CCI’s deliberations before ordering steel cartel probe satisfy prima facie requirement, Calcutta High Court says at interim stage

The appeals challenged the Single Judge’s order dated 18 May 2023 refusing interim relief against an investigation by the Director General (DG) of the Competition Commission of India (CCI) in Suo Motu Case No. 2 of 2021.

The investigation followed a Madras High Court order dated 29 July 2021 directing the DG to proceed in accordance with law on a contractors’ association’s complaint alleging cartelisation and artificial increases in steel prices.

After receiving the Madras High Court order, the CCI held a special meeting and, following deliberations, directed the DG to investigate; the DG later filed an investigation report and supplementary reports.

The appellants contended that the investigation was invalid because the CCI had not formed the prima facie opinion required by Section 26(1) of the Competition Act, 2002.

Whether the CCI’s deliberation and direction to the DG to investigate amounted to sufficient compliance with Section 26(1), despite no express recording of a prima facie opinion.

Whether the Single Judge erred in refusing interim relief to stay the investigation and related proceedings.

Section 26(1) of the Competition Act, 2002 requires the CCI to form a prima facie opinion before directing the DG to investigate; the DG cannot initiate an investigation independently of a Commission direction.

Under Competition Commission of India v. Steel Authority of India Ltd., (2010) 10 SCC 744, a Section 26(1) direction is administrative and preparatory, rather than an adjudication determining parties’ rights, and does not ordinarily entail civil consequences.

The Court also relied on Agni Steels Private Limited v. Union of India, 2023 SCC OnLine Mad 8612, which held that a Commission’s deliberation and decision to register a suo motu case may sufficiently express its prima facie satisfaction without using those precise words.

It treated the investigation as concerning the alleged anti-competitive conduct in the market, rather than being confined to the named companies.

The Court found that the DG had not proceeded independently: the Commission considered the Madras High Court order and the DG’s communication at a special meeting, deliberated, registered a suo motu case, and directed an investigation.

In the Court’s prima facie view, those steps sufficiently demonstrated the Commission’s opinion under Section 26(1); the provision did not require a reasoned order or particular formula of words.

The Madras High Court’s recorded allegations and direction to take appropriate action formed relevant context, while the market-wide nature of the inquiry meant that the investigation was not necessarily limited to the companies identified in the original complaint.

The Court declined to follow the contrary approach in Rungta Mines Ltd. v. Union of India, W.P.(C) No. 24391 of 2025.

It further held that, with the investigation complete and reports filed, the balance of convenience did not favour a stay; the challenge to the summons had become infructuous.

Its conclusions were expressly prima facie and confined to the interim-relief appeals; the writ court remained free to decide the underlying challenge independently and without being influenced by the appellate order.