Dalmia Cement (Bharat) Ltd vs The Union Of India And 3 Ors
2023 Latest Caselaw 4464 Gua

                                                                                 Page No.# 1/24

                                                                      Reportable




                      THE GAUHATI HIGH COURT AT GUWAHATI
            (The High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh)

                              PRINCIPAL SEAT AT GUWAHATI

                                         WA 281/2023


Dalmia Cement (Bharat) Ltd.
Office Situated At 11th And
12th Floor Hansalaya Building,
15 Barakhamba Road, New Delhi.
And Also At 4th Floor, Anil Plaza Ii,
Abc, Gs Road, Guwahati-781005, Assam
Rep. by Mrs. Purbali Bora The Authorised
 Representative Of The Petitioner Company
                                                                            .......   Appellant

                                           VERSUS

1:The Union Of India And 3 Ors.
Vide The Ministry Of Corporate Affairs.
A Wing, Shastri Bhawan, Rajendra Prasad
Road, New Delhi-01, India

2:The Competition Commission Of India
9th Floor, Office Block-1, Kidwai Nagar(East)
New Delhi 110023

3:Director General
Competition Commission Of India, B- Wing
Hudco Vishala, 14 Bhikaji Cama Place
New Delhi-110066

4:Oil And Natural Gas Corporation Limited
Deen Dayal Urja Bhawan 5 Nelso Mandela
Marg Vasant Kunj, New Delhi- 110070, India
                                                                       .......    Respondents

Page No.# 2/24

BEFORE HON'BLE THE CHIEF JUSTICE HON'BLE MRS. JUSTICE SUSMITA PHUKAN KHAUND

Advocate for the Appellant : Dr. Ashok Saraf, Sr. Counsel Mr. N.N. Dutta, Advocate Mr. P.K. Bora, Advocate Advocate for the Respondents : Mr. T.J. Mahanta, Sr. Counsel Ms. K. Phukan, R-1 Mr. Dhrupad Das, R-2 & 3 Mr. B. Choudhury, R-4, SC Date of Hearing : 28.08.2023 Date of Judgment : 19.10.2023

JUDGMENT & ORDER (CAV)

(S.P. Khaund, J)

1. This intra-court writ appeal is preferred against the judgment and final

order dated 28.06.2023 passed by the learned Single Judge in connection with

Writ Petition (Civil) 76/2022. The appellant in this case is Dalmia Cement

(Bharat) Limited. The Union of India [Ministry of Corporate Affairs], the

Competition Commission of India, Director General of Competition Commission

of India and Oil & Natural Gas Corporation Limited [ONGC for short] are arrayed

as Respondent Nos. 1, 2, 3 and 4 respectively, and will hereinafter also be

referred to as respondent Nos. 1, 2, 3 and 4, for brevity.

2. Brief facts of this case are that an information u/s 19[1][a] of the

Competition Commission Act, 2002 (the Competition Act for short) was filed

before the respondent No. 2 by the respondent No. 4 [ONGC] on 31.07.2020

alleging cartelisation during the bidding process of four tenders floated by ONGC Page No.# 3/24

