SC notice to CCI on Monsanto’s challenge against probe of its top officials

By: | Updated: February 19, 2019 7:15 AM

The Supreme Court on Monday sought response from the government, the Competition Commission of India (CCI) and others on an appeal by Mahyco Monsanto Biotech (India) against a Delhi High Court judgmen

Supreme Court, sc, competition commission of indiaSupreme Court

The Supreme Court on Monday sought response from the government, the Competition Commission of India (CCI) and others on an appeal by Mahyco Monsanto Biotech (India) against a Delhi High Court judgment that allowed the competition watchdog to probe the biotechnology firm, its group companies and its country directors for violation of anti-trust laws in the country.

A Bench led by Justice SA Bobde issued notice to the agriculture ministry, CCI and its director general, All India Kisan Sabha, National Seed Association of India, Monsanto’s sub-licensees — three Indian companies Nuziveedu Seeds, Prabhat Agri Biotech, and Pravardhan Seeds — and others.

Mahyco Monsanto and Monsanto Holdings have challenged the HC’s December 18 order that dismissed its plea to stop the CCI from probing its officials.

The HC held that the officers or directors of a company could be proceeded against, along with the entity.

It had relied on Section 27 of the Competition Act, 2002 that allows CCI to pass orders against an enterprise, association of enterprise, a person who has been involved in abuse of dominant position.

The HC further held that if an investigation was required to be made by the director general for unfair business practices, all aspects including ‘role of any person in charge of and responsible for conduct of the business’ would be considered.

The seed giant said that the competition law could not probe its top officials until the company was found in contravention of competition norms.

It said that the director general had been allowed to investigate into the role of officials by invoking vicarious liability under Section 48, when the company was yet to be found to be in contravention of anti-competitive laws under provisions of the Competition Act, 2002.

According to the company, “the deeming provision of Section 48 would kick in only after CCI passes an order under Section 27 of the Competition Act and enters a finding that the company has contravened the provisions of Section 3 and 4 and such order is shown to have been contravened by an enterprise or person, so as to attract the vicarious liability provisions.”

The HC division bench had said that the directors at the firm would be held liable for the affairs of the company in case the competition watchdog came to the conclusion that they were the
key persons responsible for the affairs of the company during which the abuse of the company’s dominant position in India in Bt cotton business took place.

A single judge had, in October last year, rejected Mahyco Monsanto and Monsanto Holdings’ appeal against CCI’s July 2016 order that ordered the probe on a complaint by the three Indian seed companies who alleged that the global major was using its dominant position to charge them exorbitant prices.

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The CCI order while asking the seed company and its officials to cooperate with the investigations had said the conduct of the company prima facie appeared to be in violation of the Competition Act and abuse of dominant position by charging unreasonably high fees for Bt cotton seeds.

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