TMI Blog2010 (9) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 26(1) of the Act? What directions, if any, need to be issued by the Court to ensure proper compliance in regard to procedural requirements while keeping in mind the scheme of the Act and the legislative intent? Also to ensure that the procedural intricacies do not hamper in achieving the object of the Act, i.e., free market and competition? - CIVIL APPEAL NO. 7779 OF 2010 [D.NO. 12247 OF 2010] - - - Dated:- 9-9-2010 - S.H. KAPADIA, K.S. RADHAKRISHNAN AND SWATANTER KUMAR, JJ. JUDGMENT Swatanter Kumar, J. - The application for leave to appeal is allowed. Civil appeal is admitted. 2. The decision of the Government of India to liberalize its economy with the intention of removing controls persuaded the Indian Parliament to enact laws providing for checks and balances in the free economy. The laws were required to be enacted, primarily, for the objective of taking measures to avoid anti-competitive agreements and abuse of dominance as well as to regulate mergers and takeovers which result in distortion of the market. The earlier Monopolies and Restrictive Trade Practices Act, 1969 was not only found to be inadequate but also obsolete in certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untry to country and even within a country they seem to change and evolve over the time. However, it will be useful to refer to some of the common objectives of competition law. The main objective of competition law is to promote economic efficiency using competition as one of the means of assisting the creation of market responsive to consumer preferences. The advantages of perfect competition are threefold : allocative efficiency, which ensures the effective allocation of resources, productive efficiency, which ensures that costs of production are kept at a minimum and dynamic efficiency, which promotes innovative practices. These factors by and large have been accepted all over the world as the guiding principles for effective implementation of competition law. 6. In India, a High Level Committee on Competition Policy and Law was constituted to examine its various aspects and make suggestions keeping in view the competition policy of India. This Committee made recommendations and submitted its report on 22-5-2002. After completion of the consultation process, the Competition Act, 2002 (for short, the Act ) as Act 12 of 2003, dated 12-12-2003, was enacted. As per the stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut any undue delay. In the event of delay, the very purpose and object of the Act is likely to be frustrated and the possibility of great damage to the open market and resultantly, country s economy cannot be ruled out. The present Act is quite contemporary to the laws presently in force in the United States of America as well as in the United Kingdom. In other words, the provisions of the present Act and Clayton Act, 1914 of the United States of America, The Competition Act, 1988 and Enterprise Act, 2002 of the United Kingdom have somewhat similar legislative intent and scheme of enforcement. However, the provisions of these Acts are not quite pari materia to the Indian legislation. In United Kingdom, the Office of Fair Trading is primarily regulatory and adjudicatory functions are performed by the Competition Commission and the Competition Appellate Tribunal. The U.S. Department of Justice Antitrust Division in United States, deals with all jurisdictions in the field. The competition laws and their enforcement in those two countries is progressive, applied rigorously and more effectively. The deterrence objective in these anti-trust legislations is clear from the provisions rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid meeting and the matter was adjourned till 8-12-2009. On 19-11-2009 a notice was issued to SAIL enclosing all information submitted by the informant. When the matter was taken up for consideration by the Commission on 8-12-2009, the Commission took on record the affidavit filed by the informant on 30-11-2009 in terms of the earlier order of the Commission, but SAIL requested extension of six weeks time to file its comments. Finding no justification in the request of the SAIL, the Commission, vide its order dated 8-12-2009, declined the prayer for extension of time. In this order, it also formed the opinion that prima facie case existed against SAIL, and resultantly, directed the Director General, appointed under section 16(1) of the Act, to make investigation into the matter in terms of section 26(1) of the Act. It also granted liberty to SAIL to file its views and comments before the Director General during the course of investigation. Despite these orders, SAIL filed an interim reply before the Commission along with an application that it may be heard before any interim order is passed by the Commission in the proceedings. On 22-12-2009 the Commission only reiterated its e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in this context as well as detailed submission made by the advocates of the informant before the Commission on 10-11-2009. Commission is of the opinion that there exists a prima facie case. Therefore, the Commission decided that the case be referred to Director General for investigation in the matter. (5) Secretary was accordingly directed to refer the case to DG for investigation and submission of the report within 45 days of the receipt of orders of the Commission. SAIL informed that they may furnish their views/comments in the matter to the DG." 9. As already noticed, the legality of this order was questioned before the Tribunal by SAIL on one