India: COMPAT Assumes Authority To Directly Initiate Investigation By Director-General

  • Rules that a consumer of electricity can file an information before Competition Commission of India. Restrictions / limitations could not be read into Section 19 (1) (a) of the Act to limit eligibility of an informant under the Act.
  • COMPAT rules that order refusing investigation under Section 26 (2) of the Act can be challenged in an appeal under Section 53B of the Act.
  • COMPAT in exercise of powers under the Act DG to investigate investigation for violation under the Act rather than remand to Competition Commission for reconsideration.


The Competition Appellate Tribunal ('COMPAT') allowed an appeal against an order of the Competition Commission of India ('CCI') and directed the Director-General ('DG') to investigate allegations of cartelization by the bidders in relation to procurement of coal.1 CCI concluded that material on record did not make out a prima facie case against Maharashtra State Power Generation Co. Ltd. ('MAHA Genco') and the bidders alleged to have been colluding. In an earlier round of litigation BSN Joshi & Sons Ltd ('BSN Joshi') successfully challenged a tender issued by MAHA Genco in relation to coal procurement services. Supreme Court of India ('Supreme Court') observed that private respondents had formed a cartel and that consequently, BSN Joshi's application for coal procurement services was directed to be reconsidered2 COMPAT relied on observations of the Supreme Court in BSN Joshi & Sons Ltd. v. Nair Coal Services Ltd. and Others and allowed the appeal and also directed the DG to investigate allegations of cartelization.

COMPAT's order does not set any boundaries on who can file an information before CCI. The informant in the present case was the advocate for BSN Joshi in the earlier round of litigation – COMPAT held that this was not a bar. More importantly, the direction to the DG to investigate rather than remanding the case to CCI is fairly unprecedented.


Supreme Court litigation

MAHA Genco floated a tender to appoint 'private liasoning agents' for supply of quality coal, transportation and its supervision. BSN Joshi the lowest bidder and yet was unsuccessful. It successfully challenged MAHA Genco's selection process and the Supreme Court held that the rejection was unfair3 However, despite Supreme Court upholding eligibility of BSN Joshi and giving directions, MAHA Genco did not consider it for the tender ('SC Order'). Consequently, a contempt petition under Contempt of Courts Act, 1971, was filed by BSN Joshi before the Supreme Court for non-compliance of SC Order. In the contempt petition, BSN Joshi made allegations of cartel-like behavior and substantially, Supreme Court accepted these allegations (even though Supreme Court was not the forum to arrive at a conclusion on whether a party was part of a cartel like arrangement). While disposing off the contempt petition, Supreme Court made following observations in its disposal order ('Contempt Order'):4

We are distressed to see that MAHAGENCO had been encouraging formation of a cartel and, thus, allowing the rate of transportation of coal to go high up. Unless a power generating company takes all measures to cut down such malpractices, the generation cost of electricity is bound to go higher and ultimately the same would be passed on to the consumers of electricity. We hope a public sector undertaking would take adequate and appropriate measures to meet the said contingency in future.

Thereafter, the tender was ultimately awarded to BSN Joshi. However, the contract in favor of BSN Joshi was terminated prematurely on the ground of unsatisfactory performance.

Information before CCI

An advocate practicing in Nagpur filed the present information relying substantially on the SC Order and the Contempt Order and alleged that MAHA Genco enabled the opposite parties to the information ('OPs') to act like a cartel. Based on the material before it, CCI, by a majority ('Majority Opinion') came to the conclusion that no case was made out against MAHA Genco and in fact, the informant, did not have locus standi to file the information before CCI ('CCI Order'). Majority Opinion noted that prices quoted were in a narrow band, but, that by itself was not sufficient to hold that there was a cartel or collusion. Majority Opinion further held that it was not possible for CCI to rule on alleged corrupt practices by MAHA Genco. The dissenting view ('Dissenting View') placed great reliance on the SC Order and Contempt Order and concluded that a prima facie case was made out for further investigation under Competition Act.

