Dismissed

Mahyco Monsanto Biotech (India) Private Ltd. & Anr. v. Competition Commission of India & Ors.

Delhi HC12 Oct 2018W.P.(C)/7583/2016

Case brief

AI extract

What is this about?

Directors’ liability for competition contraventions was challenged. The court upheld simultaneous proceedings against companies and responsible officers, held Section 48 applicable to Sections 3 and 4 contraventions, and treated officers’ income from the company as turnover for penalty purposes. It dismissed the appeals and declined a larger-bench reference.

What the court decided

AI extract

Mahyco Monsanto Biotech (India) Private Ltd. & Anr. Vs… — Company and Corporate | Delhi HC (2018)

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Signature Not Verified Digitally Signed By:AM UL YA

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ThroughMr JayantBhushan,SeniorAdvocate with Mr Amitabh Kumar, Mr Vaibhav Cholkse, Mrs Ela Bali, Advocates.MrPallavSaxena,with Mr SurabhiSinha,Advocatefor CCI. Mr Sanjay Jain, SeniorAdvocatewith Mr Amit Tyagi, Mr Pavan Saxena,Advocatesfor CCI. Mr SunilJ. Mathews, Advocate for R3. Mr SabahIqbal Siddiqui,Advocatefor R7.

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CORAM:

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HON'BLE MR. JUSTICE VIBHU BAKHRU ORDER

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% 12.10.2018

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The learned counsel appearing for the parties concur that the issue involvedin the presentcase is coveredby the decisionofthe DivisionBench of this Court in CadilaHealth CareLimitedv. CompetitionCommissionof India &Ors \LPA No. 160/2018 decided on 12.09.2018.

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Mr Kapoor, the learned Senior Counsel appearingfor the petitioner states that the said decision is erroneous and requests that the impugned orderbe stayedfor a periodoffifteendays for the petitionerto approachthe Division Bench of this Court. Mr Jayant, the learned Senior Counsel appearingfor the respondentstoutlyconteststhis request.

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Considering that the interim order passed on 15.05.2017 in these petitionsmerely clarifiedthat "any action taken by the respondentsin terms ofSection43 ofthe CompetitionAct, 2002 shall he subjecttofurtherorders ofthe Courtit wouldnot be appositeto pass any order as requested.

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The petitionsare, accordingly,dismissed.All pendingapplicationsare also dismissed.

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Order dasti under the signature of Court Master.

VIBHU BAKHRU, J

OCTOBER 12, 2018

pkv

IN THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment reserved on: November 19, 2018 Judsment delivered on: December 18, 2018

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LPA 637/2018 & CM. Nos. 47926/2018 and 47927/2018

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MAHYCO MONSANTO BIOTECH (INDIA) PRIVATE LTD & ANR.

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Appellants Through: Mr. P.V. Kapiir, Sr. Adv. with Mr. Ajit Warrier, Mr. Rajshelchar Rao, Mr. Aditya Neiyyar, Mi'. Angad Koclihar, Mr. Aman Singh Sethi, Mr. Vaibhav Aggarwai, Ms. Yashika Maheshhwari and Mr. Siddhant Kapur, Advs. versus COMPETITION COMMISSION OF INDIA &ORS Respondents Through: Mr. Samar Bansal, Adv. and Mr. Maii.an Shishodia, Adv. for R-l/CCI Ms. Gauri Puri with Mr. Vinayak Mehrotra, Advs. for R-2. Mr. Sunil J. Mathews, Adv. for R-3 Mr. Jayant K. Bhushan, Sr. Adv. with Mr. Amitabh Kumar, Ml-.'Vaibhav Choukse, Ms. Akansha Mehta & Mr .Aditya Gupta, Advs. for R-4 to R6. •Mr. Sabah Iqbal Siddiqui, Adv. for R-7.

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LPA 637/2018 and connected matter

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Page 1 of 42

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LPA 651/2018 & CM. Nos. 48742/2018 and 48743/2018

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MONSANTO COMPANY Appellant Through: Mr. Ajit Warrier with Mr. Angad Kochhar & Mi\ Aditya Nayyar, Advs.

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versus

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COMPETITION COMMISSION OF INDIA AND ORS.

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Respondents Through: Mr. Samar Bansal with Ms. Devahuti Pathak & Mr. Manan Shishodia, Advs. for CCI Mr. Amitabh Kumar with Mr. Vaibhav Choukse & Ms. Akansha Mehta, Advs. for R-3.to 5

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CORAM:

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HON'BLE THE CHIEF JUSTICE ' HON'BLE MR. JUSTICE V, I<A.MES.WAR RAO

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JUDGM.^EN.T

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V.KAMESWARRAO, J '

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These appeals have been filed by the appellants challenging the order dated 12^'' October, 2018 passed by the learned Single Judge in W.P. (C) 7583/2016 and 7578/2016 whereby the learned Single has dismissed the writ petitions by relying upon the.judgment of the Coordinate Bench of this Court in Cadila Healthcare Ltd. and Anr. V, Competition Commission ofIndia,LPA No. 160/2018decidedon 12"^ September,2018.

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LPA 637/2018 and connected matter

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Page 2 of 42

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It was the submission of Mr. P.V. Kapur and Mr. RajsheldiarRao, learnedSr. Counsel/ counsel appearingfoi the appellantsthat in Cadila (Supra), the CoordinateBench of this Court has noticed the order passed by the Competition Commission,of India (CCI) in Ministry ofAgriculture v. M./s. Mahyco Monsanto Biotech Limited and has conHrmed the reasoningtherein. Accordingto them, the CoordmateBench has confirmedthe judgmentwhich was under challenge in the writ petitionsbeforethe learnedSingleJudge. This was done without notice to the appellants herein. As such the judgment of the CoordinateBench in Cadila (Supra) to the extent it affiims the order of the CCI impugned by the. appellantsbefore the learned Single Judge in the writ petitions has Aversely affected thenlegal rights and remediesas evidencedby the summarydismissal of the writ petitions. In this regard, they had relied upon the judgment of the Supreme Court in Poonam v. State of Uttar Pradesh and Ors. 2016 2 SCC 779. 3. It was their submission that the judgment in Cadila (Supra) strongly indicates that the Division Bench was not apprisedof and made aware by CCI of the pendency of the writ petitionsfiled by the appellantsherein,whereinthe challengehad LPA 637/2018and connectedmatter ^

