Forech India Limited vs Competition Commission Of India ...
2016 Latest Caselaw 6279 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                         Date of decision: 29th September, 2016

+      CM No.32052/2015 (of respondents for modification of order

dated 2nd December, 2015) in W.P.(C) 11072/2015

FORECH INDIA LIMITED ..... Petitioner Through: Mr. Sandeep Sethi, Sr. Adv. with Mr. Amitabh Kumar, Mr. Gautam Shahi and Ms. Lagna Panda, Advs.

Versus

COMPETITION COMMISSION OF INDIA AND ANR ..... Respondents Through: Mr. Sidharth Luthra, Sr. Adv. with Mr. Prashanto Chandra Sen, Mr. Udayan Verma, Ms. Tara Narual and Mr. Shivanshu Singh, Advs. for CCI.

CORAM:-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1. This petition was disposed of in terms of order dated 30 th November,

2015 as under:

"1. The petition impugns the order dated 6th November, 2013 of the respondent No.1 Competition Commission of India (CCI) under Section 26(1) of the Competition Act, 2002 as well as denial by the respondent No.2 Director General (DG), CCI of information in the form of inspection of documents and evidence against the petitioner sought by the petitioner from the DG, CCI.

2. On enquiry from the senior counsel for the petitioner, as to how the challenge to the order dated 26(1) which is more than two years old i.e. of 6th November, 2013, is maintainable now, the senior counsel for the petitioner states that the petitioner for the first time learnt of the said order only on receipt of first notice dated 27th May, 2015 from DG, CCI. It is clarified that prior thereto, the petitioner was not investigated at all.

3. The order under Section 26(1) directs the DG, CCI to complete the investigation and submit a report within sixty days. It has as such been enquired from the counsel for the respondents appearing on advance notice, as to how the investigation is continuing till now. The senior counsel for the petitioner in this regard also draws attention to Regulation 20(2) of the Competition Commission of India (General) Regulation, 2009 which provides for the CCI, while directing the DG, CCI, to investigate, to submit a report within such time as may be specified by the CCI which ordinarily shall not exceed sixty days from the date of receipt of the directions.

4. The counsel for the respondents on oral instructions states that the period was extended from time to time but is unable to state, till what time it is valid now. It is stated that extension was often on the request of the opposite parties.

5. Prima facie, it appears that when there are several parties against whom an order of investigation has been made, extension of time at the behest of one or several parties without hearing the others, may not be appropriate.

6. The information pursuant to which the order under Section 26(1) has been made in the present case is of cartelisation of as many as

seventeen opposite parties to determine the tender price of conveyor belt. A question arises that when the allegation of cartelisation is against several persons, why investigation against one should be initiated after a long gap of one and a half years.

7. It is also the contention of the senior counsel for the petitioner that the petitioner has also been denied the material if any against it and the right to cross-examine the witnesses, if any whose statement has been recorded and which is found to be against the petitioner. The senior counsel for the petitioner has in this regard drawn attention to Regulation 41(5) of the Regulations supra and contended that the same provides for a right of cross-examination.

8. The counsel for the respondents states that there is no right of cross-examination and it is in the discretion of the DG, CCI, whether to give an opportunity to cross-examine the witnesses or not.

9. It has however been enquired from the counsel for the respondents, as to how a person being investigated against would know, whether to apply for cross-examination or not, unless the evidences, if any, recorded against such person are made available / known to him.

10. The counsel for the respondents states that even if the right of cross-examination is not given by the DG, CCI, the same can be sought before the CCI, after the DG, CCI has submitted the report.

11. The senior counsel for the petitioner in this regard has drawn attention to Regulation 43 which bars a party from producing any additional evidence before the CCI and which was not produced before the DG, CCI.

12. At this stage, the counsel for the respondents states that he has received instructions that as of now, the time for submitting the report is till 30th December, 2015 and before the report is submitted, all materials available will be furnished to the petitioner and if the petitioner desires to cross-examine any witness recorded, would also be given an opportunity to cross-examine.

13. The senior counsel for the petitioner states that the material should be made available before the statement of the representatives of the petitioner is recorded and for which purpose they have been summoned tomorrow i.e. 1st December, 2015 and on 3rd December, 2015.

14. The counsel for the respondents seeks time to obtain instructions.

15. List tomorrow i.e. 1st December, 2015."

and order dated 2nd December, 2015 as under:

"1. This order is in continuation of the previous orders dated 30th November, 2015 and 1st December, 2015.

2. The counsel for the respondents states that without prejudice to the rights and contentions of the respondents and without constituting a precedent, the respondents are ready to furnish all the documents of investigation available with the respondents, save those with respect to which any party has claimed confidentiality, to the petitioner on the date when the statement of the official of the petitioner who has been summoned to appear is recorded and after confronting the said official with some of the documents with which it is deemed expedient to confront him.

