Delhi HC stays CCI probe against JCB

The Delhi High Court has stayed further proceedings by the Competition Commission of India (CCI) against the Indian arm of the UK-based construction equipment maker JCB. In an unprecedented action, CCI had conducted a raid against JCB on Monday.

The court had earlier restrained CCI and its director-general (DG) from passing any order or preparing an investigation report against JCB India since a case was already going on in the court.

The court ordered a stay on the CCI investigation on Friday "in light of the aforesaid order and given the manner in which the action has been taken by the respondent (CCI)".

The court asked the DG to file a personal affidavit on the reason that prompted him to take the "drastic action".

The official has to take a chief metropolitan magistrate's permission to undertake a raid under the Competition Act. The HC asked CCI to place that material before it on the next date of hearing.

"We are very pleased with the outcome of today's court hearing. Contrary to what has been reported in one section of the press, there is no truth whatsoever in the suggestion that JCB has not been co-operating with the CCI probe," JCB told Business Standard.

The court also asked CCI to place all the hardware seized in the raid in a sealed cover and keep it in a safe custody.

JCB had moved the high court against Bull Machines in November 2011, alleging that the latter had stolen a design developed by the former.

On the other hand, Bull Machines had approached CCI against JCB for alleged abuse of its dominant position to keep away competitors.

The regulator had ordered a detailed probe into the matter after finding prima facie evidence that JCB and its subsidiary, JC Bamford Excavators, had abused their dominant position in market for construction equipment.

On Monday, CCI's investigation arm carried out search operations at JCB's offices in Delhi and Faridabad.