M/S RUNGTA MINES LIMITED, KOLKATA vs UNION OF INDIA
- Court
- Odisha High Court
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Location: ORISSA HIGH COURT, CUTTACK
Date: 27-May-2026 15:45:01
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.24391 of 2025
(In the matter of an application under Articles 226 and 227 of
the Constitution of India, 1950)
M/s. Rungta Mines Limited,
Kolkata & Anr.
…. Petitioner (s)
-versus-
Union of India & Ors. …. Opposite Party (s)
:
Advocates appeared in the case through Hybrid Mode
For Petitioner(s) : Mr. Arun Kathpalia, Sr. Adv.
Along with Mr. Tanmay Mishra, Advocate
For Opposite Party (s) : Ms. Madhavi Divan, Sr. Adv.
Along with associates
Ms. Swati Smita Pati, Adv.
CORAM:
DR. JUSTICE SANJEEB K PANIGRAHI
DATE OF HEARING:-07.03.2026
DATE OF JUDGMENT:-22.05.2026
Dr. Sanjeeb K Panigrahi, J.
1.
The present writ petition has been filed under Articles 226 and 227 of
the Constitution of India challenging the investigation initiated by the
Opposite Party No. 3 against the present Petitioner No. 1 as also their
impleadment as an Opposite Party in Suo Moto Case No. 02 of 2021,
the same being illegal, arbitrary and without jurisdiction inter alia as it
has been initiated in the absence of the jurisdiction Section 26(1) order
having been passed by the Opposite Party No. 2 under the provisions
of the Competition Act, 2002.
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I. FACTUAL MATRIX OF THE CASE
2.
The genesis of the present dispute traces back to a complaint dated
6.3.2021, filed by the Coimbatore Corporation Contractors Welfare
Association (hereinafter, “CCCWA”) before the Central Bureau of
Investigation (“CBI”), alleging that nine steel manufacturers, namely,
(i) Tata Steel Ltd., (ii) JSW Steel, (iii) SAIL Steel, (iv) Vizag Steel, (v)
Tirumala TMT, (vi) Kamachi TMT, (vii) Agni Steel, (viii) Indrola Steel,
and (ix) Kiscol TMT (collectively referred to as the “Steel
Manufacturers”), were engaged in cartelisation by fixing steel prices in
the State of Tamil Nadu with a view to earn unlawful profits.
3. Subsequently, on 25.3.2021, CCCWA instituted Criminal Original
Petition No. 6153 of 2021 under Section 482 of the Code of Criminal
Procedure, 1973 before the Hon’ble High Court of Madras, seeking
directions to the CBI to register a criminal case on the basis of the
aforesaid complaint.
4. In the interregnum, the CBI, by communication dated 30.4.2021,
fowarded the CCCWA complaint to the Director General
(Investigation), Competition Commission of India (Opposite Party No.
3), taking the view that it lacked jurisdiction to investigate the matter.
5.
During the proceedings before the Hon’ble Madras High Court, the
learned Special Public Prosecutor produced a letter dated 26.5.2021,
indicating that the complaint had already been forwarded to the
Director General (Investigation), CCI. Taking note of the same, the
Hon’ble Madras High Court, by order dated 29.7.2021, directed the
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Director General to proceed further and take necessary and
appropriate action on the complaint ‘in accordance with law’ within a
period of four weeks.
6.
Pursuant thereto, the Competition Commission of India (Opposite
Party No. 2) convened a meeting on 17.8.2021, in which the Director
General was also present. Thereafter, on 23.8.2021, the Commission
directed its Secretariat Division to register the matter as a suo motu case
and instructed the Director General to investigate the same in terms of
the directions contained in the order dated 29.7.2021 passed by the
Hon’ble Madras High Court.
7. It is important to note here that the Petitioner No. 1 was not named in
the initial CCCWA complaint which was limited to allegations against
the Steel Manufacturers operating in the state of Tamil Nadu.
8.
Notwithstanding the above, on 16.12.2022, the Director General
conducted a search and seizure operation at the premises of Petitioner
No. 1. It is the case of the Petitioner that, at no stage during the said
operation, was it apprised of its status or the nature of its involvement
in the investigation. In the absence of any indication to the contrary,
the Petitioner understood its role, if any, to be only that of a third
party.
9.
Thereafter, on 27.3.2023, summons were issued to two employees of
the Petitioner No. 1, namely, Mr. Anand Sharma, Senior General
Manager (Commercial), and Mr. Arvind Kumar, Senior General
Manager (Sales & Marketing), directing them to appear before the
Director General on 5.4.2023. Even at this stage, no clarification is
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alleged to have been provided regarding the nature or scope of the
investigation insofar as it concerned the Petitioner.
10.
The Director General submitted its investigation report to the
Competition Commission of India on 5.1.2024. Upon consideration of
the said report, the Commission, on 5.4.2024, directed further
investigation under Section 26(3A) of the Competition Act, 2002. In
compliance thereof, a supplementary investigation report was
submitted by the Director General on 11.4.2025.
11.
In or about May 2025, during the course of an internal legal audit, the
Petitioner No. 1 sought to ascertain the outcome of the earlier
summons issued to its employees. Upon obtaining legal advice, and in
light of the decision of the Hon’ble Madras High Court in MRF Ltd. v.
1
CCI & Ors. , the Petitioner was advised to seek inspection of the
records of the case.
12.
Accordingly, on 18.7.2025, the Petitioner No. 1 filed an application
seeking inspection of the records in Suo Motu Case No. 02 of 2021
under Regulation 38 of the CCI (General) Regulations, 2024.
13. While the same was pending, on 23.7.2025, the Commission again
considered the investigation materials and directed the Director
General to undertake further investigation under Section 26(3A) of the
Act and submit an additional supplementary report within a
stipulated time frame.
14. The Commission, by order dated 8.8.2025, allowed the application for
inspection. Upon inspection of the records on 11.8.2025, the Petitioner
1
2024 SCC OnLine Mad 2244
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discovered, for the first time, that it had been treated as an “Opposite
Party” in the proceedings and that the CCCWA complaint and the
order dated 29.7.2021 of the Hon’ble Madras High Court had been
construed as “information” within the meaning of Section 19(1) of the
Competition Act, prior to the registration of the suo motu case.
15. Thereafter, the Petitioner applied for certified copies of the relevant
records on 12.8.2025, which were furnished on 20.8.2025. It is in the
above backdrop that the Petitioner No. 1, upon gaining knowledge on
11.8.2025 that it had been arrayed as an “Opposite Party” in the
proceedings arising out of Suo Motu Case No. 02 of 2021, and upon
perusing the records which indicated that no prior notice or
opportunity of hearing had been afforded to it before such
impleadment, has approached this Court.
