Shri Surendra Prasad Vs.

Competition Commission of
India and others
Observation of Hon’ble Competition Appelate Tribunal Appeal No.43 of 2014

Order passed u/s 53B

Date of Order: 15.09.2015

Quorum Strength: 1

Dissenting Order-No

Reference PATICULARS
Points of Determination
1 Whether the impugned orders under section 26(2) are vitiated as the commission
Page-2 not only failed to appriciate the evidences placed on record but also ignored
Honble' Supreme court's order againts the opposite party.
Having Locus standi is not a pre-condition for filing Information
21 A reading of the plain language of Section 18 shows that the Commission
Page-17 is under an obligation to ensure that practices having adverse effect on
competition are eliminated. The Commission is also duty bound to promote
and sustain competition, protect the interest of consumers, and ensure
freedom of trade carried on by other participants in markets in India. Of
course, the exercise of power under Section 18 is subject to other
provisions of the Act. Section 19(1) empowers the Commission to inquire
into the allegations of contravention of Section 3(1) of Section 4(1) of the
Act. This can be done by the Commission on its own motion or on receipt
of any information from any person, consumer or their association or trade
association or on a reference made by the Central Government or the
State Government or a statutory authority. While determining whether or
not an agreement has an appreciable adverse effect on competition under
Section 3, the Commission is required to take into consideration all or any
of the factors enumerated in Clauses (a) to (f) of Section 19(3) of the Act.
22 It is significant to note thatParliament has neither prescribed any
Page- qualification for the person who wants to file an information under Section
17,18 19(1)(a) nor prescribed any condition which must be fulfilled before an
information can be filed under that section. There is nothing in the plain
language of Sections 18 and 19 read with Section 26(1) from which it can
be inferred that the Commission has the power to reject the prayer for an
investigation into the allegations involving violation of Sections 3 and 4 only
on the ground that the informant does not have personal interest in the
matter or he appears to be acting at the behest of someone else.As a
matter of fact,the Commission has been vested with the power to suo moto
take cognizance of any alleged contravention of Section 3(1) or Section
3(4) of the Act and hold an inquiry. This necessarily implies that the
Commission is not required to wait for receipt of a reference from the
Central or the State Government or a statutory authority or a formal
information by someone for exercising power under Section 19(1) read
with Section 26(1) of the Act. In a given case, the Commission may not act

1
Shri Surendra Prasad Vs. Competition Commission of
India and others
upon an information filed under Section 19(1)(a) but may suo moto take
cognizance of the facts constituting violation of Section 3(1) or Section 3(4)
of the Act and direct an investigation .The Commission may also take
cognizance of the reports appearing in print or electronic media or even
anonymous complaint /representation suggesting violation of Sections 3
and 4 of the Act and issue direction for investigation under Section 26(1).
The only limitation on the exercise of that power is that the Commission
should feel prima facie satisfied that thereexist a prima facie case for
ordering into the allegation of violation of Sections 3(1) or 4(1) of the Act.
23 So far as this case is concerned, I am satisfied that the appellant cannot
Page-18 be non-suited by accepting the argument of the learned counsel for the
respondents that he is espousing the cause of M/s. B.S.N. Joshi & Sons
Ltd. The fact that the appellant is practising as an advocate with the
counsel who has been representing M/s. B.S.N. Joshi & Sons Ltd. in other
cases is not sufficient to draw a dubious inference that he is prosecuting
the interest/cause of M/s. B.S.N. Joshi & Sons Ltd. That apart, the
respondents have not disputed that the appellant is a consumer of
electricity generated and supplied by Respondent No. 2. Therefore, its
locus to file an information under Section 19(1)(a) cannot be questioned.
Prima facie case exists
24 The issue which remains to be considered is whether the majority order of
Page- the Commission is vitiated by an error of law and calls for interference
18,19 under Section 53-B of the Act. At the cost of repetition, I would like to
observe that for the purpose of ordering an investigation under Section
26(1), the only thing required to be seen by the Commission is whether
there exists a prima facie case warranting such investigation. Although in
view of the judgement of the Supreme Court in Competition Commission of
India Vs. Steel Authority of India Limited- (2010) 10 SCC 744, an order
passed by the Commission under Section 26(1) cannot be appealed
against, legality and propriety of an order passed under Section 26(2) can
certainly be subjected to judicial scrutiny by the Tribunal. In other words, if
in exercise of the appellate power vested in it under Section 53- B the
Tribunal is satisfied that the negative opinion expressed by the
Commission on the issue of existence of a prima facie case is vitiated by
an error of law then it may set aside the impugned order and direct an
investigation under Section 26(1) of the Act.
26 A conjoint reading of the main judgment in Civil Appeal No. 4613/2006
Page-19 and order dated 19.12.2008 passed in Contempt Petition No. 245/2007
makes it clear that the Supreme Court had, after taking cognizance of the
notings recorded by senior functionaries of Respondent No. 2 recorded an
unequivocal finding that Respondent Nos. 3 to 5 had formed a cartel. The
subsequent allocation of liaison work to Respondent Nos. 3 to 5 despite
the fact that the rates quoted by them were substantially similar
strengthens the finding recorded by the Supreme Court that Respondents
Nos. 3 to 5 had formed a cartel and driven out the competition and it can
reasonably be said that the appellant had succeeded in making out a prima

2
Shri Surendra Prasad Vs. Competition Commission of
India and others
facie case warranting an investigation into the matter and the Commission
committed grave error by refusing to direct an investigation by the Director
General. It appears that the Commission has not been apprised that it is
judicially subordinate to the Supreme Court and is bound by the verdict of
the highest court in the country.
Commission ignored the evidences taken on record
27 Another grave error committed by the Commission is that even though it
Page-20 did take cognizance of the chart containing the rates quoted by
Respondent Nos. 3 to 5 for the year 2010 but totally ignored the allegations
made in the information and the documents filed on 15.10.2003. Thus
there is no escape from the conclusion that the view expressed by the
majority of the Commission that no prima facie case is made out for
directing an investigation under Section 26(1)suffers from a patent legal
infirmity.
Decision
28 In the dissenting order, Justice S.N. Dhingra has relied upon the ratio of
Page- the Supreme Court judgement and held that the information filed by the
20,21 appellant prima facie disclosed violation of Section 3(3) and 3(4) of the Act.
He then opined that the relevant market would be liaison services relating
to coal for thermal power stations in the State of Maharashtra and
concluded that a prima facie case has been made out for ordering
investigation under Section 26(1). In my view, the approach adopted by
Justice S.N. Dhingra is legally correct and deserves to be approved. The
views expressed by him on the relevant market also appear to be correct.
29 In the result the appeal is allowed. The majority order of the Commission is
Page-21 set aside. The Director General shall now conduct investigation into the
allegations contained in the information filed by the appellant under Section
19(1)(a) and submit a report to the Commission within three months.
However, it is made clear that while making investigation, the Director
General shall not proceed on the premise that Respondent No. 2 was a
part of the cartel.