hand, while, on the other hand the Commission had pressed its application for impleadment. In the application for impleadment it was averred by the Commission that it is a necessary and proper party for adjudication of the matter before the Tribunal and therefore, it should be impleaded as a party and be heard in accordance with law. Emphasis was also placed on section 18 of the Act to contend that powers, functions and duties of the Commission were such that it would always be appropriate for the Commission to be impleaded as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The provisions of section 19 do not suggest that any notice is required to be given to the informant, affected party or any other person at that stage. Such parties cannot claim the right to notice or hearing but it is always open to the Commission to call any such person , for rendering assistance or produce such records, as the Commission may consider appropriate. 11. The Commission, wherever, is of the opinion that no prima facie case exists justifying issuance of a direction under section 26(1) of the Act, can close the case and send a copy of that order to the Central Government, State Government, Statutory Authority or the parties concerned in terms of section 26(2) of the Act. It may be noticed that this course of action can be adopted by the Commission in cases of receipt of reference from sources other than of its own knowledge and without calling for the report from Director General. 12. In terms of section 26(3), the Director General is supposed to take up the investigation and submit the report in accordance with law and within the time stated by the Commission in the directive issued under section 26(1). After the report is submitted, there is a requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eting the inquiry in accordance with law, the Commission is required to pass such orders as it may deem appropriate in the facts and circumstances of a given case in terms of sections 26 to 31 of the Act. 15. Having referred to the background leading to the enactment of competition law in India and the procedure that the Commission is expected to follow while deciding the matters before it and facts of the case, now it will be appropriate for this Court to refer to the submissions made in light of the facts of this case. According to the Commission (the appellant herein), the directions passed in the order dated 8-12-2009 under section 26(1) of the Act are not appealable and further there is no requirement in law to afford an opportunity of hearing to the parties at the stage of formulating an opinion as to the existence of a prima facie case. It is also the contention of the Commission that in an appeal before the Tribunal it is the necessary party and that the Commission is not expected to state reasons for forming an opinion at the prima facie stage. 16. On the contrary, according to SAIL (the respondent herein), the principles of natural justice have been violated b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6)What directions, if any, need to be issued by the Court to ensure proper compliance in regard to procedural requirements while keeping in mind the scheme of the Act and the legislative intent? Also to ensure that the procedural intricacies do not hamper in achieving the object of the Act, i.e., free market and competition. 20. We would prefer to state our answers to the points of law argued before us at the very threshold. Upon pervasive analysis of the submissions made before us by the learned counsel appearing for the parties, we would provide our conclusions on the points noticed supra as follows : (1)In terms of section 53A(1)( a ) of the Act appeal shall lie only against such directions, decisions or orders passed by the Commission before the Tribunal which have been specifically stated under the provisions of section 53A(1)( a ). The orders, which have not been specifically made appealable, cannot be treated appealable by implication. For example taking a prima facie view and issuing a direction to the Director General for investigation would not be an order appealable under section 53A. (2)Neither any statutory duty is cast on the Commission to issue notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be of much higher degree than formation of a prima facie view under section 26(1) of the Act] in clear terms that an act in contravention of the stated provisions has been committed and continues to be committed or is about to be committed; ( b ) It is necessary to issue order of restraint and ( c ) from the record before the Commission, it is apparent that there is every likelihood of the party to the lis, suffering irreparable and irretrievable damage or there is definite apprehension that it would have adverse effect on competition in the market. The power under section 33 of the Act to pass temporary restraint order can only be exercised by the Commission when it has formed prima facie opinion and directed investigation in terms of section 26(1) of the Act, as is evident from the language of this provision read with Regulation 18(2) of the Regulations. (5)In consonance with the settled principles of administrative jurispru-dence, the Commission is expected to record at least some reason even while forming a prima facie view. However, while passing directions and orders dealing with the rights of the parties in its adjudicatory and determinative capacity, it is requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to all or any of the following factors, namely : ( a )creation of barriers to new entrants in the market; ( b )driving existing competitors