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been squarely mounted to the said order of CCI in Ministiy of Agriculturecase (supra) (and connected matter). The private respondentshad filed an applicationbeing CM. No. llZlinm before the learned Single Judge seeking dismissal of the writ petition by relying on Cadila (supra). The appellantshad also filed an applicationbeing CM. no. 42823/2018seekingreference of the writ petition to a larger Bench in hght of the binding precedentof the Supreme Court in CentralBoard of Dawoodi Bohra Communityand Am. V. State ofMaharashtraand Anr. (2005) 2see 67S, 'whereinit was inter a/ifl contendedthat tire groundsraised by the appellantsbeforethe learnedSingle Judge with respectto the scope, ambit and applicabilityof Section48 ot the CompaniesAct, 2002 were never raisedbefore and / or dealt by the Division Bench in Cadiia (Supra). It is stated that the learned Single Judge without calling upon CCI to clarify the actual facts and / or considering the applications fded by the appellants,summarilydismissedtlie writ petition,aitliougliit was a matter of record that certain substantialgrounds raised by the appellantsmthe writ petitionwith regardto the constructionand interpretationto be placed on Section 48 on the 2002 Act were neither raised before, nor consideredby the Division Bench in Paee 4 of 42 LPA 637/2018and connectednialter

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Cadila (Supra). In essencethe substantialgroundsraised by the appellants in relation to the constructionand interpretationof Section 48 of the 2002 Act were neitherraised nor consideredin Cadila (Supra).

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It was the submission of the learned counsel for the appellantsthat the Scheme of Act of 2002 does not contemplate punishment of the Directors / Officers of a company under Section 27 of the 2002 Act and that they can only be proceeded against if the orders / directionsof CCI are not obeyed and / or . are flouted by the company.However,CCI may, in agiven case, be entitledto invokeprovisionsof ChapterVI of the 2002 Act if the pre-conditionof the various Sections contained therein are shownto have been fulfilled. The:categoiiesofordersthat can be passed under Section 27 of the 2002 Act can only be directed against an 'enterprise'as defined under Section2(h) of the Act, 2002, and not against individualDirectors/ officers. It is their submission that since the grounds and points raised by the appellants at' the time .of hearing before this Court have admittedlynot been consideredby the DivisionBench in Cadila (Supra), this court ought to refer the matter to a larger Bench to decide the legal challengeraised by the appellants.In this regard LPA 637/2018andcomiectedmatter 5

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c IT

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they rely upon the judgmentof the Supreme Court in the case of DawoodiBohra (supra).

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It was the submission of the learned counsel for the appellantsthat DivisionBench in Cadila (Supra) only considered a limited argumentin relationto Section 48 of the 2002 Act and admittedly did not consider the arguments raised by the appellants before the Id. Single Judge. A reading of Cadila (Supra) would show that the Division Bench has, without consideringthe specialscheme and constructionofthe 2002 Act, gone into an elaboratediscussionon the interpretationofSection 138 of NegotiableInstrumentsAct, 1881 and while doing so, the Division Bench, with utmost respect, did not consider that two statutes can only be said to be m..pari materia with each other when they deal with the same subject-matterand / or same person or things and / or same class or persons,or have the same purpose or objects. The rationale behind this rule is based on the inteipietativeassumptionthat words employedin legislationsare used in an identicalsense. A comparisonofthe preambleas also the Statementof Objects and Reasons of the 2002 Act and the NI Act would show that there is no similaritybetween the subject matter of the two legislationsand they do not deal with the same LPA 637/20J8and connectedmatter Page 6of42

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person or things and / or same class or persons, or have the same purpose or objects. Therefore, there was no justification or warrant to refer to the NI Act, when the 2002 Act, as a special Act, deals with a subjectmatterwhich is entirelydistinctfrom the NI Act. In this regard, they would rely on S/m/i and Co., Bombay y. State ofMaharashtra anclAnr. AIR 1967 SC1877 8c BangaloreTurfClub Limited v. RegionalDirectorEmployees' StateInsuranceCorporation(and Connectedappeals) (2014) 9 see 657

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It was submitted that in light of special construct and scheme of the 2002 Act, an interpretationthat Section 48 can be invoked by the CCI againstindividualOfficers/ Directorsofthe Company to investigatetheir role and conduct'of offences, as contemplatedunder Sections 3 and 4 ofthe 2002 Act, and made punishable under Section 27 thereof, would result in a legal absurdity and would render the statutoryprovisionsunworkable and nonsensicalfor the reason that such an interpretationwould render the words "punishedaccordingly", appearingin Section 48 of the 2002 Act nugatory inasmuch as the orders which CCI can pass under Section27 ofthe 2002 Act can only relate to and be directed against an enterprise and not individual Directors / LPA 637/2018and connectedmailer 7

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Officers of a company. The same is also evident from the fact that Section27 ofthe 2002 Act.employsterms such as ""turnover'" and "profifwhich terms can only be relevantto an enterpriseand not to an individual. If ''turnover is interpreted to include income ofa director/ olficer(as suggestedby the learnedcounsel for the respondentsherein),the same would amount to re-writing Section27 ofthe Act. Further,the term ''profit'cannotbe applied in the context of a Director/ Officer. The Supreme Court in Excel Crop Care Ltd v. CompetitionCommissionofIndia and Ors. AIR 2017 SC 2734 has. interpreted the word ''turnover'" appearingin Section27 ofthe 2002 Act to mean only the relevant turnoverpertainingto the infringingproduct(s). In the contextof a director / officer of a company and.,in the absence of any enabling provision or prescribed parameters being prescribed under the 2002 Act, it would be impossible to ascertain the relevant turnover.

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According to the counsels, it is a settled rule of interpretationthat if the languageused in a statute is capable of bearing more than one construction,a constructionthat results in absurdity or anomaly should be eschewed. On the contrary,the court should prefer a constructionthat brings it into harmony LPA 637/2018andcomiecledmatter Page 8of42

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with its purpose as it may always be presumed that while employing a particular language in the provision, absurdity or anomaly was never intended. In this regard, reliancewas placed onthejudgmentpassed bythe SupremeCourt in M. Nizamudeen V. ChemplastSanmar Limitedand Ors. (2010) 4 SCC 240.

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It was the submission of the learned counsel for the appellantsthat the SupremeCourt while interpretingthe 2002 Act in Excel Crop Care (supra), also observed that in a situation where two inteipretationsare possible,one that leans in favour of the infringer has to be adopted on the principle of strict interpretation. It is .equally settledthat the court cannot rewrite, recast or refiame the legislation for the reasons that it has no power to legislate. Further, the.,court cannot add words to a statute or read words into it which are not there. Even assuming there is a defect or omission in the words used by the legislature, the Court cannot correct or make up the deficiency and it shall only decide what the law is and not what it should be. In this regardrelianceis placedon the judgmentofthe SupremeCourt in the case of Union of India v. Deoki Nandan Aggarwal (1992)

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Supp.(l)SCC323.