3. It is further stated that the respondents will similarly give an opportunity to the petitioner to cross examine any witness whose oral statement pertaining to the petitioner has been recorded. It is yet further stated that the petitioner shall be given an opportunity to make a further statement after copies of the documents have been given to the petitioner and after the official of the petitioner has been confronted with some of the documents.

4. The senior counsel for the petitioner has expressed apprehension that the respondents, in the guise of confidentiality, may deny all documents to the petitioner.

5. The counsel for the respondents states that the orders passed on the application of any other person claiming confidentiality with respect to any document / material shall also be supplied to the petitioner.

6. In this view of the matter, the petition is disposed of keeping all contentions of both the parties open and giving liberty to the parties to apply if any difficulty arise."

2. Thereafter, this application has been filed by the respondents

[Competition Commission of India (CCI) and Director General, Competition

Commission of India (DGCCI)] for modification of the order dated 2 nd

December, 2015 supra to the effect i) that the respondents, instead of being

required to furnish „all the documents of investigation available with the

respondents, save those with respect to which any party has claimed

confidentiality‟ be permitted to supply to the petitioner only those

documents „which are to be relied on by the respondents against the

petitioner‟ ; and, ii) that the respondents be exempted from supplying to the

petitioner the order of the confidentiality if any passed inasmuch as under

the Regulations, only the person who has applied for confidentiality is

entitled to the order of confidentiality and giving of order of confidentiality

to any other person would give access to that person of all the documents

sought to be kept confidential.

3. It is contended that the said modification would not cause any

prejudice to the petitioner inasmuch as documents to be relied on against the

petitioner would be made available to the petitioner and the petitioner would

also get an opportunity to cross examine.

4. Though no formal notice of this application was issued but the senior

counsel for the petitioner appeared on advance notice and contended that

since the inquiry is in respect of alleged cartelization, the petitioner should

be furnished all the documents.

5. Vide order dated 6th January, 2016, the counsel for the respondents

was directed to, on the next date of hearing, inform the reasons for which the

documents which were not intended to be used against the petitioner were

not intended to be given to the petitioner.

6. The counsel for the respondents on 5th February, 2016 handed over a

sealed cover and which on opening was found to be containing a four page

note dated 14th January, 2016 setting out the reasons aforesaid. After

perusing the same, the same was returned to the counsel for the respondents

and the following order was passed:

"3. I have enquired from the counsel for the respondents/applicants that if at this stage all the material available with the respondent no.2 Director General of Competition Commission of India is not put to the petitioner, would it not amount to depriving the petitioner of a fair opportunity of defending itself against the charge and in the event of the report of the DG being against the petitioner amount to condemning the petitioner unheard.

4. I have further enquired from the counsel for the respondents whether the respondent No.1 Competition Commission of India (CCI), in the event of report of DG being against the petitioner, give an opportunity to the petitioner to make a further statement and to cross- examine the witnesses, with reference to the matter placed by DG before CCI and not earlier disclosed to petitioner.

5. The counsel for the respondents states that he needs to take categorical instructions in this regard.

6. The senior counsel for the petitioner has drawn attention to the Shakuntala Vs. State of Delhi 139 (2007) DLT 178 and Ashutosh Verma Vs. CBI 2015 I AD (Delhi) 708 to contend that the principle as enuntiated under the Cr.PC, of the accused being entitled to all the material collected by the Investigating Officer, even if not used against the accused, to give an opportunity to the accused to use any material so collected before commencement of trial to defend himself, should also be applied to DG/CCI. He states that investigation by DG is at par with the investigation by the Police under the Cr.PC and even if DG has found any material which may go against the charge being investigated against the petitioner, the petitioner is entitled thereto.

7. The counsel for the respondents seeks opportunity to obtain instructions in this regard as well."

The counsel for the respondents on 5th February, 2016 also stated that

in the meanwhile no further investigation shall be conducted qua the

petitioner. The said arrangement has continued in force.

7. Thereafter, on 1st April, 2016, the following order was passed:

"2. The senior counsel for the respondents under instructions states i) that the respondents along with final report of the Director General (DG) shall disclose all the material collected during investigation in terms of Regulation 24 (sic 20(4)) of the Competition Commission of India (General) Regulations, 2009 including the documents whether relied upon by the DG or not; ii) that the petitioner if so desires at that stage, will also have a right of inspection of the entire record in terms of Regulation 37; iii) that in the event of the report of the DG being against

the petitioner, the petitioner will have an opportunity to make a further statement and to cross examine the witnesses with reference to the material placed by the DG before Competition Commission of India (CCI) and not earlier disclosed to the petitioner; iv) that the documents with respect to which the respondents at this stage claim confidentiality will not be furnished to the petitioner but the petitioner will be furnished the orders of the CCI upholding the confidentiality plea with respect to the said documents after redacting therefrom the portion which may disclose the nature of the documents, in terms of Regulation 35(14) and Regulation 6 of The Competition Commission of India (Lesser Penalty) Regulations, 2009; v) that though the petitioner at this stage shall be supplied (in terms of para 2 of order dated 2nd December, 2015) only such of the documents that are relevant qua the allegations against the petitioner but along with the report of the DG, the other documents shall also be supplied to the petitioner."

