In its ruling on an appeal filed in the case of Amit Mittal v. DLF Ltd. & Ors. on December 21, the National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprised of Justice Rakesh Kumar (Judicial Member) and Dr. Ashok Kumar Mishra (Technical Member), set aside the Competition Commission of India ("CCI") order dated August 31, 2018, which cleared DLF and its subsidiary of allegations of abuse of dominant position. A supplemental report provided by the Director General served as the foundation for the CCI order. The Bench ruled that the CCI can only order a further investigation in cases of closure, not in situations where the DG has submitted a report indicating a party's violation of the Competition Act of 2002.

The Bench stated that the CCI has very little authority to order additional investigation under Section 26 of the Act, 2002. If the DG considers that the Act of 2002 has not been violated, CCI must request objections or suggestions in accordance with Section 26. (5). If more inquiry under Section 26(7) is deemed required, CCI may then order it.

"Further investigation as per Act is required in a case of closure not in a case where DG has submitted report showing contravention of provisions of the Act by a party/parties."

The Bench noted that although CCI hid behind Regulation 20(6) of the CCI (General) Regulations, 2009 despite DLF having violated Section 4 of the Act, 2002, and ordered the DG to file a follow-up report.

"The aforesaid Regulation 20 describes procedure about the investigation by the DG, whereas Regulation 20(6) empowers the CCI to direct DG for further investigation. However, in view of Section 26 of the Act it can be concluded that Regulation 20 (6) of CCI(General) Regulations, 2009 can be used in furtherance of exercise of jurisdiction under Section 26(7) of the Act which is required to be invoked in a case where DG under Section 26(5) submits report regarding non-contravention of the provisions of the Act. In any event taking shelter of Regulation 20(6) of Regulation 2009 CCI was not authorised to pass an order for further investigation and the same cannot be justified."

The ruling from August 31, 2018, has been overturned by the Bench since it was based in large part on the DG's extra investigation report, which was carried out in accordance with a null order from the CCI. The Bench ruled that all actions taken after the DG submitted his first report on March 18, 2016, were invalid. 

The Bench sent the case back to the CCI so that it might issue a new order based on the 1st DG Report from March 18, 2016. The CCI has been given three months to investigate the entire situation and provide a decision that is legal and reasonable after giving everyone involved a chance to be heard.

Case Title: Amit Mittal v DLF Ltd. & Ors.
Citation: COMPETITION APPEAL (AT) NO.82 OF 2018

Link: https://nclat.nic.in/display-board/view_order