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' 9. It was the submission of the learned counsel for the

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LPA 637/2018and connectedmatter

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9 of42

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appellantsthat duringthe course of argumentson 19"' November, 2018, aquery was put to the appellantswhetherSection27 (g) of the 2002 Act would empower CCI to punish erring Officers / Directors of a Company under Section 27 of the 2002 Act. To which It was their submission that the power'to prescribe punishmentunder a statute is an important legislativefunction and the said functioncamiotbe presumedin favour ofthe CCI so far as directors/ officersof acompanyare.concerned. If such an interpretationis ascribedto Section27 (g) ofthe 2002 Act despite the statute itselfbeing bereft of such an enablingprovisionand any concomitantstatementof defined guidelines or parameters, then CCI wouldhave unbridledand uncanalisedpowers to punish the Officers / Du-ectors of Company without any legislative guidelines/ checks and as per its whims and fancies, which is anathema to rule of law. In this regard, reliancewas placed on Kishan PrakashSharma and Ors. V Union ofIndia and Ors. (2001) 5see 212 and B.R. Enterprisesv. Stateof U.P. and Ors. (1999) 9 see 700 10. Further they distinguishedthe judgment relied upon by the learned counsel for private respondents in the case of

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RajasthanPharmaceuticalLaboratory,Bangaloreand Ors. V. LPA 637/2018andcomiecledmailer

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State of Karnataka (1981) 1 SCC 645, which was in the context of the Drugs and Cosmetics Act, 1940. The respondents, by relying upon a similarly worded section therein as Section 48 of the 2002 Act, sought to argue that once an offence is committed, both the company and its officers are deemed to be guilty of the offence. Plowever, perusal of the judgment would show that to the contrary, the said judgment supports the case of the appellants inasmuch as at Paragraph 7, it was clearly observed that the words ''punished accordingly" in'the' context would mean that a person deemed guilty of an offence committed by a company shall receive the punishment and that is prescribed by the Act for that offence. In the present case, since no punishment can be imposedupon individualdirectors./officers of acompanyunder Section 27 of the 2002 Act, such individual directors / officers of a company cannot be proceeded against and punished, except as contemplated under Chapter VI of the 2002 Act.

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n. They also submitted that the learned counsel for the respondents have contended that if the interpretation which is sought to be given by the appellants to Section 48 of the 2002 Act has to be accepted, the same would render Section 48 of the 2002 otiose in its entirety. This submission is wholly misplaced and

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LPA 637/2018 and connected matter

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Page 11 of 42

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deserves to be rejected. In terms of the interpretation propounded by the appellants to Section 48 of the 2002 Act, it is their stand that the said section would only apply in a case where orders / directions of CCI are disobeyed / flouted by individual directors / officers of a company.

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The learned counsels for the appellants in the alternative contended that if this court were to come to a conclusion that judgment passed in Cadila (supra) does not require reconsideration by a larger Bench, it would be seen that the said judgment is primarilypremised on a judgment of a three Judge Bench of the Supreme Court in Aneeta Hacla v. M/s. Godfather Travels and Tours Private Limited (2008) 13 SCC 70. The issue in that case was whether a director/ officer of a company could be prosecuted when the company has not been arrayed as an accused.

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On the other hand, it is the submissionsof Mr. Jayant K. Bhushan, learned Senior Counsel appearing for the respondent nos. 4 to 6 in LPA 371/2018 and respondent Nos.3 to 5 in LPA 351/2018 that the plea of the appellants that no notice can be issuedto the Directorsor persons in-chargeof the Company till the Competition Commission returns a finding against the LPA 637/2018and connectedmatter Page 12 of42

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Page 12 of42

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Company that it has indulged in anti-competitive activities, is squarely covered by the judgment of the Division Bench of this Court in the case of Caclila (Supra) which is binding on this Court and there is no occasion arises for disagreeing with it or referring the matter to a larger Bench.

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It is his submission that the vicarious liability of persons in-charge of companies for offences committed by companies exists in several statutes, such as the Negotiable Instruments Act, 1881 (Section 141), Prevention of Food Adulteration Act, 1954 (Section 17) and the Drugs and Cosmetics Act, 1940 (Section 34). In none of these statutes is there any provision which envisages a two stage inquiry, as, has been canvassed by the , Appellants, nor is there any judgment ofthe Supreme Court or of this Court or any other High Court to the loiowledge of the respondents that states that such a two stage process is envisaged or that before notice is issued to the persons in-charge of the company, a finding of guilt must be recorded against the company. According to Mr. Bhushan, it would not even be in the public interest as it would prolong the proceedings and may even result in the same issue being argued twice. If for instance, the initial proceedings were only against the company and the LPA 637/2018 and coiviectedmatter Page 13 of 42

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companydid not properlydefend itselfand a finding of guilt was recorded against the company, the directors or person-in charge would surely come and challengethe finding before they could be held vicariouslyliable and would insist on that finding being revisited.

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It was his submissionthat no prejudicewould be caused to persons in-chargeif they were asked / permittedto participate in the proceedingsat the initialstage itself. They would be given a chanceto contestthe charge againstthe companyas well as the charge that they were in-chargeofthe companyat the time when the offence was committed. He refers to paras 52 to 55 of the judgmentofthe DivisionBench ofthis Court in Cadila (Supra). Further,it was submittedthat the reasoningofthe learned Single Judge in Pran Mehra vs. CCI, W.F. (C) 6258/2014as well as the Division Bench in Cadila (Supra) is correct and needs no revisitation.In this regard he would rely upon the judgmentof the Kerala High Court in B. Unnikrishnan and Ors. vj-. CCI and Ors. W.P. (C) 22534/2016.

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It was his submissionthat Section 48 which provides for vicarious liabilityof person in-chargeof and responsible for the conduct of business of the company will apply only for LPA 637/2018andconnecLedmatter Page 14of42

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contraventionof orders of the CCI or DG under Section42 to 44 ofthe CompetitionAct and not for contraventionof Section3 and 4 of the Competition Act by the Company is misconceived. The only basis on which the appellantssubmit that Section 48 applies only to contraventionof orders ofthe CCI or DG and not to contraventionof Section3 and 4 of the CompetitionAct by the company is on the ground that under Section 27, the penalty for contravening Sections 3 or 4 is a maximum of 10% of the turnoverof the company. Accordingto him, a readingof Section 48 of the CompetitionAct shows that it applies in case of any of the provisions of the CompetitionAct or rule or regulation or contraventionof an order or directionpassed by the CCI or DG. Therefore, to hold that, Section ' 48 'applies only' for a contraventionof an order of the CCI or DG would renderthe first part of the Section namely, 'contraventionof ^ provisions of the CompetitionAct' completelyredundant and otiose. It is a fundamental principal of interpretation of statutes that no constructionshould be put on aprovisionwhich renders apart of it otiose. Reliancewas placed on the judgmentof constitutional bench ofthe SupremeCourt in the case ofAswiniKumar Ghosh and Ors, vs. Arabinda Ghosh AIR 1952 SC 369 on this issue LPA 637/20J8andconnectedmailer p^,gg 15 of42

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wherein it is held as under:

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"Itis nota soundprincipleof constructionto brush aside words in a stQ.tuteas being in oppositesurplusage, ifthey can have appropriate application in circumstances conceivablywithin the contemplationof the statute."

