KARNATAKA High Court has dismissed the two writ petitions filed by the retail trade giants – Amazon and Flipkart against the order passed by the Competition Commission of India on January 13, 2020, directing an investigation under section 26(1) of the Competition Act, 2002, by the Director General, with the observation that it would be unwise to scuttle investigation. The judgement in this case has been delivered by Justice P. S. Dinesh Kumar on June 11, 2021.

 

After perusing the record and considering rival contentions, the court formulated 3 questions, the answers of which, according to it, contain the decision of these petitions: 1. What is the nature of the impugned order passed under section 26(1) of the Act 2. Whether a prior notice and opportunity of hearing is mandatory at the stage of issuing direction to the Director General to hold inquiry under section 26(1) of the Act 3. Whether the impugned order calls for interference? As both points 1 and 2 are inter-connected, the Court dealt with them together. As held in the decision CCI v. SAIL, the intimation received complaining of violation of the provisions of the Act, sets into motion the mechanism stated under section 26 of the Act. At this stage, the Commission is required to form an opinion whether or not there exists a prima facie case. The informant has alleged violation of sections 3(1) read with 3(4) and sections 4(1) read with 4(2) of the Act by the petitioners. In the impugned order, the Commission has recorded that the Act does not provide for inquiry into the cases of joint/collective dominance and proceeded further to deal with the violation under section 3 of the Act. Perusal of the impugned order shows that the Commission has examined the material produced by the informant. It has analyzed the information under various heads such as exclusive launch of mobile phones, preferred sellers on the market places, deep discounting and preferential listing of private labels.

 

 

The HC has pointed out that though, the petitioners have pleaded in details and submitted elaborate arguments on the merits of their case, but in a writ petition under Article 226 of the constitution of India, seeking judicial review, the HC can examine only the decision making process with the exception namely the cases involving violation of fundamental human rights. The law on the point is fairly well settled. In the decision – G. Veerappa Pillai v. Raman and Raman Ltd- AIR 1952 SC 192, it has been held that the writs referred to in Article 226 are intended to enable the HC to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction , or in excess of it, or in violation of principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is error apparent on the face of the record, and such act, omission, error or excess has resulted in manifest injustice. However, extensive the jurisdiction may be, it is not so wide or large as to enable the HC to convert itself into a Court of appeal and examine for itself the correctness of the decision impugned and decide what is the proper view to be taken or the order to be made. In the judgement of the case – T. C. Basappa V. T. Nagappa & Another - AIR 1954 SC 440 , it has been held that a tribunal may be competent to enter upon an inquiry but in making the inquiry it may act in flagrant disregard of the rules of procedure or where no particular procedure is prescribed, it may violate the principles of natural justice.

 

A writ of certiorari may be available in such cases. A error in the decision, or determination itself may also be amenable to a writ of certiorari but it must be a manifest error apparent on the face of the proceedings, for example, when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by certiorari but not a mere wrong decision. In the judgement of the case – G. B. Mahajan and others v. Jalgaon Municipal Council and others – 1991(3) SCC 91 (para 44), the Supreme Court speaking through Justice M N Venkatachaliah (as he then was), referring to Prof. Wade’s comment on Wednesbury doctrine, has held that the point to note is that a thing is not unreasonable in the legal sense merely because Court thinks it unwise. Prof. Wade’s comments read as under: “This has become the most frequently cited passage (though most commonly cited only by its nickname) in administrative law. It explains how ‘unreasonableness’, in its classic formulation, covers a multitude of sins. These various errors commonly result from paying too much attention to the mere words of the Act and too little to its general scheme and purpose, and from the fallacy that unrestricted language naturally confers unfettered discretion.”

 

Noted jurist V. Sudish Pai, in his Article-”Is Wednesbury on the Terminal decline?” has opined that the Wednesbury test, long established as ground of judicial review will be applicable in examining the validity of the exercise of administrative discretion. After analysing the law with regard to Constitutional review in UK and the cases involving human rights, he has stated that it is quite inappropriate to speak of the decline or demise of Wednesbury test. He has concluded that Wednesbury Principles are still alive. The Court has quoted jurist Pai saying, that “In the ultimate analysis, it can be said that the Wednesbury Principles are still alive and applicable in judicial review of administrative discretion where no constitutional and or fundamental rights are involved. Wednesbury, is but a facet and an enduring facet of the larger landscape of judicial review.

 

These issues and aspects are not a matter of mere semantics but are the constitutional underpinnings of the exercise of judicial power and limits thereof”. In this case, the informant has filed information and appended material papers, which according to the informant support its allegations. It was submitted by the Addl. Solicitor General that the Commission has also called upon the informant to file a Certificate under section 65B of the Indian Evidence Act and the penalty for incorrect information is up to Rs one crore under section 44 of the Competition Act. The HC has also appreciated that as per the expectation, that an order directing investigation should be supported by ‘some reasoning, the Commission has fulfilled that requirement. Therefore, it would be unwise to prejudge the issues raised by the petitioners in these writ petitions at this stage and scuttle the investigation. Therefore, the HC has held that the impugned order does not call for any interference and dismissed the two petitions.