COMPETITION COMMISSION OF INDIA v. STEEL AUTHORITY OF INDIA LTD. & ANR.

34Copy pinpoint34. The principle of 'appeal being a statutory right and no o 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 beiog creation of a statute, legislature has to decide whether the right to appeal should be unconditional E 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 F [(1999) 4 sec 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 vs. Harnam Singh [2008 AIR SC G 1749] may be referred to on this point. Thus, it is evident that the right to appeal is not a right which can be assumed by logical analysis much less by exercise of inherent jurisdiction. It essentially should be provided by the law in force. In absence of any specific provision creating a right in a party to file an H

166 SUPREME COURT REPORTS [2010] 11 S.C.R.

A appeal, such right can neither be assumed nor inferred in favour of the party.

35Copy pinpoint35. A statute is stated to be the edict of Legislature. It expresses the will of Legislature and the function of the Court 8 is to interpret the document according to the intent of those who made it. It is a settled rule of construction of statute that the provisions should be interpreted by applying plain rule of construction. The Courts normally would not imply anything which is inconsistent with the words expressly used by the statute. In other words, the Court would keep in mind that its function is C jus dTcere, not jus dare. The right of appeal being creation of the statute and being a statutory right does not invite unnecessarily liberal or strict construction. The best norm would be to give literal construction keeping the legislative intent in mind. D

36Copy pinpoint36. This Court in the case of Shiv Shakti Co-op. Housing Society, Nagpur vs. Swaraj Developers [(2003) 6 SCC 659], ·while referring to the principles for interpretation of statutory provisions, held as under: E "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 reqllires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. H As observed in Crawford v. Spooner Courts cannot aid the

, COMPETITION COMMISSION OF INDIA v. STEEL 167 AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] 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 unle.ss 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 , .~tands is me~hingless or of a doubtful meaning. Courts are not entitled t~ read words into an Act of Parliament unless Clear reason for it is to be found within the four corr.ers of the Act itself. (Per Lord Loreburn, L. C. in Vickers Sons c and Maxim Ltd. v. Evans, quoted in Jumma Masjid v. Kodimaniandra Deviah."

37Copy pinpoint37. The Law Commission of India, in its 183rd Report, /

while dealing with the ne~d for providing principles of interpretation of statute as regards the extrinsic aids of 0 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 evo,ved at a very early stage of Hindu civilization and culture and the same were E given by 'Jajmini', 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: : I F '\It is well settled principle of law that as the statute is ~n edict· of the Legislature., the conventional way of interpreting or construing a ~tatute is to seek the intention of legislature. The intention ofl Jegislature assimilates two aspects; one aspect carries th~ concept of 'meaning', i.e., G wha~ the word means and another aspect conveys the concept of 'purpose' and 'object' or the 'reason' or 'spirit' pervading through the statute. The process of construction, therefore, combines both the literal and purposive approaches. However, necessity of interpretation would H

\ 168 SUPREME COURT REPORTS [2010) 11, S.C.R. i A arise only where the language of a statutory provision is . ambiguous, not clear or where two views are possible or.,' 1 where the provision gives a different meaning defeating the object of the statute. If the language is clear and unambiguous, no need of interpretation would arise. In this B regard, a Constitution Brnch of five Judges of the Supreme Court in R.S. Na')ak v. A.R. Antulay, AIR 1984 SC 684 has held:

"... lf the words of the Statute are clear and unambiguous, it is the plainest duty of the Court to give effect to the natural c meaning of the words used in the provision. The question of construction arises only in the event of an ambiguity or the plain meaning of the words used in the Statute would be self defeating."

D Recently, again Supreme Court in Grasim Industries Ltd. v. Collector of Customs, Bombay, (2002) 4 SCC 297 has followed the same principle and observed:

"Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for Court to take upon itself the task of amending or altering the statutory provisions."