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It was submittedthat Section 48 of the CompetitionAct ciystal clear as it states that where a companycontravenesany provision of the Competition Act, a person in-charge of the company, when the contravention was committed, shall be - "deer}n.edto be guilty of the contraventionandshall be liable to be proceeded against and punished accordingly." The words "punishedaccordingly"have been'interpretedby the Supreme Court in RajasthanPharmaceuticalLaboratory(supra) whereinin paras 6 and 7, it has been held that-''punishedaccordingly" does not mean that individualshave to be punishedin exactlythe same mannei as the company. The punishment prescribed for the offence in the CompetitionAct for contraventionof Section 3 and 4 is in Section27 i.e. a penaltywhich shall not be more than the average of the turnover of the last 3 preceding years. The provision was basically enacted in reference to an enterprise which would be conductingbusiness but that does not mean that the deeming provisioncannot be interpretedfor an individualin

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LPA 637/2018and connectedmatter

Page 16 of42

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the context of the Competition Act. Meaning of the term 'tmiiover', in the context of an individual, can easily be interpreted to mean the income of the individual from the company in question. Merely because the term needs an interpretationdoes not mean that the individualescapes complete liability although Section 48 is very clear that the person incharge of managingthe affairs of the company shall be deemed to be guiltywhen there is a contraventionof Section3 or 4 of the CompetitionAct by a company. In this connection,reliance was placed on Excel Crop Care Limited (Supra) wherein even though Section 27 of the CompetitionAct only said turnover of the company, the Supreme Court interpreted turnover in the contextto mean turnoverfor the relevantproduct.It is submitted that this judgmentthereforeshows that the word 'turnover" has to be interpreted in the conteixt of,the offence and need not literallymean what:itprimafacie states. Thus, in the contextof an individual who is in-charge of a company, turnover may mean his income from that company. It is submitted that the interpretationof Section48 as suggestedby the appellantsthat it would not apply to contravention of any provision of the CompetitionAct is totallycontraryto the expresslanguageofthe LPA 637/2OlSand connectedmatter Page 17 oj42

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sectionand can never be the correctinterpretation.

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It was the submissionof Mi". Bhushan that the rationale for the vicariousliabilityofthe persons in-chargeis the same for the contravention of Section 3 and 4 as it is for the contravention of any direction of the CCI or DG. The whole idea behind these provisionsofvicariousliabilityis that the company being a nonthinlcingentity, cannotthink for itselfbut it is the human beings, being directors or persons in-charge,who thinlc for it. Thus, to provide a disincentivefor repetition of such activity, not only must the company be penalizedbut the persons who have been thinldngfor the wrong doings must also be penalized. Thus, the liability of directors or the persons in-charge is just, valid and necessary for the contraventionby the company of Sections 3 and 4 of the CompetitionAct as it is for a contraventionby the Companyof an order or directionby the CCI or DG. 19. Further,Mr. Bhushanon the secondsubmissionmade by the appellants that Section 48 occurs in Chapter VI of the Competition Act, therefore, the same will apply only to contraventionby companies under Chapter VI itself, submitted that the said argumentis statedto be rejectedbecause Section48 does not say that it shall apply to any contraventionof that LPA 637/2018and connectedmatter Page 18 of42

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Chapter alone. It specificallysays it applies to a contravention by a company of any provision of the Competition Act. 20. On the third submission made by the appellants that Section 48 only applies to an enterprise and only punishes enterprises for contravention of the Competition Act is concerned,it is submittedthat Section 27 may apply only to an enterprise, but when the enterprises is a company (which it obviouslycan, as per definitionof enterprisein Section2(h) and definition of person under Section 2(I)(iii) of the Competition Act), Section 48 becomes applicableand every person, n'amely, individualwould be deemed to be guilty of the same offence as the company. This is the statutory framework of many similar deeming provisionsof guilt for persons'in-chargeof companies where offences were committed by companies in various other Acts.

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On the issue of hearing the appellants by the Division Bench beforepronouncingthe judgmentin Cadila (Supra),since the Bench pronounced on the correctness of Competition Commission's order in the appellants' case is concerned, it the submission of Mr. Bhushan that often similar issue arises in different cases. It is an accepted position in law that the Court LPA 637/2018 and connectedmatter Page 19 of 42

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while deciding a lis between some parties lay down the law which will have an effect on the lis between separate parties which are still pending. Yet, there is no requirementin law for hearing all parties who may be affected. In deciding the lis between the parties involved in Cadila (Supra), this Court has laid down law and while laying down that law, it has noticedthat the judgmentof the CCI in the presentcase, laid down the correct law. There is absolutely nothing wrong with this and the submission that the appellants were therefore condemned unheardis totallymisplaced.'

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In the end, it is his submissionthat the points raised by ~\ the appellantsare either covered by the Cadila (Supra) or have no merit. In any case, that the^app,e%nts have held up the proceedingsbefore the CompetitionCommission by filing one petition after another, none of which.haveany merit, for the last nearly three years. The CCI proceedingsbegan from February 2016 and despite the DG having submitted the investigation reportto the CCI, no final order ofthe CCI has been given yet on accountof frivolous litigationspendingin this Court initiatedby Monsanto. He submittedthat this Courtmay dismiss the appeals with exemplary costs as they have not only held up the CCI LPA 637/2018and connectedmatter Page 20 of42

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proceedings but also liave wasted valuable time of this Court. 23. Mr. Samar Bansal, learned counsel for the CCI; had argued on similar lines as was argued by Mr. Bhushan. In effect he has adopted the arguments of Mr. Bhushan.

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Having heard the learned counsel for the parties and perused the record including the written submissions filed in this appeals, the following issues arise for consideration:-

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(i) Whether before deciding the appeal in the case of Cadila (supra), the Division Bench was required to hear the appellants as the Division Bench has pronounced on the correctness of the CCI orders in two cases in Ministry of Agriculture v. M/s. Mahyco Monsanto Biotech Limited and connected matter, which were under challenge in two writ petitions filed by the appellants herein;

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(ii) Whether no notice can be issued to the Directors / Persons In-charge of the Company till the CCI returns a finding against the Company that it has indulged in anti-competitive activities under Sections 3 and 4 of the Competition Act;

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(iii) Whether Section 48 of the Competition Act, which provides for vicarious liability of persons In-charge and responsible for the conduct of business of the Company, will

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LPA 637/2018 and connected matter Page 21 of 42

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apply only on contravention of orders of CCI or DG under Sections 42 to 44 of the Competition Act and not to contravention of Sections 3 and 4 of the Competition Act.