out of the market; ( c )foreclosure of competition by hindering entry into the market; ( d )accrual of benefits to consumers; ( e )improvements in production or distribution of goods or provision of services; ( f )promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services. (4) The Commission shall, while inquiring whether an enterprise enjoys a dominant position or not under section 4, have due regard to all or any of the following factors, namely : ( a )market share of the enterprise; ( b )size and resources of the enterprise; ( c )size and importance of the competitors; ( d )economic power of the enterprise including commercial advantages over competitors; ( e )vertical integration of the enterprises or sale or service network of such enterprises; ( f )dependence of consumers on the enterprise; ( g )monopoly or dominant position whether acquired as a result of any statute or by virtue of being a Government company or a public sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference from the Central Government or a State Government or a statutory authority or information received under section 19, the Commission is of the opinion that there exists no prima facie case, it shall close the matter forthwith and pass such orders as it deems fit and send a copy of its order to the Central Government or the State Government or the statutory authority or the parties concerned, as the case may be. (3) The Director General shall, on receipt of direction under sub-section (1), submit a report on his findings within such period as may be specified by the Commission. (4) The Commission may forward a copy of the report referred to in sub-section (3) to the parties concerned : Provided that in case the investigation is caused to be made based on reference received from the Central Government or the State Government or the statutory authority, the Commission shall forward a copy of the report referred to in sub-section (3) to the Central Government or the State Government or the statutory authority, as the case may be. (5) If the report of the Director General referred to in sub-section (3) recommends that there is no contravention of the provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that may arise from the findings of the Commission or the orders of the Appellate Tribunal in an appeal against any finding of the Commission or under section 42A or under sub-section (2) of section 53-Q of this Act, and pass orders for the recovery of compensation under section 53N of this Act. (2) The Headquarter of the Appellate Tribunal shall be at such place as the Central Government may, by notification, specify. 53B. Appeal to Appellate Tribunal. (1) The Central Government or the State Government or a local authority or enterprise or any person, aggrieved by any direction, decision or order referred to in clause ( a ) of section 53A may prefer an appeal to the Appellate Tribunal. (2) Every appeal under sub-section (1) shall be filed within a period of sixty days from the date on which a copy of the direction or decision or order made by the Commission is received by the Central Government or the State Government or a local authority or enterprise or any person referred to in that sub-section and it shall be in such form and be accompanied by such fee as may be prescribed : Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 26(2) of the Act. On the other hand, mere direction for investigation to one of the wings of the Commission is akin to a departmental proceeding which does not entail civil consequences for any person, particularly, in light of the strict confidentiality that is expected to be maintained by the Commission in terms of section 57 of the Act and Regulation 35 of the Regulations. 24. Wherever, in the course of the proceedings before the Commission, the Commission passes a direction or interim order which is at the preliminary stage and of preparatory nature without recording findings which will bind the parties and where such order will only pave the way for final decision, it would not make that direction as an order or decision which affects the rights of the parties and therefore, is not appealable. At this stage the case of Automec Srl v. Commission of the European Communities [1990] ECR II-00367 can be noted, where the Court of First Instance held as under : "42. As the Court of Justice has consistently held, any measure the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent argued that the expression any direction issued should be read disjunctive and that gives a complete right to a party to prefer an appeal under section 53A, against a direction for investigation, as that itself is an appealable right independent of any decision or order which may be made or passed by the Commission. 26. It is a settled principle of law that the words or and and may be read as vice versa but not normally. You do sometimes read or as and in a statute. But you do not do it unless you are obliged because or does not generally mean and and and does not generally mean or ...... [ Green v. Premier Glynrhonwy Slate Co. [1928] 1 KB 561 (p. 568)]. As pointed out by Lord Halsbury, the reading of or as and is not to be resorted to, "unless some other part of the same statute or the clear intention of it requires that to be done". [ Mersey Docks Harbour Board v. Henderson Bros. [1888] 13 AC 595 (at 603)]. The Court adopted with approval Lord Halsbury s principle and in fact went further by cautioning against substitution of conjunctions in the case of Municipal Corpn. of Delhi v. Tek Chand Bhatia [1980] 1 SCC 158, where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt prepared by the tenure holder was final and conclusive and could not be called in question in any court of law. The Court while interpreting the provisions of section 13(1) held that it is only the specific order passed under section 11(2) and section 12 of the Act which could be appealed against and while applying its rule held as under : "23. It is well known that right of appeal is not a natural or inherent right. It cannot be assumed to exist unless expressly provided for by statute. Being a creature of statute, remedy of appeal must be legitimately traceable to the statutory provisions........ ****** 31. section 13 provides a right of appeal to a party aggrieved by an order under sub-section (2) of section 11 or section 12 and no other. In other words, any order passed by the Prescribed Authority other than the order under section (2) of section 11 or section 12 is not appealable. From any reckoning, the order dated December 17, 2003 is neither an order under sub-section (2) of section 11 nor an order under section 12. Act 1960 does not make the order of the Prescribed Authority cancelling the notice issued under section 9(2) amenable to appeal. Such order does not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le an appeal, such right can neither be assumed nor inferred in favour of the party. 33. A statute is stated to be the edict of Legislature. It expresses the Will of Legislature and the function of the Court is to interpret the document according to the intent of those who made it. It is a settled rule of construction of statute that the provisions should be interpreted by applying plain rule of construction. The Courts normally would not imply anything which is inconsistent with the words expressly used by the statute. In other words, the Court would keep in mind that its function is jus dicere, not jus dare . The right of appeal being creation of the statute and being a statutory right does not invite unnecessarily liberal or strict construction. The best norm would be to give literal construction keeping the legislative intent in mind. 34. This Court in the case of Shiv Shakti Co-op. Housing Society v. Swaraj Developers [2003] 6 SCC 659, while referring to the principles for interpretation of statutory provisions, held as under : "19. It is a well-settled principle in law that the Court cannot read anything into a statutory provision which is plain and unambi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpreting or construing a statute is to seek the intention of Legislature. The intention of Legislature assimilates two aspects; one aspect carries the concept of meaning , i.e., what the word means and another aspect conveys the concept of purpose and object or the reason or spirit pervading through the statute. The process of construction, therefore, combines both the literal and purposive approaches. However, necessity of interpretation would arise only where the language of a statutory provision is ambiguous, not clear or where two views are possible or where the provision gives a different meaning defeating the object of the statute. If the language is clear and unambiguous, no need of interpretation would arise. In this regard, a Constitution Bench of five Judges of the Supreme Court in R.S. Nayak v. A.R. Antulay AIR 1984 SC 684 has held : ...lf the words of the Statute are clear and unambiguous, it is the plainest duty of the Court to give effect to the natural meaning of the words used in the provision. The question of construction arises only in the event of an ambiguity or the plain meaning of the words used in the Statute would be self defeating. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 53A of the Act. Thus, it specifically excludes the opinion/decision of the authority under section 26(1) and even an order passed under section 26(7) directing further inquiry, from being appealable before the Tribunal. Therefore, it would neither be permissible nor advisable to make these provisions appealable against the legislative mandate. 39. The existence of such excluding provisions, in fact, exists in different statutes. Reference can even be made to the provisions of section 100A of the Code of Civil Procedure, where an order, which even may be a judgment, under the provisions of the Letters Patent of different High Courts and are appealable within that law, are now excluded from the scope of the appealable orders. In other words, instead of enlarging the scope of appealable orders under that provision, the Courts have applied the rule of plain construction and held that no appeal would lie in conflict with the provisions of section 100A of the Code of Civil Procedure. Expressum facit cessare tacitum 40. Express mention of one thing implies the exclusion of other. (Expression precludes implication). This doctrine has been applied by this Court in va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the aggrieved party has a right of appeal against any direction, decision or order referred to in section 53A(1)( a ) . If the Legislature intended to enlarge the scope and make orders, other than those, specified in section 53A(1)( a ), then the language of section 53B(1) ought to have been quite distinct from the one used by the Legislature. 