“Honey (“CCI”), I Blew Up the Jurisdiction!”: The DG’s Unauthorised Sequel to Section 26
[By Aditya Bhargava] The Author is a student of National Law School of India University, Bengaluru Introduction The Competition Act, 2002 (“the Act”) was enacted to ensure fair competition by prohibiting trade practices that have an appreciable adverse effect on competition (“AAEC”) in India. For this purpose, the Competition Commission of India (CCI or “the Commission”) was established and tasked with the duty to: (i) eliminate practices having an AAEC, (ii) promote and sustain competition, (iii) protect the interests of consumers, and (iv) ensure freedom of trade carried on by market participants, in India.[1] The investigative wing of the CCI, i.e., the Director General (“DG”), assists it in investigations into anti-competitive practices of enterprise(s). Under Section 19 of the Act, any person aggrieved by the anti-competitive conduct of an enterprise can provide information to the CCI, requesting an investigation. Based on the information, if the Commission is of the prima facie opinion that there exists a potential Section 3 or Section 4 violation, it is required to direct the DG to investigate the matter through a Section 26(1) order. As per the Supreme Court’s judgment in CCI v. SAIL, this order acts as the “Jurisdictional Gateway” for the DG to proceed with the investigation. However, the precise scope of the DG’s investigation remains far from clear, considering conflicting jurisprudence from various courts and the latest 2023 amendments to the Act. The latest question is whether, relying on Excel Corp, the DG can unilaterally extend the inquiry to unnamed parties or reclassify Third Parties as Opposite or Contesting Parties without explicit permission from the CCI and in the absence of a mandatory Section 26(1) order. Currently sub-judice before several High Courts is the question of whether this reclassification is merely procedural or whether it also violates Third Parties’ substantive rights under the Act. I argue that it is the latter, and it must not be preserved under the guise of procedural efficiency, as suggested by the existing literature. This article contends that the DG’s investigation must be strictly confined to the scope of the Commission’s prima facie order. The legislative history of the Competition Act, 2002, reveals a deliberate departure from the preceding MRTP Act, 1969, by stripping the DG of suo motu powers. This established a two-tiered structure: the CCI as a quasi-judicial body with exclusive discretionary authority, and the DG as its purely investigative arm. This statutory separation of powers has been decisively affirmed by the judiciary, particularly in the recent Bombay High Court’s judgment in Asian Paints Ltd. v. Competition Commission of India, which pointed towards the CCI’s supreme role in forming a prima facie opinion under Section 26(1). Consequently, I argue that the DG cannot unilaterally implead new parties or reclassify third parties as opposite parties, as this would constitute jurisdictional overreach and a back-door attempt to reclaim suo motu powers. Therefore, should an investigation reveal the culpability of a new enterprise, the only legally sound procedure is for the DG to refer the matter back to the Commission and seek explicit permission from the Commission. Only the CCI has the authority to apply its mind and issue a fresh or supplemental Section 26(1) order to expand the inquiry. Furthermore, any party subsequently impleaded must be formally notified of its status as an “Opposite Party” and afforded all attendant procedural and substantive rights. The Statutory Architecture of Sections 26 and 41 read with the General Regulations Section 26 is a carefully crafted provision that must be read alongside Sections 19 and 41. Section 19 empowers the CCI to form a “prima facie opinion” on the basis of information, a reference, or its own knowledge. Once the Commission reaches that opinion, it shall and only then issue an order under Section 26(1) directing the DG “to cause an investigation into the matter”. The phrase “the matter” is significant: textually, it refers to the specific allegations, theories of harm, and named enterprises that gave rise to the Commission’s prima facie satisfaction. Consequently, the Act does not authorise the DG to amend, expand, or substitute “the matter”; it merely authorises the DG to investigate exactly what the Commission has delineated in its Section 26(1) order. Notably, under the Monopolies & Restrictive Trade Practices Act, 1969 (the Competition Act’s predecessor), the DG possessed suo motu powers, powers explicitly removed by the Raghavan Committee in recommending the Competition Act 2002. This legislative history clarifies the intent: the DG’s authority is strictly derivative, and the DG, being an independent office, must operate at an ‘arm’s length’ from the CCI. A clear reading of Section 41, which provides for the powers of the DG, supports this. The Section is triggered only “when so directed by the Commission”. Its subsection (4) distinguishes between (a) “officers, employees and agents of the party being investigated” and (b) “any other person,” and obliges the DG to secure the Commission’s prior approval before examining the latter on oath. The dichotomy created by the subsection presupposes clarity, at every stage, as to who is the party under investigation and who is merely a third‑party information holder. The reason this differentiation is crucial is due to the difference in rights afforded to differently designated parties under the Act. In particular, classification as an “opposite party” triggers rights such as notice, inspection of records, and participation in proceedings, alongside exposure to penalties and remedial orders, whereas a third party does not enjoy these rights nor bear such liabilities. The General Regulations, in force since 2009 and amended in 2024, reinforce this dichotomy by separating Regulation 24 (joinder of necessary parties) from Regulation 25 (participation of interested persons). Each of these is predicated on an application and a reasoned order of the Commission. Neither empowers the DG to alter party status proprio motu. The Commission’s power under Regulation 20 to “call for information from any person” is investigatory, not adjudicatory. When read alongside Section 36(1), which requires the Commission to be guided by natural justice, the text supports a clear proposition: the identity of
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