Applications challenging probe into the role of persons in-charge of Mahyco Monsanto Biotech (India) Ltd. for conduct of business, rejected

Competition Commission of India (CCI): While observing that it is permissible for the Commission to issue directions to the Director General to look into the role of the persons in-charge of and responsible for the conduct of business of the companies, before returning the finding of contravention against the Companies as envisaged under Section 27 read with Section 48 of the Competition Act, 2002, CCI rejected six applications filed by the US-based genetically-modified seed company and its group entities challenging a probe into the role of their top officials in a case relating to alleged unfair business practices in the Indian seeds market. Earlier, CCI ordered a detailed probe against US-based genetically-modified seed major Monsanto Company after finding prima-facie evidence of violating competition norms. Complaints against Monsanto were filed by the Agriculture Ministry and the National Seeds Association of India (NSAI). Allegations were related to charging unreasonably high trait fees for Bt cotton seeds, creating a monopoly and entering into anti-competitive sub-licensing agreements with the Indian seed manufacturers, among others. CCI in its majority order had found the conduct of Mahyco Monsanto Biotech (India) Ltd. (MMBL) in violation provisions of Competition Act. While ordering a detailed probe in February, CCI had also said that if the DG finds that the companies have contravened competition law, the role of officials at the time of violations would also be looked into. In these six applications, it was contended by Mahyco Monsanto Biotech (India) Ltd. that it was not permissible for CCI to issue any directions to look into the role of the persons responsible for the conduct of business unless violation of competition norms is made out. The Commission referred to various judgments by the Supreme Court and High courts and observed that proceedings of this nature are regulatory in nature and hence, need to be disposed of at the earliest so that the culprits are brought to book expeditiously and are prevented from causing further damage to market.  CIC further observed that deep understanding of the facts and circumstances what prompted a particular conduct is possible only if the persons, who were in-charge of the enterprise or who had a role in the conduct of a company at the relevant time, are allowed to explain that particular conduct, and principles of natural justice are also applied in disposal of such proceedings. The Commission also noted that if the contention of Mahyco Monsanto Biotech (India) Ltd. is accepted that a company is to be first held guilty of contravention of competition norms, and only then investigation can be initiated against the persons in-charge, then it would render such person defenseless and he would be left with no option but to suffer consequences under Section 48 of the Act. “A proceeding under the Act has genesis in the investigation ordered under Section 26 (1) of the Act. The said Section envisages that the Commission shall direct the DG to cause an investigation to be made into the “matter”. There is no suffix, no prefix, no proviso, no explanation, and no caveats of any form attached to the word “matter”. Hence, it obviously means that the DG needs to investigate into the matter at one go in all its dimensions comprehensively,” added the Commission while rejecting the plea of Mahyco Monsanto Biotech (India) Ltd. in the matter. CCI also asked Mahyco Monsanto Biotech (India) Ltd. to co-operate in the investigation so that the probe is completed “without undue delay.” [Ministry of Agriculture and Farmers Welfare v. Mahyco Monsanto Biotech (India) Ltd. , 2016 SCC OnLine CCI 40, decided on July 26, 2016]