In a significant legal victory for Star Cement Ltd, the Gauhati High Court has nullified an order by the Competition Commission of India (CCI) that imposed a ₹5 lakh penalty on the company. The penalty was levied for allegedly failing to comply with directions issued by the CCI’s Director General.
Justice Kaushik Goswami, presiding over the matter, found that the CCI had acted outside its jurisdiction. He pointed out that the order was issued without meeting essential requirements stipulated under the Competition Act, 2002, specifically the need for a prima facie finding under Sections 3(1) and 3(3) of the Act. This oversight rendered the CCI’s actions, including the subsequent review order, invalid.
The case originated from a complaint filed by the Assam Real Estate and Developer Association, which accused Star Cement and other manufacturers of engaging in cartelization and price manipulation in the North East region. Acting on these allegations, the CCI had directed an investigation in December 2016, forming a preliminary opinion of anti-competitive practices. However, Star Cement contended that it had not received the original CCI order and requested more time to provide the required information. Despite this, the CCI penalized the company for non-compliance, leading to the current legal challenge.
Justice Goswami ruled that the CCI’s order to investigate was based on insufficient evidence, making it void. The Court emphasized that for any investigation to proceed, there must be a clear prima facie case—a standard the CCI failed to meet. Consequently, the High Court quashed both the initial investigation order and the subsequent penalty.
This decision underscores the judiciary’s role in scrutinizing the actions of regulatory bodies, ensuring that they operate within the bounds of their legal authority.