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2015 (7) TMI 828 - HC - Companies LawValidity of impugned order - Abuse of dominant position - Practice of anti-competitive activities - Held that:- The duties of the Director General are enumerated in Chapter V of the Competition Act, 2002. Section 41(1) obliges the Director General, to assist the Commission in investigating into any contravention of the provisions of the Act or any Rules or Regulations made thereunder. But, he shall do so only "when so directed by the Commission." But, Sub-Section (2) of Section 41 confers upon the Director General, the same powers as are vested upon the Commission under Section 36. In other words, the Director General has powers to summon and enforce the attendance of any person to examine him, to order the discovery and production of documents, to receive evidence on affidavit, to issue Commissions for the examination of witnesses or documents and to requisition the production of any public record or document. The provisions of Sections 240 and 240A of the Companies Act, 1956 are made applicable to an investigation made by the Director General, as they would apply to an Inspector appointed under the Companies Act. As a matter of fact, if a person fails to comply, without reasonable cause, with a direction given by the Director General in terms of Section 41(2), such a person is liable to be punished with fine. Therefore, it is clear that the role of the Director General is actually to assist the Competition Commission in the effective discharge of its duties. - Therefore, Section 19(1)(b) may have to be read and understood in the context of Section 21 and 21A of the Competition Act, 2002. If so done, it will be very clear that the word "Statutory Authority" found in Section 19(1)(b), Section 21 and Section 21A cannot include the Director General. There is yet another reason for my conclusion. The Proviso to Section 21(1) empowers a Statutory Authority to make a reference suo motu to the Commission. But the Director General is not empowered to initiate an investigation suo motu. Therefore, the Director General cannot come within the definition of the expression "Statutory Authority". First contention that the permission to expand the scope of the enquiry cannot be construed as the initiation of investigation suo motu by the Director General. So long as the Competition Commission has the power to initiate an enquiry suo motu and take the assistance of the Director General in the conduct of such enquiry and so long as there is no bar for the Director General to provide information under Section 19(1)(a) of the Act, the petitioner cannot find fault either with the Director General or with the Commission. In this case the Director General did not rope in other car manufactures, of his own accord. The Director General, by filing a memo, merely brought to the notice of the Commission that there are other car manufactures who follow the very same practices, as followed by the three Respondents named by Mr.Kataria. The Commission directed the Director General to include the others also within the purview of the initiation of investigation suo motu by the Director General. Commission must record its reasons for forming a prima facie opinion with reference to the information furnished to the Commission. After pointing out in para 93 of its decision that the functions performed by the Commission are in the nature of preparatory measures in contrast to the decision making process, the Supreme court nevertheless held in para 97 that at the stage of forming a prima facie view under section 26 (1), the Commission should record minimum reasons for formation of a prima facie opinion. Therefore, it is contended by the petitioner that since the order dated 26.04.2011 does not contain any reason and does not reflect the formation of a prima facie opinion, the impugned proceedings are vitiated. The powers conferred upon an Inspector under Section 240 and 240A of the Companies Act, 1956 are just procedural in nature. The power conferred under these provisions include the power (i) to require any body corporate to furnish information or to produce such books and papers as he may consider necessary; (ii) to keep in his custody any books and papers; (3) to examine someone on oath; and (4) to seize documents. All that sub-section (3) of Section 41 says is that these powers can be exercised by the Director General, subject to the powers conferred by the Commission under sub-section (2) of Section 41 read with sub-section (2) of Section 36. - Therefore, the Director General merely placed an additional information before the Commission by his memo dated 19.04.2011. If the Commission had not issued a direction on 26.04.2011, the Director General could not have proceeded against all other car manufactures. The direction issued by the Commission on 26.04.2011 would tantamount to a directions under Section 41(1). Therefore, the question of overstepping of jurisdiction did not arise. Commission or the Director General had not done anything in a manner otherwise than what is prescribed in the Act and the Regulations. As stated earlier, the Director General did not suo motu initiate any investigation. He merely placed before the Commission, an information already available in the complaint lodged by the individual. It was an additional information that could be taken note of under the Proviso to Section 26(1). The Commission had already formed a prima facie opinion and recorded its reasons in respect of the three named car manufacturers. Therefore, it was not necessary for the Commission to again and again record reasons. The Commission did not come to any conclusion with regard to the writ petitioners, on the basis of any special pleadings as against them. The decision taken by the Commission was only to expand the scope of the investigation. Therefore, I do not think that either the Director General or the Competition Commission overstepped the jurisdiction vested in them in law. - Decided against Appellants.
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