakravarthy, J.
1. On 06.03.2021, one Coimbatore Corporation Contractors Welfare Association lodged a complaint with the Central Bureau of Investigation, New Delhi, alleging that the nine companies named in the complaint which are into the business of sale of steel products, considering the demand for steel products by the real estate sector and contractors carrying out infrastructure projects, dishonestly formed a cartel among themselves to obtain wrongful gain and all of them though own iron ore mines, have hiked the price from Rs.2,500/- to Rs.2,700/- a tonne for flat and long products and with the hike hot rolled coil price Ex-Mumbai hit a record high of Rs. 47,000/- a tonne.
2. By a communication, dated 30.04.2001, the Superintendent of Police, SPE:CBI:ACB: Chennai, forwarded the complaint to the Director General (Investigation), Competition Commission of India, New Delhi and the said communication reads thus:
“Please find enclosed complaint No.CA/0019/2021, in original, for taking necessary action at your end. CBI has not caused any enquiry on the enclosed complaint and not retained any copy of the same.”
3. However, the said Association filed Crl.O.P.No.6153 of 2021 on the file of this Court under Section 482 of the Code of Criminal Procedure, 1973 and before this Court, on behalf of the Central Bureau of Investigation, it was informed that the complaint has already been forwarded to the Competition Commission of India and that C.B.I has no jurisdiction to take up the matter. On the said submission, the above Original Petition was disposed of on the following terms:
“8. In view of the above, as the said complaint has already been forwarded to the Director General(Investigation), Competition Commission of India, New Delhi by letter dated 30.04.2021 for taking necessary action, the Direction General (Investigation), concerned is hereby directed to proceed further in this regard and take necessary and appropriate action on the complaint dated 06.03.2021 filed by the petitioner herein in accordance with law within a period of four weeks from the date of receipt of this order.”
4. Thereafter, on 17.08.2021, an urgent special meeting of the Commission was convened virtually. The meeting was attended by the Chairperson, two Members and Secretary of the Commission. Besides five officers, including Director General, two Advisors (Eco) and two Directors (Law) also attended the meeting. After deliberation, the following decisions were taken and the minutes reflected in the communication, dated 23.08.2021 as such is reproduced hereunder:
“The decisions of the Commission subsequent to detailed deliberations, are as under:
(i)The Secretariat Division is directed to register and number the captioned matter as Suo Moto case and convey the same DG/ATD
(Action: Secretariat Division)
(ii)The DG to investigate the matter in terms of directions contained in the Order dated 29/07/2021 passed by the Hon’ble High Court of Judicature at Madras in Crl.O.P. No. 6153 of 2021.
(Action :Director General)”
5. The Director General commenced investigation and on 29.11.2022, an application for search and seizure was moved before the learned Chief Metropolitan Magistrate, New Delhi, which was allowed. Pursuant to the warrant, search was conducted in the premises of the writ petitioner on 16.12.2022 and 17.12.2022. On 17.12.2022, the Executive Director of the petitioner Company e-mailed to the respondent authorities seeking marker status for filing a leniency application. It is contended
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