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: (d) Whether the parties, including informant (JSPL) or the affected party (SAIL), 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 ?

Answer & Explanation:

In the case of Competition Commission of India v. Steel Authority of India (Civil Appeal No. 7779 of 2010, judgment dated September 09, 2010), looked into the ambit and scope of power vested with the Commission under Section 26(1) of the Competition 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. With regard to notice and/or hearing at the stage of forming prima facie decision by the Commission under Section 26(1) of the Act, Supreme Court of India held that 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 issuance of a direction to the Director General to cause an investigation to be made into the matter. Hence informant (JSWL) and / or the affected party (SAIL) are not entitled to receive notice or hearing as a matter of right at the preliminary stage of the prima facie case.

Topics: Competition Law

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