8. The counsels were further heard on 1st June, 2016 and order reserved

giving liberty to the counsels to file written submissions. Written

submissions have been filed by both counsels and which have been perused.

9. The senior counsel for the respondents has contended i) that the offer

as made and contained in order dated 1st April, 2016 supra balances the

rights of the petitioner to confront the evidence against it on the one hand

with the unfettered ability of CCI to conduct a free and fair investigation and

maintain confidentiality in terms of Regulation 35 of The Competition

Commission of India (General) Regulations, 2009 on the other hand ;

ii) while investigative powers granted to DG, may be wide in scope, the

consequences of investigation by DG is a report that is to be placed before

the CCI and by which report CCI is not bound and is empowered to invite

objections and / or order further investigation; and, iii) in terms of Section

26 read with Regulation 20(4) and Regulation 21 of the General Regulations

all materials whether inculpatory and exculpatory are filed with the report

and at this stage all this material is made available for inspection and / or is

supplied subject to confidentiality, to all the concerned parties including the

party against whom action is proposed.

10. Per contra, the senior counsel for the petitioner has contended i) that

the respondents, in the garb of modification are back-tracking on their own

consent / statements / undertakings given to the Court and the application

itself is thus not maintainable; ii) that this Court after the orders dated 30th

November, 2015 and 2nd December, 2015 aforesaid has become functus

officio and its power of modify the orders is limited to correcting errors

apparent on the face of the record - reliance in this regard is placed on

A.P.SRTC Vs. Abdul Kareem (2007) 2 SCC 466; iii) that the proceedings

before the DG are in the nature of a trial and cannot be equated with a police

investigation - reliance in this regard is placed on Google Inc Vs.

Competition Commission of India (2015) 150 DRJ 192 (DB) affirmed in

Oriental Rubber Industries Pvt. Ltd. Vs. Competition Commission of India

2016 SCC Online Del 2438; iv) that the DG of CCI has been compelling the

petitioner to give its defence without informing the petitioner the charge

against it; v) that the petitioner has a right to access to all documents /

records which are not confidential; vi) that the officials of the petitioner are

being examined by the DG of CCI and being confronted with some alleged

adverse evidence including certain old e-mails; in the absence of all the

related documents, it will be difficult for the petitioner‟s officials to explain

documents based solely on their memory and without remembering the

context in which such e-mail have been sent or received; vii) reliance is

placed on V.K. Sasikala Vs. State (2012) 9 SCC 771 on the rights of an

accused; viii) that the petitioner has been accused of being a part of the

cartel; evidence of such cartel is in the nature of e-mails / other

communications which indicate that competitors were meeting each other;

all meetings of competitors cannot be taken and presented as evidence of

cartelization; thus the context of the e-mails suggesting or fixing a meeting

is necessary; ix) that in the absence of documents, the petitioner is not aware

of the evidence that it should submit to defend itself; x) that Regulation 43

of the General Regulations restricts the right of the petitioner to present

additional evidence after the completion of investigation before CCI; xi) that

the officials of the petitioner examined by the DG of CCI, upon being

confronted with old e-mails and without the attendant circumstances / mails,

may be stating something that may not be entirely correct and exposing them

to penal action under Section 45 of the Act; xii) that the petitioner

apprehends that the respondents, in the guise of confidentiality, are

suppressing or will suppress the disclosure of important documents to the

petitioner and hence it is imperative that the respondents be directed to

provide copies of the orders passed in respect of confidentiality claims to the

petitioner as mandated by Regulation 35 of the General Regulations; and,

xiii) that the practice and procedure adopted by respondents is not in

consonance with the principles of natural justice which the respondents are

bound to follow in terms of Section 36(1) of the Act.

