Writ Petition to Quash CCI’s Order Allowed as CCI Changed Petitioner’s Status to ‘OP’ Without Giving Any Opportunity | HC

Case Details: MRF Ltd. v. Competition Commission of India - [2024] 166 taxmann.com 98 (HC - Madras)

Judiciary and Counsel Details

• Dr. Anita Sumanth, J.
• A.L. Somayaji, Sr. Counsel for the Petitioner.
• N. Venkatraman, Additional Solicitor General & R. Thirunavukkarasu, Central Government Standing Counsel for the Respondent.

Facts of the Case

In the instant case, a reference was made to the CCI under section 19(1)(b) of the Competition Act, 2002 as against the company ‘J’. The CCI passed an order expressing its view that there was cartelization by tyre manufacturers and directed an investigation to be made into the matter by the DG.

The DG submitted an investigation report. Since the DG proposed to investigate the other tyre manufacturers, including the petitioner, the CCI, vide the impugned order, added the said tyre manufacturers, including the petitioner, as OPs who were not arrayed as opposite parties.

Pursuant to the said order, notices were issued to the petitioner for participation in proceedings. The petitioner made a request seeking a copy of the order directing the investigation, which was rejected by the Authority on the ground that the petitioner was not entitled to the same as its status in the proceedings was only as a third party.

The petitioner filed instant writ petitions challenging the impugned order and the notice on the ground that the petitioner’s status was changed from a ‘participant’ in the investigation to an ‘opposite party’ without any opportunity granted to it.

It was noted that there was considerable opaqueness in the manner of conduct of proceedings and considerable delay on the part of the CCI in making available the impugned order to the petitioner. Further, it was incumbent upon the Authorities to have solicited a response from the petitioner before changing its status, which had grave implications.

High Court Held

The High Court observed that the petitioner ought to be given notice before impleadment as a party and that the satisfaction of Authority as to the justification for such impleadment ought to have been made out by way of a speaking order.

The High Court held that a copy of the investigation report was not furnished to the petitioner under section 26(3) of the Act, whereas section 26(4) makes it statutorily mandatory for the CCI to supply a copy of the report to the parties. This compounded an irregularity in the procedure. Therefore, an instant writ petition was to be allowed.

List of Cases Referred to

• Excel Crop Care Ltd. v. Competition Commission of India (2017) 8 SCC 47 (para 30),
• Cadila Health Care Ltd. and others v. CCI and others 255 2018 DLT 647 (para 30)
• Competition Commission of India v. Grasim Industries 265 2019 DLT 535 (para 30).