2010 Supreme(SC) 834

2010 (6) Supreme
SUPREME COURT OF INDIA
S.H. Kapadia, CJI., K.S. Radhakrishnan and Swatanter Kumar, JJ.
Competition Commission of India — Appellant
versus
Steel Authority of India Ltd. & Anr. — Respondents
Civil Appeal No.7779 of 2010
[D.No.12247 of 2010]
Decided on : 9-9-2010

IMPORTANT POINTS
Competition Commission would be a necessary or proper party in any appeal before the Tribunal.
Direction under Section 26(1) is an administrative direction without entering upon any adjudicatory process.
Court’s function is jus dicere, not jus dare.
In an appeal against the final order, grounds to challenge the interim orders/directions can always be taken up.
Power to invite cannot be equated with requirement of statutory notice or hearing.
Reasoned judgment is basic rule of law and a mandatory requirement of the procedural law.
Ex parte restraint orders should be passed in exceptional circumstances.

Headnote:(a) Competition Act, 2002 – Sections 7, 19 and 26 – Information can be received by the Commission from anybody u/s 7 or from Government agencies or on its own u/s 19 – No notice is required even to the informant but the Commission may seek assistance from any quarter – Upon such information the Commission should satisfy itself and express its opinion that a prima facie case exists – It can then direct the Director General to cause an investigation to be made into the matter – The matter may, however be closed u/s 26 if no prima-facie case is made out. (Paras 9 and 10)

        (b) Competition Act, 2002 – Section 53A(1)(a) – Appeal shall lie only against such directions, decisions or orders passed by the Commission before the Tribunal which have been specifically stated u/s 53A(1)(a) – Other orders, cannot be treated appealable by implication – Thus taking a prima facie view and issuing a direction to the Director General for investigation would not be an order appealable under Section 53A. (Para 17)

        (c) Competition Act, 2002 – Section 26(1) – Neither the Commission is duty bound to issue notice or grant hearing, nor any party can claim notice and/or hearing at the stage of formation of opinion that a prima facie case exists for issuance of a direction to the Director General to cause an investigation to be made into the matter. (Para 17)

        (d) Competition Act, 2002 – Section 53B r/w section 53T r/w Order I Rule 10, C.P.C. – Necessary Party – Expanded meaning should be given to the term ‘persons’ entitled to appeal – Non-joinder of necessary parties may prove fatal – Non-joinder of proper parties may not be fatal but would certainly adversely affect interest of justice – In the proceedings initiated by the Commission suo moto, it shall be dominus litis and therefore necessary party – In other cases, the Commission being a regulatory body would be a proper party. (Para 17, 60, 62, 64, 66 and 68)

        AIR 1963 SC 786; (1992) 2 SCC 524; (2005) 2 SCC 431 – Relied upon

        (e) Competition Act, 2002 – Section 33 – Power under Section 33 to pass temporary restraint order can only be exercised by the Commission when it has formed prima facie opinion and directed investigation in terms of Section 26(1). (Para 17)

        (f) Administrative jurisprudence – Commission is expected to record at least some reason even while forming a prima facie view. (Para 17)

       (g) Competition Act, 2002 – Section 26(1) and (2) – Direction under Section 26(1) is a direction simpliciter to cause an investigation into the matter – It is an administrative direction without entering upon any adjudicatory process – It does not effectively determine any right or obligation of the parties to the lis – It does not entail any civil consequences – It is therefore not appealable – Closure of the case u/s 26(2), on the other hand, is a final order adjudicating the lis – Hence it is appealable u/s 53A. (Paras 20 and 21)

        (1990) ECR II-00367 – Relied upon

        (h) Competition Act, 2002 – Section 53A – Legislature opting to specifically state unambiguously the order, direction and decision, which would be appealable – It will not be permissible to include other directions or orders by implication and make them appealable. (Para 22)

        (i) Interpretation of Statutes – ‘And’ and ‘Or’ – The words `or’ and `and’ may be read as vice versa but not normally – It is always expected of the Court to apply plain rule of construction rather than trying to read the words into the statute which have been specifically omitted by the legislature (Paras 23 and 24)

        (1928) 1 KB 561; (1888) 13 AC 595; (1980) 1 SCC 158; (2009)10 SCC 531 – Relied upon

        (j) Judicial Review – Right to appeal is a creation of statute – Requires application of rule of plain construction – An appeal to be maintainable must have its genesis in the authority of law – Such provision should neither be construed too strictly nor too liberally – Court would keep in mind that its function is jus dicere, not jus dare. (Paras 26and 27)

        (1979) 1 SCC 92; (1983) 3 SCC 75; (1999) 4 SCC 468; (1999) 3 SCC 722; 2008 AIR SC 1749; (2003) 6 SCC 659 – Relied upon

