Section 41 of the Act lays down the duties & powers of the Director General. Sub-section (3) thereof envisages that the powers as they apply to an Inspector in terms of Section 240 and 240A of the Companies Act, 1956 shall apply to an investigation made by the Director General. In terms of Section 240A, where in the course of investigation, the Inspector has reasonable ground to believe that the books and papers of , or relating to any company or any other body corporate, may be destroyed, mutilated, altered, falsified or secreted, as the case may be, the Inspector, on order of Tribunal/Magistrate, may (a) enter with such assistance to such places where the books are kept, (b) to search in the manner as may be specified in the order and (c) seize the books and papers as he considers necessary. In terms of an explanation below sub section (3), the DG, CCI may search and seize with the approval of CMM, Delhi.
It is interesting to note that such power was never invoked by the Director General (Investigation & Research) under the repealed MRTP Act, 1969 but it seems to be history going by the presentations made by DG in some of the recent concluded workshops/seminars.
- DG means the Director General appointed under sub-section (1) of Section 16, Competition Act, 2002 and includes any Additional, Joint, Deputy or Assistant Director General appointed under that section 16(1), Competition Act, 2002.
- Section 26(1) stipulates that on receipt of a reference from Central/State Government or a statutory authority or on its own knowledge or information received under Section 19, if the Commission is of the opinion that there exists a prima facie case, it shall direct the DG to cause an investigation to be made into the matter.
- In Nov., 2010, the CCI, on the application of DG, imposed a fine Rs. 1 crore on Kingfisher Airlines for not furnishing information as sought by DG in order to carry out investigation into the carrier’s alleged strategic agreement with another private player, the Jet Airways – News item in Financial Express of 22nd Nov., 2010 under the caption ‘CCI slaps Rs. 1crore fine on Kingfisher’. However, the Competition Appellate Tribunal had directed the CCI not to recover the fine amount from the airline company until the matter is heard by the CCI on Jan., 2011- News item Financial Express of 2nd Dec., 2010 under the caption’ Appellate Tribunal stays CCI’s Rs. 1 crore penalty on Kingfisher’.
- In Barium Chemicals Limited vs Company Law Board (MANU/SC/ 0037/1966) & : (1966) 36 Comp Cas 639 (SC) : 1966 Suppl SCR 311 at 361: AIR 1967 SC 295 AT 324.
- In Ganga Saran & Sons (P) Ltd Vs. ITO : MANU/SC/0297/1981L1981) 130ITR 1 (SC).
- In S. Narayanappa Vs. CIT MANU/SC/0124/1966: (1967) 63ITR219(SC)
- In R. Dalmia Vs UOI MANU/DE/0408/1971: (1972) 84ITR616 (Delhi).
- Guide to SEBI Capital Issue Debentures and Listing (2003) pg 282 by K Sekhar.
- World Data Protection Report- ISSN 1473-3579 Volume 10, Number 5- May 2010 -Janssen-Claig case illustrates how the investigative powers of the competition authority may conflict with employee’s right to privacy and shows that there is a possible conflict of laws between data protection Act and competition law. While the plaintiff argued that the competition officials had used unnecessary and disproportionate means to gather the evidence, including global and massive seizures, which disrupted the normal functioning of the company. However, the court cancelled seizure of three computer files but validated the investigation on the grounds there was no evidence that the officials had not selected in advance the documents seized, nor that the seizure was disproportionate. The Court also validated the investigation on the grounds that it had used only methods enabling them to preserve the accuracy and reliability of the relevant documents.
- Presentation by the Director General on 19th Oct., 2010 in 2nd International Conference on Competition Law, held in New Delhi to commemorate the Ist Anniversary of the Competition Appellate Tribunal.
- Before return of these seized documents, the DG can place identification marks in terms of proviso below Section 240(1A) of the Companies Act, 1956.