REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7779             OF 2010  [D.No.12247 OF 2010]

 Competition Commission of India                ...Appellant

Versus

Steel Authority of India Ltd. & Anr.                                ...Respondents

                              J U D G M E N T  

SWATANTER KUMAR, J.

The application for leave to appeal is allowed.  Civil appeal is admitted.

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  certain  respects,  particularly,  in  the  light  of  international  

economic developments relating to competition law.  Most countries in  

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the world  have enacted competition  laws to  protect  their  free market  

economies- an economic system in which the allocation of resources is  

determined solely by supply and demand. The rationale of free market  

economy is that the competitive offers of different  suppliers allow the  

buyers to make the best purchase. The motivation of each participant in  

a  free  market  economy is  to  maximize  self-interest  but  the  result  is  

favourable to society.  As Adam Smith observed: “there is an invisible  

hand at work to take care of this”.

As far as American law is concerned, it is said that the Sherman Act,  

1890,  is  the first  codification of  recognized common law principles of  

competition law. With the progress of time, even there the competition  

law has  attained  new dimensions  with  the  enactment  of  subsequent  

laws, like the Clayton Act,  1914,  the Federal  Trade Commission Act,  

1914 and the Robinson-Patman Act, 1936. The United Kingdom, on the  

other  hand,  introduced  the  considerably  less  stringent  Restrictive  

Practices  Act,  1956,  but  later  on more  elaborate  legislations  like  the  

Competition Act,  1998 and the Enterprise Act,  2002 were introduced.  

Australia introduced its current Trade Practices Act in 1974.

The overall intention of competition law policy has not changed markedly  

over the past century.  Its intent is to limit the role of market power that  

might result from substantial concentration in a particular industry. The  

major concern with monopoly and similar kinds of concentration is not  

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that  being  big  is  necessarily  undesirable.   However,  because  of  the  

control exerted by a monopoly over price, there are economic efficiency  

losses to society and product quality and diversity may also be affected.  

Thus, there is a need to protect  competition.  The primary purpose of  

competition  law  is  to  remedy  some  of  those  situations  where  the  

activities of one firm or two lead to the breakdown of the free market  

system, or, to prevent such a breakdown by laying down rules by which  

rival  businesses can compete with each other.   The model  of perfect  

competition  is  the  ‘economic  model’  that  usually  comes  to  an  

economist’s mind when thinking about the competitive markets.

As far as the objectives of competition laws are concerned, they vary  

from country 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 three-

fold:  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  

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competition law.

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 22nd of May, 2002.  After  

completion of the consultation process, the Competition Act, 2002 (for  

short,  the ‘Act’)  as Act  12 of  2003,  dated 12th December,  2003,  was  

enacted.   As per the statement of objects and reasons, this enactment  

is India’s response to the opening up of its economy, removing controls  

and resorting to liberalization.  The natural  corollary of  this is that  the  

Indian  market  should  be  geared  to  face  competition  from  within  the  

country and outside.  The Bill sought to ensure fair competition in India  

by prohibiting trade practices which cause appreciable adverse effect on  

the competition in market within India and for this purpose establishment  

of a quasi judicial body was considered essential.  The other object was  

to curb the negative aspects of competition through such a body namely,  

the  ‘Competition  Commission  of  India’  (for  short,  the  ‘Commission’)  

which has the power to perform different kinds of functions,  including  

passing  of  interim  orders  and  even  awarding  compensation  and  

imposing penalty.  The Director General appointed under Section 16(1)  

of  the Act  is  a specialized investigating wing of  the Commission.   In  

short,  the establishment of the Commission and enactment of the Act  

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was aimed at preventing practices having adverse effect on competition,  

to protect the interest of the consumer and to ensure fair trade carried  

out by other participants in the market in India and for matters connected  

therewith or incidental thereto.

The various provisions of the Act deal with the establishment, powers  

and  functions  as  well  as  discharge  of  adjudicatory  functions  by  the  

Commission.  Under the scheme of the Act, this Commission is vested  

with inquisitorial, investigative, regulatory, adjudicatory and to a limited  

extent even advisory jurisdiction.  Vast powers have been given to the  

Commission  to  deal  with  the  complaints  or  information  leading  to  

invocation of the provisions of Sections 3 and 4 read with Section 19 of  

the Act.  In exercise of  the powers vested in it  under Section 64,  the  

Commission  has  framed  Regulations  called  The  Competition  

Commission  of  India  (General)  Regulations,  2009  (for  short,  the  

‘Regulations’).  The Act and the Regulations framed thereunder clearly  

indicate  the  legislative  intent  of  dealing  with  the  matters  related  to  

contravention  of  the  Act,  expeditiously  and  even  in  a  time  bound  

programme.  Keeping  in  view  the  nature  of  the  controversies  arising  

under the provisions of the Act and larger public interest,  the matters  

should be dealt with and taken to the logical end of pronouncement of  

final orders without any undue delay.   In the event of delay, the very  

purpose and object of the Act is likely to be frustrated and the possibility  

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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  relating  to  criminal  sanctions  for  individual  

violations, high upper limit for imposition of fines on corporate entities as  

well as extradition of individuals found guilty of formation of cartels.  This  

is  so,  despite  the  fact  that  there  are  much  larger  violations  of  the  

provisions in India in comparison to the other two countries, where at the  

very  threshold,  greater  numbers  of  cases  invite  the  attention  of  the  

regulatory/adjudicatory bodies.  Primarily, there are three main elements  

which are intended to be controlled by implementation of the provisions  

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of the Act, which have been specifically dealt with under Sections 3, 4  

and 6 read with Sections 19 and 26 to 29 of the Act.  They are anti-

competitive agreements, abuse of dominant position and regulation of  

combinations which are likely to have an appreciable adverse effect on  

competition.  Thus, while dealing with respective contentions raised in  

the present appeal and determining the impact of the findings recorded  

by  the  Tribunal,  it  is  necessary  for  us  to  keep  these  objects  and  

background in mind.    

Jindal  Steel  &  Powers  Ltd.  (for  short  the  ‘informant’)  invoked  the  

provisions of Section 19 read with Section 26(1) of the Act by providing  

information to the Commission alleging that M/s. Steel Authority of India  

Ltd. (for short ‘SAIL’) had,  inter alia,  entered into an exclusive supply  

agreement with Indian Railways for supply of rails.  The SAIL, thus, was  

alleged to have abused its dominant position in the market and deprived  

others of fair competition and therefore, acted contrary to Section 3(4)  

(Anti-competitive  Agreements)  and  Section  4(1)  (Abuse  of  dominant  

position) of the Act.  This information was registered by the Commission  

and was considered in its meeting held on 27th October, 2008 on which  

date  the  matter  was  deferred  at  the  request  of  the  informant  for  

furnishing additional information.  During the course of hearing, it was  

also brought to the notice of the Commission that a petition being Writ  

Petition (C) No.8531 of 2009, filed by the informant against the Ministry  

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of Railways, was also pending in the High Court of Delhi at New Delhi.  

Vide  order  dated  10th November,  2009  the  Commission  directed  the  

informant to file an affidavit with respect to the information furnished by  

it.   The  Commission  also  directed  SAIL  to  submit  its  comments  in  

respect of the information received by the Commission within two weeks  

from the date of the said meeting and the matter was adjourned till 8th  

December, 2009.  On 19th November, 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 8th December,  

2009, the Commission took on record the affidavit filed by the informant  

on 30th November, 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 8th December, 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 22nd December, 2009 the Commission only reiterated  

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its earlier directions made to the Director General for investigation and  

granted liberty to SAIL to file its reply before the Director General.  The  

correctness of the directions contained in the order dated 8th December,  

2009 was challenged by SAIL before the Competition Appellate Tribunal  

(for short, the ‘Tribunal’).  The Commission filed an application on 28th  

January, 2010 before the Tribunal seeking impleadment in the appeal  

filed by SAIL.  It also filed an application for vacation of interim orders  

which had been issued by the Tribunal on 11th January, 2010, staying  

further  proceedings before  the Director  General  in  furtherance of  the  

directions of the Commission dated 8th December, 2009. It will be useful  

to refer to the order passed by the Commission on 8th December, 2009  

at this stage itself which reads as under:

“The  meeting  was  held  under  the  chairmanship  of  Sh.  H.C.  Gupta, Member.

2. The  case  was  earlier  considered  by  the  Commission  in  its  meetings  held  on  4.11.2009 and  10.11.2009.   In  the  meeting  of  the  Commission  held  on 10.11.2009,  Mr.  Suman Kr.  Dey,  VP and Head  Legal  and  Mrs.  Pallavi  Shroff,  Advocate  (along  with  their  fellow  advocates) appeared before the Commission   on behalf of the informant  and  made  detailed  admissions.   As  per  decision  taken  during  the  meeting held on 10.11.2009, informant/his counsel  was directed to file  an affidavit regarding the current status of the writ petition filed in the  Delhi high Court, particular indicating its admission or otherwise and as  to whether any other order has been passed by the Hon’ble High Court,  in  the  matter  so  far.   SAIL  was  also  requested  to  furnish  their  views/comments in the matter within 2 weeks time.

3. In  the  meeting  of  the  Commission  held  on  08.12.2009,  the  Commission  took  on  record  the  affidavit  filed  by  the  informant  on  30.11.2009 regarding the current status of the writ petition filed in the  Delhi  High Court  and certified copies of all  the orders passed by the  Hon’ble High Court, in the matter, till date.  However, SAIL did not file its  

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reply within the stipulated time and requested to allow extension of time  from  3.12.2009  for  a  further  period  of  six  weeks.  The  Commission  considered the above request of SAIL.  However, the Commission did  not allow any further extension.

