Person summoned by CCI for investigation and recording statement has right to be represented by an advocate

Person summoned by CCI for investigation and recording statement has right to be represented by an advocate subject to procedure to be laid down – High Court

The present appeal had been filed by the Competition Commission of India (CCI/ Appellant) against the judgment of the High Court on the question whether a person summoned for investigation (and whose statement may be recorded) has the right to be represented by an advocate merely because the Authority investigating is empowered to take evidence.

ABCAUS Case Law Citation
ABCAUS 2350 ( 2018) 05 CCI

The CCI had received information, indicating existence of a bidrigging cartel in a sector. Based on the information, the CCI found that there was an apparent prima facie case of contravention of Section 3 of the Competition Act, 2002 (the Act) and in suo-motu directed the Director General (DG) to undertake an exhaustive investigation into the matter against the parties for all kinds of violation of the Act, under an order issued under section 26(1) of the Act.

Pursuant to the CCI’s order, the DG issued Notice to a company (Respondent), mentioning that its office was conducting investigation in the case and in terms of the powers vested in the DG as per Sections 36(2) and 41(2) of the Act, and asking the respondent to furnish information which inter alia included information with respect to the company and its business activities, plant addresses, names of the entire sales and marketing team and other persons responsible for tendering/bidding for contracts, explanation in detail with respect to process of supply of fabric conveyor belts in different market segments, etc.

The respondent requested CCI for permission to inspect the records of the case in terms of Regulation 50 of the Competition Commission of India (General) Regulations, 2009. The respondent stated that it was not privy to the facts in respect of the case initiated by the CCI and thus sought the requisite permission to inspect the relevant records. Within a gap of a week, the respondent again wrote to the CCI seeking permission as requested for inspection of records of the case.

The DG, in furtherance of the Notice issued, rectified certain requirements of the said Notice and issued a show cause notice seeking explanation from the Respondent as to why their acts and conduct should not be treated in contravention of Section 3 of the Act. The DG, keeping in mind adherence to strict timeline, refused to grant extension of time to the Respondent for submission of remaining information/details. The Respondents were directed to submit the information/details within time allowed.

However, the respondent again made an request for inspection of records . The CCI replied that the information of the case file was confidential and the application for inspection could not be allowed. Later, the Respondent vide letter to the CCI stated that it had submitted all the relevant data that was available with them in connection with the investigation as required by the DG.

Thereafter, the DG called for further information from the Respondent and there were a series of correspondences between the Respondent and the CCI. Thereafter, the DG issued summons under Section 41(2) read with Section 36(2) of the Act. In terms of provisions in the Act and regulations framed under it, the DG summoned the respondent under Section 36(2) to give evidence since there was information that the Respondent had knowledge of certain facts relating to the matter.

Aggrieved by the summons, the Respondent had approached the High Court by filing a Wrot Petition seeking inter alia, permission to inspect the documents/evidence that had been relied upon by the DG, directing the Commission and DG to allow the Respondent to cross-examine the witnesses and allowing the officers of the Respondent to be accompanied by legal counsel when giving their statements under oath.

Before the High Court, the CCI stated that the copies of the documents to be used against the respondent would be supplied and the Respondent would be allowed the right to cross-examine the witnesses whose evidence is intended to be used. However, the CCI declined the request that the officials of the respondent whose statements were to be recorded by the DG, be accompanied by advocates. However, the Single Judge of the High Court held that the officials of the Respondent summoned by the CCI would be entitled to be accompanied by advocates. Aggrieved by this order, CCI had filed the instant appeal before the Division Bench.   

The Hon’ble High Court observed that since the DG’s powers are so far-reaching and the consequences of an investigation by the DG so drastic, it would necessary that the right of a party/person to be accompanied by an advocate during the investigations by the DG, when the latter is collecting or recording evidence, not be taken away.

The Hon’ble High Court found that the Learned Single Judge’s opinion that when the consequences of an enquiry or investigation are severe and drastic, the right of a person to be accompanied or represented by an advocate cannot be extinguished, stands to reason and cannot be faulted with.

It was noted that the concerns raised by the CCI was that if parties are allowed to be accompanied or represented by advocates in investigations before the DG, the efficacy of the investigation may be hampered and the collection of evidence may become onerous or cumbersome. That during the course of investigation and recording of evidence of a witness, the active participation of a counsel may not be conducive to the larger public interest in promoting competition, because the likelihood of a counsel cautioning (either orally, or through non verbal communication) a witness from making or refraining from making a statement.

With respect to the above concerns, the Hon’ble High Court clarified that the Commission or the DG, as the case may be, prescribe an appropriate procedure to be followed during such investigation, where the counsel may be allowed to accompany the party, but not continuously confer with him when the DG is taking his or her testimony or asking questions. Therefore, while the party is allowed his right to be accompanied by an advocate, the DG’s investigations are not unnecessarily hindered. The Commission having regard to the appropriate best practices across jurisdictions in antitrust matters may formulate such procedures and incorporate them in regulations; till then, it is open to the DG to make appropriate procedural orders.

The Hon’ble High Court opined that this precautionary note is essential, because 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 does not deem it necessary or appropriate to say more on this aspect of the matter, leaving it to the Commission to decide the appropriate course.

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