43. One of the parties before the Commission would, in any case, be aggrieved by an order where the Commission grants or declines to grant extension of time. Thus, every such order passed by the Commission would have to be treated as appealable as per the contention raised by the respondent before us as well as the view taken by the Tribunal. In our view, such orders cannot be held to be appealable within the meaning and language of section 53A of the Act and also on the principle that they are not orders which determine the rights of the parties. No appeal can lie against such an order. Still the parties are not remediless as, when they prefer an appeal against the final order, they can always take up grounds to challenge the interim orders/directions passed by the Commission in the memorandum of appeal. Such an approach would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his doctrine was expanded in its application and the Courts specifically included in its purview, the right to notice and requirement of reasoned orders, upon due application of mind in addition to the right of hearing. These principles have now been consistently followed in judicial dictum of Courts in India and are largely understood as integral part of principles of natural justice. In other words, it is expected of a Tribunal or any quasi-judicial body to ensure compliance of these principles before any order adverse to the interest of the party can be passed. However, the exclusion of the principles of natural justice is also an equally known concept and the Legislature has the competence to enact laws which specifically exclude the application of principles of natural justice in larger public interest and for valid reasons. Generally, we can classify compliance or otherwise, of these principles mainly under three categories. First, where application of principles of natural justice is excluded by specific legislation; second, where the law contemplates strict compliance to the provisions of principles of natural justice and default in compliance thereto can result in vitiatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort, issue notice, invite objections or suggestions from the informant, Central Government, State Government, Statutory Authorities or the parties concerned, but also to provide an opportunity of hearing to the parties before arriving at any final conclusion under section 26(7) or 26(8) of the Act, as the case may be. This obviously means that wherever the Legislature has intended that notice is to be served upon the other party, it has specifically so stated and we see no compelling reason to read into the provisions of section 26(1) the requirement of notice, when it is conspicuous by its very absence. Once the proceedings before the Commission are completed, the parties have a right to appeal under section 53A(1)( a ) in regard to the orders termed as appealable under that provision. Section 53B requires that the Tribunal should give, parties to the appeal, notice and an opportunity of being heard before passing orders, as it may deem fit and proper, confirming, modifying or setting aside the direction, decision or order appealed against. 50. Some of the Regulations also throw light as to when and how notice is required to be served upon the parties including the affected pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 which specifies the mode of service of summons upon the concerned persons and the manner in which such service should be effected. The expression such other person , obviously, would include all persons, such as experts, as stated in Regulation 52 of the Regulations. There is no scope for the Court to arrive at the conclusion that such other person would exclude anybody including the informant or the affected parties, summoning of which or notice to whom, is considered to be appropriate by the Commission. 54. With some significance, we may also notice the provision of Regulation 33(4) of the Regulations, which requires that on being satisfied that the reference is complete, the Secretary shall place it during an ordinary meeting of the Commission and seek necessary instructions regarding the parties to whom the notice of the meeting has to be issued. This provision read with sections 26(1) and 26(5) shows that the Commission is expected to apply its mind as to whom the notice should be sent before the Secretary of the Commission can send notice to the parties concerned. In other words, issuance of notice is not an automatic or obvious consequence, but it is only upon applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rements vitiating the entire proceedings. Different laws have provided for exclusion of principles of natural justice at different stages, particularly, at the initial stage of the proceedings and such laws have been upheld by this Court. Wherever, such exclusion is founded on larger public interest and is for compelling and valid reasons, the Courts have declined to entertain such a challenge. It will always depend upon the nature of the proceedings, the grounds for invocation of such law and the requirement of compliance to the principles of natural justice in light of the above noticed principles. In the case of Tulsiram Patel ( supra ), this Court took the view that audi alteram partem rule can be excluded where a right to a prior notice and an opportunity of being heard, before an order is passed, would obstruct the taking of prompt action or where the nature of the action to be taken, its object and purpose as well as the scheme of the relevant statutory provisions warrant its exclusion. This was followed with approval and also greatly expanded in the case of Delhi Transport Corpn. v. Delhi Transport Corpn. Mazdoor Congress [[1991] Supp. 1 SCC 600], wherein the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in cases of urgency, a post-decisional hearing would satisfy the principles of natural justice. Reference can be made to the cases of Maneka Gandhi v. Union of India [1978] 1 SCC 248 and State of Punjab v. Gurdayal AIR 1980 SC 319. The provisions of section 26(1) clearly indicate exclusion of principles of natural justice, at least at the initial stages, by necessary implication. In cases where the conduct of an enterprise, association of enterprises, person or association of persons or any other legal entity, is such that it would cause serious prejudice to the public interest and also violates the provisions of the Act, the Commission will be well within its jurisdiction to pass ex parte ad interim injunction orders immediately in terms of section 33 of the Act, while granting post decisional hearing positively, within a very short span in terms of Regulation 31(2). This would certainly be more than adequate compliance to the principles of natural justice. 