CCI can't have untrammeled and uncontrolled discretion: COMPAT

NEW DELHI: The Competition Appellate Tribunal has said competition law is not meant to give fair trade regulator CCI "untrammelled and uncontrolled discretion" to ask for any information from anybody during the course of an investigation.

COMPAT's observations came on a petition filed by five people on whom the CCI had imposed a fine of Rs 25,000 per day.

The CCI had said that if account books of the company were not supplied within 30 days, the penalty was to be Rs 50,000 per day for the next 30 days and Rs 1 lakh per day till the penalty amount culminates to Rs 1 crore.

However, COMPAT set aside the order by saying, "We have not found any such application of mind and it seems that the direction was given as a matter of course.

"In the absence of any reason, as to why such directions were necessary, we are unable to agree with the Commission in spite of its finding of breach of its directions... We, therefore, allow this appeal and quash the penalties inflicted in the impugned order. The impugned order is set aside and the appeal stands allowed," said COMPAT.

The tribunal said CCI cannot asks for documents without stating "prima-facie as to why the examination of the books of accounts was required.

"It cannot be a mere ipse dixit on the part of the Commission (CCI) to decide to call for the production of books and documents or supply of information and the non-compliance of which would result in the penalty under Section 43," said a three-member tribunal bench headed by Chairman Justice V S Sirpurkar.

"The Section is not meant to give an untrammelled and uncontrolled discretion to the Commission to ask for any information from anybody," the tribunal said.

Section 43 of the Competition Act, 2003 gives power to the CCI to impose penalty for non-compliance with directions issued by it and its investigation arm Director General (DG).

On powers granted to the DG under section 36 4(a)&(b) to issue directions to firms or a company to produce books or documents, the tribunal said CCI would would require to state at least "prima-facie" as to why the examination of the books of accounts was required.