The Calcutta High Court has declined a stay on ongoing investigations by the Director-General (investigations) —the investigations arm of CCI — in the steel cartel matter.

It may be recalled that some of the parties in the Steel Cartel matter — who were raided at dawn in December 2022 — against whom DG had issued summons in April this year, had challenged it before the Calcutta High Court. The summons related to investigations by the DG on alleged cartelisation by steel manufacturers and manipulation of supply and prices of steel.

The petitioners — Shyam Steel Industries and others — had approached the Calcutta High Court seeking quashing of the summons.

A single judge of the Calcutta High Court, J Moushumi Bhattacharya, has rejected the plea of the petitioners, stating that the Court “sees no pressing or compelling reason to interfere with the investigation by restraining the Competition Commission of India (CCI), including the Additional Director-General/ DG, to stay their hands with reference to the summons’. 

The Calcutta High Court has now listed the matter for final hearing on June 28.

“The larger public interest angle also requires the investigation to continue. The allegations are of cartelisation and manipulation of supply and price of steel. The ramifications of such activities extend beyond a few to the public at large, including end-users, consumers and home-buyers,” said the order, which has now been made public.

It also called upon the petitioners to assist in the process of investigation and permit the Director-General to comply with the direction of the Madras High Court.

The Madras High Court had in July 2021 directed DG (investigation) to look at cartelisation charges made by the Coimbatore Corporation Contractor Welfare Association, which had approached the High Court.

While the DG (investigation) had initiated investigations, the petitioners contended that the requirement to form a prima facie opinion by the Competition Commission of India must be fulfilled before the DG can be directed to cause an investigation. 

It was submitted that without recording prima facie opinion on the existence of a case against the petitioners, all subsequent assumptions of jurisdiction are a nullity. 

However, the counsel for CCI contended that after the order of the Madras High Court, the DG did not have any choice but to conduct investigations into the matter.

In December 2022, the CCI had raided the offices of several steel companies across the country for alleged price collusion on products used in the construction industry. 

The raided companies include West Bengal-based Shyam Steel and Rungta Mines, a Jharkhand-based entity involved in construction material (including TMT bars) making.

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