In an important ruling, the Delhi High Court held that Competition Commission of India (CCI) has the power to recall or review its order directing investigation though it is not an inherent power or expressly provided under the Competition Act.
The Court said CCI has the power to recall / review the order under Section 26(1) of the Act directing an investigation by Director General (DG) but within the parameters and subject to some restrictions.
The Court observed that CCI’s power to review or recall its order directing investigation is passed in the exercise of its administrative powers based on the following reasons:-
1) Once petitions under Article 226 for quashing of investigation under the CrPC have been held to be maintainable, on the same parity a petition under Article 226 would also be maintainable against an order/direction of the CCI of investigation under Section 26(1) of the Competition Act particularly when the powers of the DG are far wider than the powers of Police of investigation under the CrPC.
2) When the effect of, an order of investigation under Section 26(1) of the Competition Act can be so drastic, availability of an opportunity during the course of proceedings before the CCI after the report of the DG, to defend itself cannot always be a ground to deny the remedy under Article 226 of the Constitution of India against the order of investigation.
3) CCI can order/direct investigation only if forms a prima facie opinion of violation of provisions of the Competition Act having been committed. CCI ordering investigation without forming and expressing a prima facie opinion or where the prima facie opinion though purportedly is formed and expressed is palpably unsustainable, the remedy of Article 226 would definitely be available in such case.
4) Rather than High Court in exercise of jurisdiction under Article 226 of the Constitution of India in the first instance investigating whether an ex parte order under Section 26(1) of investigation can be sustained or not, without any findings of the CCI in this respect in the absence of the person / enterprise complained / referred against being present before the CCI at the time of making of the order under Section 26(1), it would be better if the said exercise is undertaken in the first instance by the CCI and High Court even if approached under Article 226, having the views of CCI before it.
5) Deletion of Section 37 of the Competition Act as it stood prior to the amendment with effect from 12th October, 2007 cannot be a conclusive indication of the legislature having intended to divest the CCI of the power of review or an argument to contend that the power of review if found to be existing in the CCI de hors Section 37 has been taken away by deletion of Section 37. It is well-nigh possible that the legislature deleted Section 37 finding the same to be superfluous in view of the inherent power of the CCI to review/recall its orders.
6) The investigative powers of the DG are not unlimited. The DG in conducting the investigation is bound by the confines of investigation set out in the order of the CCI under Section 26(1) of the Act and is not empowered to conduct a roving and fishing inquiry. This is also evident from Section 26(7) of the Act empowering the CCI to direct the DG to cause further investigation into the matter and from Regulation 20(6) of the Competition Commission of India (General) Regulations, 2009, empowering CCI to direct DG to make further investigation. It is thus not as if once an order under Section 26(1) of the Act of investigation has been made, the investigation goes outside the domain of CCI.
7) A mere filing of an application for review / recall would not stall the investigation by the DG already ordered. Ordinarily, the said application should be disposed of on the very first date when it is taken up for consideration, without calling even for a reply and without elaborate hearing inasmuch as the grounds on which the application for recall / review is permissible as aforesaid are limited and have to be apparent on the face of the material before the CCI. Even if CCI is of the opinion that the application for recall / review requires reply / further hearing, it is for the CCI to, depending upon the facts order whether the investigation by the DG, is to in the interregnum proceed or not.
The Court, however, clarified that not in every case in which CCI has ordered investigation without hearing the person / enterprise complained / referred against, such person/enterprise would have a right to apply for review / recall of that order. Such a power though found to exist has to be sparingly exercised.
“Such a power has to be exercised on the well recognized parameters of the power of review / recall and without lengthy arguments and without the investigation already ordered being stalled indefinitely”, the Court added.