4. The case was discussed in detail.  After considering the details  filed  by  the  informant  with  the  information  and  the  entire  relevant  material/record available 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.”

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 party in appeals filed before the Tribunal.  It was also  

averred  in  the  application  that  intervention  of  the  Commission  at  the  

appellate  proceedings  would  not  prejudice  anybody.   The  very  

maintainability of the appeal before the Tribunal was also questioned by  

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the Commission on the ground that the order under appeal before the  

Tribunal was a direction simpliciter to conduct investigation and thus was  

not an order appealable within the meaning of Section 53A of the Act.  

The  Tribunal  in  its  order  dated  15th February,  2010,  inter  alia, but  

significantly held as under:

a) The  application  of  the  Commission  for  impleadment  was  

dismissed,  as in  the opinion of  the Tribunal  the Commission  

was  neither  a  necessary  nor  a  proper  party  in  the appellate  

proceedings before the Tribunal.  Resultantly, the application for  

vacation of stay also came to be dismissed.

b) It  was held that  giving of  reasons is an essential  element  of  

administration  of  justice.   A  right  to  reason  is,  therefore,  an  

indispensable part of sound system of judicial review. Thus, the  

Commission  is  directed  to  give  reasons  while  passing  any  

order, direction or taking any decision.

c) The appeal  against the order dated 8th December,  2009 was  

held  to  be  maintainable  in  terms of  Section  53A of  the  Act.  

While  setting  aside  the  said  order  of  the  Commission  and  

recording  a  finding  that  there  was  violation  of  principles  of  

natural justice, the Tribunal granted further time to SAIL to file  

reply by 22nd February, 2010 in addition to the reply already filed  

by SAIL.   

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This order of the Tribunal dated 15th February, 2010 is impugned in the  

present appeal.

The  informant,  i.e.  the  person  who  wishes  to  complain  to  the  

Commission constituted under section 7 of the Act, would make such  

information  available  in  writing  to  the  Commission.  Of  course,  such  

information could also be received from the Central Government, State  

Government,  Statutory authority or on its own knowledge as provided  

under Section 19(1)(a) of the Act.  When such information is received,  

the Commission is expected to satisfy itself and express its opinion that  

a prima facie case exists, from the record produced before it and then to  

pass a direction to the Director General to cause an investigation to be  

made into the matter. This direction, normally, could be issued by the  

Commission  with  or  without  assistance  from other  quarters  including  

experts of eminence. 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.

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  

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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.

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 requirement and in fact  

specific duty on the Commission to issue notice to the affected parties to  

reply  with  regard  to  the  details  of  the  information  and  the  report  

submitted by the Director General and thereafter permit the parties to  

submit  objections  and  suggestions  to  such  documents.  After  

consideration of objections and suggestions, if the Commission agrees  

with  the  recommendations  of  the  Director  General  that  there  is  no  

offence disclosed, it shall close the matter forthwith, communicating the  

said order to the person/authority as specified in terms of Section 26(6)  

of the Act.  If there is contravention of any of the provisions of the Act  

and in the opinion of the Commission, further inquiry is needed, then it  

shall  conduct  such  further  inquiry  into  the  matter  itself  or  direct  the  

Director General to do so in accordance with the provisions of the Act.

In terms of Section 26(7), the Commission is vested with the power to  

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refer the matter to the Director General for further investigation, or even  

conduct  further  inquiry  itself,  if  it  so  chooses.  The  Commission,  

depending  upon  the  nature  of  the  contravention,  shall,  after  inquiry,  

adopt the course specified under Sections 27 and 28 of the Act in the  

case of abuse of dominant position and the procedure under Sections 29  

to 31 of the Act in the case of combinations. The Commission is vested  

with powers of wide magnitude and serious repercussions as is evident  

from the provisions of  Sections 27(d),  28 and 31(3) of  the Act.   The  

Commission is empowered to direct modification of agreements insofar  

as  they  are  in  contravention  of  Section  3,  division  of  an  enterprise  

enjoying  dominant  position,  modification  of  combinations  wherever  it  

deems necessary and to ensure that there is no abuse or contravention  

of the statutory provisions.  We may notice that the provisions relating to  

combinations  have  been  duly  notified  vide  Notifications  dated  12th  

October 2007 and 15th May, 2009 respectively.  However, in the facts of  

the present case, these provisions do not fall  for consideration of the  

Court.   

 For conducting inquiry and passing orders, as contemplated under the  

provisions  of  the  Act,  the  Commission  is  entitled  to  evolve  its  own  

procedure under Section 36(1) of the Act.  However, the Commission is  

also vested with the powers of a Civil Court in terms of Section 36(2) of  

the Act,  though for a limited purpose.  After completing the inquiry in  

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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.

 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 8th December,  

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.   

On  the  contrary,  according  to  SAIL  (the  respondent  herein),  the  

principles of natural justice have been violated by the Commission while  

declining to grant extension of time to file its reply and that the direction  

in referring the matter to Director General was passed in undue haste.  

 The  informant  placed  reliance  upon  Regulation  30(2)  of  the  

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Regulations which empowers the Commission to pass such orders as it  

may deem fit on the basis of the facts available, where a party refuses to  

assist  or otherwise does not provide necessary information within the  

stipulated time.   Further, according to the informant there was no valid  

reason submitted by the SAIL which would justify grant of extension and  

as such the order passed by the Commission on merits was not liable to  

be interfered.    

We may also notice that learned counsel appearing for the parties had  

addressed the Court on certain allied issues which may not have strictly  

arisen from the memorandum of appeal, but the questions raised were  

of public importance and are bound to arise before the Commission, as  

well as the Tribunal in all matters in which the proceedings are initiated  

before the Commission.  Thus, we had permitted the parties to argue  

those  allied  issues  and,  therefore,  we  would  proceed  to  record  the  

reasons while dealing with such arguments as well.

       In order to examine the merit or otherwise of the contentions raised  

by the respective parties, it will  be appropriate for us to formulate the  

following points for determination:--

1) Whether  the  directions  passed  by  the  Commission  in  

exercise  of  its  powers  under  Section  26(1)  of  the  Act  

forming  a  prima  facie opinion  would  be  appealable  in  

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terms of Section 53A(1) of the Act?

2) What is the ambit  and scope of power vested with the  

Commission under Section 26(1) of the Act and whether  

the parties, including the informant or the affected party,  

are entitled to notice or hearing, as a matter of right, at  

the preliminary stage of formulating an opinion as to the  

existence of the prima facie case?  

3) Whether  the Commission  would be a necessary,  or  at  

least  a  proper,  party  in  the  proceedings  before  the  

Tribunal in an appeal preferred by any party?

4) At what stage and in what manner the Commission can  

exercise powers vested in it under Section 33 of the Act  

to pass temporary restraint orders?

5) Whether  it  is  obligatory  for  the  Commission  to  record  

reasons for formation of a prima facie opinion in terms of  

Section 26(1) of the Act?

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  

17

procedural  intricacies  do  not  hamper  in  achieving  the  

object of the Act, i.e., free market and competition.

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 or grant hearing, nor any party can claim, as  

a matter of right,  notice and/or hearing at  the stage of  

formation  of  opinion  by  the  Commission,  in  terms  of  

Section 26(1) of the Act that a prima facie case exists for  

18

issuance of a direction to the Director General to cause  

an investigation to be made into the matter.

However, the Commission, being a statutory body exercising, inter alia,  

regulatory  jurisdiction,  even  at  that  stage,  in  its  discretion  and  in  

appropriate  cases  may  call  upon  the  concerned  party(s)  to  render  

required assistance or produce requisite information, as per its directive.  

The  Commission  is  expected  to  form  such  prima  facie view  without  

entering  upon  any  adjudicatory  or  determinative  process.   The  

Commission is entitled to form its opinion without any assistance from  

any  quarter  or  even  with  assistance  of  experts  or  others.   The  

Commission  has  the  power  in  terms  of  Regulation  17  (2)  of  the  

Regulations to invite not  only the information provider but even ‘such  

other person’ which would include all persons, even the affected parties,  

as  it  may  deem  necessary.   In  that  event  it  shall  be  ‘preliminary  

conference’, for whose conduct of business the Commission is entitled  

to evolve its own procedure.

3) The Commission, in cases where the inquiry has been  

initiated  by  the  Commission  suo  moto, shall  be  a  

necessary party and in all other cases the Commission  

shall  be  a  proper  party  in  the  proceedings  before  the  

Competition Tribunal.  The presence of the Commission  

before the Tribunal would help in complete adjudication  

19

and effective and expeditious disposal of matters. Being  

an  expert  body,  its  views  would  be  of  appropriate  

assistance to the Tribunal. Thus, the Commission in the  

proceedings before the Tribunal would be a necessary or  

a proper party, as the case may be.

4) During an inquiry and where the Commission is satisfied  

that the act is 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  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  

20

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  

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.

