In an unprecedented move, the Delhi High Court on Tuesday, December 2, 2014, ruled that the Competition Commission of India (CCI) can appeal stay orders on investigations, by virtue of being ‘a party to the dispute’ in the proceedings. This order came in light of the appeal against a stay order passed by learned Single Judge of the Delhi High Court. It stayed CCI from probing into JCB India Ltd. and JC Bramford Excavators.
CCI was investigating JCB based on prima facie evidence that it had abused its dominant position. In 2011, JCB had moved to the High Court against Bull Machines, alleging that the latter had stolen a design developed by the former. Bull Machines in turn alleged before the CCI that JCB was abusing its dominant position in the market.
Having found prima facie evidence in support of the abuse, CCI launched a Director General investigation into JCB India as well as JC Bramford Excavators. JCB filed an application to quash this order before the Single Judge of the Delhi High Court. The Judge struck down the request in an interim order. This order directed JCB to provide the required information for the DG investigation, subject to the condition that no final order/ report was to be passed by the CCI or the DG.
However the lack of support from JCB resulted in the CCI conducting a raid in the JCB offices in the NCR. Consequently a fresh application was made by JCB to the Single Bench of the Delhi High Court. This time the Single Bench stayed all proceedings of the CCI against JCB, including the probe. The Court further passed an order stating that the CCI was required to file an affidavit, ‘indicating the material available and the reasons that prompted the drastic action’.
This stay order was appealed by CCI before the Division Bench of the Delhi High Court. It was argued on the well settled ground that the Courts should not interfere with investigation. However, questions were raised about the standing of CCI to raise such appeals. It was felt that the informant being the aggrieved party should have filed the appeal instead. The bone of contention was therefore whether the CCI could file such an appeal since it itself had ordered the probe against JCB in the first place.
The Bench, comprising of Chief Justice G. Rohini and Justice Rajiv Sahai Endlaw passed the judgment on this issue. They held that CCI could indeed appeal such an order since it was one of the ‘parties in the dispute’.
The Bench justified CCI to be a party by saying that, “We are of the view that since the investigation by the director general forms part of the regulatory jurisdiction exercised by CCI, any order hampering the investigation process directly affects the statutory functioning of CCI. Under the circumstances, the right to assail an order staying the investigation cannot be confined only to the informant, but the CCI also being an equally aggrieved party, is entitled to do so.”
However, it also highlighted that interference by the Division Bench at the present stage is “unwarranted” and directed the parties to make their submissions before the Single judge who is hearing the matter.
This ruling has significant ramifications, as the CCI, a regulatory body, has been recognized as a ‘party to the dispute’ in proceedings concerning parties/ matter which it is investigating. They now have recourse in cases where stay orders against such proceedings have tied their hands and reduced them to inaction.
This post has been authored by Aishwaria Iyer, a third year student at the West Bengal National University of Juridical Sciences.
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