Delhi High Court Slaps ₹1 Lakh Cost On Litigant For Filing Contempt Plea Against CCI To Stall Authority's Ongoing Investigation Against It

The Court remarked that the petitioner-company was attempting to secure a judicial review of the CCI's investigation methodology through the back door, which was impermissible.

“To reiterate, the petitioner has failed to demonstrate that the respondents have committed contempt of this Court's directions. The Commission possesses independent and plenary powers to shape the investigation methodology and timeline. In reality, while the petitioner ostensibly seeks contempt proceedings, it is attempting to secure a judicial review of the investigation methodology through the back door, which cannot be entertained.”

Background:

The petitioner-company, Forech India Pvt Ltd, was investigated by the CCI regarding alleged existence of a bid-rigging cartel in the Conveyor Belt sector in India. Finding a prima case of anti-competitive agreements, the CCI directed the Director General (DG) to carry out an exhaustive investigation in the matter.

Thereafter, the DG issued notice to the petitioner-company asking it to furnish certain information about its business activities, addresses and persons responsible for tendering and bidding of contracts. The petitioner- company then sought inspection of the relevant records based on which the inquiry was initiated and the summons issued by the DG.

Subsequently, the company filed a petition before the High Court seeking permission to inspect the documents/evidence relied upon by the CCI and further issuance of necessary directions to the CCI and DG to allow the company to cross-examine the witnesses.

In the proceedings, the CCI said that it would furnish all the documents of investigation available with it except in cases where any party has claimed confidentiality. In view of this, the Court on 02.12.2015 disposed the petition.

However, the CCI then filed an appeal for modification of the order. It sought modification of its statement to furnish to the petitioner all documents of investigation with the respondents save those with respect to which any party has claimed confidentiality.

The Court on 29.09.2016 partly allowed the application, allowing modification to the extent that the CCI could furnish to the petitioner-company with orders passed on the application of any other person claiming confidentiality after redacting the portion which may disclose the nature of the documents.

Subsequently, by an ex-parte order dated 16.03.2021, the CCI directed all the parties including the petitioner-company to file non-confidential version of their existing submissions. Further,

on 08.05.2024, the CCI affirmed its previous order and also directed the DG to complete the case records as pet the High Court's order.

The petitioner-company claimed that the CCI's order dated 08.05.2024 was a deliberate and wilful violation of the undertakings given by it before the Court. It stated that the CCI's order was an attempt to wriggle out of its undertaking given before the Court.

Findings:

Considering the facts of the case, Justice Dharmesh Sharma did not find any merit in the petitioner-company's assertions.

The Court was of the view that the contempt petition was a “deliberate attempt to stall the ongoing investigation with ulterior motives.”

The Court observed that to hold a hold a person guilty of contempt, it must be proved that the disobedience was wilful, deliberate and intended to defy the authority of the court. Mere technical or unintended breaches would not warrant contempt proceedings, it added.

Here, it noted that the facility of inspection was never denied to the petitioner-company by the CCI, It noted that only certain technical compliances were required to be followed in which inspection applications were to be submitted.

It stated, “A thorough review of the order dated 16.03.2021, as approved vide order dated 08.05.2024, reveals that the Commission is aware of its obligation to comply with this Court's directions dated 02.12.2015.”

It noted that the CCI's order dated 16.03.2021 merely acknowledged the delay in the progress of the investigation and the conclusion of the inquiry. It said that the CCI then issued directions to provide all parties with non-confidential versions of confidential documents and allow inspection and grant certified copies to concerned parties.

The Court remarked, “However, instead of complying with the DG's directions, the petitioner is raising a misconceived legal plea, by claiming that this process amounts to creating fresh documentation or evidence in the matter. This Court is unable to comprehend as to how the directions issued by the Commission could possibly lead to the disclosure of new information, submissions, evidence, documents, or any other material by any of the concerned parties.”

It further remarked that the real grievance of petitioner appeared to be that the DG should provide them with copies of the voluminous record instead of allowing inspection. The Court stated that providing copies of a massive record would be a herculean task and that CCI cannot be expected to perform such task.

On CCI's powers, the Court stated that it has its plenary power to modify its orders as necessary, pursuant to the investigation conducted under Section 26 of the Act. It stated that such power cannot be curtailed in any way.

The Court thus held that the petitioner failed to demonstrate any prejudice caused to him in the ongoing investigation due the CCI's order dated 16.03.2021.

The Court dismissed the contempt petition and imposed costs on the petitioner for “using delaying tactics and trying to stall the ongoing investigation, ultimately wasting this Court's precious time.”

Case title: Forech India Pvt Ltd vs. Shri Inder Pal Singh Bindra Secretary Competition Commission Of India & Anr. (CONT.CAS(C) 1371/2024 & CM APPL. 50365/2024, CM APPL. 50367/2024)