38Copy pinpoint38. Thus, the Court can safely apply rule of plain construction and legislative intent in light of the object sought to be achieved by the enactment. While interpreting the provisions of the Act, it is not necessary for the Court to implant, or to exclude the words, or over emphasize language of the provision where it is plain and simJi)le. The provisions of the Act G should be permitted to have their full operation ~ather than causing any impediment in their application by unnecessarily 1

· ~xpanding the scope of the provisions by implication.

39Copy pinpoint39. We are unable to per~uade ourselves to agree with H ~he reas9ning given and view taken by the Tri~unal in thi~ regard,

. COMPETITION COMMISSION OF INDIA v. STEEL 169 AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] in the impugned order. Even though the Tribunal referred to the A dictum of the Court in the case of Tek Chaod 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 8 exception.

40Copy pinpoint40. 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, C 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 D 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 E · 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 order passed under Section 26(7) directing further inquiry, from being appealable before the F Tribunal. Therefore, it would neither be permissible nor advisable to make these provisions appealable against the legislative mandate.

41Copy pinpoint41. The existence of such excluding provisions, in. fact, G exists in different statutes. Reference can even be made to the provisions of Section 1DOA 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 H

170 SUPREME COURT REPORTS [2010] 11 S.C.R.

A 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 1OOA of the Code of Civil Procedure. B

42Copy pinpoint42. Expressum facit cessare taciturn - Express mention of one thing implies the exclusion of oth~r. (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 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. Kai/ash Chand Mahajan (AIR 1992 SC 1277) and Padma Sundara Rao v. State of T.N. (AIR 2002 SC 1334)]. E

43Copy pinpoint43. 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:- F "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 G 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 H De Gama (AIR 1990 SC 981)."

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AUTHORITY OF INDIA LTD. (SWATANTER KUMAR, J.]

44Copy pinpoint44. Applying these principles to the provision$ of Section A 53A(1)(a), we are bf the considered view that the ~ppropriate interpretation of this provision would be that no other dire~tion, decision or order of the Commission is appealable e~cept those expressly stated in Section 53A(1)(a). The maxim est boni judicis ampliare justiciam, non-jurisdictionem finds 8 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 direction, order or decision of the Commission would be appealable will amount to unreasonable expansion of the c provision, when the language of Section 53A is clear and unambiguous. Section 538(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 0 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 538(1) ought to have been quite distinct from the one used by the legislature.

45Copy pinpoint45. 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 appeal. Such an approach · would be in consonance with the procedural law prescribed in H

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A Order XLlll Rule 1A and even other provisions of Code of Civil Procedure.

46Copy pinpoint46. The above approach will subserve the purpose of the Act in the following manner :

B First, expeditious disposal of matters before the Commission and the Tribunal is an apparent legislative intent 1 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. E

47Copy pinpoint47. 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, the appeal preferred by SAIL ought to have been dismissed by the Tribunal as not F maintainable.

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

48Copy pinpoint48. The issue of notice arid 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. prtnciple of ctudi a/teram partem, as commonly understood, means 'hear the other side or hear both sides before a decision is arrived at'. It is founded on the ruie H

COMPETITION COMMISSION O~ !NOIA v. STEEL 173 AUTHORITY OF INDIA LTD. [SWAtANTER KUMAR, J.] that no one should be condem~ed or\deprived of his right even A in quasi judicial proceedings unless h~ has been granted liberty of being heard. ·

49Copy pinpoint49. In cases of Cooper v. Wands Worth Board of Works [(1863), 14 C.B. (N.S.) 180) and Errington v. Minister of Health, 8 ((1935) 1 KB 249),\ the Courts in the United Kingdom had enunciated this printi:iple in the early times. This principle was adopted under vario~s 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 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 p~ej~dice has been caused to the delinquent and the non-compliance is with regard to an action of directory nature. The cJses may fall in any of these categories and therefore, the Court has to examine the .facts H

174 SUPREME COURT REPORTS [2010] 11 S . C.R.

A 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.

50Copy pinpoint50. In light of the above principles, let us examine whether 8 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 C case, or otherwise, and to issue direction to the Director General to conduct investigation in the matter.

