Bombay High Court: A writ petition was filed by Asian Paints Limited-petitioner, challenging the order passed by the Competition Commission of India (‘CCI’) wherein CCI, without giving any opportunity of hearing to the petitioner had ordered probe into the allegations made by Respondent 2-Birla Paints Division that the petitioner abused its dominance in the decorative paints market. The Division Bench of Revati Mohite Dere* and Dr. Neela Gokhale, JJ., held that that no right to pre-investigation hearing at the prima facie stage with adequate safeguards was available at later stages of the proceedings. Additionally, Section 26(2-A) of the Competition Act, 2002 (‘Act’) did not create any jurisdictional embargo preventing CCI from entertaining a representation, if it was found distinct/different from the earlier representation. The Court thus, dismissed the petition as it found no infirmity in CCI’s order.
Background
The petitioner was a company incorporated under the Companies Act, 2013 for the manufacture, sale and distribution of paints, coatings, home decor products, bath fittings and providing related services. Respondent 2 also an incorporated company, was engaged in the manufacture of man-made fibres, chemicals and had entered in the decorative paints market in India around March 2024, under the brand name of Birla Opus Paints.
The CCI received an information from Respondent 2, under Section 19(1)(a) of the Act alleging therein, that the petitioner had abused its dominance in the decorative paints market. The allegations included offering arbitrary discounts and incentives to dealers in exchange of exclusivity by threatening the dealers against stocking the products manufactured by Respondent 2. It was also alleged that the petitioner directed the dealers to return the tinting machines supplied by Respondent 2, restraining suppliers from providing goods to the Respondent 2 and coercing landlords and transport agents to avoid dealing with products of Respondent 2.
Pursuant to an e-mail from a media house, the petitioner found about the complaint made against it, and thus, addressed a letter to CCI, seeking an opportunity to present its case and seek option of oral hearing. The petitioner pointed out in its letter that similar case was earlier initiated by JSW which was dismissed by CCI as it did not find any evidence of abuse of dominance by the petitioner despite a thorough investigation. The petitioner contended that under Section 26(2-A) of the Act, CCI was jurisdictionally barred from entertaining any substantially similar complaint that had already been decided.
In response to the letter, CCI asked the petitioner to file a formal application under relevant regulations. However, on 1-7-2025 without affording opportunity of hearing to the petitioner, CCI published an order directing the Director General to investigate the matter within 90 days.
The petitioner alleged that the CCI had initially uploaded one version of the order on 1-7-2025 which was later replaced with second version on 2-7-2025, but CCI claimed that the first order was inadvertently uploaded.
Aggrieved by the same, the petitioner challenged both the orders of CCI before the present Court.
Analysis, Law and Decision
The Court observed that the petitioner’s challenge was based primarily on two conditions, firstly, that it should have been given a chance of being heard before the CCI passed its order for investigation. Secondly, that under Section 26(2-A) of the Act operated as mandatory jurisdictional bar preventing CCI from re-inquiring into substantially similar complaints.
The Court, with reference to the first contention, reiterated that the functions performed by CCI under Section 26(2-A) of the Act were purely administrative in nature and not judicial, therefore, the parties had no inherent right of hearing at the prima facie stage. Thus, the Court opined that the order under the said section was merely preparatory matters directing the investigation through mandatory show cause notices and hearing, before passing the final order under Section 27 of the Act.
The Court, in respect to the second contention, did a detailed analysis regarding the legislative intent behind the addition of Section 26(2-A) in the Act. The Court referred to the Competition Law Review Committee Report of July 2019, which clarified that the said provision was introduced to avoid duplication of efforts and to ensure expedition in disposal of cases. The Court observed that the said provision operated as discretionary tool for CCI to close the cases where substantially similar case had already been decided, rather than creating an absolute jurisdictional embargo on entertaining new complaints.
The Court also distinguished the instant case with the earlier case filed by JSW, stating that different sections of the Act were invoked. It specified that the representation made by Respondent 2 was for the contravention of Sections 4(2)(a)(i), 4(2)(c) and 4(2)(d) of the Act while the case filed by JSW was related to violation of Sections 4(2)(c) and Section 3(4)(b) and 3(4)(d) of the Act. Thus, the JSW case was filed in a different context and was also dismissed due to lack of adequate supporting evidences, rather than on merit. The Court opined that the CCI had acted in full awareness of the earlier proceedings and had found merit in the complaint filed by Respondent 2 which distinguished it from the case filed by JSW. Thus, Section 26(2-A) did not create any jurisdictional embargo on the CCI to entertain a representation, if it was found distinct/different from the earlier representation.
Furthermore, the Court accepted the explanation given by CCI regarding the two versions of the uploaded order that the first order was uploaded inadvertent draft that was corrected with a properly signed second version, which was authentic and was sent to all the parties.
Accordingly, the Court held that Section 26(2-A) did not create any jurisdictional embargo preventing CCI from entertaining new complaint, which involved different legal provisions, different parties and potentially different factual matrices from the case filed by JSW. The Court found no infirmity in CCI’s administrative order directing the Director General for the investigation. Further, the Court held that no right to pre-investigation hearing at the prima facie stage with adequate safeguards was available at later stages of the proceedings. Therefore, the Court dismissed the petition as it found no infirmity in the said order passed by CCI.
[Asian Paints Ltd. v. CCI, 2025 SCC OnLine Bom 3196, decided on: 11-9-2025]
*Judgement authored by- Justice Revati Mohite Dere
Advocates who appeared in this case:
Advocate for the Petitioner- Darius Khambata, Sharan Jagtiani, Senior Advocates; Ameya Gokhale, Harman Singh Sandhu, Nitika Dwivedi, Kriti Kalyani, Chintan Gandhi, Anushka Bhardwaj, Swarupini Srinath i/by Shardul Amarchand Mangaldas & Co.
Advocate for the Respondents- Mustafa Doctor, Aspi Chinoy, Senior Advocates; Ravi Kini, Abhay Itagi, Vidhi Bhasin i/by M.V. Kini Law Firm, Abhinav Chandrachud, Sneha Jaisingh, Jaidhara Shah, Neeraja Barve, Akshay Ayush i/b Bharucha and Partners