16.
The Petitioner has instituted the present writ petition under Article
226 of the Constitution of India, inter alia seeking quashing of the
investigation and all consequential proceedings arising out of Suo
Motu Case No. 02 of 2021, insofar as they relate to the Petitioner.
17. Now that the broad facts leading up to the instant Petition have been
laid down, this Court shall endeavour to fully summarise the
contentions of the Parties.
II.
PETITIONER’S SUBMISSIONS:
18. Ld. Counsel for the Petitioners submits that the impugned
investigation is, on the face of it, without jurisdiction, having been
initiated in the absence of a mandatory order under Section 26(1) of
the Competition Act, 2002. It is contended that the statutory scheme
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requires the Competition Commission of India to first form a prima
facie opinion, upon due application of mind, before directing an
investigation by the Director General. According to the Ld. counsel,
this requirement is not a mere formality but goes to the root of the
matter and is a condition precedent for the assumption of jurisdiction.
In the present case, it is submitted that no such order exists, nor is
there any material to indicate that the allegations were considered qua
the Petitioner. On that basis, it is urged that the investigation, insofar
as it concerns the Petitioner, stands vitiated at its inception.
19. It is further submitted that the reliance placed by the Opposite Parties
on the order dated 29.7.2021 passed by the Hon’ble Madras High
Court is misconceived. Ld. Counsel submits that the said order merely
directed the Director General to take appropriate steps “in accordance
with law” and did not, in any manner, dispense with or override the
requirement under Section 26(1). It is pointed out that the Hon’ble
High Court did not examine the merits of the allegations nor did it
form any prima facie view of contravention under the Act. In such
circumstances, it is submitted that the said order cannot be treated as a
substitute for the Commission’s independent satisfaction. Any such
interpretation, according to Ld. Counsel, would amount to an
abdication of statutory duty and would effectively bypass the
legislative framework governing competition law.
20. Ld. Counsel further submits that the Director General has acted
beyond the scope of his statutory mandate by initiating and
continuing investigation against the Petitioner in the absence of any
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direction to expand the investigation by the Commission. It is
contended that the Director General is merely an investigative arm
and cannot assume jurisdiction on its own or expand the scope of
investigation to include entities not contemplated by the Commission.
In the present case, it is pointed out that neither the original complaint,
nor the order of the Hon’ble Madras High Court, nor even the minutes
of the Commission’s meeting make any reference to the Petitioner. The
inclusion of the Petitioner, therefore, according to the Ld. Counsel,
amounts to an exercise of power dehors the statute and renders the
proceedings ultra vires.
21. It is further contended that the manner in which the Petitioner has
been impleaded as an “Opposite Party” is in clear violation of the
principles of natural justice. Ld. Counsel further submits that the
Petitioner was never issued any notice, nor was it afforded an
opportunity to contest its inclusion before being subjected to coercive
measures such as search and seizure and the issuance of summons. It
is further argued that such impleadment carries serious civil and
reputational consequences and cannot be undertaken in a manner
lacking transparency. Reliance is placed on the decision in MRF Ltd. v.
CCI & Ors . (supra) , wherein it has been held that an entity must be
informed and given an opportunity of hearing before being arrayed as
an opposite party in investigation proceedings.
22. It is also submitted that the Petitioner has no nexus with the
allegations forming the subject matter of the investigation. It is pointed
out that the CCCWA complaint relates to alleged cartelisation in the
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State of Tamil Nadu, whereas the Petitioner neither operates in the
relevant market nor was engaged in any government procurement in
that State. It is further submitted that the Petitioner was not named in
the complaint and holds only a negligible market share in India. In
such circumstances, its inclusion is said to be wholly arbitrary. It is
further submitted that such selective targeting, while ignoring other
major players, reflects non-application of mind and is violative of
Article 14 of the Constitution.
23.
On the question of delay and laches, it is submitted that the Petitioner
had no knowledge of its status as an “Opposite Party” until inspection
of records was permitted on 8.8.2025 and carried out on 11.8.2025.
Prior thereto, the Petitioner proceeded on the bona fide understanding
that it was being treated only as a third party, there being no
communication to indicate otherwise. It is contended that the cause of
action arose only upon discovery of its impleadment and the
underlying jurisdictional defects. In such circumstances, it is
submitted that the writ petition cannot be said to be belated. It is
further urged that where proceedings are void for lack of jurisdiction,
delay cannot cure the illegality.
III.
OPPOSITE PARTY’S SUBMISSIONS:
24.
Per contra, Ld. Counsel appearing for the Opposite Parties submits that
the present writ petition is liable to be dismissed at the threshold on
the ground of delay and laches. It is contended that the Petitioner
actively participated in the investigation proceedings, including
during the search and seizure operations and in response to summons
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issued to its employees, without raising any objection at the relevant
time. It is further submitted that the investigation has since culminated
in the submission of the main report as well as supplementary reports
before the Competition Commission of India. In such circumstances, it
is submitted that the Petitioner cannot be permitted to challenge the
proceedings at this belated stage. The writ petition, it is submitted, is
therefore both delayed and, in any event, rendered infructuous.
25.
It is further contended that, in the peculiar facts of the present case, the
absence of a formal order under Section 26(1) does not vitiate the
investigation. Ld. Counsel submits that the Hon’ble Madras High
Court, by its order dated 29.7.2021, directed the Director General to
proceed further and take necessary action on the complaint. According
to the Opposite Parties, this direction was not merely recommendatory
but constituted a binding mandate requiring investigation. In view of
such judicial direction, it is submitted that the usual procedural
sequence contemplated under Section 26(1) stood modified, and the
Director General was justified in proceeding accordingly.
26. It is further submitted that the Competition Commission of India and
the Director General perform distinct but complementary roles under
the statutory framework. While the Commission exercises
adjudicatory functions, the Director General is entrusted with
investigative powers under Sections 16 and 41 of the Act. It is
contended that once the matter was taken cognizance of pursuant to
the High Court’s order and registered as a suo motu case, the
Commission’s decision to proceed necessarily implies the existence of
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a prima facie opinion. It is submitted that such opinion need not
always be recorded in a formal or reasoned order and may be
gathered from the decision-making process.
27.
It is also submitted that the scope of investigation by the Director
General is not confined to the entities named in the original complaint.
The Director General is empowered to conduct a comprehensive
inquiry into the alleged anti-competitive conduct and may, in the
course of such investigation, examine the role of other entities whose
involvement comes to light. The mere fact that the Petitioner was not
named in the initial complaint, it is argued, does not preclude
investigation against it. Any challenge at this stage is said to be
premature.
