SWATANTER KUMAR, K. S. RADHAKRISHNAN, S. H. KAPADIA
Competition Commission of India – Appellant
Versus
Steel Authority of India Ltd. – Respondent
What is the appealability of a direction issued by the Competition Commission under Section 26(1) of the Competition Act, 2002? What is the scope of the Competition Commission's power under Section 26(1) of the Competition Act, 2002, regarding notice and hearing at the prima facie stage? What is the role of the Competition Commission as a party in proceedings before the Competition Appellate Tribunal?
Key Points: - A direction under Section 26(1) of the Competition Act, 2002, to the Director General for investigation is an administrative direction and not an appealable order under Section 53A (!) (!) . - The Competition Commission is a necessary or proper party in proceedings before the Competition Appellate Tribunal (!) (!) . - At the stage of forming a prima facie opinion under Section 26(1), neither the Commission is duty-bound to issue notice or grant a hearing, nor can any party claim it as a right (!) (!) (!) . - The Commission is expected to record at least some reason even while forming a prima facie view (!) (!) . - The power under Section 33 to pass temporary restraint orders can only be exercised after a prima facie opinion has been formed and investigation directed under Section 26(1) (!) (!) (!) . - Ex parte restraint orders should be passed in exceptional circumstances and with a higher degree of satisfaction than a prima facie view (!) (!) (!) . - The Competition Commission must record reasons for its decisions and orders, especially when they determine the rights of parties (!) (!) . - The Competition Act, 2002, specifically lists the directions, decisions, or orders that are appealable before the Tribunal; other orders cannot be treated as appealable by implication (!) (!) (!) . - The Commission's function under Section 26(1) is inquisitorial and preparatory, not adjudicatory, and does not require notice or hearing at that stage (!) (!) . - Investigations and inquiries under the Act should be completed expeditiously, with specific timeframes suggested for various stages (!) (!) (!) (!) (!) .
JUDGMENT
Swatanter Kumar, J. —
The application for leave to appeal is allowed. Civil appeal is admitted.
2. The decision of the Government of India to liberalize its economy with the intention of removing controls persuaded the Indian Parliament to enact laws providing for checks and balances in the free economy. The laws were required to be enacted, primarily, for the objective of taking measures to avoid anti-competitive agreements and abuse of dominance as well as to regulate mergers and takeovers which result in distortion of the market. The earlier Monopolies and Restrictive Trade Practices Act, 1969 was not only found to be inadequate but also obsolete in certain respects, particularly, in the light of international economic developments relating to competition law. Most countries in the world have enacted competition laws to protect their free market economies- an economic system in which the allocation of resources is determined solely by supply and demand. The rationale of free market economy is that the competitive offers of different suppliers allow the buyers to make the best purchase. The motivation of each participant in a free market economy is to maximize self-inter
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