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ISLAMABAD: The apex court suspended the Islamabad High Court’s judgment restraining the Competition Commission of Pakistan (CCP) inquiry against the ghee and oil mills.

A three-judge bench, headed by Justice Umar Ata Bandial on Monday heard the CCP appeal against the IHC verdict.

Faisal Siddiqui, representing the CCP, argued that numerous complaints about hike in edible items’ prices were received on the PM Portal and by the Punjab government, and on their request, the commission initiated an inquiry against 117 mills.

However, due to the high court judgment, the inquiry against the whole oil and ghee industry stopped, he added.

Justice Bandial directed the commission to resume inquiry against the mills’ owners, but issue fresh notice to Dalda Foods Limited and tell the mill why an inquiry initiated against it.

IHC sets aside CCP’s letters to Dalda Foods

The IHC, in October, had set aside the CCP’s letters to Dalda Foods Limited seeking information regarding excessive pricing of vanaspati ghee

The Federal Ministry of Industries and Production on June 8, 2020, wrote a letter to the CCP that despite reduction in palm oil prices, the retail prices of vegetable ghee in the market have not shown a declining trend and requested the CCP to intervene in such a situation under Sections 3(3)(a) and 37 of the Competition Act, 2010.

The counsel said the commission initiated a probe against the oil and ghee mills, once it received their replies.

Justice Mansoor questioned did the authority pass an order before writing to the ghee mills for the information.

The judge said the competition commission sent notices and did not elaborate why it was summoning the mill owners. He remarked if the structure of inquiry were not followed in the beginning, then it was not possible to continue with the probe. If the commission wanted to initiate an inquiry into price hike, it should tell the mill owners about the reasons.

The case was adjourned for an indefinite period.

According to the IHC judgment, many mills owners submitted the information to the CCP, which after preliminary fact-finding exercise, ordered a formal enquiry under Section 37(1) in price increase of ghee/cooking oil to determine prima facie contravention of Sections 3 and 4 of the Act.

Having found Dalda Foods to not be in compliance with the request for information under Section 33 of the Act, the special order under Section 36 of the Act for provision of information through notice dated 7th September 2020 was issued to the company. Dalda Foods, aggrieved by the initiation of enquiry, under Section 33 and the special order, approached the IHC.

The IHC judgment states that the impugned enquiry has been ordered by the CCP for a collateral purpose without satisfying the requirements of Section 37 and the enquiry order has been passed in breach of provisions of the Act, and is therefore void.

The subsequent orders seeking information from the petitioner (Dalda Foods) for purposes of the enquiry and the Section 36 order reiterating the demand for information being contingent upon and rooted in a void order are also not backed by lawful authority.

The judgment said this decision does not, however, prohibit the CCP from exercising its authority under Section 37 of the Act, to the extent that materials already received from the federal and provincial governments and/or from undertakings in the ghee/cooking oil industry make out a plausible case for initiation of an enquiry against the petitioner for breach of Section 4 or any other provision of the Act, through a reasoned order satisfying the requirements of Section 37(2) of the Act.

Copyright Business Recorder, 2021

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