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17 September 2019

Competition - DG can investigate matter beyond CCI order of investigation

Delhi High Court has held that an order of CCI under Section 26(1) of the Competition Act which triggers investigation by DG, does not circumscribe the scope of investigation by DG only to such matters which are subject matter of the original complaint.

It noted that the direction given to the DG was to investigate “the matter”, and this enabled the DG to examine any other violation also that may have come to his notice while undertaking the investigation.

The High Court in its judgement dated 13-9-2019 observed that Supreme Court in CCI v. Steel Authority of India Limited made it clear that the opinion formed by the CCI at the stage of issuing directions to the DG under Section 26(1) is, by no means, intended to restrict the opinion that may be formed by the DG on such investigation.

Court in CCI v. Grasim Industries Ltd. set aside the order of the single judge and restored the order by CCI. Relying on Excel Crop Care Ltd v. CCI, it observed that the language of the order passed by CCI is broad enough for DG to investigate violation of Section 4 of Competition Act.

Holding that the DG’s report was not violative of principles of natural justice, the Court did not concur with the views of the Single Judge in its impugned order that the Opposite Party was deprived of an opportunity to present its case before the DG.

DG was hence held to be within his powers in terms of Section 26(1) read with Regulations 18, 20 and 41 of the CCI (General) Regulations 2009, to submit a report regarding the violation of Section 4, although the direction issued by the CCI under Section 26(1) was with reference to information pertaining to violation of Section 3(3)(a), (b) and (c) of the Competition Act.