The Delhi High Court has asserted that the proceedings under the Competition Act, 2002 are public interest proceedings in the nature of rights in rem, and impleadment of a party before the CCI is not an adversarial determination of rights but a measure to assist the Commission in arriving at a just and informed conclusion. Where the Commission records its satisfaction that a person or enterprise has substantial interest in the outcome of the proceedings and that participation is necessary in public interest, impleadment under Regulation 25(1) is permissible, and the appellant cannot claim to be the dominus litis with the right to choose who should be impleaded.
The High Court therefore dismissed Ultratech’s intra-court appeal challenging the CCI’s order dated July 05, 2023, which allowed the Builders’ Association of India (BAI) to be impleaded in the ongoing cement cartelisation proceedings. The Court rejected Ultratech’s contention that the CCI’s order was non-speaking, holding that the Commission had recorded its satisfaction in paragraph 13 of the order that BAI had substantial interest in the outcome of the proceedings and that its participation was necessary for a meaningful inquiry under Regulation 25(1) of the CCI (General) Regulations, 2009.
The Court also held that the order dated July 05, 2023, did not amount to an impermissible review of the earlier rejection order dated Dec 29, 2021, since the two applications were moved at materially different stages of the proceedings, the first during the pendency of the DG investigation and the second after the DG had submitted its investigation report on July 01, 2022. The Court found no violation of principles of natural justice, observing that Ultratech had constructive notice of BAI’s impleadment proceedings through the CCI’s order dated Oct 06, 2022, which was forwarded to all opposite parties including the appellant through their authorised representatives.
The Division Bench comprising the Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia noted that the Supreme Court had, vide order dated Feb 26, 2024, in Dalmia Cement (Bharat) Ltd. v. CCI [SLP(C) No. 4100/2024], dismissed the Special Leave Petition arising from the Madras High Court’s order upholding the same CCI order dated July 05, 2023, while keeping the question of law open and recording BAI’s statement that it would not seek inspection of documents marked confidential. The Court observed that the CCI’s order dated July 05, 2023, was not a non-speaking order, as the Commission had recorded its satisfaction in paragraph 13 that BAI had substantial interest in the outcome of the proceedings and that it was necessary to allow it to present its opinion for a meaningful inquiry.
The Court further observed that the order dated July 05, 2023, did not amount to a review of the earlier rejection order dated Dec 29, 2021, because the circumstances had materially changed, the DG’s investigation had been completed and the report submitted on July 01, 2022, which was a different stage of the proceedings. The Court also observed that no violation of natural justice had occurred, since the appellant had been put on notice through the CCI’s order dated Oct 06, 2022, which directed that a copy of the order be forwarded to the opposite parties, including Ultratech, through their authorised representatives.
The Court further observed that impleadment of a party before the CCI is not a conclusive determination of rights but merely an action to enable the Commission to reach an informed conclusion, and that proceedings under the Competition Act, 2002 are in the nature of rights in rem.
Briefly, the Competition Commission of India (CCI) initiated a Suo Moto Case against grey cement manufacturers, including Ultratech Cement Ltd, following multiple complaints of cartelization and abnormal price increases received between December 2018 and May 2019. The Builders’ Association of India (BAI), which had itself complained to the CCI on Feb 08, 2019, sought impleadment in the proceedings.
BAI’s first impleadment application dated Dec 07, 2021, was rejected by the CCI on Dec 29, 2021, on the ground that the investigation by the Director General (DG) was at an advanced stage. BAI challenged this rejection before the Delhi High Court and the Single Judge disposed of the writ petition by granting BAI liberty to apply afresh under Regulation 25 of the CCI (General) Regulations, 2009, noting that the DG had already submitted its investigation report on July 01, 2022.
Exercising this liberty, BAI moved a fresh impleadment application on Sep 27, 2022, which was allowed by the CCI vide order dated July 05, 2023, finding that BAI had substantial interest in the outcome of the proceedings. Ultratech challenged this order before the Delhi High Court, which was dismissed by the Single Judge.