for the purchase of Oil Well Cement [hereinafter referred to as OWC] in the

years 2013, 2015, 2017 and 2018. The aforesaid information was registered and

numbered as Case No. 35/2020 against Shree Digvijay Cement Co. Ltd, Dalmia

Cement Bharat Ltd (appellant herein) and India Cements Ltd as opposite parties

No, 1, 2 and 3. The respondent No. 2, thereafter vide order dated 18.11.2020 in

the purported exercise of powers u/s 26(1) of the Act formed a prima facie

opinion that the appellant and some other cement manufacturing companies

rigged through collusion /cartelisation four tenders for the supply of OWC to

ONGC for the aforementioned years and fixed prices and allocated various

consignees amongst themselves. It was observed by the respondent No. 2 that

the appellant and some other cement manufacturing companies have prima

facie violated provisions of Sections 3[3][a], 3[3][b], 3[3][c] and 3[3][d] read

with Section 3[1] of the Act. The Respondent No. 2 (also referred to as the CCI

or the Commission for brevity) vide order dated 18.11.2020 u/s 26 of the Act

directed the respondent No. 3 to investigate into the matter and submit report

within a period of 60 days from the date of receipt of the order. It was also

further directed that if during investigation, involvement of any other entities

could be unearthed then the respondent No. 2 shall also ascertain the role, if

any of the person/persons who are in charge of the affairs of such entities or

with whose consent or connivance, the alleged conduct of the opposite-parties Page No.# 4/24

took place. It is stated that a year after the order u/s 26[1] of the Act was

passed, the respondent No. 3 issued notice dated 08.11.2021 u/s 36[2] read

with Section 41 of the Act directing the appellant to furnish information as was

enumerated in the notice. The copy of the order dated 18.11.2020 was not

annexed with the notice. The appellants were directed to furnish the information

by 19.11.2021.

3. It is contended that the appellant was unaware of the investigation

initiated under the direction of respondent No. 2 vide order dated 18.11.2020 till

the receipt of notice dated 08.11.2021. Thereafter, an application for inspection

of record was filed by the appellant on 15.11.2021 and the appellant was

allowed to examine the records vide order dated 24.11.2021. Although the

appellant company filed an application for certified copies of records on

25.11.2021, it was not provided with the full set of documents filed by the

ONGC [Respondent No.4] as certain excerpts of opinion as well as minutes of

the meeting of the tender committee were treated as confidential. After a

second request for documents the appellant received an oral communication

from the office of the respondent No. 2, CCI, on 28.11.2021 denying appellant's

request, on the grounds of confidentiality.

4. On perusal of the documents received on 30.11.2021 the appellant Page No.# 5/24

realised that the notice dated 08.11.2021 does not satisfy the standard of

legality and is liable to be set aside, being beyond the period of limitation and

for indulging in a roving and fishing enquiry. The appellant then filed an

application under Article 226 of the Constitution of India for issuance of writ of

mandamus/certiorari or any other appropriate writ which was registered as Writ

Petition (Civil) No. 76/2022.

5. It is averred that certain crucial documents relied by the respondent No. 2

before passing the impugned order dated 18.11.2020 were not provided to the

appellant despite repeated requests, which is against the principles of natural

justice.

6. The appellant is aggrieved by the order of the learned Single Judge dated

28.06.2023 in WP(C) 76/2022, wherein, it was held that the impugned order

dated 18.11.2020 passed by the Competition Commission of India was a well

reasoned order. The operation of the notice dated 8.11.2021 was not interfered

with, in the interest of facilitating a proper inquiry by the Director General (also

referred to as Respondent No. 3 or DG).

It is the fervent case of the appellant before the learned Single Judge that, if

the order dated 18.11.2020 passed under section 26[1] of the Act is not stayed

restraining the respondent Nos. 2 and 3 from proceeding further with the Page No.# 6/24

investigation, the reputation and commercial prospects of the company will be

tarnished. The effect of an order of investigation under section 26[1] of the Act

being very drastic inasmuch as an investigation against the public limited

company poses a risk of credit breach and may adversely affect its competitive

position in the business world even though the company may be completely

exonerated later.

7. The learned counsel for the respondents have submitted that the

impugned order dated 18.11.2020 passed by the Competition Commission of

India does not suffer from illegality. It is also submitted on behalf of the

respondents that the order dated 28.06.2023 in WP(C) 76/2022 does not suffer

from any infirmity. The order of the Commission, CCI dated 18.11.2020 under

Section 26[1] of the Act in case No. 35/2020 inter alia reflects that the

respondent No. 4 floated four tenders in the years 2013, 2015, 2017 and 2018

inviting bids for purchasing OWC for consignees located at different

geographical locations, but Shree Digvijay Cement Co. Limited, Dalmia Cement

[appellant] and M/s India Cements Limited acted in concert and quoted either

identical rates or cosmetically different rates and allocated the market amongst

themselves, in contravention to Section 3 of the Act. After scrutinising whether

the technical conditions to submit quotations were fulfilled, the ONGC,

respondent No. 4, could unearth collusion between Shree Digvijay Cement and Page No.# 7/24

Dalmia Cement in relation to tender No. 3 (ZNIVC13001) dated 04.07.2013.