51Copy pinpoint51. 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 D 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 G General and if it has not already 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 H

COMPETITION COMMISSION OF INDIA v. STEEL 175

AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] 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) th!3 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 538 requires that the Tribunal should give, parties to the appeal, notice and an opportunity of being c heard before passing orders, as it may deem fit and proper, confirming, modifying or setting aside the direction, decision or order appealed against.

52Copy pinpoint52. 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 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. H

176 SUPREME COURT REPORTS [201 OJ 11 S.C.R.

53Copy pinpoint53. 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. B 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. c Thereafter, an inquiry commences in terms of Regulation 18(2) when the Commission directs the Director General to make the investigation, as desired.

54Copy pinpoint54. 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 Gover11ments but even to the parties concerned.

55Copy pinpoint55. 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.

56Copy pinpoint56. 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 H Secretary shall place it during an ordinary meeting of the

COMPETITION COMMISSION OF INDIA v. STEEL 177

AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] 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. '

57Copy pinpoint57. 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. D

58Copy pinpoint58. 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 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 G 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. I

59Copy pinpoint59. Cumulative reading of these provisions, in conjunction H

178 SUPREME COURT REPORTS [201 O] 11 S.C.R.

A 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.

60Copy pinpoint60. 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 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 G 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, H fairness in action does not demand its application and even

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AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] warrants its exclusion. In the case of Union of India v. WN. A 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:-

"88. -The principle of"law that could be deduced from the above decisions is that it is no doubt true that the fact that a decision, whether a prima facie case has or has not been made out, is not by itself determinative of the exclusion of hearing, but the consideration that the decision was purely an administrative one and a full-fledged inquiry follows is a relevant - and indeed a significant - factor in deciding whether at that stage there ought to be hearing which the statute dip not expressly grant. D I'

89. Applying the above principle, it may be held that when the investigating officer is not deciding any matter except collecting the materials for ascertaining whether a prima facie case is made out or not and a full inquiry in case of filing a report under Section 173(2) follows in a trial before the Court or Tribunal pursuant to the filing of the report, it cannot be said that at that stage rule of audi a/teram partem superimposes an obligation to issue a prior notice and hear the accused which the statute does not expressly recognise. The question is not whether audi alteram partem is implicit, but whether the occasion for its attraction exists at all."

61Copy pinpoint61. The exclusion of principles of natural justice by specific legislative provision is not unknown to law. Such exclusion would either be specifically provided or would have to be imperatively inferred from the language of the provision. There may be cases where post decisional hearing is contemplated. Still there may be cases where 'Clue process' is specified by offering a full H

180 SUPREME COURT REPORTS [2010] 11 S.C.R.

A hearing before the final order is made. Of course, such legislation may be struck down as offending due process if no safeguard is prqyided against arbitrary action. It is an equally &ettled principle that in cases of urgency, a post-decisional hearing would satisfy the principles of natural justice. Reference B can be made to the cases of Maneka Gandhi v. Union of India [(1978) 1 SCC 48] and State of Punjab v. Gurdayal [AIR 1980 SC 319]. The provisions of Section 26{1) clearly indicate exclusion of prinf_iples of natural justice, at least at the initial stages, by necessary implication. In cases where the conduct C of an enterprise, association of enterprises, person or association of persons or any other legal entity, is such that it would cause serious prejudice to the public interest and also violates the provisions of the Act, the Commission will be well within its jurisdiction to pass ex parte ad interim injunction orders immediately in terms of Section 33 of the Act, while 0 granting post decisional hearing positively, within a very short span in terms of Regulation 31(2). This would certainly be more than adequate compliance to the principles of natural justice.

