On August 24, the Delhi High Court had also nullified a trial court’s order for search warrants against JCB, emphasizing that Bull Machine’s withdrawal of the complaint after the settlement rendered the CCI’s investigation unwarranted.
NEW DELHI: The Supreme Court, on Friday (20th Dec), rejected an appeal filed by the Competition Commission of India (CCI) challenging the Delhi High Court’s decision from August 2024, which had quashed an inquiry against UK-based JCB Limited and its Indian subsidiary over alleged abuse of a dominant position.
A Supreme Court bench of Justices Abhay S Oka and Augustine George Masih criticized the CCI for attempting to attribute motives to the settlement, stating, “You attributed motives to the settlement. Parties have settled. CCI must understand that.”
The High Court had annulled the case after the informant, Bull Machine, withdrew its complaint following a settlement with JCB.
Delhi High Court’s Order
On August 24, the Delhi High Court had also nullified a trial court’s order for search warrants against JCB, emphasizing that Bull Machine’s withdrawal of the complaint after the settlement rendered the CCI’s investigation unwarranted.
The Division Bench of Justices Prathiba M Singh and Amit Sharma further annulled the trial court’s order that had issued search warrants against JCB, highlighting that the informant, Bull Machine, an Indian manufacturer of tractors and tractor attachments, had withdrawn its complaint from the CCI after reaching a settlement with JCB.
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The High Court reprimanded the CCI for continuing the investigation against JCB, stating that regulatory bodies like the CCI must respect the outcomes of mediation and the settlements between parties. It emphasized that mediation and settlements should be recognized by all courts and forums handling pending disputes. This recognition not only upholds the legitimacy of mediation but also fosters a legal environment where parties are encouraged to resolve conflicts amicably without fear of subsequent regulatory interference.
The court noted that the CCI’s decision to pursue an inquiry after a settlement could undermine the entire mediation process and lead to a loss of trust, as parties might fear their efforts to resolve disputes peacefully would be disregarded. It further stated that settlements, being voluntary agreements between parties, should not be reopened unless there is an extraordinary situation, ensuring closure and finality to disputes.
The High Court also warned that the threat of ongoing investigations by the CCI could force parties into prolonged and costly legal battles, thus negating the purpose of settlements.
In upholding the rights of Intellectual Property Rights (IPR) holders, the Division Bench cautioned the CCI against interfering in IP disputes that fall under the jurisdiction of High Courts or commercial courts.
The High Court’s decision followed two petitions filed by JCB, a UK-based company, which had approached the court against Bull Machine over allegations of design infringement, copyright violation, and passing off.
The CCI had initiated an inquiry in 2014 into potential abuse of dominance by JCB India and its UK-based parent company, based on a complaint from Bull Machine, which accused JCB of filing a frivolous infringement claim. JCB challenged the CCI’s jurisdiction to address the frivolity of the infringement claim, which was already being examined by the High Court. In 2015, JCB also contested a raid conducted on its premises in India related to these proceedings.
Bull Machine and JCB eventually settled their dispute through a Supreme Court-directed mediation in 2021.
JCB was represented by Senior Advocate Sandeep Sethi and a team from Chandhiok & Mahajan and DSK Legal, while Bull Machine was represented by Advocates Anurag Ahluwalia, Abir Roy, Vivek Pandey, Aman Shankar, Sasthibrata Panda, and Biyanka Bhatia. The CCI was represented by Advocates Samar Bansal and Vedant Kapur.
Today’s Hearing
During today’s hearing, Senior Advocate Madhavi Diwan, representing the CCI, argued that the case raised significant jurisdictional questions for the commission. Referring to the Excel Crop judgment, Diwan pointed out that the Director General of CCI had conducted an independent investigation, but the High Court’s order had prevented the commission from accessing the investigation report, hampering its ability to proceed.
However, the Supreme Court stated that it could not intervene, as there was no substantial evidence to support the CCI’s arguments, saying, “Sorry, we cannot intervene. Nothing is there. How can you say litigation was in bad faith?”
In dismissing the appeal, the Bench clarified that the legal questions raised by the CCI remained open.