Submissions made and findings in relation to Point No.1

If we examine the relevant provisions of the Act, the legislature, in its  

wisdom,  has  used  different  expressions  in  regard  to  exercise  of  

21

jurisdiction by the Commission. The Commission may issue directions,  

pass orders or take decisions, as required, under the various provisions  

of  the Act.  The object  of  the Act  is demonstrated by the prohibitions  

contained  in  Sections  3  and  4  of  the  Act.  Where  prohibition  under  

Section 3 relates to anti-competition agreements there Section 4 relates  

to  the  abuse  of  dominant  position.   The  regulations  and  control  in  

relation to combinations is dealt with in Section 6 of the Act.  The power  

of  the  Commission  to  make  inquiry  into  such  agreements  and  the  

dominant  position of  an entrepreneur,  is  set  into  motion by providing  

information  to  the  Commission  in  accordance  with  the  provisions  of  

Section  19  of  the  Act  and  such  inquiry  is  to  be  conducted  by  the  

Commission  as  per  the  procedure  evolved  by  the  legislature  under  

Section 26 of the Act.  In other words, the provisions of Sections 19 and  

26  are  of  great  relevance  and  the  discussion  on  the  controversies  

involved in the present case would revolve on the interpretation given by  

the Court to these provisions.   

Thus, we may reproduce provisions of Section 19 and 26 which read as  

under:

“19.  Inquiry  into  certain  agreements  and  dominant  position  of  enterprise.--(1)   The  Commission  may  inquire  into  any  alleged  contravention of the provisions contained in subsection (1) of section 3  or sub-section (1) of section 4 either on its own motion or on—

(a) receipt of any information, in such manner and accompanied by such  fee as may be determined by regulations, from any person, consumer or  their association or trade association; or

22

(b)  a  reference  made  to  it  by  the  Central  Government  or  a  State  Government or a statutory authority.

(2) Without prejudice to the provisions contained in sub-section (1), the  powers and functions of the Commission shall include the powers and  functions specified in sub-sections (3) to (7).

(3) The Commission shall, while determining whether an agreement has  an appreciable adverse effect on competition under section 3, have due  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 sector  undertaking or otherwise;

(h) entry barriers including barriers such as regulatory barriers, financial  risk, high capital cost of entry, marketing entry barriers, technical entry  

23

barriers, economies of scale, high cost of substitutable goods or service  for consumers;

(i) countervailing buying power;

(j) market structure and size of market;

(k) social obligations and social costs;

(/)  relative  advantage,  by  way  of  the  contribution  to  the  economic  development, by the enterprise enjoying a dominant position having or  likely to have an appreciable adverse effect on competition;

(m) any other factor which the Commission may consider relevant for the  inquiry.

(5) For determining whether a market constitutes a "relevant market" for  the purposes of this Act, the Commission shall have due regard to the  "relevant geographic market'' and "relevant product market".

(6) The Commission shall,  while determining the "relevant geographic  market", have due regard to all or any of the following factors, namely:—

(a) regulatory trade barriers;

(b) local specification requirements;

(c) national procurement policies;

(d) adequate distribution facilities;

(e) transport costs;

(f) language;

(g) consumer preferences;

(h) need for secure or regular supplies or rapid after-sales services.

(7)  The  Commission  shall,  while  determining  the  "relevant  product  market", have due regard to all or any of the following factors, namely:—

(a) physical characteristics or end-use of goods;

(b) price of goods or service;

(c) consumer preferences;

(d) exclusion of in-house production;

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(e) existence of specialised producers;

(f) classification of industrial products.

26. Procedure for inquiry under section 19

(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.

(2) Where on receipt of a 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  subsection  (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 this Act,  the Commission shall invite objections or suggestions from the Central  Government or the State Government or the statutory authority or the  parties concerned, as the case may be, on such report of the Director  General.

(6) If, after consideration of the objections and suggestions referred to in  

25

sub section (5), if any, the Commission agrees with the recommendation  of the Director General, it shall close the matter forthwith and pass such  orders  as  it  deems  fit  and  communicate  its  order  to  the  Central  Government or the State Government or the statutory authority or the  parties concerned, as the case may be.

(7) If, after consideration of the objections or suggestions referred to in  sub section (5),  if  any,  the Commission is  of  the opinion that  further  investigations is called for, it may direct further investigation in the matter  by the Director General or cause further inquiry to be made by in the  matter or itself proceed with further inquiry in the matter in accordance  with the provisions of this Act.

(8)  If  the report  of  the Director  General  referred to in sub-section (3)  recommends that there is contravention of any of the provisions of this  Act, and the Commission is of the opinion that further inquiry is called  for,  it  shall  inquire  into  such  contravention  in  accordance  with  the  provisions of this Act.”

The Tribunal has been vested with the power to hear and dispose of  

appeals against any direction issued or decision made or order passed  

by  the  Commission  in  exercise  of  its  powers  under  the  provisions  

mentioned in Section 53A of the Act.  The appeals preferred before the  

Tribunal under Section 53A of the Act are to be heard and dealt with by  

the Tribunal as per the procedure spelt out under Section 53B of the Act.  

It will be useful to refer to both these provisions at this stage itself, which  

read as under:--

“53A. Establishment of Tribunal. - (1) The Central Government shall,  by  notification,  establish  an  Appellate  Tribunal  to  be  known  as  Competition Appellate Tribunal, –

(a)  to  hear  and  dispose  of  appeals  against  any  direction  issued  or  decision made or order passed by the Commission under sub-sections  (2) and (6) of section 26, section 27, section 28, section 31, section 32,  section 33, section 38, section 39, section 43, section 43A, section 44,  

26

section 45 or section 46 of this Act;

(b)  to  adjudicate  on claim for  compensation  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 subsection(2) of section 53Q 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 period of sixty days if  it  is  satisfied that  there was  sufficient cause for not filing it within that period.

(3) On receipt of an appeal under sub-section (1), the Appellate Tribunal  may, after giving the parties to the appeal, an opportunity of being heard,  pass such orders thereon as it thinks fit, confirming, modifying or setting  aside the direction, decision or order appealed against.

(4) The Appellate Tribunal shall send a copy of every order made by it to  the Commission and the parties to the appeal.

(5) The appeal filed before the Appellate Tribunal under sub-section (1)  shall be dealt with by it as expeditiously as possible and endeavour shall  be made by it to dispose of the appeal within six months from the date of  receipt of the appeal.”

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  

27

contravention of certain provisions of the Act and then pass a direction  

to the Director General to cause an investigation into the matter. These  

proceedings are initiated by the intimation or reference received by the  

Commission in any of the manners specified under Section 19 of the  

Act. At the very threshold, the Commission is to exercise its powers in  

passing the direction for investigation; or where it finds that there exists  

no prima facie case justifying passing of such a direction to the Director  

General, it can close the matter and/or pass such orders as it may deem  

fit  and proper.   In other words,  the order passed by the Commission  

under Section 26(2) is a final order as it puts an end to the proceedings  

initiated upon receiving the information in one of the specified modes.  

This order has been specifically made appealable under Section 53A of  

the  Act.   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.  

Closure of the case causes determination of rights and affects a party,  

i.e. the informant; resultantly, the said party has a right to appeal against  

such closure of case under 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  

28

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.

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 his legal position is  an act or decision against which an action for annulment may be brought  under Article 173.  More specifically, in the case of acts or decisions  adopted by a  procedure  involving  several  stages,  in  particular  where  they  are  the  culmination  of  an  internal  procedure,  an  act  is  open to  review only if it is a measure definitively laying down the position of the  institution  on the  conclusion of  that  procedure,  and not  a  provisional  measure intended to pave the way for that final decision (judgment in  Case 60/81 IBM v. Commission [1981] ECR 2639, at p. 2651, paragraph  8 et seq.). It follows that the fact that the contested act is a preparatory  measure constitutes one of the barriers to the admissibility of an action  for annulment which the Court may consider of its own motion, as the  Court of Justice acknowledged in its judgment in Case 346/87 Bossi v.  Commission [1989] ECR 303, especially at p.332 et seq.”

The provisions  of  Sections  26 and 53A of  the  Act  clearly  depict  the  

29

legislative intent that the framers never desired that all orders, directions  

and  decisions  should  be  appealable  to  the  Tribunal.   Once  the  

legislature  has  opted  to  specifically  state  the  order,  direction  and  

decision, which would be appealable by using clear and unambiguous  

language,  then  the  normal  result  would  be  that  all  other  directions,  

orders etc. are not only intended to be excluded but, in fact, have been  

excluded from the operation of that provision.  The presumption is in  

favour of the legislation.  The legislature is deemed to be aware of all the  

laws  in  existence  and  the  consequences  of  the  laws  enacted  by  it.  

When other  orders  have been  excluded  from the  scope  of  appellate  

jurisdiction, it will not be permissible to include such directions or orders  

by implication or with reference to other provisions which hardly have  

any bearing on the matter in issue and thus make non-appealable orders  

appealable. The provisions of Section 53A(1)(a) use the expression ‘any  

direction issued or decision made or order passed by the Commission’.  

There is no occasion for the Court to read and interpret the word ‘or’ in  

any different form as that would completely defeat the intention of the  

legislature.   The  contention  raised  before  us  is  that  the  word  ‘or’  is  

normally disjunctive and ‘and’ is normally conjunctive, but at the same  

time  they  can  be  read  vice  versa.  The  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  

30

independent of any decision or order which may be made or passed by  

the Commission.   

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 and 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  Corporation of  Delhi  vs.  Tek Chand Bhatia  [(1980)  1  SCC  

158], where the Court held as under:--

“11. ……As Lord Halsbury L.C. observed in  Mersey Docks & Harbour  Board v. Henderson [LR (1888) 13 AC 603], 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”.  The substitution of  conjunctions,  however,  has  been  sometimes  made  without  sufficient  reasons, and it has been doubted whether some of the cases of turning  “or”  into  “and”  and vice  versa have not  gone to  the  extreme limit  of  interpretation.”