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ISSUE NQ.l

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Insofar as the issue No.l is concerned, no doubt the judgment passed by the CCI in Ministry of Agriculture (supra) and connected matter was under challenge before the learned • Single Judge of this Court; the said judgment having been approved by the Division Bench in the case of Cadila (supra), the appellants were required to be heard. In any case we have also heard the learned counsel for the appellants on the issues, which they had raised in their writ petitions or at least in their applications for amendment for additional grounds and which have been incorporated in these appeals and accordingly, proceed to decide the same. So, to that extent, the grievance of the appellants has been addressed.

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Before we come to the other two issues raised by the appellants in these appeals, it is necessary to note the only issue, which the Division Bench in Cadila (supra) has framed for its consideration, which has a bearing on the judgment passed by the CCI in Ministry of Agriculture (supra) and which was under

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LPA 637/2018 and connected matter

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challenge before the learned Single Judge by the appellants is question No.4 which reads, ''Whether DG could have issued notice to Cadila Officials under Section 48

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That apart, the issue whether the penalty could have been imposed on the Officers / Directors only for contravention of Sections 42 to 44 of the Competition Act or also for contravention of Sections 3 and 4 of the said Act, is an issue, which was neither raised nor considered by the Division Bench in Cadila (supra). Having said that, we now proceed to answer the two issues, which have arisen for our consideration.

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ISSUE NO. 2

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Insofar as issue No. 2 is concerned, the Division Bench in

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Cadila (supra), in paras 52 to 54, has held as under;-

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Cadila's argument on this aspect'is that without first recording the complicity or otherwise of a company, its directors or employees/officials cannot be issued notice for contravention of the Act. In other words, according to Cadila, the CCI has to first record that the company is guilty of an abusive act, after which it can proceed against its director, etc. The relevant provision is as follows: —Contravention by Companies

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(1) Where a person committingcontraventionof any of the provisions of this Act or of any rule, regulation, order made or direction issued thereunder is a company, every person who, at the . time the contravention M>as committed, was in-

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charge of, and M>as responsible to the companyfor the conduct of the business of the company, as yvell as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the contraventionwas committedwithout his Jmowledge or that he had. exercised all due diligence to prevent the commission of such contravention.

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(2) Notwithstanding anything contained in sub section (1), where a contravention of any of the provisions of this Act or of any rule, regulation, order made or direction issued thereunder has been committed by a company and it is proved that the contravention has taken place yvith the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that contraventionand shall he liable to be proceeded against and punished accordingly. . •

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Explanation.—Forthe purposes of this section,

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a.) "company"m.eans a body corporateand includes afirm or otherassociationofindividuals;and b) "director", in relation to afirm, means a partner in thefirm..

¶123

The questionsought to be agitatedwas urged before another, single judge in Pran Mehra vs. Competition Commission of India and Another (Writ Petitions No. 6258/2014, 6259/ 2014 and 6669/2014) when the court held asfollows:

¶124

"6.... I am in agr-eem-eritwith the submissionsof Mr. Chandhiok that there cannot be two separate

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rG VJ

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proceedings in respect of the company (i.e. VeriFone)and the key-personsas the schem.e ofthe Act, to my mind, does not contemplate such a procedure. The procedure suggested by Mr.Ramji Srmivasan is both inefficaciousand inexpedient.As in every such matter, including the proceedings under Section 138ofthe NegotiableInstrumentsAct, 1881 (in short N.I Act), a procedure of the kind ^ suggestedis not contemplated.The judgmentofthe Supreme Court in the case Aneeta Hada. dealt with proceedingsunder Section 138 of the N.I Act. The ' judgmentdoes not deal with issue at hand, which is whether adjudicationin two parts, as contendedby Mr. Ramji Srinivasan,is permissible.The judgment, • in my opinionis distinguishable.

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It is no doubt true that thepetitionerscan only be held liable if the CCI, were to come to a conclusion that they were the key-persohs,who were in-charge and responsiblefor the conduct of the business''of the company.In the course of-theproceedingsqua. a company, it would be open to' the key-persons to contend that the contravention, if any, was not committedby them, and that, they had in any event employeddue diligencetoprevent_the contravention. • These arguments can •easily-be'~advanced by keypersons withoutprejudice to the main issue, as to whetheror not the com.panyhad contravened,in the firstplace, the provisionsof the Act, as alleged by the D.G.I, ina given case. •

¶131

The CCI has, by its separate order, in Ministry of Agriculturev M/s Mahyco Monsanto Biotech Ltd (Ref Case No.02/2015, order dated 26/07/2016)followed the above decisionand hadfurther citedShailendraSwamp V. The Director, EnforcementDirectorate (2011) 162 Comp. Cas. 346 (Del) which held that FERA proceedingscan he heldsimultaneouslySushilaDevi vs. Securitiesand ExchangeBoard ofIndia (2008) 1 Comp. L.J. 155 Del, where the petitionerbeing the officer incharge ofand responsiblefor the conductofthe business

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of the company was swrnnoned as an accused for violation of Sections 24 (1) of the Securities and Exchange Board of India Act, 1992 along with- the company. The CCI also noticed that the law on this aspect was finally settled in Aneeta Hada vs. M/s Godfather Travels cS; Tours Private Limited (2008) 13 see 70.

¶136

¶137

Aneeta Hada set at rest the controversywhether in one proceeding, against the company, its director ("person in-charge") can also be prosecuted or proceededagainston the principleofvicariousliability. Before Aneeta Hada, there existed a dichotomy of opinions- on the one hand, in Sta.te ofMadras v^- C V. Parekh and Another (1970) 3 SCO 491 held that without prosecuting the company tdn.e director could not be prosecutedSheoratanAgai^aland Another vs State of Madhya Pradesh (1984) 4SCO 352(on the other hand) explainedthe decision in C. V. Parekh (supra) by a tM>o ludge bench of the Court which held that the company alone or the person in-chargeofand responsiblefor the conduct of business of the company alone, m.ay be prosecutedfor the acts of the company as there is no statutory requirement that suck person cannot be prosecutedunless the, company is also arraignedas an accused with him. In Aneeta Hada (supra) it was held inter alia, as foUoM>s:

¶138

Applying the doctrine ofstrict construction,we are of the consideredopinion that commission of offence by the company is an express condition precedentto attractthe vicariousliabilityofothers. Thus, the words —as well as the companyW appearing in the section make it absolutely unmistakablyclear that when the company.can be prosecuted, then only the persons mentionedin the other categoriescould be vicariouslyliablefor the offence subject to the averments in the petitionand proofthereof One cannot be oblivious of the fact that the company is a juristicperson and it has its own respectability.If afinding is recordedagainst

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it, it would create a concavity in. its reputation. There can be situations when the corporate reputation is affected when a Director is indicted.