7.1 In 2015 ONGC invited bids for tender No. 5 (ZNIAC15001) and both Shree

Digvijay Cement and Dalmia Cement submitted identical bids with the base price

of Rs. 8,000/- per unit for all destinations. Two foreign bidders - Schlumberger

and Classic Oil Field had also qualified for submission of the price bids. In order

to escape scrutiny and avoid price negotiations with ONGC, Shree Digvijay

Cement quoted lower rates for the Silchar and Jorhat consignee destinations

and Dalmia Cement (appellant-herein) in turn quoted lower rates for Bokaro and

Sonarpur consignees, thereby securing equal work distribution. Likewise in the

year 2017 similar nature of concerted agreement to quote exactly the same

price even though they belong to different geographical areas have been alleged

by the ONGC against appellant/Dalmia Cement and Shree Digvijay Cement.

7.2 It was also found that the ONGC has alleged that to arrive at the same FOR

rate of Rs. 8282.70 Shree Digvijay as well as Dalmia cement had indulged in

backward calculation to arrive at the same basic price. Thus it is manifest that

both the bidders had formed a cartel, thereby defeating the very purpose of

public tendering by resorting to unfair trade practices. When India Cements was

qualified for tender No. 7, collusion between Shree Digvijay Cement, Dalmia

Cement and India Cements emerged on scrutiny by ONGC indicative of some Page No.# 8/24

kind of concert or agreement amongst the same cement companies to share the

market amongst themselves by way of geographical allocation.

7.3. It was also alleged by the ONGC that it floated tender No. 8

[ZNINC18001] dated 31.08.2018 and collusion between the three cement

companies as bidders could be detected. A comparative statement of bids

submitted by Shree Digvijay Cement, Dalmia Cement and India Cements in all

the aforementioned four tenders depicted their parallel rate offering as

submitted by ONGC. The respondent No.4/ONGC has alleged that based on the

price bids submitted by the domestic bidders in response to tender Nos. 3, 5, 7

and 8, it became clear that the appellant/Dalmia Cement, Shree Digvijay and

India Cements had colluded in submitting identical base rates, ex-works rate

and FOR rate/unit qua most of the consignees destination and the OPs (Dalmia,

Digvijay and India Cements) had a tacit understanding in escalating and

inflating the rates together. Although Shree Digvijay, Dalmia and India cements

are located at different geographical locations in India, yet the rates quoted by

all the three bidders are identical/nearly identical in most tenders which cannot

be a matter of coincidence. The three cement companies have endeavoured to

geographically trifurcate the market amongst themselves. Similar rates are

quoted for Mumbai Port, Chennai Port and Kolkata Port by the three cement

companies. The respondent No. 4/ONGC who is dependent on OWC is bereft of Page No.# 9/24

any alternative and hence is compelled to pay a higher price due to the unholy

nexus between the three cement companies. ONGC has also submitted before

the Commission that a letter dated 26.08.2019 was issued by the Vigilance

Division of the Ministry of Petroleum and Natural Gas, Govt. of India to the Chief

Vigilance Officer, advising to refer the matter of unfair trade practices by the

bidders to the Competition Commission of India. ONGC/respondent No.4 had

also sought confidentiality over the third party documents that were submitted

by the bidders against the tenders invited by the ONGC.

8. Heard Dr. Ashok Saraf, learned Senior Counsel for the appellant assisted

by learned counsel Mr. N.N. Dutta and Mr. P.K. Bora. Also heard Mr. T.J.