28. It is further contended that no prejudice has been caused to the
Petitioner so as to warrant interference under Article 226 of the
Constitution. The proceedings before the Commission are inquisitorial
in nature, and adequate opportunity will be available to the Petitioner
at the appropriate stage to present its defence. It is contended that at
the stage of investigation, prior notice is not required before gathering
material or issuing summons. The principles of natural justice, it is
submitted, do not apply in their full rigour at this stage.
29.
It is also contended that the allegations of arbitrariness and selective
targeting are unfounded. The investigation, according to the Ld.
Counsel, has been conducted in a comprehensive manner, and the
inclusion of the Petitioner is based on material gathered during the
course of investigation. The Director General, it is submitted, is vested
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with discretion in determining the scope and direction of
investigation, and such discretion ought not to be interfered with
lightly. It is urged that no case for interference under Article 226 is
made out, particularly when adequate remedies are available before
the Commission. Interference at this stage, it is submitted, would
impede the functioning of a specialised statutory authority and
frustrate the object of the Competition Act.
IV. ISSUES FOR CONSIDERATION:
30.
In view of the rival submissions advanced by Ld. Counsel for the
parties and upon perusal of the materials on record, the following
issues arise for consideration before this Court:
A. Whether the order dated 29.7.2021 passed by the Hon’ble
Madras High Court can be construed as dispensing with or
substituting the statutory requirement under Section 26(1)
of the Act?
B. Whether the investigation initiated by the Director General
against the Petitioner is vitiated for want of a prior order
under Section 26(1) of the Competition Act, 2002, forming
a prima facie opinion by the Competition Commission of
India?
C. Whether the Director General acted beyond the scope of its
statutory mandate by including the Petitioner within the
ambit of investigation in the absence of any specific
direction by the Commission?
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D. Whether the impleadment of the Petitioner as an
“Opposite Party”, without prior notice or opportunity of
hearing, is violative of the principles of natural justice?
E. Whether the present writ petition is liable to be dismissed
on the ground of delay, laches, prematurity, or lack of
territorial jurisdiction especially in light of the stage of the
investigation proceedings?
A. WHETHER THE ORDER DATED 29.7.2021 PASSED BY THE
HON’BLE MADRAS HIGH COURT CAN BE CONSTRUED
AS DISPENSING WITH OR SUBSTITUTING THE
STATUTORY REQUIREMENT UNDER SECTION 26(1) OF
THE ACT?
31.
The first issue that arises for consideration relates to the true import
and effect of the order dated 29.7.2021 passed by the Hon’ble Madras
High Court, and whether the same can be construed as dispensing
with the statutory requirement of formation of a prima facie opinion
under Section 26(1) of the Competition Act. The Opposite Parties
contend that the said order constitutes a binding judicial mandate to
investigate, thereby obviating the need to follow the procedure
contemplated under the Act. The Petitioners, on the other hand,
submit that the order merely directs action “in accordance with law”
and cannot be read as overriding the statutory scheme.
32.
Section 26(1) of the Act provides that upon receipt of information
under Section 19, if the Commission is of the opinion that there exists a
prima facie case, it shall direct the Director General to cause an
investigation to be made into the matter. The relevant portion is
reproduced herein for the sake of convenience:
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“26. (1) On receipt of a reference from the Central
Government or a State Government or a statutory
authority or on its own knowledge or information
received under section 19, if the Commission is of the
opinion that there exists a prima facie case, it shall
direct the Director General to cause an investigation
to be made into the matter:
Provided that if the subject matter of an
information received is, in the opinion of the
Commission, substantially the same as or has
been covered by any previous information
received, then the new information may be
clubbed with the previous information.”
The language employed is both conditional and mandatory. The
formation of an opinion regarding the existence of a prima facie case is
the condition precedent, and upon such formation, a direction to
investigate follows. The use of the expression “shall” indicates that
once such opinion is formed, the direction must be issued; at the same
time, it makes it clear that the formation of such opinion is
indispensable.
33. The statutory scheme, when viewed as a whole, reinforces this
position. Section 19 empowers the Commission to receive information,
while Section 26 delineates the procedural steps that follow. The
requirement of a prima facie opinion operates as a threshold safeguard
before the investigative machinery is set in motion. It is not an empty
formality; rather, it is intended to ensure that the coercive powers of
investigation are invoked only upon due application of mind.
34.
At the outset, it becomes necessary to notice the nature of the
proceedings before the Hon’ble Madras High Court. The order in
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question came to be passed in a petition under Section 482 of the Code
of Criminal Procedure, wherein the grievance of the complainant was
directed against the inaction of the CBI. The High Court was not
exercising jurisdiction under Article 226 of the Constitution in relation
to the Competition Act, nor was it called upon to examine any issue
arising under the said Act. The Competition Commission of India was
not a party to those proceedings, and the scope of adjudication was
confined to the prayer made therein.
35.
The operative portion of the order assumes importance. The Hon’ble
Court, upon noticing that the complaint had already been forwarded
to the Director General, directed the latter to “proceed further in this
regard and take necessary and appropriate action on the complaint…
in accordance with law.” The expression “in accordance with law” is
of significance. It indicates that the authority concerned is required to
act within the framework of the law governing it.
36. The submission of the Opposite Parties that the said direction amounts
to a mandate to investigate, independent of statutory requirements,
does not merit acceptance. A judicial direction to act “in accordance
with law” cannot be construed as dispensing with the law itself. Such
an interpretation would not only be inconsistent with the language
employed but would also run contrary to settled principles.
37. The CCI has committed a fatal error of misconstruing the Madras High
Court order as one of a mandamus directing investigation, as is
admitted at paragraph 11 of its Counter Affidavit, where it has stated:
"11. That it is also a settled principle of law when the
Hon'ble High Court of Judicature under the writ
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jurisdiction directs and/or issues a mandate for
conduction an investigation concerning the public at
large, no sanction is required from any other
authority under the relevant statute which in the
present case has been resorted to an substantially
acted upon by the OP No. 3"
38. It is well settled that judicial orders must be read in the context in
which they are passed. The Hon’ble Madras High Court was not
exercising its powers under writ jurisdiction, did not issue any
mandate for conduct of investigation, did not examine the merits of
the allegations contained in the complaint, nor did it record any
finding suggestive of contravention of the Competition Act. There is
nothing in the order to indicate that the Court formed any prima facie
opinion of the nature contemplated under Section 26(1).
39.
In the absence of such examination, the order cannot be construed as a
substitute for the Commission’s statutory satisfaction. The
requirement under Section 26(1) is that the Commission must apply its
own mind to the material before it and arrive at an independent
conclusion regarding the existence of a prima facie case. This function
is entrusted to the Commission under the statute and cannot be
supplanted by inference.
40.