        (k) Competition Act, 2002 – Section 53A and section 100, C.P.C. – The expression ‘any’, in fact, qualifies each of the three expressions ‘direction issued or decision made or order passed’ – It cannot be said that it signifies any one of them and, particularly, only ‘direction issued’ – Legislature specifically making orders u/s 26(2) and 26(6) appealable – Not open to Court to make orders u/s 26(1) and 26(7) appealable. (Paras 31 and 32)

        (l) Maxim – Expressum facit cessare tacitum – Express mention of one thing implies exclusion of other – Expression precludes implication. (Para 33)

        AIR 1985 SC 1416; AIR 1992 SC 1277; AIR 2002 SC 1334 – Relied upon

        (m) Maxim – Est boni judicis ampliare justiciam, non-Jurisdictionem – No other direction, decision or order of the Commission is appealable except those expressly stated in Section 53A(1)(a). (Para 34)

        AIR 2002 SC 1334 – Relied upon

        (n) Competition Act, 2002 – Section 53A r/e Order XLIII, rule 1A, C.P.C. – In an appeal against the final order, grounds to challenge the interim orders/directions can always be taken up. (Paras 35 and 38)

        (o) Natural justice – Audi alteram partem – Doctrine specifically includes in its purview, the right to notice and requirement of reasoned orders – Concept of exclusion of the principles of natural justice is also equally known – Legislature has the competence to enact laws which specifically exclude the application of principles of natural justice - Where the order entails civil consequences, adherence to the principles of natural justice is imperative – Adherence to or exclusion of the these principles would also depend on the functions of the authority. (Paras 40, 49, 51 and 52)

        (1863), 14 C.B. (N.S.) 180; (1935) 1 KB 249; AIR 1985 SC 1416; (1991) Supp1 SCC 600; (1993) Supp 4 SCC 260; (1978) 1 SCC 48; AIR 1980 SC 319; (1982) 3 SCC 338; (2003) 4 SCC 557 – Relied upon

        (p) Competition Act, 2002 – Section 26(1)r/w Reg. 14(7) – Notice expressly excluded – No compelling reason to read the requirement of notice in Section 26(1). (Para 42)

        (q) Competition Commission of India (General) Regulations, 2009 – Regulation 17(2) – Power to invite cannot be equated with requirement of statutory notice or hearing. (Para 44)

        (r) Competition Commission of India (General) Regulations, 2009 – Regulation 21(8), 22, 33(4), 48 and 52 – Contemplates notice to any person – Includes Government agencies, experts and even the informant – However section 26(1) of the Competition Act, 2002 vests discretion into the Commission to issue notice. (Paras 44, 45 and 48)

        (s) Competition Act, 2002 – Section 26(1) – Functions of the Commission u/s 26(1) is either adjudicatory nor regulatory – It is inquisitorial and in the nature of preparatory measures in contrast to the decision making process – Not necessary to issue notice to informant before forming opinion as to prima facie case – Commission may, however, invite assistance of any person under Regulation 17(2) of the Competition Commission of India (General) Regulations, 2009. (Para 52 to 55)

        (1992) 4 SCC 605; (1972) ECR 0933 – Relied upon

        (t) Administrative Law – Recording reasons – Imperative that administrative authorities and tribunals should record explicit reasons in support of the order made by them – Reasoned judgment is basic rule of law and a mandatory requirement of the procedural law. (Para 56)

        JT 2010 (4) SC 35; (1979) 2 SCC 368; 1974 ICR 120 – Relied upon

        (u) Competition Act, 2002 – Section 33 r/w Regulation 18(2) and 31(2), Competition Commission of India (General) Regulations, 2009 – An ‘inquiry’ is commenced when the Commission issues a direction to the Director General – Enquiry and investigation are quite distinguishable – Powers under section 33 can be exercised only after enquiry has commenced – Ex parte restraint orders, having far reaching consequences, should be passed in exceptional circumstances. (Paras 70 and 74)

        (1994) 4 SCC 225 – Relied upon

        (v) Competition Act, 2002 – Section 33, 27(d) and 31(3) r/w Order XXXIX, Rules 3 and 3A, C.P.C. – Delay in disposal of cases and undue continuation of interim restraint orders – Not desirable – Directions issued. (Paras 75, 76, 79, 80 and 81)

       Facts of the case:

        1. Jindal Steel & Powers Ltd. invoked the provisions of Section 19 r/w Section 26(1) of the Act by providing information to the Commission alleging that M/s. Steel Authority of India Ltd. had, inter alia, entered into an exclusive supply agreement with Indian Railways for supply of rails. The SAIL, thus, was alleged to have abused its dominant position in the market and deprived others of fair competition and therefore, acted contrary to Section 3(4) and Section 4(1) of the Act.

        2. The Commission directed the Director General for investigation and granted liberty to SAIL to file its reply before the Director General.

        3. Legality of this order was questioned before the Tribunal by SAIL

        4. Commission’s order was set aside by the Tribunal.

       Finding of the Court:

        Commission may not really record detailed reasons, but must express its mind in no uncertain terms that it is of the view that prima facie case exists, requiring issuance of direction for investigation to the Director General.

       Result : Appeal partially allowed.