Authority: Calcutta High Court (High Court at Calcutta)

Order Date: 06.10.2026 (Judgment pronounced); Judgment reserved on 01.10.2026

Case Overview

  • Parties: Appellants – Shyam Steel Industries Ltd. (MAT 967 of 2023) and Gobind Beriwal (MAT 1157 of 2023); Respondents – Union of India and other officials of the Competition Commission of India (CCI).
  • Origin: Both appeals arise from the Single Judge’s order dated 18 May 2023 in WPA 10107 2023, which refused an interim stay of the CCI investigation into alleged cartelisation by steel manufacturers.
  • Background: The investigation was triggered by a Madras High Court order dated 29 July 2021 (CRL O.P. No. 6153 2021) directing the Director General (DG) of the CCI to investigate a complaint filed by the Coimbatore Corporation Contractors Welfare Association alleging profiteering and a 55 % hike in steel prices.
  • Allegations: The Welfare Association claimed that a syndicate of steel manufacturers—including Tata Steel Ltd., JSW Steel, Sail Steel, Vizag Steel, Tirumala TMT, Kamachi TMT, Agni Steel, Indrola Steel, and Kiscol TMT—artificially inflated steel prices (e.g., hot‑rolled coil price reached Rs 47,000 per tonne) by restricting supply and colluding.
  • Procedural History: The DG commenced investigation on 23 Aug 2021, filed a search‑and‑seizure application on 29 Nov 2022, obtained a warrant, and conducted searches on 16‑17 Dec 2022. A final investigation report was submitted on 5 Jan 2024, with supplementary reports thereafter. The matter remained pending before the CCI for further steps under Section 26 of the Competition Act.
  • Appellants’ Contentions: Senior Advocates Mukul Rohatgi and Ratnanko Banerjee argued that the CCI must first form a prima facie opinion under Section 26(1) before the DG can investigate, citing CCI v. Steel Authority of India (2010) and an Orissa High Court decision (Rungta Mines Ltd.). They claimed the investigation was ultra‑vires and sought quashing of the suo‑moto case No. 2 2021 and the summons dated 13 Apr 2023.
  • Respondents’ Contentions: Senior Advocate Madhavi Divan contended that the Madras High Court order was final, the DG was bound to act, and the CCI had, in fact, formed a prima facie opinion during an urgent special meeting on 17 Aug 2021. She highlighted that the investigation was a proceeding in rem, time‑bound, and that the summons and search warrants were valid.
  • Legal Analysis: The Court examined Sections 26(1) and 41(1) of the Competition Act, the nature of a prima facie opinion, and the distinction between administrative directions and adjudicatory orders. It noted that the CCI’s virtual meeting on 17 Aug 2021, attended by the Chairperson, members, and senior officials, resulted in a decision to register a suo‑moto case and direct the DG to investigate, thereby satisfying the statutory requirement of forming a prima facie opinion.
  • The Court also referenced Supreme Court pronouncements that Section 26(1) directions are preparatory and do not confer civil consequences, and that the investigation is in rem, affecting all market participants, not just the named appellants.

Final Outcome

  • The Calcutta High Court dismissed both appeals and the connected applications, refusing any interim stay or injunction against the CCI’s investigation.
  • The Court held that the investigation was lawfully initiated, the DG’s actions were valid, and the challenge to the summons became infructuous.
  • No order was made to quash the suo‑moto case No. 2 2021; the matter will proceed before the CCI for further adjudication.

Topics: Competition Law, Steel Cartel Investigation