The Supreme Court on Thursday said Competition Commission of India (CCI) has the authority to order investigations into allegations of unfair trade practices and its directions cannot be challenged before the Competition Appellate Tribunal (COMPAT).
Allowing CCI's appeal partially, the bench headed by Chief Justice SH Kapadia said such powers had to be exercised sparingly. The bench further put some conditions saying that the investigations have to be completed in a time-bound manner within 60 days.
It added that while directing investigations, the competition watchdog CCI has to record reasons. The matter before the CCI concerned an exclusive arrangement between the Indian Railways and the Steel Authority of India Limited (SAIL) for the supply of rails. Jindal Steel and Power Limited (JSPL) challenged this arrangement before the CCI as being violative of the Competition Act.
CCI had challenged COMPAT's order restraining the commission's director general from probing into allegations levelled by Jindal Steel and Power Limited over an exclusive agreement between SAIL and Indian Railways on purchase of rails.
CCI had approached the apex court in July contending that COMPAT could not restrain its director general from carrying out the investigations against any firm or company.
The anti-trust regulator had further claimed it wasn't necessary to hear the company against whom preliminary enquiry had been ordered.
COMPAT had argued that prima facie it was necessary to check if there was any violation of natural justice through the initiation of such an inquiry.
Commenting on the judgement, Pallavi S. Shroff of Amarchand and Mangaldas that represented JSPL said, “This decision saves the CCI from degenerating into merely a post office on the way to the COMPAT. This seminal decision of the Supreme Court corrects the balance of power between the CCI and the COMPAT, a balance that had been skewed by the decision of the COMPAT."