Somi Conveyor Beltings Ltd. & Anr. vs. Union of India & Ors.

Somi Conveyor Beltings Ltd. & Anr. vs. Union of India & Ors.

[W.P.(C) 1416/2016]

Together with

Premier Rubber Mills vs. Union of India & Ors.

[W.P.(C) 1969/2016]

Decided on: April 11, 2017

Court: High Court of Delhi

Facts

In this case, Petitioners’ request for inspection of records and supply of certified copies of documents was not accepted by Competition Commission of India (“CCI”) on the ground that such information was confidential in terms of the provisions of the Competition Act, 2002 read with the relevant regulations. The regulations in question were: (a) Regulation 35 and proviso to Regulation 37(1) of the Competition Commission of India (General) Regulations, 2009; and (b) Regulation 6 of the Competition Commission of India (Lesser Penalty) Regulations, 2009 (collectively, “Regulations”). The Petitioners filed a writ petition claiming that Respondents’ (Union of India/ CCI/ Director General) denial to access to documents, evidence, information, etc. in possession of CCI and the Director General on the ground of confidentiality is arbitrary and in violation of Articles 14, 19(1)(a), 19(1)(g) and 21 of the Constitution of India.

CCI had earlier passed an order against the Petitioners that they indulged in bid- rigging and cartel in the market for conveyor belts in India and exchanged commercial and confidential price sensitive information among themselves prior to submission of bids.

Issue

Whether CCI denying Petitioners’ request for inspecting or accessing the documents, evidence, information, etc. in possession of CCI and the Director General (“DG”) on the ground of confidentiality was in violation of Articles 14, 19(1)(a), 19(1)(g) and 21 of the Constitution of India.

Held

Section 26 of the Competition Act, 2002 (“Act”) provides the procedure for inquiry by CCI under Section 19, i.e., inquiry into anti-competitive agreements and abuse of an enterprise of its dominant position. Section 36 of the Act empowers CCI to regulate its own procedure for the purpose of discharging its functions under the Act. However, CCI is guided by the principles of natural justice. As per Section 36(2) of the Act which deals with recording of evidences, CCI is conferred with the same powers as vested in a Civil Court under Civil Procedure Code, 1908 (“CPC”) while trying a suit.

Section 57 of the Act makes it clear that no information relating to any enterprise (which has been obtained by CCI for the purpose of the Act) should be disclosed otherwise than in compliance with or for the purposes of the Act or any other applicable laws. In addition, Regulation 35 of General Regulations, 2009 expressly provides that CCI should maintain confidentiality of the identity of an informant, document(s) on a request made by the informant. Such confidential treatment may be given by CCI or DG to other information or document(s) also for which no such request has been made by the informant or the relevant person.

Although Regulation 37 enables a party to the proceedings to inspect the documents or records submitted during proceedings or to obtain copies of the same by making an application, the same is subject to the restriction on disclosure of information as provided under Section 57 of the Act. Thus, it is clear that the entitlement of a party to the proceedings to inspect the documents or to obtain copies of the same is not absolute and it is always open to CCI to reject permission for inspection or furnishing copies if it is of the view that the documents/ information require confidential treatment.

The High Court further referred to the judgment of Supreme Court in Natwar Singh Vs. Director of Enforcement [(2010) 13 SCC 255] wherein it was held that the requirement of principles of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter to be dealt with and the consequences that may visit a person after such inquiry from out of the decision pursuant to such inquiry. Further, the Apex Court observed that adequate disclosure is only an additional procedural safeguard in order to ensure the attainment of the fairness and it has its own limitations. Hence, the High Court held that Respondents did not commit any error in rejecting the request of the petitioners for inspection of the documents.

Relying on several judgments of Supreme Court (Supreme Court Employees’ Welfare Association vs. Union of India [(1989) 4 SCC 187]; Shree Sitaram Sugar Company Ltd. vs. Union of India [(1990) 3 SCC 223]; Indian Express Newspapers vs. Union of India [(1985) 1 SCC 641]; State of T.N. vs. P. Krishnamurthy & Ors. [(2006) 4 SCC 517], the Delhi High Court held that though delegated legislation can also be challenged as being unreasonable, the unreasonableness is not to be judged by the same standard as unreasonableness of administrative action. Delegated legislation can be struck down as unreasonable only if it is manifestly arbitrary or if so unreasonable that Parliament never intended to confer such power on the Regulator.

Accordingly, the High Court upheld the validity of the impugned Regulations and dismissed the writ petitions.

Editor: Vivek Verma

Read full text of the judgment here

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