62Copy pinpoint62. It is true that in administrative action, which entails civil consequences for a person, the principles of natural justice should be adhered to. In the case of Raj Restaurant and Anr. v. Municipal Corporation of Delhi, [(1982) 3 SCC 338], the Supreme Court held as under:

"5. Where, in order to carry on business a licence is required, obviously refusal to give licence or cancellation or revocation of licence would be visited with both civil and pecuniary consequences and as the business cannot be carried on without the licence it would also affect the livelihood of the person. In such a situation before either refusing to renew the licence or cancelling or revoking the same, the minimum principle of natural justice of notice and opportunity to represent one's case is a must. It is not disputed that no such opportunity was given before taking the decision not to renew the licence though it is admitted H

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AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] that the for the reasons herein before set out the licence was not renewed such a decision in violation of the principle of natural justice would b void. Now, it is true that no specific order is made setting out the reason for refusal to renew the licence. But the action taken of sealing the premises for carrying on the business without a licence clearly implies that there was refusal to renew the licence and the reasons are now disclosed. And the action disclosing the deeision being in violation of the principle of natural justice, deserves to be quashed."

63Copy pinpoint63. 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]. \Ne 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. G Exercise of power should be fair and free of arbitrariness.

64Copy pinpoint64. Now, let us examine what kind of function the Commission is called upon to discharge while forming an opinion under Section 26(1) of the Act. At the face of it, this is H

182 SUPREME COURT REPORTS [2010] 11 S.C.R.

A 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 B scope of such investigation has to be examined with reference to the statutory powers. In that case the Court found that the proceedi,,gs, before the High Power Judicial Committee constituted, were neither civil nor criminal but sui generis. Referring to the investigation under criminal jurisprudence as c 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.......... " H

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AUTHORITY OF INDIA LTD. [SWATANTERi<UMAR, J.]

65Copy pinpoint65. The exceptions to the doctrine of audi alteram partem are not unknown either to civil or criminal jurisprudence in our country where under the 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 c can be made to the case of Azienda Co/ori Nazionali - AGNA 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 D 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 G to commence 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."

66Copy pinpoint66. The jurisdiction of the Commission, to act under this H

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A 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 B function. At that stage, it doe~ot 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) c 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 i~ appealable before the Tribunal and only D after this stage, th~re 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. E However, Regulation 17(2) gives right to Commission for seeking information, or in other 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 F 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

. COMPETITION COMMISSION OF INDIA v. STEEL 185 AUTHORITY OF INDIALTD. [SWATANTER KUMAR, J.] opinion and the matters are dealt with effectively and expeditiously.

67Copy pinpoint67. 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 8 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 C Commission. ·

68Copy pinpoint68. The Tribunal, in the impugned judgment, has taken the view that there is a requirement to record reasons which can be express, or, in any case, ·followed by necessary implication and therefore, the authority is required to record reasons. for D 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, E C.T.D.W.C. v. Mis Shlfkla & 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 alsq examined the practice and requirement of providing reasons fbr conclusions, orders and directions given by the quasi-judipial 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 in~tstence 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 H

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A 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 B that the grounds upon which the administrative agency acted be clearly disclosed and adeqt:Jately sustained."

xxx xxx xxx xxx

c 12. At the cost of repetition, we may notice, that this Court has consistently taken the view that recprding of reasons is an essential feature of dispensation 6f justice. A litigant who approaches the Court with any grievance in accordance with law is entitled to know the re/asons for grant or rejection of his prayer. Reasons are t~e soul of orders. Non-recording of reasons could lead to dual infirmities; firstly, it may cause prejudice tp the affected party and secondly, more particularly, ham1per the proper 1

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

COMPETITION COMMISSION OF INDIA v. STEEL 187

AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] 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 ...

69Copy pinpoint69. In this very judgment, the Court while referring to other c 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 D sec 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 conclusions. By practice adopted in all courts and by virtue of judge-made law, the concept of reasoned E judgment has become an indispensable part of basic rule of law and in fact, is a mandatory r'?.quirement 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. F v. Crabtree [1974 ICR 120] in this regard.

70Copy pinpoint70. 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, G 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, H

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A 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 B 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 formed on the basis of the records, including the c 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, 0 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. E

71Copy pinpoint71. 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 F 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 G 26 to 28 of the Act.

