Delhi HC upholds right to counsel during inquiry by DG of CCI (with riders)

Delhi HC upholds right to counsel during inquiry by DG of CCI (with riders)

Shruti Mahajan

The Delhi High Court has ruled that the right of a person to be accompanied by a lawyer during an investigation by the Director General (DG) of the Competition Commission of India (CCI) cannot be taken away.

In a case filed by the Competition Commission of India (CCI), the Court also said that this right cannot and should not cause hindrance in the investigation procedure of the CCI.

This principle was laid down by a Division Bench of Justices Ravindra Bhat and Sanjeev Sachdeva in the Civil Appeal of Competition Commission of India v. Oriental Rubber Industries.

Following suspicions of the existence of a bid-rigging cartel in the Conveyor Belt sector in India, the CCI filed a suo motu case of violation of Section 3 of the Competition Act, 2002. This section deals with Anti-Competitive Agreements, under which bid-rigging falls.

The DG of the CCI was required to undertake an exhaustive investigation in this matter. The Competition Act provides the CCI with the same powers as a civil court and empowers the DG to examine records of parties and record evidence.

Pursuant to orders to investigate the prima facie case of bid-rigging, the DG issued notice to the respondent company asking for information to be furnished.

There was some correspondence between the respondent company and the DG, with the former making a request to inspect the records of the case. The DG then issued a show cause notice to the respondent, seeking a response from them as to why the conduct and acts of the respondent company should not be treated as anti-competitive acts.

The respondent, claiming to have submitted all the information available with them, yet again requested for permission to inspect the records of the case. This request was rejected by the DG and was followed by issuing of summons on the respondent to give evidence.

Aggrieved by the summons, a writ petition was filed by the respondent before a Single Judge of the Delhi High Court. The prayers made in the petition were for:

  • Permission to inspect the records based on which the case was initiated;
  • Permission to cross-examine the witnesses; and
  • Permission for the officers of the respondent company to be accompanied by a legal representative during investigation and recording of statements.

While the CCI agreed to the first two prayers, it refused to allow the presence of a lawyer during the investigation.

The Single Judge ruled in favour of the company and allowed the writ petition. The CCI, aggrieved by this judgment, filed an appeal before the Division Bench.

CCI was represented by Senior Advocate Prashanto Sen, who argued before the Division Bench that the investigation by a DG is not adjudicatory in nature and that Section 35 of the Act provides for representation by a legal representative before the CCI, and not the DG.

It was also submitted that the right to practice guaranteed to a lawyer under the Advocates Act, 1961 is not an unqualified right, and may be subject to restrictions “by law for the time being in force”.

Senior Counsel Sandeep Sethi, representing the respondents, highlighted that the investigation carried out by the DG is equivalent to commencement of a trial. It was submitted,

“Since the DG’s powers under the Act are of widest amplitude and the consequences far-reaching, and that an investigation by the DG commences the trial/inquiry, it is, therefore, necessary that a person called for an investigation by the DG has the right to be accompanied by counsel.”   

It was further submitted that there is no express provision in the Competition Act which prohibits lawyers from accompanying the parties. Such prohibitions are expressly made out in Acts governing family or industrial dispute matters.

After hearing both sides, the Court was of the view that the right to practice of a lawyer and the right of a person to be represented by a legal representative are complementary and cannot be taken away from anyone.

However, placing reliance on Supreme Court judgments in Poolpandi v. Superintendent, Central Excise and Senior Intelligence Officer v. Jugal Kishore Samra, the Court also noted that this right is not unrestricted and if taken away for limited purposes, it will not be unconstitutional.

Noting that the DG holds the power similar to that of a civil court, the Court was of the view that the right of a party to be accompanied by his/her lawyer while collecting evidence cannot be taken away. Although, the Court also said,

“…often there can be situations where the prominent presence of a counsel might hinder questioning of the witness by the investigating officers or the Director-General. Apart from non-verbal communication, the counsel might restrict the element of surprise that is essential when collecting such evidence. Therefore, the DG shall ensure that the counsel does not sit in front of the witness; but is some distance away and the witness should be not able to confer or consult her or him.”

The Court effectively held that the CCI or the DG may lay down a procedure to be followed in the proceedings.

Read judgment:

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