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•4,

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This court is ofopinion that the correctinterpretationof law was given in Pran Mehra the reasoningof which is hereby confirmed, as is the reasoning in Ministry of Agriculturev M/s Mahyco Monsanto Biotech Ltd, yvhich proceeds on a correct appreciation of the law.• AccordinglyCadila'sgrievancewith respect to issuance of notice to its directors by citing Section 48 is without substance;it is hereby rejected. The impugnedjudgment cannot befaulted. "

¶145

2'19. The submissionof Mr. Kapur and Mr. Rao on this issue was that the judgmentof Cadila (supra), is primarilypremised on a judgmentofthree Judges in AneetaHada (supra), wherein the issue was whether a Director/ Official of a Company could be piosecuted when the Company has not been arrayed as an accused. In otherwords,the saidjudgmentis not applicable. We are unable to accept the said contention. Para 58 of the of the judgment in Aneeta Hada (supra), as-noted by the Division Bench is very clear and we reproducedthe same as under;-

¶146

''58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence bv the company/ is an express condition precedent to attract the vicarious liability of others. Thus, the words —"as well as the company ' avpearins in the section m.ake it absolutely unmistakablyclear that when the company can be prosecuted, then only the persons mentioned in the other categories coidd he vicariously liable for the offencesubjectto the avemientsin the petitionand proof

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thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding: is recorded against it. it would create a concavit]^ in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted. "

¶152

That apart in Pran Mehra v. CCl and another, Writ Petitions No. 6258/2014, 6259/2014 and 6669/ 2014 decided on February26, 2015, a learned Single Judge of this Court, has on the precise issue dealing with the provisionsofthe Competition Act, stated as under:-

¶153

¶154

/ '

¶155

"6.... I am in asreement with the subm.issions of Mr. Chandhiok that there cannot be two separate proceedings in respect of the company (i.e. VeriFone) and the key-persons as the scheme of the Act, to my mind, does not contemvlate such a procedure. The procedure sup^ested bv Mr.Rcum'i Sriniyasanis both inefficacious-and inexpedient.As in eyery such matter, including the proceedings under Section I38ofthe'NegotiableInstrwnentsAct, 1881 (in short N.I. Act), a procedure of the kind suggestedis not contemplated.The judgmentof the Supreme Court in the case Aneeta Tlqda dealt with proceedings imder Section 138 of the N.I. Act. The judgment does not deal with issue at hand, which is whether adjudicationin two parts, as contendedby Mr. Ramji Sriniyasan,is permissible.The judgment, in my opinion is distinguishable,(emphasissupplied by this Court)

¶156

It is no doubt true that the petitioners can only be held liable if the CCL were to come to a conclusion that they were the key-persons, who were in-charse and responsible for the conduct of the business of the company. In the course of the proceedings Qua a

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company, it would be oven to the key-persons to contend that the contravention, if any, was not committed by them, and that, they had in any event employeddue diligenceto prevent the contravention. These arguments can easily be advanced by keypersons without vreiudice to the main issue, as to whether or not the company had contravened, in the first place, the provisions of the Act, as alleged bv the D.G.I., in a s^iven case, (emphasissuppliedby this Court)

¶161

We agree with the aforesaid conclusion of the learned Single Judge, which is independentof what was held in Aneeta Hada (supra), which is the correctinterpretationof law. So, we rejectthe submissionofMr. Kapur and Mi-.Rao.

¶162

ISSUE NO. 3

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On this issue, the submissionsofMr. Kapur and Mr. Rao can be summed up as under;(i) The Scheme of Competition-Act,does not contemplate punishment of the Officers / Directors of a Company under Section27 of the Act as the order contemplatedtherein can only •be againstan'e«te77™eV

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(ii) They can only be proceeded against if the orders / diiections of CCI are not obeyed and / or, are flouted by the Company;

¶166

(iii) The interpretationthat Section48 of the CompetitionAct

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can be invoked by CCI against individual Officers / Directors of the Company to investigate their role and conduct, for offences as contemplated under Sections 3 and 4 of the Competition Act and made punishable under Section 27 thereof would result in legal absurdity and would render the statutory provisions unworkable and nonsensical for the reason that such an intei"pretationwould render the words ^punished accordingly' appearing in Section 48 of the Competition Act nugatoiy, inasmuchas the orders which CCI can pass under Section27 of CompetitionAct can only relate to and be directed against an enterprise and not to individual Officers / Directors of a Company. The same is evident from Section 27 of the Act, which employsterms such as 'turnover'and 'profit' which terms can only be relevantto an 'enterprise'and not to an individual. (iv) It is a settled rule of interpretationthat if the language used in a Statute is capable of bearing more than one constiuction,the constructionthat leads to absurdity or anomal)' should be eschewed. On the contrary,a constructionthat brings it into harmonywith its purposemust be followed.

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(v) In the Cadila judgment, the Division Bench without considering the special Scheme and construction of the LPA 637/2018andconnectedmailer Page 30 of42

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Competition Act lias ,gone in to elaborate discussion on the interpretation of Section 138 of NI Act. A comparison of two statutes can only be said to be pari materia with each other, when they deal with the same subject matter and / or samx person or things and / or same class of persons or have the same purpose or objects.