The record indicates that the Commission, in its minutes dated
23.8.2021, appears to have treated the High Court’s order as the basis
for directing investigation, without undertaking any independent
evaluation. Such an approach reflects a misappreciation of the scope of
the judicial direction.
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41. The statutory scheme does not contemplate any exception to the
requirement of forming a prima facie opinion. Whether the
information is received from an external source, referred by another
authority, or taken cognizance of suo motu , the requirement remains
the same. The Commission must form an opinion that a prima facie
case exists.
42. The argument that the judicial direction modifies the statutory
procedure is also untenable. Courts do not ordinarily intend to
override statutory provisions unless such intention is expressly
indicated. In the present case, no such intention can be discerned. On
the contrary, the direction to act “in accordance with law” reinforces
the obligation to adhere to the statutory framework.
43. It is also of some relevance that the order was passed in proceedings to
which the Competition Commission was not a party. It would be
difficult to hold that such an order binds the Commission in a manner
that alters its statutory obligations, without affording it an opportunity
of being heard.
44. In the considered view of this Court, the reliance placed on the order
dated 29.7.2021 is misplaced. The said order neither dispenses with
nor substitutes the requirement under Section 26(1) of the Competition
Act. It merely requires the authority to proceed in accordance with
law, which necessarily includes compliance with the statutory
procedure.
45. Accordingly, this Court holds that the order dated 29.7.2021 passed by
the Hon’ble Madras High Court does not dispense with the
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requirement under Section 26(1) of the Competition Act, 2002, nor can
it be construed as a substitute for the Commission’s statutory
satisfaction.
B. WHETHER THE INVESTIGATION INITIATED BY THE
DIRECTOR GENERAL AGAINST THE PETITIONER IS
VITIATED FOR WANT OF A PRIOR ORDER UNDER
SECTION 26(1) OF THE COMPETITION ACT, 2002,
FORMING A PRIMA FACIE OPINION BY THE
COMPETITION COMMISSION OF INDIA?
46.
The next issue that falls for consideration goes to the root of the
controversy, namely, whether the investigation undertaken by the
Director General suffers from a jurisdictional infirmity on account of
the absence of a prior order under Section 26(1) of the Competition
Act, 2002. The Petitioners contend that such an order is a sine qua non
for the initiation of investigation and that its absence renders the entire
proceedings qua them, void ab initio . The Opposite Parties, however,
seek to sustain the investigation by contending that the decision to
proceed itself reflects the formation of a prima facie opinion. The issue,
therefore, calls for an examination of the statutory framework, the law
laid down by the Hon’ble Supreme Court, and its application to the
facts at hand.
47.
It is no doubt correct that a direction under Section 26(1) is
administrative in nature and does not, by itself, determine rights or
liabilities. However, that does not dilute the requirement of its
existence. The administrative character of the order pertains to its
nature, not to the necessity of complying with the statutory
precondition.
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48. The legal position stands settled by the Hon’ble Supreme Court
in Competition Commission of India v. Steel Authority of India
2
Limited . The Hon’ble Apex Court, while interpreting Section 26(1),
held that the Commission must form an opinion as to the existence of
a prima facie case and must indicate such opinion, even if briefly. It
was also clarified that the Director General cannot initiate
investigation suo motu and is required to act pursuant to a direction
issued under Section 26(1).
49.
The importance of this requirement becomes evident when one
considers the consequences that follow from such a direction. Upon
issuance of a direction to investigate, the Director General is vested
with wide-ranging powers, including search and seizure, summoning
of individuals, and examination of records. These powers, though
exercised at a preliminary stage, are intrusive in nature and are
capable of affecting business operations, reputation, and commercial
standing. It is for this reason that the statute mandates the formation
of a prima facie opinion as a threshold safeguard.
50. The Opposite Parties have sought to contend that the formation of a
prima facie opinion can be inferred from the act of registering a suo
motu case and directing investigation. The submission, though it may
appear attractive at first glance, does not withstand closer scrutiny.
51. The Opposite Parties rely very heavily on the Hon’ble Madras High
3
Court’s judgment in Agni Steels Pvt. Ltd. v. Union of India wherein,
2
(2010) 10 SCC 744
3
W.P. No. 11911 of 2023, dated 19.10.2023
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the Hon’ble Madras High Court was pleased to observe that the
Commission is empowered to initiate an inquiry either suo motu or on
receipt of information under Section 19 of the Act. The Court clarified
that while formation of a prima facie opinion is mandatory under
Section 26(1), such opinion may be implicit in the decision to register a
suo motu case and need not always be expressed in a specific form,
particularly where a Court has directed the Commission to proceed
with an investigation. It is further contended that this order has
attained finality as the Hon’ble Supreme Court vide order dated
10.11.2023 declined to interfere with the same.
52. In Agni Steel (supra), the Hon’ble Madras High Court upheld the
investigation in the peculiar facts and circumstances of that case,
where the entity under investigation was expressly named in the
CCCWA complaint, and there existed material before the Commission
linking it to the alleged cartelisation. It is in that limited factual context
that the Court held that the Commission’s prima facie satisfaction,
though not expressly recorded in formulaic terms, could be inferred
from the surrounding record. In stark contrast, the present case suffers
from a complete absence of jurisdictional foundation.
53.
The Petitioners before this Court, were neither named in the CCCWA
complaint nor linked by any material whatsoever to the alleged
contravention. Further, there is no order under Section 26(1) of the
Competition Act qua the Petitioners—no consideration of information,
no formation of prima facie opinion, and no reasons recorded.
Moreover, the dismissal of the Special Leave Petition against Agni
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Steel (supra) in limine does not lend finality to the judgment nor
elevate it to a binding precedent. It is well settled, inter alia in
4
Kunhayammed v. State of Kerala , that a non-speaking dismissal of an
SLP does not result in merger, nor does it constitute a declaration of
law under Article 141 of the Constitution. Such dismissal merely
indicates that the Hon’ble Supreme Court was not inclined to exercise
its discretionary jurisdiction, and cannot be read as affirmation of the
reasoning of the High Court.
54.
The requirement under Section 26(1) is not merely that the
Commission should be satisfied; it must also indicate, even if in brief
terms, that such satisfaction has been arrived at. Section 26(1)
demands more than a silent satisfaction. The statute expects the
Commission to show , however briefly, that it has applied its mind.
The Hon’ble Supreme Court has also emphasized that the Commission
must express its mind, though detailed reasons are not required. What
is contemplated is at least a minimal articulation of the basis on which
the Commission considers it appropriate to proceed.
55. Turning to the facts of the present case, the minutes of the meeting
dated 23.8.2021 assume significance. A perusal thereof indicates that
the Commission directed the Secretariat to register the matter as a suo
motu case and instructed the Director General to investigate in terms of
the directions contained in the order dated 29.7.2021 passed by the
Hon’ble Madras High Court.