To us, the language of  the Section is clear and the statute does not  

demand that we should substitute ‘or’ or read this word interchangeably  

31

for achieving the object of the Act.  On the contrary, the objective of the  

Act is more than clear that  the legislature intended to provide a very  

limited right to appeal.  The orders which can be appealed against have  

been specifically stipulated by unambiguously excluding the provisions  

which  the  legislature  did  not  intend  to  make  appealable  under  the  

provisions of the Act.  It is always expected of the Court to apply plain  

rule of construction rather than trying to read the words into the statute  

which have been specifically omitted by the legislature.

         We may usefully refer to similar interpretation given by this Court  

in  the  case  of  Super  Cassettes  Industries  Ltd.  vs.  State  of  U.P.  

[(2009)10 SCC 531], wherein the Court was dealing with cancellation of  

a notice issued under Section 9(2) of the U.P. Imposition of Ceiling of  

Land Holdings Act,  1960, requiring submission of  a statement  by the  

tenure holder for determination of surplus land in accordance with law.  

Sub-section (1) of Section 13 of the said Act read as under:--  

“13. Appeals—(1) Any party aggrieved by an order under sub-section (2)  of Section 11 or Section 12, may, within thirty days of the date of the  order, prefer an appeal to the Commissioner within whose jurisdiction  the land or any part thereof is situate.”

The State of UP through its Collector  had preferred an appeal under  

Section 13 of the Act against an order passed by the authority cancelling  

the notice which had been issued under Section 9(2) of the Act.  The  

contention raised was that the said order amounted to an order being  

32

passed under Section 11(2) of the Act.  An order passed under Section  

11(2) of the Act in furtherance of the statement 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…….

xxx              xxx                xxx             xxx

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 canceling the notice issued under Section 9(2) amenable to  appeal. Such order does not fall within the ambit of Section 13.”

We find that the view taken by the Court in this case squarely applies to  

the case in hand as well.  Right to appeal is a creation of statute and it  

does require application of  rule of  plain construction.   Such provision  

should neither be construed too strictly nor too liberally, if given either of  

these  extreme  interpretations,  it  is  bound  to  adversely  affect  the  

legislative  object  as  well  as  hamper  the  proceedings  before  the  

33

appropriate forum.

    In the case of Maria Cristina De Souza Sadder vs.  Amria Zurana  

Pereira Pinto [(1979) 1 SCC 92], this Court held as under:

“5 …It is no doubt well-settled that the right of appeal is a substantive  right and it gets vested in a litigant no sooner the lis is commenced in the  Court  of  the  first  instance,  and  such  right  or  any  remedy  in  respect  thereof will  not be affected by any repeal of the enactment conferring  such  right  unless  the  repealing  enactment  either  expressly  or  by  necessary  implication  takes  away  such  right  or  remedy  in  respect  thereof.”

The principle of ‘appeal being a statutory right and no party having a  

right to file appeal except in accordance with the prescribed procedure’  

is now well settled.  The right of appeal may be lost to a party in face of  

relevant provisions of law in appropriate cases.  It being creation of a  

statute, legislature has to decide whether the right to appeal should be  

unconditional or conditional.  Such law does not violate Article 14 of the  

Constitution.  An appeal to be maintainable must have its genesis in the  

authority  of  law.   Reference  may  be  made to  M.  Ramnarain  Private  

Limited v. State Trading Corporation of India Limited, [(1983) 3 SCC 75]  

and Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City  

of Ahmedabad [(1999) 4 SCC 468].  Right of appeal is neither a natural  

nor  inherent  right  vested  in  a  party.  It  is  substantive  statutory  right  

regulated  by  the  statute  creating  it.  The  cases  of  Kondiba  Dagadu  

Kadam vs.  Savitribai Sopan Gujar     [(1999  ) 3 SCC 722] and Kashmir Singh  

34

“19.  It  is  a  well-settled  principle  in  law  that  the  Court  cannot  read  anything into a statutory provision which is plain and unambiguous. A  statute is an edict of the legislature. The language employed in a statute  is the determinative factor of legislative intent. Words and phrases are  symbols  that  stimulate  mental  references  to  referents.  The  object  of  interpreting  a  statute  is  to  ascertain  the  intention  of  the  legislature  enacting it.  (See Institute  of  Chartered  Accountants  of  India  v.  Price   Waterhouse.) The intention of the legislature is primarily to be gathered  from the language used, which means that attention should be paid to  what  has  been  said  as  also  to  what  has  not  been  said.  As  a  consequence, a construction which requires for its support, addition or  substitution  of  words  or  which  results  in  rejection  of  words  as  meaningless has to be avoided. As observed in Crawford v. Spooner  Courts  cannot  aid  the  legislatures'  defective  phrasing  of  an  Act,  we  cannot add or mend, and by construction make up deficiencies which  are left there.  (See State of Gujarat v. Dilipbhai Nathjibhai Patel). It is  contrary to all rules of construction to read words into an Act unless it is  absolutely necessary to do so. [See Stock v. Frank Jones (Tipton) Ltd.]  Rules  of  interpretation  do  not  permit  Courts  to  do  so,  unless  the  provision as it stands is meaningless or of a doubtful meaning. Courts  are not  entitled to read words into an Act  of  Parliament  unless clear  reason for it is to be found within the four corners of the Act itself. (Per  Lord Loreburn, L.C. in Vickers Sons and Maxim Ltd. v. Evans, quoted in  Jumma Masjid v. Kodimaniandra Deviah.”

        The Law Commission of India, in its 183rd Report, while dealing  

with  the  need  for  providing  principles  of  interpretation  of  statute  as  

regards the extrinsic aids of interpretation in General Clauses Act, 1897,  

expressed the view that a statute is a will of legislature conveyed in the  

form of  text.  Noticing  that  the  process  of  interpretation  is  as  old  as  

language, it says that the rules of interpretation were evolved at a very  

early stage of Hindu civilization and culture and the same were given by  

'Jaimini',  the author  of  Mimamsat  Sutras;  originally  meant  for  shrutis,  

they  were  employed  for  the  interpretation  of  Smritis as  well.  While  

referring to the said historical background, the Law Commission said:

36

We are unable to persuade ourselves to agree with the reasoning given  

and view taken by the Tribunal in this regard, in the impugned order.  

Even though the Tribunal referred to the dictum of the Court in the case  

of Tek Chand Bhatia (supra), it still concluded that the use of the words  

‘any’  and ‘or’  were the expressions of  wide magnitude and that  'any’  

being an adjective qualifies the nouns under the relevant provisions, i.e.  

directions, decisions and orders, all were appealable without exception.  

The expression ‘any’,  in  fact,  qualifies  each of  the  three  expressions  

‘direction issued or decision made or order passed’.   It cannot be said  

that it signifies any one of them and, particularly, only ‘direction issued’.  

All these words have been used by the legislature consciously and with  

a  purpose.  It  has  provided  for  complete  mechanism  ensuring  their  

implementation  under  the  provisions  of  the  Act,  for  example,  under  

Section  26(1)  the  Commission  is  expected  to  make  a  decision by  

formation of  a  prima facie opinion and issue a  direction to  cause an  

investigation to be made by the Director General and after receiving the  

report  has  to  take  a  final  view in  terms  of  Section  26(6)  and  even  

otherwise, it has the discretion to form an opinion and even close a case  

under Section 26(2).  Having enacted these provisions, the legislature in  

its  wisdom,  made  only  the  order  under  Section  26(2)  and  26(6)  

appealable under Section 53A of the Act.  Thus, it specifically excludes  

the opinion/decision of the authority under Section 26(1) and even an  

38

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.  

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 –  Express  mention  of  one  thing  

implies the exclusion of other. (Expression precludes implication). This  

doctrine has been applied by this Court in various cases to enunciate the  

principle  that  expression  precludes  implication.   [Union  of  India  vs.  

Tulsiram Patel, AIR 1985 SC 1416].  It is always safer to apply plain and  

primary rule of construction.  The first and primary rule of construction is  

that intention of the legislature is to be found in the words used by the  

legislature itself.  The true or legal meaning of an enactment is derived  

39

by construing the meaning of  the word in  the light  of  the discernible  

purpose or object which comprehends the mischief and its remedy to  

which an enactment is directed. [State of Himachal Pradesh vs. Kailash  

Chand Mahajan (AIR 1992 SC 1277) and  Padma Sundara Rao v. State  

of T.N. (AIR 2002 SC 1334)].

It is always important for the Court to keep in mind the purpose which  

lies behind the statute while interpreting the statutory provisions.  This  

was  stated  by  this  Court  in  Padma  Sundara Rao’s  case  (supra)  as  

under:--

“11. … The first and primary rule of construction is that the intention of  the legislation must be found in the words used by the legislature itself.  The question is not what may be supposed and has been intended but  what has been said. “Statutes should be construed, not as theorems of  Euclid”, Judge Learned Hand said, “but words must be construed with  some imagination of the purposes which lie behind them”. (See Lenigh  Valley Coal Co. v. Yensavage,218 FR 547). The view was reiterated in  Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama (AIR  1990 SC 981).”   