Submissions made and findings in relation. to Point No.3

72Copy pinpoint72. The concept of necessary and proper parties is an accepted norm of civil law and its principles can safely be H applied to the proceedings before the Tribunal to a limited

COMPETITION COMMISSION OF INDIA v. STEEL 189

AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] extent. Even some provisions of the Act and the Regulations A 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 8 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 c under Section 538 of the Act.

73Copy pinpoint73. 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 D ' period specified 53A(1)(a)). The appeal is to be filed within the and Section 538(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 E contemplates that before the Tribunal a person may either appear 'in person' or authorize one or more chartered accountants or company secrete.. •• as, 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.

74Copy pinpoint74. 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 H

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A or order of the Tribunal to them.

75Copy pinpoint75. The expression 'any person' appearing in Section 538 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 8 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 C 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 able to effectively exercise its right to appeal in terms of Section 53 D of the Act. Furthermore, Regulations 14(4) and 51 support the view thatlhe Commission can be a necessary or a proper party in the pi'.oceedings 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, a~ 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 coulcl be useful in complele and effective adjudication of the · issue before it.

76, Regulations 24 to 26 define powers of the Commission H

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AUJ"HORITY OF INDIA LTD. [SWATANTER KUMAR, J.] 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 mind in regard to application of a party for impleadment. The person or enterwise sought to be im.pleaded should have substantial i 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 c 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.

77Copy pinpoint77. 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 is essential for complete.and effective adjudication of the subject matter, inter a/ia, 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. H

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78Copy pinpoint78. These principles were stated by this Court in Udit Narain Singh Malpaharia v. Addi. 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 B 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 c effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding."

79Copy pinpoint79. 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.

80Copy pinpoint80. 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 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 1O which provides that a G necessary or proper party may be added. [Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay ((1992) 2 sec 524].

81Copy pinpoint81. In the proceedings, which are initiated by the H Commission suo moto, it shall be dominus /itis of such

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AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.]

proceedings while in other cases, the Commission being a A regu:atoiy 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 B Court in the case of Brahm Dutt v. Union of India [(2005) 2 sec 431], while considering the constitutional validity of Section 8 of the Act observed that the Commission is an expert body which had been creqted 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 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 E

82Copy pinpoint82. 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: F

"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 G committed, the Commission may, by order, temporarily restrain any party from carrying on such .act until the conclusion of such inquiry or until further oJders, without giving notice to such party, where it deems it necessary" H

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83Copy pinpoint83. 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 B 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 defined in the Act, however, Regulation 18(2) explains what is 'inquiry'. 'Inquiry' c 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 F 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 G 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 invoked by a party for passing of an ex parte order. Even H at that stage, the Commission is required to record a

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AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.) 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 Commi~sion 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 c 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 D 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 E 31 (2) of the Regulations clearly mandates such a procedure. Wherever the Coll]mission has passed interim order, it shall hear the parties against whom such an order has been made, thereafter, as s_oon as possible. The expression 'as soon as possible' appearing in Regulation 31 (2) has some significance F · 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 G will be desirable to pass such order in exceptional circumstances and deal with these matters most expeditiously.

84Copy pinpoint84. During an inquiry and where the Commission is satisfiedl~hat the act has been committed and continues to be H I

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A 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 B power has to be exercised by the Commission sparingly and under compelling and exceptional circumstances. The Commission, while recording a reasoned order, inter a/ia, shquld : (a) record its satisfaction (which has to be of much higher degree than formation of a prima facie view under c Section 26(1) of the Act) in clear terms that an act in contr~vention of the stated provisions has been committed and continuei; 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, there is every likelihood that the party to the /is would suffer irreparable and irretrievable damage, or 0 there is definite apprehension that it would have adverse effect on competition in the market.

85Copy pinpoint85. The power under Section 33 of the Act, to pass a temporary restraint order, can only be exercised by the E 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.