4
(2000) 6 SCC 359
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56. In the instant case, what is noticeably absent from the said minutes is
any reference to the contents of the CCCWA complaint, any
consideration of the allegations made therein, or any indication that
the Commission formed an independent prima facie view. There is no
discussion of the material placed before it, nor any indication of
application of mind to the allegations.
57. The absence is not merely of elaborate reasoning; there is no indication
of reasoning at all. The minutes do not record that the Commission
was satisfied about the existence of a prima facie case, nor do they
reflect any exercise of consideration. The direction to investigate
appears to have followed on the basis of the Hon’ble High Court’s
order, without the statutory exercise mandated under Section 26(1).
58. The contention that the Commission’s decision to proceed implies the
existence of satisfaction is further weakened by the nature of the
record. Where a statute requires the formation of an opinion, the
record must, at least in substance, reflect that such opinion was
formed. In the present case, the record is silent in that regard, and that
silence assumes significance.
59. The consequences of such omission cannot be overlooked. The powers
exercised by the Director General, including search and seizure and
summoning of individuals, are not routine administrative steps. They
have serious civil and reputational implications. The statutory
requirement of a prima facie opinion serves as a necessary check
against arbitrary exercise of such powers.
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60. The submission of the Opposite Parties that the defect, if any, is
curable cannot be accepted. A defect of this nature goes to the root of
the matter. The formation of a prima facie opinion is a jurisdictional
fact, and its absence renders the initiation of investigation without
authority.
61. Moreover, a jurisdictional defect cannot be cured by subsequent
action. The Commission cannot, at a later stage, supply reasons or seek
to justify an investigation that was initiated without compliance with
the statutory requirement.
62. This Court is also mindful of the submission that an order under
Section 26(1) is administrative in nature. While that proposition is
correct, it does not obviate the requirement of compliance with the
statutory precondition. The administrative character of the order does
not dispense with the necessity of forming the opinion mandated by
the statute.
63. In the considered view of this Court, the present case discloses a clear
absence of the foundational requirement under Section 26(1). The
Commission has neither formed nor recorded a prima facie opinion,
and the Director General has proceeded to investigate in the absence
of a valid direction.
64.
Such investigation, in the absence of jurisdictional foundation, cannot
be sustained in law. Accordingly, this Court holds that the
investigation initiated against the Petitioner is vitiated for want of a
prior order under Section 26(1) of the Competition Act, 2002.
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65. It is clarified that this Court has not examined the merits of the
allegations or the sufficiency of material against the Petitioners. The
consideration is confined to the existence of the jurisdictional facts
necessary to trigger the investigative process under Section 26(1).
C. WHETHER THE DIRECTOR GENERAL ACTED BEYOND
THE SCOPE OF ITS STATUTORY MANDATE BY
INCLUDING THE PETITIONER WITHIN THE AMBIT OF
INVESTIGATION IN THE ABSENCE OF ANY SPECIFIC
DIRECTION BY THE COMMISSION?
66.
The third issue that arises for consideration concerns the scope of the
powers of the Director General under the Competition Act and
whether, in the facts of the present case, the inclusion of the Petitioner
within the ambit of investigation was within the bounds of such
authority. The Petitioners contend that the Director General has acted
beyond jurisdiction by initiating and continuing investigation against
an entity not named in the original complaint and in the absence of
any specific direction by the Commission. The Opposite Parties, on the
other hand, submit that the Director General is vested with wide
investigative powers and is entitled to examine the role of any entity
whose involvement comes to light during the course of investigation.
67.
This Court considers it apposite to first delineate the statutory position
of the Director General. Under Sections 16 and 41 of the Competition
Act, the Director General functions as the investigative arm of the
Competition Commission of India. The Director General does not
possess independent adjudicatory powers and acts in furtherance of
directions issued by the Commission. This position is not in dispute.
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68. The Hon’ble Supreme Court in CCI v. SAIL (supra) has clearly held
that the Director General cannot initiate investigation suo motu and is
required to act strictly in terms of the direction issued by the
Commission under Section 26(1). The powers of the Director General,
though wide in the matter of fact-finding, are circumscribed by the
scope of the inquiry as determined by the Commission. The Hon’ble
Supreme Court has held as follows:
"31(5) In consonance with the settled principles of
administrative jurisprudence, 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 required of the Commission to
pass speaking orders, upon due application of mind,
responding to all the contentions raised before it by the rival
parties.
xxx
37. As already noticed, in exercise of its powers, the
Commission is expected to form its opinion as to the
existence of a prima facie case for contravention of certain
provisions of the Act and then pass a direction to the
Director General to cause an investigation into the matter.
xxx
38. In contradistinction, the direction under Section 26(1)
after formation of a prima facie opinion is a direction
simpliciter to cause an investigation into the matter.
Issuance of such a direction, at the face of it, is an
administrative direction to one of its own wings
departmentally and is without entering upon any
adjudicatory process. It does not effectively determine any
right or obligation of the parties to the lis.
xxx
97. Section 26, under its different sub-sections, requires the
Commission to issue various directions, take decisions and
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pass orders, some of which are even appealable before the
Tribunal. Even if it is a direction under any of the provisions
and not a decision, conclusion or order passed on merits by
the Commission, it is expected that the same would be
supported by some reasoning. At the stage of forming a
prima facie view, as required under Section 26(1) of the
Act, the Commission may not really record detailed
reasons, but must express its mind in no uncertain
terms that it is of the view that prima facie case exists,
requiring issuance of direction for investigation to the
Director General. Such view should be recorded with
reference to the information furnished to the
Commission. Such opinion should be formed on the
basis of the records , including the information furnished
and reference made to the Commission under the various
provisions of the Act, as aforereferred. However, other
decisions and orders, which are not directions simpliciter and
determining the rights of the parties, should be well reasoned
analysing and deciding the rival contentions raised before the
Commission by the parties. In other words, the
Commission is expected to express prima facie view in
terms of Section 26(1) of the Act, without entering into
any adjudicatory or determinative process and by
recording minimum reasons substantiating the
formation of such opinion , while all its other orders and
decisions should be well reasoned.
xxx
116. 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 direction of the Commission under Section 26(1) of
the Act. The Director General, unlike the investigation
under the MRTP Act, 1969, where the Director General
can initiate investigation suo motu, cannot do so under
the Act. Then the Commission has to consider such report as
well as consider the objections and submissions made by
other party. Till the time final order is passed by the
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Commission in accordance with law, the inquiry under this
Act continues. Both these expressions cannot be treated as
synonymous. They are distinct, different in expression and
operate in different areas."
(emphasis is ours)
69.