Mahanta, learned Senior Counsel for respondent Nos. 2 & 3 assisted by learned

counsel Mr. D. Das and heard learned counsel Ms. K. Phukan, for respondent

No. 1 and Mr. B. Choudhury, Standing Counsel, ONGC for respondent No. 4.

Arguments: the appellant

9. It is contented by the appellant that a writ petition under Article 226 of

the Constitution of India, challenging the investigation order is maintainable in

view of the Judgment dated 05.12.2018 passed by the Hon'ble Supreme Court

of India in Competition Commission of India Vs. Bharti Airtel reported in

(2019) 2 SCC 521.

Page No.# 10/24

10. It is averred that the only ground on which the respondent No. 2 formed

an opinion of a prima facie case for investigation by the Director General,

respondent No. 3, was based on the allegation that the writ petitioner/appellant

conspired and formed a cartel with other manufacturers while making quotation

of identical rates in the tender process acting in contravention to Section 3(3)

(a), 3(3)(b) and 3(3)(c) read with Section 3(2) of the Act of 2002, without

appreciating the fact that there were a handful of suppliers of the OWC in India

and a mere price parallelism cannot be a ground to record a prima facie

satisfaction of malpractices or anti-competitive conduct. Reliance in support of

the above contention was placed on the Supreme Court Judgment in the case of

Rajasthan Cylinders and Containers Limited Vs. Union of India and

Anr., reported in (2020) 16 SCC 615, wherein, the Hon'ble Supreme Court

held that mere price parallelism cannot be a ground for prima-facie conclusion

of collusive agreement of bid rigging and thus, the respondent no. 2 ought not

to have issued the direction under Section 26(1) of the Act, as there were no

grounds for directing such an investigation. The petitioner/appellant had

portrayed a strong prima facie case for grant of an interim order but the

decision of Hon'ble the Supreme Court in Rajasthan Cylinders and

Containers Limited (supra) has been misconstrued as the learned Single

Judge held that this decision was not applicable in the present case, because Page No.# 11/24

the judgment and order in Rajasthan cylinder and Containers Limited

(supra) was passed after a final order whereas, the instant case is at its initial

stage. It is contended that the ratio of the decision is binding and not the stage

at which the case is pending.

11. Learned Senior Counsel Dr. Saraf laid stress in his argument that the

information of the instant case was filed by the respondent no. 4 in the year

2022 and anti competitive practice was alleged against the appellant for the

years 2013, 2015, 2017 and 2018. No cogent reasons were assigned justifying

the delay in filing the information under section 19 (1)(a) of the Act. By Section

14 of the Competition [Amendment] Act, 2023, two provisos have been inserted

in sub-section [1] of Section 19 of the Competition Act, 2002. As per the first

proviso to sub-section [1] of Section 19, the Commission shall not entertain an

Information or a reference unless it is filed within 3 [three] years from the date

on which the cause of action has arisen. As per the second proviso to sub-

section [1] of Section 19, an Information or a reference may be entertained

after the period specified in the first proviso if the Commission is satisfied that

sufficient cause is shown for not filing the information or the reference within

such period after recording its reasons for condoning such delay.

11.1. The learned Senior Counsel for the appellant has submitted that Page No.# 12/24

in Case no. 34/2020 and other connected cases, the Competition Commission of

India observed that the lease deed referred to in matters dates back to as early

as July, 2010, October 2010 and June 2014 and the informant had offered no

justifiable reasons for approaching the CCI at this belated stage.

12. It is also contended that the respondent no. 3, DG transgressed the

investigation order and conducted a roving and fishing enquiry. The appellant is

also aggrieved because it was not provided with certain vital documents which

were relied upon by the respondent no. 4 in support of its information before

the respondent No. 2. The appellant was denied the copies of these documents

retained by the respondents leading to deprivation of opportunity to offer an

explanation. Thus, the respondents acted against principles of natural justice.