60. It is true that in administrative action, which entails civil consequences for a person, the principles of natural justice should be adhered to. In the case of Raj Restaurant v. Municipal Corpn. of Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uire the concerned authority to act in conformity with these principles as well as ensure that the indicated legislative object is achieved. Exercise of power should be fair and free of arbitrariness. 62. Now, let us examine what kind of function the Commission is called upon to discharge while forming an opinion under section 26(1) of the Act. At the face of it, this is an inquisitorial and regulatory power. A Constitution Bench of this Court in the case of Krishna Swami v. Union of India [1992] 4 SCC 605 explained the expression inquisitorial . The Court held that the investigating power granted to the administrative agencies normally is inquisitorial in nature, The scope of such investigation has to be examined with reference to the statutory powers. In that case the Court found that the proceedings, before the High Power Judicial Committee constituted, were neither civil nor criminal but sui generis. Referring to the investigation under criminal jurisprudence as well as scope of inquiry under service jurisprudence, the Court held as under : "61. The problem could be broached through a different perspective as well. In normal parlance, in a criminal case, investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of Justice while holding that sending notification of the above mentioned decision simultaneously with the notice of objections cannot affect the rights of the defence, stated as under : "10. Neither the provisions in force nor the general principles of law require notice of the Decision to initiate the procedure to establish an infringement to be given prior to notification of the objections adopted against the interested parties in the context of such proceedings. 11. It is the notice of objections alone and not the Decision to commence proceedings which is the measure stating the final attitude of the Commission concerning undertakings against which proceedings for infringement of the rules on competition have been commenced." 64. The jurisdiction of the Commission, to act under this provision, does not contemplate any adjudicatory function. The Commission is not expected to give notice to the parties, i.e., the informant or the affected parties and hear them at length, before forming its opinion. The function is of a very preliminary nature and in fact, in common parlance, it is a departmental function. At that stage, it does not condemn any person and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the reference to the Commission. 66. The Tribunal, in the impugned judgment, has taken the view that there is a requirement to record reasons which can be express, or, in any case, followed by necessary implication and therefore, the authority is required to record reasons for coming to the conclusion. The proposition of law whether an administrative or quasi-judicial body, particularly judicial courts, should record reasons in support of their decisions or orders is no more res integra and has been settled by a recent judgment of this Court in the case of Assistant Commissioner, C.T.D.W.C. v. Shukla Bros. [JT 2010 (4) SC 35] wherein this Court was primarily concerned with the High Court dismissing the appeals without recording any reasons. The Court also examined the practice and requirement of providing reasons for conclusions, orders and directions given by the quasi-judicial and administrative bodies. The Court examined various judgments of this Court in relation to its application to administrative law and held as under : "10. The Supreme Court in the case of S.N. Mukherjee v. Union of India [1990] 4 SCC 594, while referring to the practice adopted and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority may not provide reasons like a judgment but the order must be supported by the reasons of rationality. The distinction between passing of an order by an administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned orders..." 67. In this very judgment, the Court while referring to other decisions of the Court held that it is essential that administrative authorities and Tribunals should accord fair and proper hearing to the affected persons and record explicit reasons in support of the order made by them. Even in cases of supersession, it was held in Gurdial Singh Fijji v. State of Punjab [1979] 2 SCC 368, that reasons for supersession should be essentially provided in the order of the authority. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. By practice adopted in all courts and by virtue of judge-made law, the concept of reasoned judgment has become an indispensable part of basic rule of law and in fact, is a mandatory requirement of the procedural law. Clarity of thoughts leads to clarity of vision and therefore, proper reasoning is foundation of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns on every issue while passing an order under sections 26 to 28 of the Act. Submissions made and findings in relation to Point No. 3 70. The concept of necessary and proper parties is an accepted norm of civil law and its principles can safely be applied to the proceedings before the Tribunal to a limited extent. Even some provisions of the Act and the Regulations would guide the discussion in this behalf. In terms of section 7(2) of the Act the Commission is a body corporate having perpetual succession and a common seal with power to sue and be sued in its name. In terms of section 53A, the Tribunal is constituted to hear and dispose of appeals against any direction issued, decision made or order passed under the provisions stated therein. The Tribunal is also vested with the power of determining the claim of compensation that may arise from the findings recorded by the Commission. As already noticed, the procedure for entertaining the appeals is specified under section 53B of the Act. 71. The right to prefer an appeal is available to the Central Government, State Government or a local authority or enterprise or any person aggrieved by any direction, decision or order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of such proceedings. Thus, the principle of fairness would demand that such party should be heard by the Tribunal before any orders adverse to it are passed in such cases. The Tribunal has taken this view and we have no hesitation in accepting that in cases where proceedings initiated suo moto by the Commission, the Commission is a necessary party. However, we are also of the view that in other cases the Commission would be a proper party. It would not only help in expeditious disposal, but the Commission, as an expert body, in any case, is entitled to participate in its proceedings in terms of Regulation 51. Thus, the assistance rendered by the Commission to the Tribunal could be useful in complete and effective adjudication of the issue before it. 74. Regulations 24 to 26 define powers of the Commission to join or substitute parties in proceedings, permit person or enterprises to take part in proceedings and strike out unnecessary parties. Out of these provisions regulation 25(1) has a distinct feature as it lays down the criteria which should be considered by the Commission while applying its mind in regard to application of a party for impleadment. The person or ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved in the proceeding." 77. Another way to examine the matter is that if the proceedings cannot be concluded completely and effectively in absence of a party, that party should be normally impleaded as a party before the Court, of course, subject to other restrictions in law. While non-joinder of necessary parties may prove fatal, the non-joinder of proper parties may not be fatal to the proceedings, but would certainly adversely affect interest of justice and complete adjudication of the proceedings before the appropriate forum. 78. As a normal rule, the applicant/informant is dominus litis and has the right to control the proceedings, but at the same time, such applicant is required to notify all other parties against whom the applicant wishes to proceed. Even if an applicant fails to join a party the Court has the discretion to direct joining of such party as the question of impleadment has to be decided on the touchstone of Order 1 Rule 10 which provides that a necessary or proper party may be added. [ Ramesh Hirachand Kundanmal v. Municipal Corpn. of Greater Bombay [1992] 2 SCC 524. 79. In the proceedings, which are initiated by the Commission suo moto, it s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to such party , where it deems necessary. The first and the foremost question that falls for consideration is, what is inquiry ? The word inquiry has not been defined in the Act, however, Regulation 18(2) explains what is inquiry . Inquiry shall be deemed to have commenced when direction to the Director General is issued to conduct investigation in terms of Regulation 18(2). In other words, the law shall presume that an inquiry is commenced when the Commission, in exercise of its powers under section 26(1) of the Act, issues a direction to the Director General. Once the Regulations have explained inquiry it will not be permissible to give meaning to this expression contrary to the statutory explanation. Inquiry and investigation are quite distinguishable, as is clear from various provisions of the Act as well as the scheme framed thereunder. The Director General is expected to conduct an investigation only in terms of the directive of the Commission and thereafter, inquiry shall be deemed to have commenced, which continues with the submission of the report by the Director General, unlike the investigation under the MRTP Act, 1969, where the Director General can initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligatory upon the fora dealing with the matters to ensure compliance to this legislative mandate. Restraint orders may be passed in exercise of its jurisdiction in terms of section 33 but it must be kept in mind that the ex parte restraint orders can have far reaching consequences and, therefore, it will be desirable to pass such order in exceptional circumstances and deal with these matters most expeditiously. 