Jindal Steel and Power Ltd. (JSPL), furnished information to the Competition Commission of India (CCI), invoking Sec. 19 read with Sec. 26(1) of the Competition Act, 2002 and alleged that Steel Authority of India Ltd. (S

CS Executive · Economic, Commercial and Intellectual Property Laws · PYQS · December 2024
Jindal Steel and Power Ltd. (JSPL), furnished information to the Competition Commission of India (CCI), invoking Sec. 19 read with Sec. 26(1) of the Competition Act, 2002 and alleged that Steel Authority of India Ltd. (SAIL), the respondent, had entered into an exclusive supply agreement with the Indian Railways for supply of rails. According to Sec. 3(4) of the Competition Act 2000, an exclusive supply agreement would be considered to be anti-competitive if it causes an appreciable adverse effect on competition in India. In this case, the other rail suppliers in the industry did not have an opportunity to place their bids because no tender floated by the Respondent. This resulted in filing a complaint before the Competition Commission of India (CCI) for the abuse of dominant position by SAIL. CCI registered the information provided by JSPL and directed SAIL to submit its comments within two weeks with respect to the information provided to CCI. SAIL made a prayer for an extension of six weeks for filing comments, which CCI rejected. CCI found a prima facie case against the respondents. It directed the Director General (DG) to investigate, granting liberty to the respondent to file its views and comments before the DG during the investigation. SAIL challenged the correctness of this order before Appellate Tribunal on the ground of not being heard and hence a violation of natural justice. Commission made an application before Appellate Tribunal to implead it (SAIL) as a party to appeal. The investigation by DG was stayed by the Appellate Tribunal, it rejected CCI's plea for impleadment on the reasoning that it was neither a necessary party nor a proper party and observed that reasoning must be given for any order, direction, or decision taken. Commission went in appeal to the Supreme Court against this order of the Appellate Tribunal. From the above Case Study, answer the following questions as per provisions of the Competition Act, 2002: (c) What is the purpose of appointing Director General under Section 16(1) of the Competition Act, 2002 ?

Answer & Explanation:

Hon'ble Supreme Court in the case of CCI v. SAIL (2010) 10 SCC 744 observed that the Director General (DG) appointed under Section 16(1) of the Act is a specialized investigating wing of the Commission. DG being appointed by the Central Government to assist the Commission, is one of the wings of the Commission itself to whom the investigation is directed with dual purpose; to collect material and verify the information, as may be, directed by the Commission, to enable the Commission to examine the report upon its submission by the DG and to pass appropriate orders after hearing the parties concerned. Further, Section 16(1) of the Competition Act, 2002 as amended in 2023 provides that Commission may with the prior approval of the Central Government appoint a Director General for the purposes of assisting the Commission in conducting inquiry into contravention of any of the provisions of this Act and for performing such other functions as are, or may be, provided by or under this Act.

Topics: Competition Law

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