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2022 (1) TMI 1313 - HC - Indian LawsCartelization - representation alleged that when natural rubber price increased, the tyre prices were increased in a concerted manner by the domestic major tyre manufacturers, however, when the price of natural rubber decreased, the tyre prices were not reduced by the domestic major tyre manufacturers and as such, they indulged in price parallelism and cartelization - Section 3 of the Competition Act, 2002. Whether the reference made under Section 19(1)(b) of the Competition Act is invalid and non est in law? - Whether Regulation 15(3) is mandatory or directory? - HELD THAT:- A conjoint reading of Regulation 15(3), Regulation 15(5), Regulation 40 and Section 15(c) would indicate the clear wisdom of the Legislature that the non compliance of the regulations in each case shall not invalidate the proceedings initiated by the CCI. Only in two situations, namely, if there is an irregularity or non compliance of the procedures affecting the merits of the case, Regulation 15(3) will come into operation. Secondly, if there is any irregularity or non compliance of the procedures or regulations resulting in miscarriage of justice alone, Regulation 15(3) will take effect. In all other cases not affecting the merits of the case or causing miscarriage, the non compliance of the regulations will not invalidate the proceedings before the CCI. The Apex Court in STATE OF PUNJAB AND ANOTHER VERSUS SHAMLAL MURARI & ANR [1975 (10) TMI 105 - SUPREME COURT] has settled this issue holding that while dealing with procedural law, we must always remember that procedural law is not to be a tyrant, but a servant, not an obstruction, but an aid to justice. This legal position has been reiterated by the Apex Court in yet another decision in RANI KUSUM VERSUS KANCHAN DEVI & ORS. [2005 (8) TMI 709 - SUPREME COURT]. When the Competition Commission has proceeded to order investigation after forming an opinion that a prima facie case exists, the rights of the parties cannot be complained of being affected in any manner at this stage, because the order for investigation does not attract any civil consequences, inasmuch as it does not determine the issue raised against the parties finally. Although certain procedural lapses take place while arriving at such a prima facie opinion, that itself will not make the entire proceedings invalid, because the parties are given opportunities to take part in the investigation and thereafter to submit their objections before the Commission, to enable the Commission to arrive at a just and proper conclusion and pass a final order under Section 27 - the view taken by the learned single Judge that the writ Court cannot interfere with the preliminary order directing investigation on the ground of procedural lapses either in making the reference or entertaining the same, does not call for any interference by this Court. Whether the order dated 24.6.2014 passed by the Commission under Section 26(1) of the Competition Act, shall be liable to be quashed? - HELD THAT:- The allegations of the AITDF in the representation dated 28.11.2013 to the MCA were that the opposite parties, having control over 90% of the tyre production in India, are engaged in abusing their dominant position through price parallelism under the aegis of cartel association-Automotive Tyre Manufacturers' Association (ATMA) and also raising the prices of tyres and tubes on the pretext of increase in the price of natural rubber and other inputs, but the subsequent reduction in the price of the raw material has not been followed by the corresponding decrease in the price of tyres, resulting in huge loss to the innocent public - Moreover, whether the order or direction issued under Section 26(1) of the Competition Act is appealable or not, is concerned, the said issue is no longer res integra. While considering the very same issue, the Apex Court in Competition Commission of India v. Steel Authority of India Limited, [2010 (9) TMI 215 - SUPREME COURT] has held vividly that the order or direction issued under Section 26(1) after forming a prima facie opinion is a direction simpliciter to cause an investigation in the matter and it does not effectively determine any right or obligation of the parties to the lis, because it passes the interim order or direction at the preliminary stage without recording a finding which would bind the parties and it would not make the direction as an order which affects the rights of the parties and therefore, is not appealable. Whether the complaint/reference made by the fourth respondent-AITDF is hit by the principles of res judicata? - HELD THAT:- The AITDF made a complaint against the appellant and others relating to the year 2011-12, 2012-13 and 2013-14. Since the present complaint is not related to 2008, whereas it alleges that the appellant and others have indulged in cartelization during the period from 2011-12 to 2013-14 by indirectly determining the sale of tyres and tubes in the domestic market contravening the provisions of Section 31 read with Section 33 of the Competition Act, the CCI is empowered to inquire into the fresh complaint for each year, for, Section 27 of the Competition Act empowers the CCI to pass an adjudicatory order for each year of cartelization. The principles of res judicata may not apply, inasmuch as the expression 'for each year of the continuance of such agreement', the CCI is empowered to investigate the complaint of cartelization, as it concerns with each year. Moreover, if the CCI taking up the complaint for the year 2008, finding want of acceptable evidence, dismissed the complaint for the year 2008, it does not mean that the same CCI is precluded from entertaining a fresh complaint for the next year against the same producer or distributor, trader, etc., by virtue of Section 27. When the Act permits the CCI to initiate action on the complaint of cartelization independently for each year, the argument of the appellant on the principles of res judicata cannot be accepted. This issue is also answered against the appellant, accordingly. Whether the conduct of the ninth respondent-ATMA in approaching the Delhi High Court for the relief would amount to forum shopping? - HELD THAT:- When this Court has directed the final order to be kept in a sealed cover and accordingly, the CCI also has complied with the order by keeping the above order in a sealed cover, instead of approaching this Court, discreetly approaching the Delhi High Court with the writ petition would amount to abuse of the process of law, for the simple reason that what shall not be done directly cannot be done indirectly - since the investigation as ordered by the CCI has already been completed and the report of the investigating officer has also been submitted before the Commission and all the parties have also taken part in the proceedings before the Commission and advanced their arguments and that the final order passed by the CCI is also kept in a sealed cover as per the order dated 8.3.2018 passed by this Court, after getting the said final order, the parties, who are likely to be aggrieved, have to work out their remedy in the manner known to law. Therefore, at this final stage, the Court should, as far as possible, avoid any decision which would bring about the result of rendering the system unworkable in practice. There are no merit in the appeal and accordingly, the writ appeal stands dismissed.
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