This position has been consistently reaffirmed in subsequent decisions,
5
including Competition Commission of India v. Bharti Airtel Ltd. ,
6 7
Samir Agrawal v. CCI , CCI v. State of Mizoram , and Coal India Ltd.
8
v. CCI , all of which reiterate that formation of a prima facie opinion
under Section 26(1) constitutes the jurisdictional foundation for
commencement of an investigation. Investigation by the DG under the
Competition Act commences not merely on the receipt of
reference/information but only after CCI has formed a prima facie
opinion of violation of the provisions of the Act having been
committed. The Hon’ble Delhi High Court in Google Inc. and Ors. v.
9
CCI and Anr. was pleased to hold as follows:
“… R. Again, as aforesaid, CCI can order/direct investigation
only if forms a prima facie opinion of violation of provisions of
the Act having been committed. Our Constitutional values
and judicial principles by no stretch of imagination would
permit an investigation where say CCI orders/directs
investigation without forming and expressing a prima
facie opinion or where the prima facie opinion though
purportedly is formed and expressed is palpably unsustainable.
The remedy of Article 226 would definitely be available in such
case.”
5
(2019) 2 SCC 521
6
(2021) 3 SCC 136
7
(2022) 13 SCC 1
8
(2023) 7 SCC 827
9
2015 SCC OnLine Del 8992
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70. The Opposite Parties have relied upon the proposition that the
Director General may, in the course of investigation, expand the scope
of inquiry to include additional parties or facets that come to light. In
principle, there can be no serious dispute with this proposition. It is
well settled that the investigation is not confined in a rigid manner to
the entities named in the original information, and the Director
General may examine the role of other participants in the alleged anti-
competitive conduct.
71.
However, this principle must be understood in its proper context. The
power to expand the scope of investigation presupposes the existence
of a validly initiated inquiry. It cannot be invoked to justify the
assumption of jurisdiction in the absence of such initiation. The
distinction between expansion within jurisdiction and assumption of
jurisdiction without foundation is of some importance.
72.
In the present case, as has already been held while dealing with Issue
No. (A), there is no valid order under Section 26(1) forming a prima
facie opinion. The foundational requirement for initiation of
investigation is thus absent. In such circumstances, the question of the
Director General expanding the scope of investigation to include
additional entities, including the Petitioner, does not arise.
73.
Even otherwise, the factual matrix raises certain concerns regarding
the manner in which the investigation has been conducted. The
CCCWA complaint specifically named nine steel manufacturers
allegedly involved in cartelisation in the State of Tamil Nadu. The
Petitioner was not among those named.
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74. Notwithstanding the above, the Director General proceeded to
conduct search and seizure operations at the premises of the
Petitioner, while several entities named in the complaint were not
subjected to similar measures. The record does not disclose any clear
basis for this differential approach.
75. It is also the case of the Petitioners that they had no apparent nexus
with the allegations forming the subject matter of the complaint. The
alleged cartel pertains to the State of Tamil Nadu, whereas the
Petitioner is stated to operate predominantly in a different geographic
market and to hold a negligible market share in India during the
relevant period.
76. The Opposite Parties have sought to justify the inclusion of the
Petitioner on the ground that material implicating it emerged during
the course of investigation. However, no such material has been
placed on record to indicate the basis on which such inclusion was
made. The absence of any reference to such material in the
Commission’s directions further weakens this contention.
77. It must be borne in mind that the powers exercised by the Director
General, particularly those relating to search and seizure, are intrusive
in nature and have serious implications for the entity concerned. The
exercise of such powers must, therefore, be supported by a lawful and
reasoned process.
78. The reliance placed by the Opposite Parties on precedents permitting
expansion of investigation is, in the facts of the present case,
misplaced. Those decisions proceed on the footing that the
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investigation was validly initiated. They do not support a situation
where the very foundation of the investigation is absent.
79.
It was also submitted that the sufficiency or otherwise of material
against the Petitioner is a matter to be examined at the stage of final
adjudication. While that may be so in the ordinary course, the present
case involves a more fundamental issue, namely, the existence of
jurisdiction to investigate.
80.
In the considered view of this Court, the inclusion of the Petitioner
within the scope of investigation, in the absence of a valid order under
Section 26(1) and without any discernible material indicating its
involvement, amounts to an exercise of power not contemplated by
the statute.
81. Accordingly, this Court holds that the Director General acted beyond
the scope of its statutory mandate in including the Petitioner within
the ambit of investigation.
D. WHETHER THE IMPLEADMENT OF THE PETITIONER AS AN
“OPPOSITE PARTY”, WITHOUT PRIOR NOTICE OR
OPPORTUNITY OF HEARING, IS VIOLATIVE OF THE
PRINCIPLES OF NATURAL JUSTICE?
82.
The fourth issue that arises for consideration is whether the manner in
which the Petitioner came to be arrayed as an “Opposite Party” in the
investigation is in violation of the principles of natural justice. The
Petitioners contend that they were neither informed of their status nor
afforded any opportunity to contest their inclusion before being
subjected to coercive measures such as search and seizure and
issuance of summons. The Opposite Parties, on the other hand, submit
that at the stage of investigation, strict adherence to principles of
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natural justice is not required and that adequate opportunity would be
available at a later stage.
83.
It is well settled that the principles of natural justice are not inflexible
and their application depends upon the nature of the proceedings in
question. In the context of Section 26(1), the Hon’ble Supreme Court
has held that the formation of a prima facie opinion is administrative
in nature and does not require prior notice or hearing. However, the
present case does not concern merely the passing of an order under
Section 26(1), but relates to the subsequent conduct of investigation
and, more particularly, the manner in which the Petitioner came to be
included within its scope.
84. The distinction between the initiation of investigation and the
inclusion of a particular entity as an “Opposite Party” assumes
significance. While the former may not attract the requirement of prior
hearing, the latter carries with it direct civil and reputational
consequences. Being arrayed as an “Opposite Party” in a competition
proceeding is not without consequence, as it exposes the entity to
potential liability and attendant adverse implications.
85. In the present case, the record indicates that the Petitioner was not
named in the original complaint and had no prior indication that it
was under investigation. Notwithstanding this, the Director General
conducted search and seizure operations at its premises on 16.12.2022,
followed by issuance of summons to its employees on 27.3.2023.
86. At no point during these proceedings does it appear that the Petitioner
was informed of the nature of the allegations, the scope of the
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investigation, or the capacity in which it was being proceeded against.
The absence of such information assumes significance in assessing
whether the principles of fairness have been adhered to.
87.
The Petitioner has stated that it participated in the proceedings under
the bona fide belief that it was being treated as a third party. This
assertion finds some support in the fact that no communication was
issued clarifying its status. It was only upon inspection of records in
August 2025 that the Petitioner became aware that it had been treated
as an “Opposite Party”.
