NCLAT Sets Aside CCI’s 4-Year-Old Order On DLF, Asks To Re-Examine

NCLAT said that CCI was “not authorised to pass an order for further investigation” if its probe unit has already “noticed the violation” in its first report.

The National Company Law Appellate Tribunal (NCLAT) has set aside a four-year-old order passed by the Competition Commission of India (CCI), the country's fair trade regulator, with respect to DLF and has asked the regulator to examine the matter again, reported PTI.

The case dates back to August 31, 2018. The CCI rejected a complaint against the DLF and its subsidiary for alleged abuse of the dominant position. This was done on the basis of a second/supplementary report submitted by CCI’s probe unit – the DG (Director General). 

Now, the appellate tribunal, NCLAT, has said that CCI was “not authorised to pass an order for further investigation” if its probe unit has already  “noticed the violation” in its first report.

A two-member NCLAT bench said, “Without going into further detail or delving into the 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.”

The NCLAT sent the matter back to CCI “to pass the order afresh on the basis of the first report” filed by the DG office. It said, “The CCI is required to examine the entire issue and pass an 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.”

The matter started after an informant had filed a complaint against DLF Home Developers alleging that the realtor’s buyer-seller agreement for the estate at Regal Garden in Sector 90, DLF Garden City, Gurugram, reflected abuse of dominance. The informant had complained before the CCI, alleging the clauses to be “highly unfair and discriminatory.”  On August 31, 2018, the CCI closed the case, observing that there was no violation of the Competition Act. The CCI order was challenged before the NCLAT.  

Questioning the CCI direction, the NCLAT said, “Even though DG in its investigation report dated March 2016 noticed the violation committed by Respondents under Section 4 of the Act, by its order dated November 9, 2016, the CCI directed the DG to conduct further investigation.” It observed that after the second/supplementary DG report, CCI passed the order concluding that the contravention of the provisions under Section 4 of the Competition Act is not established in the matter.

NCLAT said, “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.”