¶173

Having noted the submissions made by Mr. Kapur and Mr. Rao, to answer this issue, it is necessary to reproduce Sections 27, 42 to 44 and 48 of the Competition Act:-

¶174

Orders by Commission after inquiry into agreements or abuse of dominant position -Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it m.ay pass-Ml-or any of thefollowing orders, namely:— (a) direct any enterpriseor assbcidtionof enterprises or person or association of persons, as the case m.ay be, involved in such agreement, or abuse of dominant position, to discontinue and not, to re-enter such agreement or discontinue such abuse of dominant position, as the case may be;

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(b) imposesuchpenalty, as it may deemfit which shall be not more than tenpercent of the average of the turnover for the last threeprecedingfinancial years, upon each of such person or enterprises which are parties to such agreements or abuse:

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[Provided that in case any agreement referred to in section 3 has been entered into by a cartel, the Commission may impose upon each producer, seller,

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distributor, trader of service provider included in that cartel, apenaltyofup to three times ofits profitfor each year ofthe continuanceofsuch agreementor ten percent. of its turnoverfor each year of the continuanceof suchagreement,whicheveris higher.] r'==''-"7

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(d) direct that the agreementsshall stand modified to the extent and in the manner as may be specifiedin the order by the Commission;

¶182

(e) direct the enterprisesconcerned,to abide by such other orders as the Commission may pass and com.ply with the directions, includingpayment of costs, if any; [Omittedby Competition(Am.endm.ent)Act, 2007]

¶183

(g) pass such other 45[orderor issue such directions]as it may deem fit. 46[Providedthat while passing orders under this section, if the Commissioncomes to afimding, that an. enterprisein contraventionto section3 or section 4 of the Act is a mem.ber ofa group as defined in clause (b) of the Explanationto section-5 of the Act, and other mem.bers of such a group are also responsiblefor, or have contributed to, such •a .contravention, then it m.ay pass orders, under this section, againstsuch mem.bers of the group. '

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¶185

Contraventionof orders of Com.m.ission - (1) The Com.m.ission may cause an inquiry to be made into com.plianceof its orders or directionsm.ade in exerciseof its powers under the Act.

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(2) If any person, without reasonable clause, fails to comply with the orders or directionsof the Com.mission issued,under sections 27; 28, 31, 32, 33, 42A and 43A of the Act, he shall be punishable with fine which m.ay extendto rupees one lakhfor each day duringwhich such non-complianceoccurs, subject to a maximum, of rupees ten crore, as the Commission may determine.

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(3) If any person does not comply with the orders or

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directions issued, orfails to pay the fine imposed under sub-section (2), he shall, without prejudice to any proceeding under section 39, be punishable with imprisonmentfor a term, which m.ay extendto threeyears, or withfine which m.ay extendto rupees twentyfive crore, or M'ith both, as the ChiefMetropolitanMagistrate,Delhi m.ay deem,fit:

¶191

Provided that the ChiefMetropolitan Magistrate, Delhi shall not take cognizance of any offence under this section save on a complaintfiled by the Comm.issionor any of its officersauthorized by it.]

¶192

42A Compensationin case of contraventionof orders of Comm.ission]- Withoutprejudice to the provisions of this Act, any person m.ay make an applicationto the Appelkite Tribunalfor an orderfor the recovery of compensation from any enterprisefor•any loss or damage shown, to have been siffered, by suchperson as a. result of the said, enterpriseviolatingdirectionsissued by the Commission or contravening, without any reasonable ground, any decision or order of the Comm.ission issued under sections 27, 28, 31, 32 and 33 or any condition or restriction .subject to which any. approval, sanction, directionor exem.ptionin relation to any matterhas been accorded, given, made or granted under this Act or delayingin carryingout such orders or directionsof the Com.missionf • •

¶193

Penalty for failure to comply with directions of Comm.issionand Director General - If any person fails to com.pl.y, withoutreasonablecause, with a directiongiven by— •

¶194

the Com.mission under sub-sections (2) and (4) of section 36; or (b) the Director General while exercising powers referredto in sub-section(2)ofsection41, such person shall be pimishable with fine which m.ay extendto rupees one lakhfor each day duringwhich such failure continues subject to a maximum of rupees one .crore, as may be determ.inedby the Commissionf

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43A Power to impose penalty for nonfurnishing of information on combinations] - If any person or enterprise who fails to give notice to the Commission under sub- section(2) of section 6, the Commission shall ' impose on suchperson or enterprise a penalty M'hich m.ay extend to one percent, of the total turnover or the assets, whichever is higher, ofsuch a combination.]

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Penalty for m.akingfalse statement or omission to furnish m.aterial information - If any person, being a part)! to a combination,—

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(a) makes a statement which is false in any material particular, or Imowing it to befalse; or

¶201

(b) omits to state any material particular Imowing it to be material, such person shall be liable to a penalty M'hich shall not be less than rupees fifty lakhs but which may extend to rupees one crore, as may be determined by the Commission.

¶202

Contravention by companies-(l) Where a person committing contravention of any of.the provisions of this Act or of any rule, regulation, order made or direction issued thereunder is a company, evejyperson who, at the time the contravention was•committed,was in charge of and M>as responsible to the companyfor the conduct of the business of the company, as well as the company, shall be deemed to be guilty of. the contravention and shall be liable to be proceeded against and punished ' accordingly:

¶203

Provided that nothing contained in this sub-section shall render any such person liable to any punishnent 'if he proves that the contravention was committed, yvithout his Imowledge or that he had exercisedall due diligence to prevent the comm.issionofsuch contravention.

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(2) Notwithstanding anything contained in sub-section (1), where a contra.ventionof any of theprovisions of this Act or of any rule, regulation, order m.ade or direction

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issued thereunder has been committed by a company and it is proved that the contraventionhas taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, m.anager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to he guilty of that contravention and. shall be liable to be proceeded. against and punished. accordingly. Explanation.—For thepurposes of this section,—

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(a) "company" means a body corporate and includes a firm or other association of individuals; and

¶210

(b) "director", in relation to a.firm, means a partner in the firm.

¶211

We may state at the outset that, in view of our conclusion

¶212

to issue No.2 above, we proceed to answer this issue, on the premisethat Officers/ Directorscan be proceededagainst, along with Company.We also say that the Officers/ Directors can only be liable if the CCI were to come to the conclusion that they were the key persons who were Iri-charge and responsible for the conduct of the business of the Company.

¶213

On a perusal of Section 27 of the Act, it is clear that it stipulates,the CCI on a finding that there is a contraventionof Section 3 or Section 4, can pass orders against an 'enterprise' and a 'person' i.e individual,who has been proceeded against, imposing penalty;

¶214

The issue is, as contended by Mi". Kapur and Mr. Rao that, the penalty under Section 27(b) being 10% of the average LPA 637/2018 andcoimededmatter Page 35 of 42

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turnover for the last three precedingfinancial years cannot be on the person/ individual/ Director/ Official. This they say so, as there is no 'turnover'ofa person. On this submissionofMr. Kapur, the argument of Mr. Bhushan and Mr. Bansal was primarilywas that on a reading of Sections 27(b) and 48' of the CompetitionAct, it is clear that apenalty can be imposed on a person for violationof the provisionsof the Act, which includes Sections3and 4also, in view ofthe presenceofthe words "upon each of such person" in Section 27(b) and "where a person committingcontraventionofany oftheprovisionsofthis Act" in Section 48(1). 37. We agree with the said submissionof Mi*. Bhushan and Ml. Bansal. There cannot be any cjispirte that if the Company and the Officers / Directors m-e being proceeded against for violationof Sections3and 4, there has to be aconsequencefor violation. IVtr. Kapur and iVtr. Rao's plea was that the word 'turnover'would not be applicableto Officers/ Directors. The plea appears to be appealing on a first blush, but on a deeper consideration,if we agree witli the submission made by Mi-. Kapur and Mr. Rao then the very provision of penahy to be imposed on the Officers/ Directorsbeing 'persons'in terms of LPA 637/2018and connectedmatter

¶217

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Section 27(b) would be rendered otiose / nugatory. In other words, there would not be any stipulation of penalty to be imposed on Officers / Directors even if they are found to be violatingSections3 and 4. That cannot bethe intent of Sections 27(b) and 48. Such a stipulation,surely requires a purposive interpretation.

