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2015 (9) TMI 1691 - AT - Indian LawsRefusal to direct an investigation - Section 19(1)(a) of the Competition Act, 2002 - closure of case under Section 26(2) of the Act - whether the appellant should be non-suited on the ground that he had not approached the Commission with clean hands and that he has been representing and espousing the cause of M/s. B.S.N. Joshi & Sons Ltd.? HELD THAT:- A reading of the plain language of Section 18 shows that the Commission is under an obligation to ensure that practices having adverse effect on competition are eliminated. The Commission is also duty bound to promote and sustain competition, protect the interest of consumers, and ensure freedom of trade carried on by other participants in markets in India. Of course, the exercise of power under Section 18 is subject to other provisions of the Act. Section 19(1) empowers the Commission to inquire into the allegations of contravention of Section 3(1) of Section 4(1) of the Act. This can be done by the Commission on its own motion or on receipt of any information from any person, consumer or their association or trade association or on a reference made by the Central Government or the State Government or a statutory authority. While determining whether or not an agreement has an appreciable adverse effect on competition under Section 3, the Commission is required to take into consideration all or any of the factors enumerated in Clauses (a) to (f) of Section 19(3) of the Act. It is significant to note thatParliament has neither prescribed any qualification for the person who wants to file an information under section 19(1)(a) nor prescribed any condition which must be fulfilled before an information can be filed under that section. There is nothing in the plain language of Sections 18 and 19 read with Section 26(1) from which it can be inferred that the Commission has the power to reject the prayer for an investigation into the allegations involving violation of Sections 3 and 4 only on the ground that the informant does not have personal interest in the matter or he appears to be acting at the behest of someone else - In a given case, the Commission may not act upon an information filed under section 19(1)(a) but may suo moto take cognizance of the facts constituting violation of Section 3(1) or Section 3(4) of the Act and direct an investigation. The Commission may also take cognizance of the reports appearing in print or electronic media or even anonymous complaint/representation suggesting violation of Sections 3 and 4 of the Act and issue direction for investigation under Section 26(1). The only limitation on the exercise of that power is that the Commission should feel prima facie satisfied that thereexist a prima facie case for ordering into the allegation of violation of Sections 3(1) or 4(1) of the Act. Thus, the appellant cannot be non-suited by accepting the argument of the learned counsel for the respondents that he is espousing the cause of M/s. B.S.N. Joshi & Sons Ltd. The fact that the appellant is practising as an advocate with the counsel who has been representing M/s. B.S.N. Joshi & Sons Ltd. in other cases is not sufficient to draw a dubious inference that he is prosecuting the interest/cause of M/s. B.S.N. Joshi & Sons Ltd. That apart, the respondents have not disputed that the appellant is a consumer of electricity generated and supplied by Respondent No. 2. Therefore, its locus to file an information under section 19(1)(a) cannot be questioned. Whether the majority order of the Commission is vitiated by an error of law and calls for interference under Section 53-B of the Act? - HELD THAT:-If in exercise of the appellate power vested in it under Section 53- B the Tribunal is satisfied that the negative opinion expressed by the Commission on the issue of existence of a prima facie case is vitiated by an error of law then it may set aside the impugned order and direct an investigation under Section 26(1) of the Act - A reading of the impugned order shows that while refusing to order an investigation into the allegations made by the appellant that Respondent Nos. 3 to 5 had formed a cartel and successfully prevented competition in the matter of award of liaison work for procurement of quality coal and supervision of transportation thereof, the majority of the Commission altogether over looked the unequivocal finding recorded by the Supreme Court in the order passed in Contempt Petition No. 245/2007. Another grave error committed by the Commission is that even though it did take cognizance of the chart containing the rates quoted by Respondent Nos. 3 to 5 for the year 2010 but totally ignored the allegations made in the information and the documents filed on 15.10.2003. Thus there is no escape from the conclusion that the view expressed by the majority of the Commission that no prima facie case is made out for directing an investigation under Section 26(1) suffers from a patent legal infirmity. The majority order of the Commission is set aside. The Director General shall now conduct investigation into the allegations contained in the information filed by the appellant under section 19(1)(a) and submit a report to the Commission within three months. However, it is made clear that while making investigation, the Director General shall not proceed on the premise that Respondent No. 2 was a part of the cartel - Appeal allowed.
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