The appellant had a strong prima facie case with the balance of convenience

tilting in its favour. The appellant will indeed suffer irreparable loss if the

operation of the notice dated 18.11.2021 is not stayed. Such an order will

adversely affect the appellant's competitive position and reputation in the

business world, even though, it may be exonerated later from such charges of

anti competitive conduct. The appellant has thus prayed for an order to set

aside/stay the order dated 18.11.2020 passed by the respondent No.

2/Competition Commission of India (CCI).

Page No.# 13/24

Arguments: The respondents

13. Mr. T.J. Mahanta Senior Advocate argued on behalf of the respondents

that the writ petition against the order under section 26(1) of the Act was filed

at a premature stage. In the event respondent no. 2 decides to proceed further

after receipt of a report from the respondent no. 3 with findings that there was

contravention of any of the provisions of the Act, the appellant can avail the

remedy of appeal under Section 53A of the Act. It has further been submitted

by the respondents' counsel that the information under Section 19(1) of the Act

of 2002 more particularly Annexure-1 of writ petition was forwarded by the

respondent No. 4 against the opposite parties i.e.

O.P. No. 1 Shree Digvijay Cement,

O.P. No. 2 Dalmia Cement, and

O.P. No. 3 M/s India Cements Limited.

Thereafter, notices were issued against the opposite parties and the

impugned order dated 18.11.2020 was passed against the opposite party Nos.

1, 2 (Appellant) and 3.

14. The learned counsel for the respondents have supported the decision of

the Commission, CCI. It is also submitted on behalf of the respondents that the

order dated 28.06.2023 in connection with WP(C) 76/2022 has been justly Page No.# 14/24

passed. It is submitted that an investigation on the information/complaint of the

respondent no. 4 ought not to be interjected at the initial stage. It is submitted

that in terms of the penultimate order dated 18.11.2020, under Section 26 of

the Act, the CCI directed the respondent no. 3, DG to investigate into the matter

and notice was issued on 08.11.2021 under Section 36(2) read with Section 41

of the Act directing the appellant to furnish information as enumerated in the

notice. The aforementioned orders are not barred by limitation as per the newly

inserted sub-section 1 of Section 19 of the Competition Act of 2002. The

Commission, in connection with Case No. 35/2020 considered the comparative

statements provided by the ONGC-respondent No. 4. The spreadsheet of the

comparative statements with the breakdown of the quoted rates, has been

meticulously dealt with by the Commission. It is easily deducible from the

comparative statements of the tender process of Shree Digvijay Cement, Dalmia

Cement (Appellant) and India Cement that the companies have quoted identical,

ex-work rates, FOR rates/units etc., relating to four tenders of 2013, 2015, 2017

and 2018. After a meticulous scrutiny of the comparative statements and

bidding prices along with the information provided by the ONGC-respondent no.

4, it was decided that the appellant, along with India Cement and Digvijay

Cement have acted in violation of the provisions of Section 3 of the Act and the

DG was directed to investigate into the role of the appellants, Digvijay Cement Page No.# 15/24

and India Cement as well as the other persons or officers responsible for

indulging in anti competitive conduct.

Findings of the Commission

15. It would be apt to reiterate that the commission meticulously scrutinised

the comparative statements provided by the ONGC-respondent no. 4 with

respect to the four tender processes of the years 2013, 2015, 2017 and 2018

for OWC. The ONGC had provided a detailed statement in a tabulated form

along with the information. The prominent statements of the aforementioned

four tenders which depict identical and similar base rates, ex-works rate, FOR

rate/ unit etc were culled out for the purposes of conciseness.

15.1. The Commission, CCI considered the information (dated

31.07.2020) in its ordinary meeting held on 27.10.2020. The CCI has also inter-

alia observed that the cement market is subjugated by few players and is thus

prone to cartelisation. The OWC is a special kind of cement, used to fill the

space between the well walls and steel lining tubes and the cements sets slowly

to give the slurry time to reach a larger depth of the oil well and develop

strength for stability in high temperature. As there are few suppliers of OWC in

the market, it becomes easier for the cement companies to coordinate their

conduct. The Commission had analysed the facts and allegations presented in Page No.# 16/24

the information.