Applying these principles to the provisions of Section 53A(1)(a),  

we are of the considered view that the appropriate interpretation of this  

provision  would  be  that  no  other  direction,  decision  or  order  of  the  

Commission  is  appealable  except  those  expressly  stated  in  Section  

53A(1)(a).   The  maxim  est  boni  judicis  ampliare  justiciam,  non-

jurisdictionem finds application here.  Right to appeal, being a statutory  

right, is controlled strictly by the provision and the procedure prescribing  

such  a  right.  To  read  into  the  language  of  Section  53A  that  every  

40

direction, order or decision of the Commission would be appealable will  

amount to unreasonable expansion of the provision, when the language  

of  Section 53A is clear and unambiguous. Section 53B(1) itself  is  an  

indicator of the restricted scope of appeals that shall  be maintainable  

before the Tribunal; it provides 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.    

           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  

41

appeal.  Such an approach would be in consonance with the procedural  

law prescribed in Order XLIII Rule 1A and even other provisions of Code  

of Civil Procedure.

The above approach will subserve the purpose of the Act in the following  

manner :  

First,  expeditious disposal  of  matters before the Commission and the  

Tribunal is an apparent legislative intent from the bare reading of the  

provisions  of  the  Act  and  more  particularly  the  Regulations  framed  

thereunder.   Second, if  every direction or recording of an opinion are  

made appealable then certainly it would amount to abuse of the process  

of  appeal.   Besides this,  burdening the Tribunal  with  appeals against  

non-appealable  orders  would  defeat  the  object  of  the  Act,  as  a  

prolonged litigation may harm the interest of free and fair market and  

economy. Finally, we see no ambiguity in the language of the provision,  

but even if, for the sake of argument, we assume that the provision is  

capable of two interpretations then we must accept the one which will fall  

in line with the legislative intent rather than the one which defeat the  

object of the Act.   

For these reasons, we have no hesitation in holding that no appeal will  

lie from any decision, order or direction of the Commission which is not  

made specifically appealable under Section 53A(1)(a) of the Act.  Thus,  

42

the  appeal  preferred  by  SAIL  ought  to  have  been  dismissed  by  the  

Tribunal as not maintainable.  

Submissions made and findings in relation to Point Nos.2 & 5

The issue of notice and hearing are squarely covered under the ambit of  

the principles  of  natural  justice.   Thus,  it  will  not  be inappropriate  to  

discuss these issues commonly under the same head.  The principle of  

audi alteram partem,  as commonly understood, means ‘hear the other  

side or hear both sides before a decision is arrived at’.  It is founded on  

the rule that no one should be condemned or deprived of his right even  

in quasi judicial proceedings unless he has been granted liberty of being  

heard.   

In cases of Cooper v. Wands Worth Board of Works [(1863), 14 C.B.  

(N.S.) 180] and Errington v. Minister of Health, [(1935) 1 KB 249], the  

Courts in the United Kingdom had enunciated this principle in the early  

times.  This principle was adopted under various legal systems including  

India  and  was  applied  with  some  limitations  even  to  the  field  of  

administrative law.  However, with the development of law, this 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  

43

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 vitiating not only the orders  

but even the proceedings taken against the delinquent; and third, where  

the law requires compliance to these principles of natural justice, but an  

irresistible conclusion is drawn by the competent court or forum that no  

prejudice has been caused to the delinquent and the non-compliance is  

with regard to an action of directory nature. The cases may fall in any of  

these categories and therefore, the Court has to examine the facts of  

each case in light of the Act or the Rules and Regulations in force in  

relation to such a case.  It is not only difficult but also not advisable to  

spell out any straight jacket formula which can be applied universally to  

all cases without variation.

44

In  light  of  the  above  principles,  let  us  examine  whether  in  terms  of  

Section 26(1) of the Act read with Regulations in force, it is obligatory  

upon the Commission to issue notice to the parties concerned (more  

particularly  the  affected  parties)  and  then  form  an  opinion  as  to  the  

existence of a  prima facie case, or otherwise, and to issue direction to  

the Director General to conduct investigation in the matter.

At the very outset, we must make it clear that we are considering the  

application of these principles only in light of the provisions of Section  

26(1)  and  the  finding  recorded  by  the  Tribunal  in  this  regard.   The  

intimation  received  by  the  Commission  from  any  specific  person  

complaining of violation of Section 3(4) read with Section 19 of the Act,  

sets into the motion, the mechanism stated under Section 26 of the Act.  

Section 26(1), as already noticed, requires the Commission to form an  

opinion whether or not there exists a  prima facie case for issuance of  

direction to the Director General to conduct an investigation. This section  

does not mention about issuance of any notice to any party before or at  

the time of formation of an opinion by the Commission on the basis of a  

reference or information received by it.  Language of Sections 3(4) and  

19 and for that matter, any other provision of the Act does not suggest  

that notice to the informant or any other person is required to be issued  

at  this  stage.   In  contra-distinction  to  this,  when  the  Commission  

receives the report from the Director General and if it has not already  

45

taken a decision to close the case under Section 26(2), the Commission  

is not only expected to forward the copy of the report, 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.

Some of the Regulations also throw light as to when and how notice is  

required  to  be  served  upon  the  parties  including  the  affected  party.  

Regulation 14(7) states the powers and functions, which are vested with  

the Secretary of the Commission to ensure timely and efficient disposal  

of  the  matter  and  for  achieving  the  objectives  of  the  Act.   Under  

46

Regulation 14(7)(f) the Secretary of the Commission is required to serve  

notice of the date of ordinary meeting of the Commission to consider the  

information or reference or document to decide if there exists a  prima  

facie case  and  to  convey  the  directions  of  the  Commission  for  

investigation,  or  to  issue  notice  of  an  inquiry  after  receipt  and  

consideration of the report of the Director General.  In other words, this  

provision talks of issuing a notice for holding an ordinary meeting of the  

Commission.  This notice is intended to be issued only to the members  

of the Commission who constitute ‘preliminary conference’ as they alone  

have to decide about the existence of a prima facie case.  Then, it has to  

convey the direction of the Commission to the Director General.  After  

the receipt of the report of the Director General, it has to issue notice to  

the parties concerned.

Regulation  17(2)  empowers the  Commission  to  invite  the  information  

provider and  such other person, as is necessary, for the preliminary  

conference to aid in formation of a prima facie opinion, but this power to  

invite cannot be equated with requirement of statutory notice or hearing.  

Regulation 17(2), read in conjunction with other provisions of the Act and  

the Regulations, clearly demonstrates that this provision contemplates to  

invite the parties for collecting such information, as the Commission may  

feel  necessary,  for  formation  of  an  opinion  by  the  preliminary  

conference.  Thereafter, an inquiry commences in terms of Regulation  

47

18(2) when the Commission directs the Director General  to make the  

investigation, as desired.

Regulation  21(8)  also  indicates  that  there  is  an  obligation  upon  the  

Commission to consider the objections or suggestions from the Central  

Government or the State Government or the Statutory Authority or the  

parties concerned and then Secretary is required to give a notice to fix  

the meeting of the Commission, if it is of the opinion that further inquiry  

is called for.   In that provision notice is contemplated not only to the  

respective Governments but even to the parties concerned.

The notices are to be served in terms of Regulation 22 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.  

        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  

48

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 application  of  

mind by the authorities concerned that notice is expected to be issued.   

Regulation  48,  which deals with the procedure for imposition  

of penalty, requires under Sub-Regulation (2) that show cause notice is  

to be issued to any person or enterprise or a party to the proceedings,  

as the case may be, under Sub-Regulation (1), giving him not less than  

15 days time to explain the conduct and even grant an oral hearing, then  

alone to pass an appropriate order imposing penalty or otherwise.

Issue of notice to a party at the initial stage of the proceedings, which  

are  not  determinative  in  their  nature  and  substance,  can  hardly  be  

implied; wherever the legislature so desires it must say so specifically.  

This can be illustrated by referring to the Customs Tariff (Identification,  

Assessment and Collection of Anti-Dumping Duty on Dumped Articles  

and for Determination of Injury) Rules, 1995 under the Customs Tariff  

Act,  1975.  Rule  5(5)  provides  that  while  dealing  with  an  application  

submitted by aggrieved domestic producers accounting for not less than  

49

25% of total production of the like article, the designated authority shall  

notify the government of exporting country before proceeding to initiate  

an  investigation.  Rule  6(1)  also  specifically  requires  the  designated  

authority to issue a public notice of the decision to initiate investigation.  

In  other  words,  notice  prior  to  initiation  of  investigation  is  specifically  

provided for under the Anti-Dumping Rules, whereas, it is not so under  

the provisions of Section 26(1) of the Act.

Cumulative reading of these provisions, in conjunction with the scheme  

of the Act and the object sought to be achieved, suggests that it will not  

be in consonance with the settled rules of interpretation that a statutory  

notice or an absolute right to claim notice and hearing can be read into  

the provisions of Section 26(1) of the Act. Discretion to invite, has been  

vested in the Commission, by virtue of the Regulations, which must be  

construed in their plain language and without giving it undue expansion.

It is difficult to state as an absolute proposition of law that in all cases, at  

all stages and in all events the right to notice and hearing is a mandatory  

requirement  of  principles  of  natural  justice.   Furthermore,  that  non-

compliance  thereof,  would  always  result  in  violation  of  fundamental  

requirements  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  

50

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 Corporation vs. Delhi Transport  

Corporation Mazdoor Congress [(1991) Supp1 SCC 600], wherein the  

Court  held  that  rule  of  audi  alteram partem  can be excluded,  where  

having regard to  the nature of  the action to  be taken,  its  object  and  

purpose and the scheme of the relevant statutory provisions, fairness in  

action does not demand its application and even warrants its exclusion.  