86Copy pinpoint86. 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 sec 225), wherein this Court was concerned with Consumer Protection Act 1986, Companies Act 1956 and Securities and Exchange Board of India (Mutual Fund) G 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. H The Court spelt out the following principles:

COMPETITION COMMISSION OF INDIA v. STEEL 197

AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] "36. As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the 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 (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 (d) the court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction; E (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 F 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." G

87Copy pinpoint87. 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 H

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A 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 B 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 exercised in appropriate circumstances. These provisions can hardly be invoked in each and every case except in a reasoned manner. c 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 D 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.

88Copy pinpoint88. For these reasons, we may conclude that the E 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.

Submissions made and findings in relation to Point No.6

89Copy pinpoint89. In light of the above discussion, the next question that we are required to consider is, whether the Court should issue

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AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] certain directions while keeping in mind the scheme of the Act, A 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 B 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 c 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 0 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, 538(5) and 53T and Regulations 12, 15, 16, 22, 32, 48 and 31 clearly show the legislative intent to ensure time bound disposal of such matters. E

90Copy pinpoint90. 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. F 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 G 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 H

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A ot object the Act and to ensure its proper implementation. The power tQ restructure the agreement can be brought into service· and matJers dealt with expeditiously, rather than passing of ad interim prders in relation to such agreements, which may continue for indefinite periods. To avoid this mischief, it is B 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 applicatipns expeditiously. Order XXXIX, Rules 3 and 3A of the Code of,Civil Procedure also have similar provisions. Certain c proced~ral directions will help in avoiding prejudicial consequences, against any of the parties to the proceedings and thej possibility of abuse of jurisdiction by the parties can be elim nated by proper exercise of discretion and for valid reasons. Courts have been issuing directions in appropriate cases /and wherever the situation has demanded so. 0 Admini$tration of justice does not depend on individuals, but it has to ~e 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. E 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 F which shall remain in force till appropriate regulations in that regard are framed by the competent authority.

FINQINGS ON MERITS: !

91Copy pinpoint91. Having examined various legal issues arising in the pre,sent case, we will now revert back to the facts of the case in Jiland. It is clear that Jindal Steel, the informant. had made a reference to the Commission. The Commission had initiated pefoceedings and asked for further information from the i~formant and thereafter, had even issued notice calling upon H SAIL to submit its views and comments. From the record it is I

COMPETITION COMMISSION OF INDIA v. STEEL . 201 AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] clear that parties had appeared before the Commission. The A 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 B 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 c 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 F (1) to Section 19 are fulfilled and brought to the notice of 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 G 9ated 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 jur~sdiction or suffering from any apparent error of law. However, the Tribunal, in exercise of its judicial discretion, had interfered with the said H

202 SUPREME COURT REPORTS [2010] 11 S.C.R.

A 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, B 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 c 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.

D CONCLUSION AND DIRECTIONS

·. 92. 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.

93Copy pinpoint93. 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

COMPETITION COMMISSION OF INDIA v. STEEL 203

AUTHORITY OF INDIA LTD. [SWATANTER KUMAR, J.] 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 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 D 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) T~e Director_ General in terms of Regulation 20 is E . 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 nirector General in terms of Section 26(2) of the Act. l ne 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 F from the date of passing of directions in terms of Section 26( 1) of the Act.

(E) The Commission as well as the Director General shall maintain complete 'confidentiality' as envisaged under G 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 H

204 SUPREME COURT REPORTS [2010] 11 S.C.R.

A terms of the provisions of the Act and the Regulations in force.

94Copy pinpoint94. 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 8 that the Competent Authority ·frames Regulations P!.9'1lidirlg 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.

95Copy pinpoint95. Resultantly, this appeal is partially allowed. The order dated 15th February, 2010 passed by the Tribunal is modified to the above extent. The Commission snall proceed with the case in accordance with law and the principles· enunciated supra.

96Copy pinpoint96. In the circumstances there will be no order as to costs.

R.P Appeal partly allowed.