15.2 It was observed by the Commission that the comparative prices [Base

rates as well as FOR rates] quoted by Shree Digvijay and Dalmia Cements in the

impugned Tender No. 3 (2013) appears to be the same for the locations covered

by the Mumbai Port, Chennai Port and Kolkata Port except Kolkata MBA. It was

also decided by the Commission, CCI that the comparative prices relating to

tender No. 5 [2015] reveals that Shree Digvijay Cement and Appellant/Dalmia

Cement submitted identical bids. The Commission also noted that two foreign

bidders Schlumberger and Classic Oil Field had also qualified for the price bid

submission for this tender and the Classic Oil Field was the L1 bidder for

Mumbai and Chennai. Due to urgency, the Classic Oil Filed was disqualified to

deliver the consignment for Mumbai and Chennai despite being the L1 bidder.

Moreover, the appellant along with Digvijay and Dalmia Cement through

representations asked for BIS certification of international bidders.

15.3 The question of cartelisation was also raised by Classic Oil Field and

also by Tender Committee relating to Tender No. 5. After a detailed deliberation,

the Commission held that Tender No. 5 is indicative of some sort of

understanding between Digvijay and Dalmia Cement [appellant]. It was also

held by the Commission that price fixing was observed between both the Page No.# 17/24

cement companies in relation to Tender No. 5.

15.4 In relation to Tender No. 8, it was held that the cement companies

Shree Digvijay, Dalmia and India Cements submitted identical ex-works price

bids of Rs. 7350/- qua all consignees which does not appear to be a mere

coincidence. On evaluation, it was found that an international bidder, namely,

Bell Weather was the L1 bidder from Mumbai and Chennai whereas the above

three cement companies were L1 bidder from Kolkata where the bid was

evaluated on the basis of ex-works price of domestic bidder and FY price of

foreign bidder. It was observed by the Commission that with relation to Tender

No. 8, the cement company trifurcated for market amongst themselves and

quoted suitable rates for different regions and different posts.

16. The Commission formed an opinion that :-

"36. In view of the foregoing, the Commission prima facie notes that the aforementioned 4 impugned tenders were rigged through collusion/cartelization among the OPs as stated above, who fixed the prices and allocated various consignees among them, thus prima facie appear to be in contravention of provision of Sections 3[3][a], 3[3][b], 3[3][c], and 3[3][d], read with Section 3[1] of the Act.

37. In view of the foregoing, the Commission is of the opinion that there exists prima facie case which requires investigation by the DG, to determine whether the alleged anti-competitive conduct has resulted in contravention of the provision of Section 3 of the Act."

17. The Commission then directed the Director General to cause an

investigation to be made into the matter under the provisions of Section 26[1] Page No.# 18/24

of the Act and to submit report within a period of 60 days from receipt of the

direction. With respect to violation of the provisions of Section 3 of the Act, the

Director General/respondent no. 3 was also directed to investigate into the role

of the persons/officers who were in charge of and responsible for the conduct of

the activities of such entities, who may be found to have indulged in anti-

competitive conduct at the time the alleged contravention was committed as

well as persons/officers in whose consent or connivance the alleged

contradiction was committed, in terms of the Section 48 of the Act.

Consideration of submission

18. We have given a thoughtful consideration to the submissions made at the

Bar. It has been aappositely held by the learned Single Judge that the decision

of Hon'ble the Supreme Court in Rajasthan Cylinders and Containers

Limited (supra) was rendered on appeals filed against orders passed by the

Competition Appellate Tribunal, whereby the Competition Appellate Tribunal had

upheld the findings of the CCI that the appellant/suppliers of liquefied

petroleum gas (LPG) cylinders to the IOCL had indulged in cartelization, thereby

influencing and rigging the prices, thus violating the provisions of Section 3(3)

(d) of the Act. The CCI had already passed the final order holding that the

appellants were guilty of contravention of Section 3(3)(d) and Section 3(3)(a) of Page No.# 19/24

the Act and imposed penalties in the Form of fines under Section 27 of the Act.