82. During an inquiry and where the Commission is satisfied that the act has been committed and continues to be committed or is about to be committed, in contravention of the provisions stated in section 33 of the Act, it may issue an order temporarily restraining the party from carrying on such act, until the conclusion of such inquiry or until further orders, without giving notice to such party where it deems it necessary. This power has to be exercised by the Commission sparingly and under compelling and exceptional circumstances. The Commission, while recording a reasoned order, inter alia , should : ( a ) record its satisfaction [which has to be of much higher degree than formation of a prima facie view under section 26(1) of the Act] in clear terms that an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. ( g )General principles like prima facie case, balance of convenience and irreparable loss would also be considered by the court." 85. In the case in hand, the provisions of section 33 are specific and certain criteria have been specified therein, which need to be satisfied by the Commission, before it passes an ex parte ad interim order. These three ingredients we have already spelt out above and at the cost of repetition we may notice that there has to be application of mind of higher degree and definite reasons having nexus to the necessity for passing such an order need be stated. Further, it is required that the case of the informant-applicant should also be stronger than a mere prima facie case. Once these ingredients are satisfied and where the Commission deems it necessary, it can pass such an order without giving notice to the other party. The scope of this power is limited and is expected to be exercised in appropriate circumstances. These provisions can hardly be invoked in each and every case except in a reasoned manner. Wherever, the applicant is able to satisfy the Commission that from the information received and the documents in support thereof, or e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, expeditious disposal by the Commission is not adhered to. The scheme of various provisions of the Act which we have already referred to including sections 26, 29, 30, 31, 53B(5) and 53T and Regulations 12, 15, 16, 22, 32, 48 and 31 clearly show the legislative intent to ensure time bound disposal of such matters. 88. The Commission performs various functions including regulatory, inquisitorial and adjudicatory. The powers conferred by the Legislature upon the Commission under sections 27( d ) and 31(3) are of wide magnitude and of serious ramifications. The Commission has the jurisdiction even to direct that an agreement entered into between the parties shall stand modified to the extent and in the manner, as may be specified. Similarly, where it is of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition but such adverse effect can be eliminated by suitable modification to such combination, the Commis-sion is empowered to direct such modification. These powers of the Commission, read with provisions mentioned earlier, certainly require issuance of certain directions in order to achieve the object of the Act and to ensur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SAIL to file its views and comments during the pendency of the investigation. Since further time was declined, SAIL preferred an appeal before the Tribunal, which resulted in passing of the order impugned in the present appeal. We are unable to accede to the submission that the Commission is not a necessary or proper party before the Tribunal. On the contrary, the Regulations and even the interest of justice demands that for complete and effective adjudication the Commission be added as a necessary and proper party in the proceedings before the Tribunal. The direction issued by the Commission was set aside by the Tribunal and further time was granted to SAIL to file its further reply in addition to what has been filed on 15-12-2009 and the Tribunal then directed the Commission to consider all such material and record a fresh decision. We have held that there is no statutory obligation on the Commission to issue notice for grant of hearing to the parties at the stage of forming an opinion under section 26(1) of the Act unless, upon due application of mind, it finds it necessary to invite parties or experts to render assistance to and produce documents before the Commission at that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construed meaningfully, keeping in view the object of the Act and the larger interest of the domestic and international trade. In this backdrop, we are of the considered view that the following directions need to be issued : (A)Regulation 16 prescribes limitation of 15 days for the Commission to hold its first ordinary meeting to consider whether prima facie case exists or not and in cases of alleged anti-competitive agreements and/or abuse of dominant position, the opinion on existence of prima facie case has to be formed within 60 days. Though the time period for such acts of the Commission has been specified, still it is expected of the Commission to hold its meetings and record its opinion about existence or otherwise of a prima facie case within a period much shorter than the stated period. (B)All proceedings, including investigation and inquiry should be completed by the Commission/Director General most expeditiously and while ensuring that the time taken in completion of such proceedings does not adversely affect any of the parties as well as the open market in purposeful implementation of the provisions of the Act. (C)Wherever during the course of inquiry the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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