In the case of Union of India v.  W.N. Chadha [(1993) Supp 4 SCC 260],  

wherein the Court was primarily concerned with Section 166(9) of the  

Criminal  Procedure  Code and  the  application  of  principles  of  natural  

justice in the domain of administrative law and while deciding whether a  

person was entitled to the right of hearing, held as under:-

51

Wherever, this Court has dealt with the matters relating to complaint of  

violation of principles of natural justice, it has always kept in mind the  

extent to which such principles should apply. The application, therefore,  

would  depend  upon  the  nature  of  the  duty  to  be  performed  by  the  

authority under the statute.  Decision in this regard is, in fact, panacea to  

the rival contentions which may be raised by the parties in a given case.  

Reference can be made to the judgment of this Court  in the case of  

Canara Bank vs. Debasis Das [(2003) 4 SCC 557].  We may also notice  

that the scope of duty cast upon the authority or a body and the nature  

of  the  function  to  be  performed  cannot  be  rendered  nugatory  by  

imposition  of  unnecessary  directions  or  impediments  which  are  not  

postulated in the plain language of the section itself. ‘Natural justice’ is a  

term, which may have different connotation and dimension depending  

upon the facts of the case, while keeping in view, the provisions of the  

law  applicable.   It  is  not  a  codified  concept,  but  are  well  defined  

principles enunciated by the Courts.  Every quasi judicial order would  

require 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.   

        Now, let us examine what kind of function the Commission is  

called upon to discharge while forming an opinion under Section 26(1) of  

54

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 vs. 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,  investigation  connotes  discovery and collection of  evidence before charge-sheet  is  filed and  based thereon definite charges are framed. Inquiry by a Magistrate is  stopped  when  the  trial  begins.  The  trial  is  a  culminating  process  to  convict  or  acquit  an accused.  In  Service Jurisprudence,  departmental  inquiry against a delinquent employee, bears similar insignia to impose  penalty.  At  the investigation stage the accused or the charged officer  has  no  say  in  the  matter  nor  is  he  entitled  to  any  opportunity.  The  disciplinary authority or inquiry officer, if appointed, on finding that the  evidence discloses prima facie ground to proceed against the delinquent  officer,  the  inquiry  would  be  conducted.  The  criminal  court  frames  charges after supplying the record of investigation relied on. Equally, the  disciplinary  authority/inquiry  officer  would  frame  definite  charge  or  charges and would communicate the same together with a statement of  the facts in support thereof sought to be relied on and would call upon  the delinquent officer to submit his explanation or written statement of  defence  etc.  At  the  trial/inquiry  the  person  is  entitled  to  reasonable  opportunity to defend himself……….”

The exceptions to the doctrine of audi alteram partem  are not unknown  

either to civil  or criminal jurisprudence in our country where under the  

55

Code of Civil Procedure ex-parte injunction orders can be passed by the  

court  of  competent  jurisdiction  while  the  courts  exercising  criminal  

jurisdiction can take cognizance of an offence in absence of the accused  

and issue summons for his appearance.  Not only this, the Courts even  

record  pre-charge  evidence  in  complaint  cases  in  absence  of  the  

accused  under  the  provisions  of  the  Code  of  Criminal  Procedure.  

Similar  approach  is  adopted  under  different  systems  in  different  

countries.  Reference in this regard can be made  to the case of Azienda  

Colori  Nazionali  -  ACNA  S.P.A.  v  Commission  of  the  European  

Communities, [(1972) ECR 0933], where the argument was raised that  

the Commission had infringed the administrative procedure laid down in  

Regulation No. 17/62 of the European Council Regulation.  In that case  

the Commission of  the European Communities sent  the notice of  the  

objections to the applicant at the time of informing the applicant about  

the decision to initiate procedure to establish infringement of rules on  

competition. The European 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  

56

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.”

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 therefore,  

application of audi alteram partem is not called for. Formation of a prima  

facie opinion departmentally (Director General, being appointed by the  

Central Government to assist the Commission, is one of the wings of the  

Commission itself)  does not amount to an adjudicatory function but is  

merely of administrative nature.  At best, it can direct the investigation to  

be conducted and report  to be submitted to the Commission itself  or  

close the case in terms of Section 26(2) of the Act, which order itself is  

appealable  before  the  Tribunal  and  only  after  this  stage,  there  is  a  

specific right of notice and hearing available to the aggrieved/affected  

party.  Thus, keeping in mind the nature of the functions required to be  

performed by the Commission in terms of Section 26(1), we are of the  

considered view that the right of notice of hearing is not contemplated  

under the provisions of Section 26(1) of the Act.  However, Regulation  

17(2)  gives  right  to  Commission  for  seeking  information,  or  in  other  

57

words,  the  Commission  is  vested  with  the  power  of  inviting  such  

persons, as it  may deem necessary, to render required assistance or  

produce requisite information or documents as per the direction of the  

Commission. This discretion is exclusively vested in the Commission by  

the legislature.  The investigation is directed with dual purpose; (a) to  

collect material and verify the information, as may be, directed by the  

Commission, (b) to enable the Commission to examine the report upon  

its submission by the Director General and to pass appropriate orders  

after hearing the parties concerned.  No inquiry commences prior to the  

direction issued to the Director General for conducting the investigation.  

Therefore, even from the practical point of view, it will be required that  

undue time is not spent at the preliminary stage of formation of  prima  

facie opinion and the matters are dealt with effectively and expeditiously.  

We  may  also  usefully  note  that  the  functions  performed  by  the  

Commission  under  Section  26(1)  of  the  Act  are  in  the  nature  of  

preparatory measures in contrast to the decision making process.  That  

is the precise reason that the legislature has used the word ‘direction’ to  

be issued to the Director General for investigation in that provision and  

not that the Commission shall take a decision or pass an order directing  

inquiry into the allegations made in the reference to the Commission.   

        The Tribunal, in the impugned judgment, has taken the view that  

there is a requirement to record reasons which can be express, or, in  

58

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. M/s Shukla & Brothers [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  insistence  placed  by  the  Courts  in  United  States,  emphasized  the  importance of recording of reasons for decisions by the administrative  authorities  and tribunals.   It  said  “administrative  process  will  best  be  vindicated by clarity in its exercise”.  To enable the Courts to exercise  the power of review in consonance with settled principles, the authorities  are advised of the considerations underlining the action under review.  This Court with approval stated:-

“the  orderly  functioning  of  the  process  of  review  requires  that  the  grounds  upon  which  the  administrative  agency  acted  be  clearly  disclosed and adequately sustained.”

xxx               xxx                  xxx                xxx

12. At  the cost  of  repetition,  we may notice,  that  this  Court  has  consistently  taken the  view that  recording  of  reasons is  an  essential  

59

feature of dispensation of justice.  A litigant who approaches the Court  with  any  grievance  in  accordance  with  law  is  entitled  to  know  the  reasons for grant or rejection of his prayer.   Reasons are the soul of  orders.  Non-recording of reasons could lead to dual infirmities; firstly, it  may  cause  prejudice  to  the  affected  party  and  secondly,  more  particularly,  hamper  the  proper  administration  of  justice.   These  principles are not only applicable to administrative or executive actions,  but they apply with equal force and, in fact,  with a greater degree of  precision  to  judicial  pronouncements.   A  judgment  without  reasons  causes prejudice to the person against whom it is pronounced, as that  litigant is unable to know the ground which weighed with the Court in  rejecting his claim and also causes impediments in his taking adequate  and  appropriate  grounds  before  the  higher  Court  in  the  event  of  challenge to that judgment…

13. The principle of natural justice has twin ingredients; firstly, the  person  who  is  likely  to  be  adversely  affected  by  the  action  of  the  authorities should be given notice to show cause thereof and granted an  opportunity  of  hearing  and  secondly,  the  orders  so  passed  by  the  authorities  should  give  reason for  arriving at  any conclusion showing  proper application of mind.  Violation of either of them could in the given  facts and circumstances of the case, vitiate the order itself.  Such rule  being applicable to the administrative authorities certainly requires that  the judgment of the Court should meet with this requirement with higher  degree of satisfaction.  The order of an administrative 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…

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  

60

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 just and fair  

decision. Reference can be made to Alexander Machinery (Dudley) Ltd.  

v. Crabtree [1974 ICR 120] in this regard.

The  above  reasoning  and  the  principles  enunciated,  which  are  

consistent with the settled canons of law, we would adopt even in this  

case.   In  the  backdrop  of  these  determinants,  we  may  refer  to  the  

provisions  of  the  Act.  Section  26,  under  its  different  sub-sections,  

requires the Commission to issue various directions, take decisions and  

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  

61

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 afore-referred.  However, other decisions and orders, which  

are not directions  simpliciter and determining the rights of the parties,  

should be well  reasoned analyzing 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.   

Such an approach can also  be justified  with  reference to  Regulation  

20(4),  which  requires  the  Director  General  to  record,  in  his  report,  

findings on each of the allegations made by a party in the intimation or  

reference submitted to the Commission and sent for investigation to the  

Director General,  as the case may be, together with all  evidence and  

documents collected during investigation. The inevitable consequence is  

that the Commission is similarly expected to write appropriate reasons  

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

62

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.