Several affected parties preferred statutory appeals before the Competition

Appellate Tribunal who, by its judgment upheld the findings of the CCI. Thus,

the Supreme Court Judgment in the case of Rajasthan Cylinders and

Containers Limited (supra) was rendered after final orders had been passed

whereas, the appellant is before this Court at a premature stage of proceeding

and it was thereby held by the learned Single Judge that the observations made

in Rajasthan Cylinders and Containers Limited (supra) were not directly

applicable to the facts and circumstances to this case.

19. It could be deciphered from the order of the CCI dated 18.11.2020 in

connection with Case No. 35/2020 and the order of the learned Single Judge

dated 28.06.2023 in connection with WP(C) 76/2022 that this case is at the

premature stage. The information submitted by the respondent no. 4 under

Sections 19(1)(a) of the Act, 2002 was taken into consideration by the CCI. The

information was relating to cartelization and rigging of four tenders of 2013,

2015, 2017 and 2018 by the appellant along with two other cement companies

and a direction for investigation was ordered by the CCI to unearth if the

cement companies including the appellants had acted in contravention to

section 3(3)(a) 3(3)(c) 3(3)(d) read with Section 3(1) of the Act. The Director

General (DG) was directed to cause an investigation under the provision of Page No.# 20/24

Section 26(1) of the Act. It is true that notices were issued after almost a year

i.e. on 08.11.2021. Aggrieved by the order dated 18.11.2020 and the notice

dated 08.11.2021, the appellant preferred the writ petition being WP(C)

76/2022. As the operation of the notice dated 08.11.2021 was not interfered

with by the learned Single Bench, the appellant is before this Court. The

appellant is speculating the ramifications of the investigation by the DG under

Section 26(1) of the Act. It is submitted by the appellant that the company's

reputation is at stake. It is submitted that if the companies' reputation is

marred, it could adversely impact its future business prospect.

20. The ONGC-respondent no. 4 had forwarded all the comparative statements

of the pricing bids and the tender processes pertaining to the four tenders of

2013, 2015, 2017 and 2018. The figures tabulated relating to the bidding

process of the four tenders have been scrutinized by the CCI. These figures

were also elaborately discussed and dealt with by the learned Single Judge

while passing the order dated 28.06.2023 in connection with WP(C) 76/2022.

The appellant is silent about these facts and figures.

21. Apart from offering a bald denial, the appellant has failed to refute these

statements at this preliminary stage. Interference into the merits of the case

without specific denial by the appellant is not warranted at the initial stage. In Page No.# 21/24

case the appellant's company is exonerated from the allegation of rigging and

cartelization, it can regain uphold its reputation.

22. The complaint/information and the case no. 35/2020 initiated on the

information by the ONGC-respondent no. 4 does not appear to be barred by

limitation as contended by the appellant. It does not appear that the

Commission, CCI had conducted a roving and fishing enquiry and has

transgressed its jurisdiction. The notice under Section 41 read with Section

36(2) of the competition Act dated 08.11.2021, more particularly, Annexure(C)

of the writ petition has been impugned. A scrutiny of the notice reflects the

nature of the investigation ordered by the CCI. The format of the notice

however reflects that to cause the investigation certain information has been

solicited by the CCI from the appellant. At this juncture, it cannot be held that

the respondent no. 3 has gone beyond the scope of the impugned order dated

18.11.2020 and has conducted a roving and fishing enquiry.

