Delhi High Court1 has given yet another boost to the powers of the Competition Commission of India (CCI) when it held that the CCI has inherent powers to review or recall its order.
A Complaint was filed before the CCI that Google Inc. has abused its dominant position in the internet advertising space by promoting its vertical search services like Youtube, Google News, Google Maps, etc. In other words, these services would appear predominantly during a search result on Google, irrespective of their popularity or relevance. On April 15th, 2014 the CCI ordered Director General (DG) under Section 26(1) of the Competition Act, 2002 (Act) to investigate into the affairs of Google Inc. As per Section 26(1), the CCI orders an investigation on the basis of prima-facie opinion and at this stage, the Act does not provide any right of being heard to the parties.
Therefore, Google Inc had filed an application before the CCI for recall of its order dated April 15th, 2014. However, the application was rejected on the ground that CCI lacked jurisdiction to entertain any such application.
Further, the three appellants i.e. i) Google Inc., California, United States of America (USA), ii) Google Ireland Ltd. and, iii) Google India Pvt. Ltd., Bangalore, filed the writ petition impugning, the order dated 15th April, 2014 of the CCI. The CCI dismissed the application filed by the appellants for recall of the order dated 15th April, 2014 as not maintainable and restrained the CCI from carrying out any further proceedings against the appellants pursuant to the order dated 15th April, 2014.
The main issue was whether an administrative body like CCI had inherent powers to review or recall its order passed under section 26(1) in the absence of any specific provisions in the Competition Act, 2002?
The CCI, before it passes an order under Section 26(1) of the Act directing the DG to cause an investigation to be made into the matter, is required to, on the basis of the reference received from the Central or the State Government or a statutory authority or on the basis of the information/complaint under Section 19 or on the basis of its own knowledge, form an opinion that there exists a prima facie case of contravention of Section 3(1) or Section 4(1) of the Act.
The statute does not provide any remedy to a person/ enterprise, who/which without being afforded any opportunity, has by an order/direction under Section 26(1) been ordered/directed to be investigated against/ into. Though Competition Appellate Tribunal [COMPAT] has been created as an appellate forum against the orders of CCI but its appellate jurisdiction is circumscribed by Section 53A of the Competition Act and no appeal is prescribed against the order of CCI under Section 26(1) of the Act. The said person/ enterprise, in the absence of any remedy, has but to allow itself to be subjected to and participate in the investigation.
CCI can order/direct investigation only if forms a prima facie opinion of violation of provisions of the Act having been committed. Our Constitutional values and judicial principles by no stretch of imagination would permit an investigation where say CCI orders/directs 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.
Even otherwise, the remedy under Article 226 of the Constitution of India has been held to be a part of the basic structure of our constitution. The rule of availability of alternative remedy being a ground for not entertaining a petition under Article 226 is not an absolute one and a petition under Article 226 can still be entertained where the order under challenge is wholly without jurisdiction or the like.
A Single Judge of this Court in Asahi Glass India Vs. Director General of Investigation2 held a writ petition under Article 226 to be maintainable against an order/ direction for investigation by the DG under the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) (which the Competition Act repeals vide Section 66 thereof), of course in cases of inherent lack of jurisdiction or abuse of process of law or jurisdictional issues.
Supreme Court3 held that if a wrong and illegal administrative act can in the exercise of powers of judicial review be set aside by the Courts, the same mischief can be undone by the administrative authority by reviewing such an order if found to be ultra vires and that it is open to the administrative authority to take corrective measure by annulling the palpably illegal order.
The most relied judgment of Competition Commission of India Vs. Steel Authority of India Ltd.4 as relied by both the parties is only on the right of hearing of the person/enterprise complained/referred against at the stage of Section 26(1) of the Act. What it lays down is that CCI at that stage is not required to issue notice to such a person/enterprise. The question whether CCI is entitled to recall/review the order so made did not arise for consideration therein. The fact that said judgment holds that CCI is not required to hear the person complained/referred against before ordering investigation cannot lead to an inference that such a person even if approaches the CCI for recall/review of such an order is not to be heard.
It is in the discretion of the CCI to hear or not to hear the person/enterprise complained/referred against at the stage of Section 26(1) of the Act, CCI cannot be held to be without jurisdiction to recall/review the order.
Court held that mere filing of an application for review/ recall would not stall the investigation by the DG, CCI 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, CCI, is to in the interregnum proceed or not. Court further held that 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 and ensuring that the reasons which prevailed with the Supreme Court in SAIL (supra) for negating a right of hearing to a person are not subverted.
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. In fact, it is up to the CCI to also upon being so called upon to recall/ review its order under Section 26(1) of the Act to decide whether to, pending the said decision, stall the investigation or not, as observed hereinabove also. The jurisdiction of review/recall would be exercised only if without entering into any factual controversy, CCI finds no merit in the complaint/reference on which investigation had been ordered. The application for review/recall of the order under Section 26(1) of the Act is not to become the Section 26(8) stage of the Act.
CCI has the power to recall/review the order under Section 26(1) of the Act but within the parameters and subject to the restrictions discussed above.
This decision of the Delhi High Court shows that the remedy of writ petition has made heavy inroads into the functioning of the CCI. This decision also stands as testimony to yet another successful lawyerly tactic to prolong investigations. While CCI can no longer reject an application for review or recall of its order, it would be interesting to see whether the CCI actually reviews or recalls any of its order while disposing of any such application.
1 In the case of Google Inc. and Others v. Competition Commission of India, W.P. (C ) No. 7084/ 2014
3. Vinod Kumar Vs. State of Haryana (2013) 16 SCC 293
4. MANU/SC/0690/2010 : (2010) 10 SCC 744
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