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 referred to in clause (a) of  

Section 53A (ought to be printed as 53A(1)(a)).  The appeal is to be filed  

within the period specified and Section 53B(3) further requires that the  

Tribunal, after giving the parties to appeal an opportunity of being heard,  

to pass such orders, as it thinks fit, and send a copy of such order to the  

Commission and the parties to the appeal.  Section 53S contemplates  

that  before  the  Tribunal  a  person  may  either  appear  ‘in  person’  or  

63

authorize one or more chartered accountants or company secretaries,  

cost accountants or legal practitioners or any of its officers to present its  

case  before  the  Tribunal.   However,  the  Commission’s  right  to  legal  

representation in any appeal before the Tribunal has been specifically  

mentioned under Section 53S(3). It provides that the Commission may  

authorize one or more of chartered accountants or company secretaries  

or cost accountants or legal practitioners or any of its officers to act as  

presenting officers before the Tribunal.   

Section 53T grants a right in specific terms to the Commission to prefer  

an appeal before the Supreme Court within 60 days from the date of  

communication of the decision or order of the Tribunal to them.  

The  expression  ‘any  person’  appearing  in  Section  53B  has  to  be  

construed liberally as the provision first  mentions specific government  

bodies then local authorities and enterprises, which term, in any case, is  

of generic nature and then lastly mentions ‘any person’.  Obviously, it is  

intended that  expanded meaning be given to the term ‘persons’,  i.e.,  

persons or bodies who are entitled to appeal.  The right of hearing is  

also available to  the parties  to  appeal.   The above stated provisions  

clearly indicate that the Commission a body corporate, is expected to be  

party in the proceedings before the Tribunal as it  has a legal right of  

representation.   Absence  of  the  Commission  before  the  Tribunal  will  

deprive it of presenting its views in the proceedings.  Thus, it may not be  

64

able to effectively exercise its right to appeal in terms of Section 53 of  

the Act.  Furthermore, Regulations 14(4) and 51 support the view that  

the  Commission  can  be  a  necessary  or  a  proper  party  in  the  

proceedings before the Tribunal.  The Commission, in terms of Section  

19 read with Section 26 of the Act, is entitled to commence proceedings  

suo  moto and  adopt  its  own  procedure  for  completion  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.  

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  

65

mind in regard to application of a party for impleadment.  The person or  

enterprise sought to be impleaded should have substantial interest in the  

outcome of  the  proceedings  and/or  that  it  is  necessary  in  the  public  

interest to allow such an application.  In other words, substantial interest  

in proceedings and serving of larger public interest, amongst others, are  

the criteria which could be considered by the Commission.  This principle  

would  obviously  stand  extended  for  exercise  of  jurisdiction  by  the  

Tribunal.  In our view, the Commission would have substantial interest in  

the outcome of the proceedings in most of the cases as not only would  

the  judgments  of  the  Tribunal  be  binding  on  it,  but  they  would  also  

provide  guidelines  for  determining  various  matters  of  larger  public  

interest and affect the economic policy of the country.  

In light  of  the above statutory provisions, let  us examine the scheme  

under the general principles as well. The provisions of Order I Rule 10 of  

Code of Civil Procedure control the parties to the proceedings and their  

addition  or  deletion  thereof.   Wide  discretion  is  vested  in  the  

Court/appropriate  forum  in  regard  to  impleadment  of  necessary  and  

proper parties to the proceedings.  Of course, such discretion has to be  

exercised  in  accordance  with  provisions  of  law  and  the  principles  

enunciated  by  various  judicial  pronouncements.  The  consideration  

before the Court, while determining such a question, is whether the said  

party is a necessary or a proper party and its presence before the Court  

66

is essential for complete and effective adjudication of the subject matter,  

inter alia, it should also be kept in mind that multiplicity of litigation is to  

be avoided and that the necessary or proper party should not be left out  

from the proceedings, particularly, before the tribunal or the forum.

These  principles  were  stated  by  this  Court  in  Udit  Narain  Singh  

Malpaharia v.  Addl.Member,  Board of  Revenue, Bihar,  [AIR 1963 SC  

786], wherein this Court has held as under:--

“7. To answer the question raised it would be convenient at the outset to  ascertain who are necessary or proper parties in a proceeding.  The law  on the subject is well settled: it is enough if we state the principle.  A  necessary party is one without whom no order can be made effectively;  a proper party is one in whose absence an effective order can be made  but whose presence is necessary for a complete and final decision on  the question involved in the proceeding.”

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.

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  

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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 I Rule 10 which provides  

that  a necessary or  proper party  may be added.  [Ramesh Hirachand  

Kundanmal v. Municipal Corporation of Greater Bombay [(1992) 2 SCC  

524].

In the proceedings, which are initiated by the Commission  suo moto, it  

shall  be  dominus  litis  of  such  proceedings  while  in  other  cases,  the  

Commission  being  a  regulatory  body  would  be  a  proper  party  

discharging inquisitorial, regulatory as well as adjudicatory functions and  

its presence before the Tribunal, particularly, in light of the above stated  

provisions,  would  be  proper.   The  purpose  is  always  to  achieve  

complete, expeditious and effective adjudication.  This Court in the case  

of Brahm Dutt v. Union of India [(2005) 2 SCC 431], while considering  

the  constitutional  validity  of  Section  8  of  the  Act   observed  that  the  

Commission is an expert body which had been created in consonance  

with  international  practice.   The  Court  observed  that  it  might  be  

appropriate  if  two  bodies  are  created  for  performing  two  kinds  of  

functions, one, advisory and regulatory and other adjudicatory.  Though  

the Tribunal has been constituted by the Competition (Amendment) Act,  

2007, the Commission continues to perform both the functions stated by  

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this Court in that case.  Cumulative effect of the above reasoning is that  

the  Commission  would  be  a  necessary  and/or  a  proper  party  in  the  

proceedings before the Tribunal.

Submissions made and findings in relation to Point No.4

Under this issue we have to discuss the ambit and scope of the powers  

vested in  the  Commission under  Section  33 of  the  Act.   In  order  to  

objectively analyze the content of the submissions made before us, it will  

be appropriate to refer to the provisions of the said Section, which read  

as under:

“33.  Power  to  issue  interim  orders.  - Where  during  an  inquiry,  the  Commission is satisfied that an act in contravention of sub-section (1) of  section 3 or sub-section (1) of section 4 or section 6 has been committed  and continues to be committed or that such act is about to be committed,  the  Commission  may,  by  order,  temporarily  restrain  any  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”

A bare reading of the above provision shows that the most significant  

expression used by the legislature in this provision is ‘during inquiry’.  

‘During  inquiry’,  if  the  Commission  is  satisfied  that  an  act  in  

contravention of the stated provisions has been committed, continues to  

be committed or is about to be committed, it may temporarily restrain  

any  party  ‘without  giving  notice  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  

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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 investigation  

suo moto. 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 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.  Once the inquiry has begun, then alone the  

Commission is expected to exercise its powers vested under Section 33  

of the Act.  That is the stage when jurisdiction of the Commission can be  

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invoked by a party for passing of an ex parte order.  Even at that stage,  

the Commission is required to record a satisfaction that there has been  

contravention of  the provisions mentioned under  Section 33 and that  

such  contravention has been committed, continues to be committed or  

is  about  to  be  committed.   This  satisfaction  has  to  be  understood  

differently from what is required while expressing a  prima facie view in  

terms of Section 26(1) of the Act.  The former is a definite expression of  

the satisfaction recorded by the Commission upon due application of  

mind  while  the  latter  is  a  tentative  view at  that  stage.   Prior  to  any  

direction,  it  could  be  a  general  examination  or  enquiry  of  the  

information/reference received by the Commission, but after passing the  

direction the inquiry is more definite in its scope and may be directed  

against a party.  Once such satisfaction is recorded, the Commission is  

vested with  the power and the informant is entitled to claim  ex parte  

injunction.  The legislature has intentionally used the words not only ‘ex  

parte’ but also ‘without notice to such party’.  Again for that purpose, it  

has to  apply its  mind,  whether  or  not  it  is  necessary  to  give such a  

notice.  The intent of the rule is to grant ex parte injunction, but it is more  

desirable that upon passing an order, as contemplated under Section  

33, it  must give a short notice to the other side to appear and to file  

objections to the continuation or otherwise of such an order.  Regulation  

31(2) of the Regulations clearly mandates such a procedure.  Wherever  

the  Commission  has  passed  interim  order,  it  shall  hear  the  parties  

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against whom such an order has been made, thereafter,  as soon as  

possible.   The  expression  ‘as  soon as  possible’ appearing  in  

Regulation 31(2) has some significance and it will be obligatory 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.

 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  act  in  

contravention  of  the  stated  provisions  has  been  committed  and  

continues  to  be  committed  or  is  about  to  be  committed;  (b)  it  is  

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necessary to issue order of restraint and  (c) from the record before the  

Commission,  there  is  every  likelihood  that  the  party  to  the  lis would  

suffer  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 a 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.