Issue before COMPAT

Two issues arose for consideration before COMPAT:

  • Whether the informant in the case had locus standi to file the information before CCI, and,
  • Whether CCI Order deserved to be set aside.


COMPAT held that section 19 (1) (a) of Competition Act, 2002 ('Competition Act') did not provide for any limitation on who could file an information. In the present case, informant was admittedly a consumer of electricity and hence, was affected by conduct of MAHA Genco. COMPAT also rejected another argument of OPs that informant had not made a complete disclosure before CCI, namely, that informant before CCI was associated with lawyers who represented BSN Joshi in the Supreme Court in the earlier round. However, COMPAT rejected this ground as well and held that the fact that the informant was practicing as an advocate with the counsel who had represented BSN Joshi in Supreme Court was not sufficient to justify the 'dubious' inference that the informant was prosecuting the case for BSN Joshi.

On allegations regarding cartel like behavior, COMPAT concluded that based on a reading of SC Order and Contempt Order, OPs were acting like a cartel. COMPAT also held that the observations of Supreme Court would be relevant and binding on CCI and therefore, CCI was bound to take cognizance of the fact that Supreme Court had expressed view on a related issue. COMPAT also held that the allegations of informant read with distribution of successful bidders, clearly made out a prima facie case of cartel like behavior by OPs and therefore, the matter ought to have been referred for investigation.

COMPAT approved the findings in the Dissenting Opinion and accepted the conclusions in the Dissenting View, including those relating to 'relevant market'. Thus, rather than remand the matter back to CCI, COMPAT itself directed investigation by the DG.

Our Analysis

COMPAT's order almost exclusively relies on observations of Supreme Court in the earlier round of litigation. The powers of a court to take cognizance of judgments of another court are provided for in sections 40 to 43 of Evidence Act, 1872 ('Evidence Act'). Issues of cartelization were not directly in issue before the Supreme Court and hence it is arguable that COMPAT ought not to have relied on those observations, particularly, keeping in mind Section 42 of the Evidence Act.5 Admittedly, while reviewing material on record at the preliminary stage to determine whether a case is fit for investigation, CCI only takes a prima facie view of material on record. Although COMPAT specifically rejected CCI's observations in CCI's Order, it may have been more appropriate to remand the matter to CCI for fresh reconsideration rather than COMPAT directing DG to investigate – a fairly drastic exercise of power by COMPAT.

Section 53B (3) of the Competition Act provides:

On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the direction, decision or order appealed against. (emphasis added)

COMPAT's power to direct DG to conduct the investigation may be considered beyond the scope of powers under section 53B (3) of the Competition Act. There does not appear to be a precedent of COMPAT restoring a complaint and also directing investigation by the DG. It is settled law that courts cannot direct the investigating agency how to carry out an investigation and powers of court are limited. Section 129B of Customs Act, 1962 and section 35C of Central Excise Act, 1944 use similar language as section 53B – 'pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority' (emphasis added) and there is no precedent for either tribunals exercising such powers. It is therefore a moot point, whether COMPAT has such powers6 and if so, whether any parameters are to be satisfied before COMPAT exercises such powers.


1 Shri. Surendra Prasad v. Competition Commission of India & Ors. Appeal No. 43 of 2014.

2 BSN Joshi & Sons Ltd. V. Nair Coal Services Ltd. And Others (2006) 11 SCC 548.

3 High Court of Bombay, Nagpur Bench, dismissed the writ petition (being Writ Petition No. 2444 of 2005). This dismissal was challenged in Supreme Court.

4 Order dated December 19, 2008, in Contempt Petition No. 245 of 2007.

5 Section 42 - Judgments, orders or decrees other than those mentioned in Section 41, are relevant if they relate to matters of a public nature relevant to the inquiry; nut such judgments, orders or decrees are not conclusive proof of that which they state.

6 See for instance I.T.O. v. Mohammed Kunhi 1969 SCR (1) 65 for the argument that tribunals have necessary powers to carry out their functions and Union of India v. Paras Laminates (P) Ltd. 1990 SCR (3) 789 for a discussion on when courts should refrain from interfering with the executive.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions