The case relates to dismissal of charges against DLF and its subsidiaries for abuse of dominant position based on the second/supplementary report of the DG.
The appellate tribunal said the CCI “is not authorized to order further inquiry” if once its inquiry unit – the DG (Director General) – has already “noticed the violation” in its first report and “it cannot be justified”.
Based on the second/supplementary DG report, the CCI concluded that “violation of the provisions” of the Competition Act was not established against DLF and its wholly-owned subsidiaries. DLF Home Developers.
A two-member NCLAT bench said that “it is of the opinion that the order is liable to be rejected without going into further details or going into the merits of the case as prima facie the order is passed in the supplementary inquiry report filed by the DG which was conducted on the impugned order of the CCI.”
The matter pertains to Regal Gardens in Sector 90 of DLF Garden City in Gurugram, where a whistleblower had alleged against the realty firm that clauses in the buyer-seller agreement reflected abuse of dominance by DLF Home Developers.
The whistleblower complained to the CCI that the clauses were allegedly “grossly unfair and discriminatory”, however, the fair trade regulator closed on August 31, 2018, observing that there had been no violation.
The CCI order was later challenged before the NCLAT, an appellate authority for the regulator of fair trade, which set aside the order more than four years later and sent the matter back for re-examination.
The National Company Law Appellate Tribunal (NCLAT) referred the “matter” back to the CCI for passing a fresh order based on the first report filed by the DG’s office.
“CCI shall examine the entire matter and pass appropriate order in accordance with law after giving opportunity of hearing to all concerned within three months from the date of receipt/production of copy of this order,” it said.
The NCLAT observed that the DG conducted the inquiry in compliance with the orders of the CCI and in its report found violations of provisions under Section 4 of the Act by DLF and its affiliates.
“While the DG in its inquiry report dated March 2016 had noticed the violation committed by the respondents under Section 4 of the Act, the CCI by its order dated November 9, 2016 directed the DG to conduct further enquiry,” it said.
And on receipt of the second/supplementary DG report, the CCI passed the order concluding that the violation of the provisions under Section 4 of the Act was not established in this regard.
Questioning the CCI direction for second/supplementary enquiry, the NCLAT said: “Further inquiry is required under the Act not in cases of closure where the DG has submitted a report in violation of the provisions of the Act by a party/parties.”
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