In a landmark ruling, National Company Law Appellate Tribunal (NCLAT) remanded a matter related to realty major DLF back to Competition Commission of India (CCI ) for a fresh order on the basis of the first investigation report in the case.
The CCI had earlier closed the case against DLF on the basis of a supplementary investigation report, which was found to be beyond the jurisdiction of the competition watchdog.
Competition law experts say the latest NCLAT ruling is likely to impact many cases decided and pending before CCI and appellate fora where supplementary investigation reports were sought from the CCI’s investigation arm — namely, the office of the Director General (DG).
In its 27-page order on Wednesday, the NCLAT, after making elaborate reference to the provisions of the Competition Act 2002 and the general regulations framed thereunder by CCI, held that CCI had no power to order supplementary investigation in a matter where the DG already found contravention by the entity.
It, however, clarified that if the DG does not find contravention in the first instance, CCI can order supplementary investigation.
Disposing of the appeal, NCLAT noted “we are of the opinion that without going into further detail or delving into merit of the case the order impugned is liable to be set aside since the order is primarily passed on the supplementary investigation report submitted by the DG, which was conducted on a void order of the CCI. Accordingly, all subsequent proceeding after the submission of the 1st report by the DG dated 18.03.2016, are declared void”.
Accordingly, the matter was remitted back to the CCI “to pass order afresh on the basis of the 1st DG Report”.
“The CCI is required to examine the entire issue and pass appropriate order in accordance with law after giving opportunity of hearing to all concerned within a period of three months from the date of receipt/production of copy of this order,” NLCAT said in its order.
Two investigations
The appeal before NCLAT arose out of an order passed by CCI in 2018 in a case filed against DLF by a flat buyer at its residential township ‘Regal Garden’ in DLF Garden City, Gurgaon, that claimed various terms of flat buyer agreement were unfair and discriminatory in abuse of dominant position by DLF.
The CCI ordered an investigation and the DG report found DLF in contravention of the competition law. CCI, however, ordered the DG to conduct a supplementary investigation.
This time, the DG did not find any contravention and CCI closed the matter NCLAT has now voided the CCI order, saying no provision in the competition law enabled it to order supplementary investigation where the DG finds contravention in the first instance.
Earlier, in 2011, CCI had imposed a penalty of ₹630 crore on DLF for abusing its dominant position through“unfair and discriminatory” terms for buyers through apartment buyers’ agreements.