11. I have considered the rival contentions.

12. I may at the outset notice that the order dated 2nd December, 2015 of

which modification is sought is not adjudicatory in nature but is an order

passed on the statement of the counsel for the respondents and which

statement itself was "without prejudice to the rights and contentions of the

respondents and without constituting a precedent." Supreme Court, not

only in Abdul Kareem supra cited by the senior counsel for the petitioner but

also in Delhi Administration Vs. Gurdip Singh Uban 2000 (7) SCC 296 and

in Inderchand Jain Vs. Motilal (2009) 14 SCC 663 held; i) that no

application for review will be entertained in a civil proceedings except on

the grounds mentioned in Order XLVII Rule 1 of the Code of Civil

Procedure, 1908; ii) that there is a real distinction between a mere erroneous

decision and a decision which could be characterised as vitiated by error

apparent; iii) that a review by no means is an appeal in disguise; iv) that

sometimes applications are filed for 'clarification', 'modification' or 'recall'

not because any such clarification, modification is indeed necessary but

because the applicant in reality wants a review and also wants a re-hearing -

such applications if they are in substance review applications deserve to be

rejected straightaway; v) the limitations on exercise of power of review are

well settled; vi) a re-hearing of the matter is impermissible in law; vii) that

power of review can be exercised for correction of a mistake and not to

substitute a view and such power can be exercised within the limits of statute

dealing with the exercise of power. Reference in this regard may also be

made to Cine Exhibition Private Ltd. Vs. Collector, District Gwalior (2013)

2 SCC 698 and Villianur Iyarkkai Padukappu Maiyam Vs. Union of India

(2010) 15 SCC 230.

13. The respondents indeed, in the garb of modification, are seeking to

wriggle out of the consent given by them i) to furnish to the petitioner all the

documents of investigation available with the respondents save those with

respect to which any party has claimed confidentiality; ii) to give an

opportunity to the petitioner to cross-examine any witness whose oral

statement pertaining to the petitioner has been recorded; iii) to give to the

petitioner an opportunity to make a further statement after copies of the

documents have been given to the petitioner and after the official of the

petitioner has been confronted with some of the documents; iv) to give to the

petitioner the orders passed on the application of any other person claiming

confidentiality with respect to any document / material.

14. The respondents, through while seeking modification of their

statement to give to the petitioner orders on the application of any other

person claiming confidentiality with respect to any document / material have

given reasons therefor, for seeking modification of their statement to furnish

to the petitioner all documents of investigation with the respondents save

those with respect to which any party has claimed confidentiality, have not

given any reasons whatsoever save for expressing "difficulties" therein and

which reasons were shown to the undersigned subsequently in confidence.

15. I am not satisfied with the reasons shown to me in confidence for

withdrawing the consent given on 2nd December, 2015 to furnish to the

petitioner all documents of investigation available with the respondents save

those with respect to which any party has claimed confidentiality.

16. Since the order disposing of the petition was not adjudicatory order

and was without prejudice to the rights and contentions of the respondents

and without constituting a precedent for the respondents, I do not deem it

appropriate to in this application for modification of the said order enter into

an adjudicatory exercise as the counsels have argued. The same would

clearly be beyond the scope of modification and even beyond the scope of

review. Reference in this regard can be made to the order dated 16th

September, 2016 of the Division Bench of this Court in Review Petition

No.542/2014 in W.P.(C) No.3821/2014 titled Rosa Power Supply Co. Ltd.

Vs. Union of India. I therefore decline to adjudicate, whether the

respondents under the law are required to at the stage of investigation before

the DG of CCI supply all material to the person being investigated against or

not.

17. Though the respondents on 1st April, 2016 and as recorded in the order

of that date reproduced above further agreed to grant full opportunity to the

petitioner including of adducing evidence and cross-examining witnesses

before the CCI also and it appeared that the same offered a viable solution

but the same was not acceptable to the senior counsel for the petitioner. In

the light of consent earlier given by the respondents in this regard and to

withdraw which no satisfactory reason is given, the same cannot be

permitted to be withdrawn without consent of the petitioner.

18. The modification of that part of the order sought is thus declined.

19. However as far as the other modification sought with respect to

furnishing to the petitioner copies of all the orders passed on the application

of any other person claiming confidentiality with respect to any document /

material is concerned, I am of the view that the consent of the respondents

thereto may affect third parties and thus the respondents cannot be held to be

bound thereby. The modification with respect thereto offered on 1 st April,

2016 and as recorded in the order of that date i.e. of furnishing the orders of

CCI upholding the confidentiality plea with respect to documents / material

after redacting therefrom the portions which may disclose the nature of the

documents / material in terms of Regulation 35(14) and Regulation 6 of the

Competition Commission of India (Lesser Penalty) Regulations, 2009 is

found to be more appropriate and is permitted.

20. Accordingly, the application is partly allowed. The order dated 2 nd

December, 2015 is modified to the extent that the respondents may furnish

to the petitioner orders passed on the application of any other person

claiming confidentiality with respect to any document / material after

redacting therefrom the portion which may disclose the nature of the

documents / material. Else the orders dated 30th November, 2015 and 2nd

December, 2015 remain the same and bind the respondents.

The application is disposed of.

RAJIV SAHAI ENDLAW, J SEPTEMBER 29, 2016 „gsr‟..