88. The contention of the Opposite Parties that the conduct of search and
seizure and issuance of summons itself constitutes sufficient notice of
involvement cannot be accepted. Such actions, in the absence of
disclosure regarding the basis or status of involvement, do not amount
to notice in the legal sense.
89.
Notice, in its true sense, must convey not only that a person is
required to participate in proceedings but also the capacity in which
such participation is sought. Without such clarity, the affected party is
deprived of the opportunity to take an informed decision regarding its
response.
90.
The requirement of fairness in administrative action entails that an
entity should, at the very least, be aware of the case it is required to
meet. While detailed disclosure may not be necessary at the
investigative stage, the complete absence of any indication regarding
the status of the Petitioner cannot be justified.
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91. The reliance placed by the Petitioners on the decision in MRF Ltd. v.
CCI & Ors. (supra) is not without substance. The said decision
underscores the importance of informing an entity of its status in the
proceedings, particularly where such status carries legal consequences.
It was held by the Hon’ble Madras High Court:
“22. It is also my considered view that there has been
considerable opaqueness in the manner of conduct of the
proceedings and considerable delay on the part of R-1 to R-5
in making available order dated 26-8-2020 to the petitioner.
Having expressly stated under letter dated 24-4-2020 that the
role of the petitioner is only as a third party, it was incumbent
upon the authorities to have solicited the response of the
petitioner prior to changing the status, which change has
serious and grave implications.
xxx
24. In my considered view, an entity is entitled to know the
status under which its presence and participation is sought in
statutory proceedings. The application of the statutory
provisions and connected Regulations, their consequences, as
well as available protections would vary depending on the
status of the party. Thus, unless a party is aware as to the
specific provision under which its involvement is sought and
obtained, it would be in the dark as to the measures available
to it under the law.
xxx
40. Neither Section 41 nor Section 26(4) elaborate on the
procedure to be followed when a third party is escalated to the
position of contesting/opposite party. However, it is clear that
this escalation is triggered by virtue of the reports of the DG
under sub-sections (3) and (3-B).
41. If the reports under sub-sections (3) and (3-B) contain
recommendations that there is no contravention of the
statutory provision, the Commission, under sub-section (5),
shall invite objections or suggestions from the Government
concerned. On consideration of the objections as well as
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suggestions of the Government concerned, the Commission
could close the matter if it agrees with the recommendations of
the DG.
42. If the objections/suggestions of the Government are
contrary to the reports of the DG and if the Commission
concurs, it may direct further investigation into the matter. If
on the other hand, the reports under sub-sections (3) and (3-B)
recommend contravention of statutory provisions and if the
Commission is of the opinion that further enquiry is called for,
it shall cause such further enquiry under sub-section (8) of
Section 26.
43. Sub-section (8) contains two limbs. The first limb refers to
the adverse report of the DG under sub-sections (3) and (3-B)
of Section 26. The second limb empowers the Commission to
call for further enquiry if it believes it necessary. Thus, the
scheme of Section 26 makes it possible for the report of the DG
under sub-sections (3) and (3-B) to be the final word on the
matter, if the Government concerned concurs and the
Commission is of the opinion that the enquiry by the DG has
been comprehensive. It thus becomes all the more incumbent
for opportunity to be afforded to a third party, prior to
conversion of its status from “third person” to “contesting
party”.”
92.
The submission that adequate opportunity would be afforded at a
later stage does not adequately address the grievance raised by the
Petitioner. Natural justice is not confined to the stage of final
adjudication; it extends to all stages where the rights or interests of a
party are affected.
93. The cumulative effect of the above circumstances leads to the
conclusion that the Petitioner was not afforded a fair opportunity to
know or contest its inclusion in the proceedings. The procedure
adopted lacks transparency and does not conform to the requirements
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of fairness. Procedure, in this context, is not a technicality—it is the
only assurance against arbitrary power.
94.
In the considered opinion of this Court, the impleadment of the
Petitioner as an “Opposite Party” without prior notice or intimation,
coupled with the conduct of coercive measures, is arbitrary and
violative of the principles of natural justice.
E. WHETHER THE PRESENT WRIT PETITION IS LIABLE TO BE
DISMISSED ON THE GROUND OF DELAY, LACHES,
PREMATURITY, OR LACK OF TERRITORIAL JURISDICTION
ESPECIALLY IN LIGHT OF THE STAGE OF THE
INVESTIGATION PROCEEDINGS?
95. The final issue that arises for consideration pertains to the
maintainability of the present writ petition. The Opposite Parties have
raised multiple objections, namely, that the petition is liable to be
dismissed on account of delay and laches, that it seeks to interfere at
an interlocutory stage of investigation, and that this Court lacks
territorial jurisdiction. The Petitioners, in response, contend that the
cause of action arose only upon discovery of their status as an
“Opposite Party” in August 2025 and that the present challenge is to a
jurisdictional defect, which can be raised at any stage.
96.
The doctrine of delay and laches is premised on the principle that a
party who sleeps over its rights cannot seek equitable relief at a
belated stage. However, the application of this doctrine is not
mechanical and must be assessed in the context of when the cause of
action actually arose. In the present case, the Petitioners have
demonstrated that they were not aware of their status as an “Opposite
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Party” until inspection of records was granted on 8.8.2025 and carried
out on 11.8.2025.
97.
The sequence of events lends credence to this assertion. The Petitioner
was neither named in the original complaint nor informed of its
inclusion during the course of investigation. The search and seizure
operation and subsequent summons did not disclose the nature of
allegations or the status of the Petitioner. In such circumstances, the
Petitioner’s understanding that it was participating as a third party
cannot be said to be unreasonable.
98. The cause of action, therefore, cannot be traced back to the date of
search or summons but must be pegged to the date when the
Petitioner acquired knowledge of its impleadment and the underlying
jurisdictional defects. The prompt steps taken thereafter, including
seeking certified copies and approaching this Court, negate any
suggestion of deliberate delay or acquiescence.
99. It is also well settled that where the challenge is to the very jurisdiction
of an authority, the doctrine of delay does not operate with the same
rigour. A jurisdictional defect strikes at the root of the proceedings and
cannot be cured by passage of time. Courts have consistently held that
if an action is void ab initio , it can be challenged whenever it comes to
the knowledge of the aggrieved party.
100. The objection of prematurity is equally devoid of merit. The Opposite
Parties have contended that the investigation has not culminated in a
final order and that the Petitioners will have an opportunity to present
their case before the Commission. While this proposition holds good
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in cases where the challenge pertains to merits or sufficiency of
evidence, it does not apply where the very initiation of proceedings is
under challenge.
101.
