Safiya Malik

The High Court of Bombay Division Bench of Justice Revati Mohite Dere and Justice Dr. Neela Gokhale has held that no party possesses an inherent right to an oral or written hearing when the Competition Commission of India forms its prima facie opinion under Section 26(1) of the Competition Act, 2002. The Court clarified that such orders are administrative in nature and that the decision to grant a hearing rests with the Commission. Dismissing a writ petition by Asian Paints Limited, it upheld CCI’s direction for investigation into allegations by Grasim Industries Limited of abuse of dominance in the paints market.

The matter arose from information filed by Grasim Industries Limited before the Competition Commission of India (CCI). Grasim alleged that Asian Paints Limited had abused its dominant position in the decorative paints market. The allegations related to conduct that, according to Grasim, was restrictive and anti-competitive in nature.

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Acting on this information, the CCI passed an order under Section 26(1) of the Competition Act, 2002. By this order, the CCI directed the Director General to investigate the allegations made against Asian Paints.

Asian Paints Limited challenged this order through a writ petition before the Bombay High Court. The company contended that the CCI could not have directed an investigation without affording it an opportunity of oral or written hearing. According to Asian Paints, the denial of such hearing was contrary to the principles of natural justice and therefore rendered the CCI’s action unlawful.

The petitioner further argued that the impugned order of the CCI was vitiated because it failed to record reasons establishing a prima facie case of abuse of dominance. It claimed that the absence of adequate reasoning indicated a non-application of mind.

On the other hand, the CCI submitted that its order under Section 26(1) was only administrative in nature. It contended that at this stage, the Commission is not required to provide an opportunity of hearing to the opposite party before forming its prima facie opinion. The CCI also pointed out that Section 26(2-A) of the Competition Act only mandates hearing in circumstances where the Commission proposes to close a matter at the preliminary stage, not when it directs an investigation.

Grasim Industries supported the order, maintaining that the allegations warranted a detailed investigation and that the CCI was correct in referring the matter to the Director General.

The statutory framework referred to in the case included Section 26(1) of the Competition Act, 2002, which empowers the CCI to direct investigation upon forming a prima facie view, and Section 26(2-A), which provides for a hearing if the Commission proposes to close the matter at the threshold.

The Division Bench recorded: “although there were some deviations in the orders, the end result in both the orders is identical/same.” The court noted the CCI’s explanation that the first uploaded order was an inadvertent draft and that the correct signed order was subsequently uploaded and forwarded to the parties. The Bench recorded that this explanation was not seriously contested after being placed on record.

In addressing the petitioner’s claim to a right of hearing, the court observed: “It is well settled that no inherent right of hearing, oral/written, vests in the Petitioner at the stage of formation of a prima facie opinion. Whether or not to afford such hearing is a matter of discretion with the CCI, guided by the facts and circumstances of each case.” The Bench reaffirmed the position that orders under Section 26(1) are administrative in nature, preparatory in character, and not judicial or quasi-judicial.

The court examined the insertion of Section 26(2-A) by the Competition (Amendment) Act, 2023. It recorded: “Section 26(2-A) only cautions the CCI to be mindful before considering the representation for the said reasons and cannot be interpreted to create any jurisdictional embargo, when a new complaint is made to CCI.” The judges stated that the legislative intent, as reflected in the Competition Law Review Committee Report of 2019, was to enable the CCI to avoid duplication of efforts, not to bar subsequent complaints absolutely.

The Bench observed: “It is not as if once a representation made by a party is dismissed, no new representation on a subsequent complaint can be entertained which is based on new facts. That of course would depend on the facts and circumstances of each case.” The court also noted that the earlier dismissal of the JSW complaint was based on insufficient evidence and that an appeal was still pending.

The judgment recorded that “Section 26(2-A) expressly clarifies, what was implicit in Section 26(2) and expressly enables the Commission to close a matter, if it is of the opinion that ‘the same or substantially the same facts and issues’ raised in the information received… has already been decided by the Commission in its previous order.” It was further observed that where the CCI chooses not to close the matter, it is not required to expressly record reasons for not applying Section 26(2-A).

The Bench also relied on the precedent in CCI v. Bharti Airtel Ltd. (2019) 2 SCC 521, noting: “Once we hold that the order under Section 26(1) of the Competition Act is administrative in nature and further that it was merely a prima facie opinion directing the Director General to carry the investigation, the High Court would not be competent to adjudge the validity of such an order on merits.”

The court held that the petitioner’s reliance on Alliance of Digital India Foundation v. Google was misplaced, as the facts of that case related to subsequent representations against the same policy. It concluded: “The facts in Google (supra) are clearly distinguishable. Hence, Google (supra) has no application to the case in hand.”

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“In view of the above discussion, we find no merit in the petition. The petition is accordingly dismissed. No order as to costs.” The court clarified that both impugned orders dated 1 July 2025 resulted in the same outcome, and that the second order uploaded on 2 July 2025 was the authentic and correct order.

“There is no substance in the grievance made by the Petitioner with respect to two orders. In fact, upon the explanation offered by learned senior counsel for Respondent No.1, learned senior counsel for the Petitioner did not seriously contest the first order and as such, we are not required to go into the same.”

The Bench held that the petitioner had no vested right to a hearing at the stage of a Section 26(1) inquiry and that the CCI was not bound to close the matter under Section 26(2-A).

Advocates Representing the Parties

For the Petitioner: Mr. Darius Khambata, Senior Advocate with Mr. Sharan Jagtiani, Senior Advocate, Mr. Ameya Gokhale, Mr. Harman Singh Sandhu, Ms. Nitika Dwivedi, Ms. Kriti Kalyani, Mr. Chintan Gandhi, Ms. Anushka Bhardwaj, Ms. Swarupini Srinath i/by Shardul Amarchand Mangaldas & Co.

For the Respondents: Mr. Mustafa Doctor, Senior Advocate with Mr. Ravi Kini, Mr. Abhay Itagi, Ms. Vidhi Bhasin i/by M. V. Kini Law Firm, Mr. Aspi Chinoy, Senior Advocate with Dr. Abhinav Chandrachud, Ms. Sneha Jaisingh, Ms. Jaidhara Shah, Ms. Neeraja Barve and Mr. Akshay Ayush i/b Bharucha and Partners.

Case Title: Asian Paints Limited v. Competition Commission of India & Anr.

Neutral Citation: 2025: BHC-OS:15008-DB

Case Number: Writ Petition No. 2887 of 2025

Bench: Justice Revati Mohite Dere, Justice Dr. Neela Gokhale