It  will  be useful  to  refer  to  the judgment of  this Court  in the case of  

Morgan  Stanley  Mutual  Funds  v.  Kartick  Das  [(1994)  4  SCC  225],  

wherein this Court was concerned with Consumer Protection Act 1986,  

Companies  Act  1956  and  Securities  and  Exchange  Board  of  India  

(Mutual Fund) Regulations, 1993. As it appears from the contents of the  

judgment, there is no provision for passing ex-parte interim orders under  

the Consumer Protection Act, 1986 but the Court nevertheless dealt with  

requirements for the grant of an  ad interim injunction, keeping in mind  

the expanding nature of the corporate sector as well as the increase in  

vexatious litigation. The Court spelt out the following principles:

“36. As a principle,  ex parte injunction could be granted only under  exceptional  circumstances.   The factors  which should weigh with  the  

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court in the grant of ex parte injunction are—

(a) whether  irreparable  or  serious  mischief  will  ensue  to  the  plaintiff;

(b) whether the refusal or ex parte injunction would involve greater  injustice than the grant of it would involve;

(c) the court will also consider the time at which the plaintiff first  had  notice  of  the  act  complained  so  that  the  making  of  improper order against a party in his absence is prevented;

(d) the court will consider whether the plaintiff had acquiesced for  sometime and in such circumstances it will not grant ex parte  injunction;  

(e) the court would expect a party applying for ex parte injunction to  show utmost good faith in making the application;

(f) even if granted, the ex parte injunction would be for a limited period  of time.

(g) General  principles  like  prima  facie  case,  balance  of  convenience and irreparable loss would also be considered  by the court.”

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  

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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 even from  

the report submitted by the Director General, a strong case is made out  

of contravention of the specified provisions relating to anti-competitive  

agreement or an abuse of dominant position and it is in the interest of  

free  market  and  trade  that  injunctive  orders  are  called  for,   the  

Commission,  in its  discretion,  may pass such order  ex parte or  even  

after issuing notice to the other side.

For these reasons, we may conclude that the Commission can  

pass  ex parte ad interim restraint  orders in terms of Section 33, only  

after having applied its mind as to the existence of a  prima facie case  

and  issue  direction  to  the  Director  General  for  conducting  an  

investigation in terms of Section 26(1) of the Act.  It has the power to  

pass  ad interim ex parte injunction orders, but only upon recording its  

due  satisfaction  as  well  as  its  view that  the  Commission  deemed  it  

necessary not to give a notice to the other side.  In all cases where ad  

interim ex parte injunction is issued, the Commission must ensure that it  

makes the notice returnable within a very short duration so that there is  

no abuse of the process of law and the very purpose of the Act is not  

defeated.

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Submissions made and findings in relation to Point No.6

In light of the above discussion, the next question that we are required to  

consider  is,  whether  the  Court  should  issue  certain  directions  while  

keeping in mind the scheme of the Act, legislative intent and the object  

sought to be achieved by enforcement of these provisions.  We have  

already  noticed  that  the  principal  objects  of  the  Act,  in  terms  of  its  

Preamble  and  Statement  of  Objects  and  Reasons,  are  to  eliminate  

practices  having  adverse  effect  on  the  competition,  to  promote  and  

sustain  competition  in  the  market,  to  protect  the  interest  of  the  

consumers and ensure freedom of trade carried on by the participants in  

the market,  in view of the economic developments in the country.   In  

other words, the Act requires not only protection of free trade but also  

protection of consumer interest.  The delay in disposal of cases, as well  

as  undue  continuation  of  interim  restraint  orders,  can  adversely  and  

prejudicially affect the free economy of the country.  Efforts to liberalize  

the Indian Economy to bring it at par with the best of the economies in  

this era of  globalization would be jeopardised if  time bound schedule  

and,  in  any  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  

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legislative intent to ensure time bound disposal of such matters.  

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 Commission 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  ensure  its  proper  implementation.   The  

power  to  restructure  the  agreement  can be brought  into  service  and  

matters dealt with expeditiously, rather than passing of ad interim orders  

in  relation  to  such  agreements,  which  may  continue  for  indefinite  

periods.   To  avoid  this  mischief,  it  is  necessary  that  wherever  the  

Commission exercises its jurisdiction to pass ad interim restraint orders,  

it  must  do so by issuing notices for  a short  date and deal  with such  

applications expeditiously.  Order XXXIX, Rules 3 and 3A of the Code of  

Civil  Procedure  also  have  similar  provisions.   Certain  procedural  

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directions will help in avoiding prejudicial consequences, against any of  

the parties to the proceedings and the possibility of abuse of jurisdiction  

by the parties can be eliminated by proper exercise of discretion and for  

valid reasons.  Courts have been issuing directions in appropriate cases  

and wherever the situation has demanded so.  Administration of justice  

does not depend on individuals, but it has to be a collective effort at all  

levels of the judicial hierarchy, i.e. the hierarchy of the Courts or the fora  

before whom the matters are  sub-judice, so that the persons awaiting  

justice can receive the same in a most expeditious and effective manner.  

The  approach  of  the  Commission  even  in  its  procedural  matters,  

therefore, should be macro level rather than micro level.  It must deal  

with all such references or applications expeditiously in accordance with  

law and by giving appropriate reasons.  Thus, we find it necessary to  

issue  some  directions  which  shall  remain  in  force  till  appropriate  

regulations in that regard are framed by the competent authority.

FINDINGS ON MERITS:

Having examined various legal issues arising in the present case, we will  

now revert back to the facts of the case in hand.  It is clear that Jindal  

Steel,  the  informant,  had made a  reference  to  the  Commission.  The  

Commission had initiated proceedings and asked for further information  

from the informant and thereafter, had even issued notice calling upon  

SAIL to submit its views and comments. From the record it is clear that  

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parties had appeared before the Commission.  The SAIL had failed to  

file the reply and prayed for extension of time, which was declined by the  

Commission  in  its  order  dated  8th December,  2009.   The  Director  

General was asked to conduct the investigation, but liberty was granted  

to  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  15th December,  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 stage.  We are also unable to agree with the view expressed by the  

Tribunal that the inquiry commences as soon as the aspects highlighted  

in sub-section (1) to Section 19 are fulfilled and brought to the notice of  

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the Commission. It is obvious that Regulation 18(2) was not brought to  

the  notice  of  the  Tribunal  which  resulted  in  error  of  law,  particularly,  

when examined in the light of other provisions and scheme of the Act as  

well. The Commission, vide its order dated 8th December, 2009, had, for  

reasons stated therein,  declined the extension of  time to SAIL.   This  

order of the Commission cannot be stated to be without jurisdiction or  

suffering from any apparent error of law.  However,   the Tribunal, in  

exercise of its judicial discretion, had interfered with the said order and  

granted  further  time to  SAIL  unconditionally.   We do  not  propose  to  

interfere in the exercise of the discretion by the Tribunal except to the  

extent of imposition of cost. We, therefore direct that SAIL should pay  

cost of Rs. 25,000/- to the informant for seeking extension of time.  The  

cost shall be conditional, whereafter, the additional reply filed by SAIL  

would be taken on record and the Commission shall apply its mind to  

form a prima facie view in terms of Section 26(1) of the Act, if the report  

of the Director General has not been received as yet.  In the event the  

report prepared by the Director General during the period 8th December,  

2009 to 11th January,  2010 has been received, the Commission shall  

proceed in accordance with the provisions of the Act and the principles  

of law enunciated in this judgment giving proper notice to the informant  

as well as to SAIL and pass appropriate orders.

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CONCLUSION AND DIRECTIONS

Having discernibly stated our conclusions/ answers in the earlier part of  

the judgment, we are of the considered opinion that this is a fit  case  

where this Court should also issue certain directions in the larger interest  

of justice administration.

The scheme of the Act and the Regulations framed thereunder clearly  

demonstrate the legislative intent  that  the investigations and inquiries  

under the provisions of the Act should be concluded as expeditiously as  

possible.  The  various  provisions  and  the  Regulations,  particularly  

Regulations 15 and 16, direct conclusion of the investigation/inquiry or  

proceeding within a “reasonable time”.  The concept of “reasonable time”  

thus has to be 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  

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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 Commission exercises  

its jurisdiction to pass interim orders, it should pass a final order in  

that behalf as expeditiously as possible and in any case not later  

than 60 days.  

D) The Director  General  in  terms of  Regulation  20 is  expected to  

submit  his  report  within  a  reasonable  time.   No inquiry  by  the  

Commission can proceed any further in absence of the report by  

the Director  General  in  terms of  Section  26(2)  of  the Act.  The  

reports  by the Director  General  should be submitted within  the  

time as directed by the Commission but in all cases not later than  

45 days from the date of passing of directions in terms of Section  

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26(1) of the Act.  

E) The Commission as well  as the Director General shall  maintain  

complete ‘confidentiality’  as envisaged under Section  57 of the  

Act  and  Regulation  35  of  the  Regulations.  Wherever  the  

‘confidentiality’ is breached, the aggrieved party certainly has the  

right  to  approach  the  Commission  for  issuance  of  appropriate  

directions in terms of the provisions of the Act and the Regulations  

in force.

In  our  considered view the scheme and essence of  the Act  and the  

Regulations are clearly suggestive of speedy and expeditious disposal of  

the  matters.  Thus,  it  will  be  desirable  that  the  Competent  Authority  

frames  Regulations  providing  definite  time  frame  for  completion  of  

investigation, inquiry and final disposal of the matters pending before the  

Commission. Till such Regulations are framed, the period specified by  

us  supra shall  remain  in  force  and  we  expect  all  the  concerned  

authorities to adhere to the period specified.  

Resultantly,  this  appeal  is  partially  allowed.   The  order  dated  15th  

February, 2010 passed by the Tribunal is modified to the above extent.  

The Commission shall proceed with the case in accordance with law and  

the principles enunciated supra.  

         In the circumstances there will be no order as to costs.

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…….................................CJI             [ S.H. KAPADIA ]

.………..............................J.             [ K.S. RADHAKRISHNAN ]

.… …..................................J.

[ SWATANTER KUMAR ] New Delhi September 9, 2010.

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