The present writ petition does not seek to interdict a lawful
investigation on merits but challenges the absence of jurisdictional
foundation and violation of procedural safeguards. Interference in
such cases does not amount to premature adjudication but is necessary
to prevent continuation of proceedings that are ex facie without
authority of law.
102. This Court is also mindful of the submission that an order under
Section 26(1) is administrative in nature and ordinarily not amenable
to judicial review at an interlocutory stage. However, the present case
stands on a different footing, as it involves not the correctness of such
an order but the complete absence thereof. The bar on interference in
administrative directions cannot be extended to shield actions taken
without jurisdiction.
103. The objection relating to territorial jurisdiction also merits some
discussion. The Opposite Parties have contended that the investigation
pertains to alleged cartelisation in the State of Tamil Nadu and that
similar proceedings are pending before other High Courts. The
Petitioners, however, submit that a substantial part of the cause of
action arises within the territorial jurisdiction of this Court.
104. It is well settled that under Article 226 of the Constitution, a High
Court may exercise jurisdiction if the cause of action, wholly or in part,
arises within its territorial limits. The expression “cause of action” has
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been interpreted broadly to include all material facts which give rise to
the grievance. It is not necessary that the entire cause of action must
arise within the jurisdiction; even a part thereof would suffice.
105.
In the present case, the Petitioner carries on substantial business
operations within the State of Odisha. 3 out of its 4 manufacturing
units are situated here. Moreover, a significant portion of Petitioner
No. 1's sales, and a strong network of local suppliers and customers
are situated in the State of Odisha. Any adverse outcome of the
investigation will directly and materially affect its business operations
which are primarily based in the State of Odisha. The consequences of
the impugned investigation, including potential adverse findings,
would directly impact its business, reputation, and commercial
dealings within the jurisdiction of this Court. The search and seizure,
though conducted outside the State, have ramifications that extend to
the Petitioner’s operations within Odisha.
106. This, coupled with the continuing effect of the investigation on the
Petitioner’s business within the State, furnish a sufficient nexus to
invoke the jurisdiction of this Court.
107. The allegation of forum shopping also does not merit acceptance. The
mere fact that other entities have approached different High Courts in
relation to similar investigations does not preclude the Petitioners
from seeking relief before this Court, particularly when they are not
parties to those proceedings. Each case must always be examined on
its own facts. The Petitioners are not parties to the proceedings before
any of the other Hon'ble High Courts and accordingly, the Petitioners
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cannot be accused of attempting to re-agitate, circumvent, or obtain a
conflicting adjudication on issues under consideration.
108.
The principle of comity of courts, while requiring due regard to
decisions of coordinate High Courts, does not operate as a bar to the
exercise of jurisdiction where the cause of action arises within the
territorial limits of this Court. Nor does it compel this Court to defer
adjudication in the absence of identity of parties and issues.
109.
The cumulative effect of the above discussion leads to the conclusion
that the objections raised by the Opposite Parties regarding delay,
laches, prematurity, and territorial jurisdiction are unsustainable. The
Petitioners have approached this Court within a reasonable time from
the date of knowledge, and the challenge pertains to a jurisdictional
defect that warrants judicial scrutiny.
110.
Accordingly, this Court holds that the present writ petition is
maintainable and not liable to be dismissed on the grounds urged by
the Opposite Parties.
V. CONCLUSION:
111. In view of the foregoing analysis and findings returned on the issues
framed hereinabove, this Court is of the considered opinion that the
impugned investigation, insofar as it relates to the Petitioners, suffers
from fundamental jurisdictional infirmities and procedural
irregularities which go to the root of the matter. The absence of a valid
order under Section 26(1) of the Competition Act, 2002, coupled with
the misconstruction of the order dated 29.7.2021 passed by the Hon’ble
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Madras High Court, renders the very initiation of investigation
unsustainable in law.
112.
This Court has further found that the inclusion of the Petitioners
within the ambit of investigation is not supported by any discernible
statutory foundation and has been carried out in a manner that reflects
non-application of mind. The procedure adopted by the Opposite
Parties, particularly in arraying the Petitioners as “Opposite Parties”
without prior notice or intimation, falls foul of the principles of natural
justice and cannot be countenanced.
113. In such circumstances, permitting the investigation to continue against
the Petitioners would amount to allowing an action founded on a
jurisdictional vacuum to proceed, which is impermissible in a system
governed by rule of law. The statutory safeguards engrafted under the
Competition Act cannot be diluted or bypassed under the guise of
administrative expediency.
114. allowed.
Accordingly, the writ petition deserves to be
115. Before parting, this Court deems it appropriate to observe that the
Competition Commission of India occupies a pivotal role in ensuring
the orderly functioning of markets and in curbing anti-competitive
practices that may distort economic efficiency and consumer welfare.
The mandate entrusted to the Commission is of considerable
significance in a liberalised economy, where fair competition forms the
bedrock of growth and public interest.
116. At the same time, the exercise of such regulatory power must be
tempered with adherence to statutory safeguards and procedural
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discipline. Investigations under the Competition Act, by their very
nature, carry serious civil, commercial, and reputational consequences
for the entities concerned. The power to investigate cannot be
exercised in a manner that disregards foundational requirements of
jurisdiction or fairness.
117. The balance between effective enforcement and protection against
arbitrary action is not merely desirable but essential. While the
Commission must act with firmness in addressing anti-competitive
conduct, such action must be anchored in the framework of the statute
and guided by principles of natural justice. Any deviation therefrom
risks undermining not only the rights of affected parties but also the
institutional credibility of the regulatory process.
118. It is in this context that this Court reiterates that procedural safeguards
under the statute are not impediments to enforcement but are integral
to ensuring that such enforcement is just, transparent, and sustainable.
The rule of law demands that power be exercised not merely in
furtherance of legitimate objectives, but strictly within the bounds of
the authority conferred by statute.
119. This decision must not be construed as an invitation for routine
interference with investigative processes under the Competition Act,
but is confined to the peculiar facts and circumstances of the present
case where the foundational jurisdictional requirement is
demonstrably absent.
120. It is, therefore, ordered as follows:
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(i) The investigation arising out of Suo Motu Case No.
02 of 2021 , insofar as it relates to the Petitioners, is
hereby quashed and set aside.
(ii) All consequential proceedings, actions, and
measures taken by the Opposite Parties against the
Petitioners pursuant to the said investigation,
including search and seizure operations and
summons, stand set aside.
(iii) There shall be no order as to costs.
121. The Writ Petition is accordingly allowed in the above terms. Ordered
accordingly.
122. Interim order, if any, passed earlier stands vacated.
(Dr. Sanjeeb K Panigrahi)
Judge
Orissa High Court, Cuttack,
nd
Dated 22 May, 2026/
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