23. The appellant is also aggrieved that the full set of documents filed by the

respondent no. 4 were not provided to the appellant. An application was filed by

the appellant on 15.11.2021 to examine the records. Although, the appellant

filed an application for certified copies of the records on 25.11.2021, they were

not provided certain documents. It is alleged that the respondent no. 2, CCI Page No.# 22/24

relied on these documents before passing the impugned order dated 18.11.2020

and as these documents were not provided to the appellant, the CCI acted

against the principles of natural justice. This contentions of the appellant holds

no water. The order of the CCI dated 18.11.2020 clearly reflects on what

grounds investigation was initiated under Section 26(1) of the Competition Act.

Moreover, it is true that at this premature stage, when notice dated 08.11.2021

has been issued, an opinion cannot be formed that such a notice does not

satisfy the standards of legality and that the notice is issued in furtherance of a

roving and fishing enquiry. At this juncture, the operation of the notice cannot

be stayed as the appellant is apprehending that he will be placed in a

disadvantageous position and his reputation will be tarnished. It has been

opined by the CCI and has also been held by the learned Single Judge that a

prima facie case necessitating investigation exists. It would not be justified to

stay the operation of the notice dated 08.11.2021.

24. The appellant has relied on the decision of Hon'ble the Supreme Court of

India in Competition Commission of India Vs. Bharti Airtel Limited and

Ors. (Supra) wherein, it has also been observed that:-

"97. The above reasoning and the principles enunciated, which are consistent with the settled canons of law, we would adopt even in this case. In the backdrop of these determinants, we may refer to the provisions of the Act. Section 26, under its different sub- sections, requires the Commission to issue various directions, take decisions and pass orders, Page No.# 23/24

some of which are even appealable before the Tribunal. Even if it is a direction under any of the provisions and not a decision, conclusion or order passed on merits by the Commission, it is expected that the same would be supported by some reasoning. At the stage of forming a prima facie view, as required under Section 26(1) of the Act, the 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. Such view should be recorded with reference to the information furnished to the Commission. Such opinion should be formed on the basis of the records, including the information furnished and reference made to the Commission under the various provisions of the Act, as aforereferred. However, other decisions and orders, which are not directions simpliciter and determining the rights of the parties, should be well reasoned analyzing and deciding the rival contentions raised before the Commission by the parties. In other words, the Commission is expected to express prima facie view in terms of Section 26(1) of the Act, without entering into any adjudicatory or determinative process and by recording minimum reasons substantiating the formation of such opinion, while all its other orders and decisions should be well reasoned.

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98. Once we hold that the order under Section 26(1) of the Competition Act is administrative in nature and further that it was merely a prima facie opinion directing the Director General to carry the investigation, the High Court would not be competent to adjudge the validity of such an order on merits. The observations of the High Court giving findings on merits, therefore, may not be appropriate."

25. Reverting back to the case at hand, it is discernable from the impugned

order of the CCI dated 18.11.2021 in case No. 35/2020 that an opinion was

formed by the CCI on the basis of the information received from the respondent

no.4 - ONGC, after the documents provided by the ONGC were taken into

consideration to express that in no uncertain terms the CCI is of the view that a Page No.# 24/24

prima facie exists, requiring issuance of direction for investigation to the DG.

The learned Single Judge was therefore reluctant to stay the operation of the

notice. In the light of the decision of Hon'ble the Supreme Court of India in the

case of Competition Commission of India Vs. Bharti Airtel Limited and

Ors. (Supra), this Court is reluctant to adjudge the validity of such an order on

merits. However, it is hereby provided that the copies of the complete set of

documents relied upon by the CCI which the appellant has been allowed to

inspect and excluding the documents for which privilege is claimed shall

forthwith be provided to the appellant so as to give a proper opportunity of

defence to the appellant in the subsequent proceedings.

26. In the wake of the foregoing discussions, the appeal is hereby dismissed

as this appeal is bereft of merits with the above observation.

27. No order as to cost(S).

                         JUDGE             CHIEF JUSTICE




Comparing Assistant