¶220

The Supreme Court in State of Bihar & Ors. V. Anil Kumarand Ors AIR 2017SC2716has by relyingupon National InsuranceCo. Ltd. v. Laxmi Narain Dliut (2007) 4 SCALE 36 held as under; -

¶221

A statute is an edict of the Legisla.t.ureand in construing a statute, it is necessary to seek the intention of its niaker. A statute has to be construed accordins! to the intent of those who make it and the duty of the court is to act upon the trup intentionof the Lesislaiure.If a statutoryprovision is open to more than one internretation the Court has to choose that interpretationwhich represents the true intentionofthe Leeislature.This task veiy often raises difficultiesbecause of various reasons, inasnmch as the words used may not be scientific symbolshavingany preciseor definitemeaningand the languagem.ay be an imperfectmedium, to convey one's thought or thai the assembly of Legislatures consistingofpersons of various shades of opinion purport to conveya meaningwhich may be obscure. It is impossible even for the most imasinative Legislature to foresee all situations exhaustively and circumstancesthat may emer2e after enacting a statute where its applicationmay be called for. - Nonetheless, the function of the Courts is onlv to

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expound and not to legislate. Lesislation in a modern State is actuated with some policy to curb some public evil or to effectuate some public benefit The legislation is primarily directed to the problems before the Lesislature based on information derived, front past and present experience. It may also be designed by use of general words to cover similar problems arising in future. But, from the very nature of things, it is impossible to anticipate fully the varied situations arising in future in which the application of the legislation in hand may be called for, and, words chosen to communicate such indefinite referents are bound to be in many cases lacking in clarity and precision and thus giving rise to controversial questions of construction. The process of construction combines both literal and purposive approaches. In other words the legislative intention i.e., the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose, or object which comprehends the mischief and its remedy to which the enactment is directed. (See District Mining.Officer and Ors. v. Tata Iron & Steel Co. & Anr. JT'WOl (6) SC 183). It is also well settled that to arrive at the intention of legislation depending on the objects for which the enactment is made, the Court can resort to historical, contextual and purposive interpretation leaving textual interpretation aside. (emphasis supplied) 69. It was also opined: More often than not, literal interpreta.tion of a. statute or a provision of a statute results in absurdity. Therefore, while interpreting statutory provisions, the Courts should keep in mind the objectives or purpose for which statute has been enacted. JusticeFra.nl<furterof U.S. Supreme Court in an article titled as Some Reflections on the ReadingofStatutes(47 ColumbiaLaw Reports 527), observed that,

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lesislation has an aim, it seeks to obviate some mischief, to supply an adequacy, to effect a change of policy, to formulate a plan of Government. That aim, that policy is not drawn, like nitrogen, out of the air; it is evidenced in the languase of the statutes, as read in the lisht of other external manifestations of purpose".

¶229

Further, it has been held by the Supreme Court in Board of Muslim Wakfs Rajasthan v. Radha Krishna cQ; ors (1979) 2 see 468, that the construction which tends to malce any part of tlie statute meaningless or ineffective must always be avoided and construction which advances the remedy intended by the statute should be accepted. Mi\ Kapur and Mr. Rao, in their submissions had relied on the general meaning of the word 'turnover' the income of a Company in a particular period, but the synonyms of the word 'turnover'' (as per English Oxford Living Dictionary) are revenue, gross revenue, income, yield, volume of business, business sales. So, the turnover, in the context of Officers / Directors has to be interpreted as the income of the Officers / Directors from the Company, as there cannot be an income of an Officer / Director from an infringing product. We have been told, during the course of the arguments that the CCI has been imposing penalty on the income of the Officers /

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Directors of the Company. We agree with such an action.

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So, tlie plea of Mr. Kapur and Mr. Rao that Section 27(b) shall be applicable to an 'enterpriseis not appealing. 41. Insofar as the plea of Nfr. Kapur and Mr. Rao that Section 48 as it falls under Chapter VI, only relates to the contravention of Sections 42 to 44 of the Act, is also not appealing, inasmuch as the Section contemplates, "on contravention of the provisions of the Act", one shall be hable to-be proceeded against and punished accordingly.The contraventionof the provisions of the Act includes Sections 3 and 4, as is clear from Section 46, which is also in Chapter VI, stipulates lesser penalty for violating Section 3 in certain eventualities. If'the interpretationas sought to be advanced by Mr. Kapur and Mr., Rao, is to be accepted/ agreed to, then Section48 shall become nugatory,and there shall be no penalty for violating the Act.

¶235

Insofar as the judgments, as relied upon by the learned counsels for the appellants are concerned, in Poonam (supra), the reliancewas placed on a propositionof law that no order can be passedbehindthe back ofapersonadverselyaffectinghim.

¶236

Insofaras CentralBoardofDawoocliBohra Community

¶237

and Am. (supra), the reliance was placed by the appellants in

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support of their contention that the matter must be referred to a larger Bench in the facts of this case.

¶241

Insofar as the judgments in the case of Shah and Co., Bombay (supra) & Bangalore Turf Club Limited relied upon by the appellants in support of their submission that there is no justification to refer to the NI Act when the 2002.Act as a Special Act deals with the subject matter, which is entirely distinct from the NI Act.

¶242

•

¶243

Insofar as the M. Nizamudeen (supra) is concerned, the same was relied upon by the learned counsel for the appellants to contend that it is a settled rule of interpretation that if the language used in a statute is capable,of.bearing more than one construction,a constructionthat results in absurdity or anomaly should be eschewed.

¶244

Similarly, Union of India v. Deoki Nandan Aggarwal (supra),was reliedupon by the learnedcounselfor the appellants to contend that defect or omission in the words used by the legislator,the Court cannot corrector make up the deficiency. It shall only decide what the law is, and not what it should be. 47. Insofar as B. Unnikrishnan and Ors. and B. R.

¶245

Enterprises (supra) are concerned, the same were relied upon

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that the Officers / Dkectors cannot be punished without any legislative guideHnes / checks and as per whims and fancies this is anathema to rule of law.

¶249