Asian Paints Limited, Through VersusCompetition Commission of India and Another …

Introduction

This case examines the scope of the CCI’s powers under Sections 26(1) and 26(2-A) of the Competition Act, 2002. After Birla Opus Paints alleged abuse of dominant position in the market by Asian Paints, the CCI ordered an investigation despite a complaint with substantially similar facts having been dismissed earlier.

Asian Paints challenged this before the Bombay High Court, arguing that the CCI lacked jurisdiction to reopen the matter. The Court’s ruling clarifies whether such preliminary investigation orders are administrative and whether Section 26(2-A) bars fresh inquiries on similar facts.

Provisions referred:

Competition Act, 2002.

• Section 26:
• “(1) On receipt of a reference from the Central Government or a State Government or a statutory authority or on its own knowledge or information received under section 19, if the Commission is of the opinion that there exists a prima facie case, it shall direct the Director General to cause an investigation to be made into the matter: Provided that if the subject matter of an information received is, in the opinion of the Commission, substantially the same as or has been covered by any previous information received, then the new information may be clubbed with the previous information. “
• “(2A) The Commission may not inquire into agreement referred to in section 3 or conduct of an enterprise or group under section 4, if the same or substantially the same facts and issues raised in the information received under section 19 or reference from the Central Government or a State Government or a statutory authority has already been decided by the Commission in its previous order.”

Facts

1.  Asian paints Ltd is a leading company engaged in the manufacture and sale of decorative paints and related products in India.
2. A new entrant in the decorative paint market , Birla Opus Paints launched around march 2024, filed an information under section 19(1)(a) of the Competition Act 2002, before the Competition Commission of India in December 2024, alleging Asian Paints Ltd abused its dominance in the market through practices like :
3. Granting extra discounts, incentives and benefits to dealers in return of exclusivity.
4. Threating and putting sanctions on traders dealing with Birla Opus.
5. Directing dealers to return/not use tinting machines from Birla Opus.
6. Coercing landlords, clearing/forwarding agents, and transporters to avoid Birla Opus, hindering logistics.
7. Restraining suppliers of raw materials from dealing with Birla Opus.
8.  Launching a smear campaign against Birla Opus.

These alleged violations targeted Sections 4(2)(a)(i), 4(2)(c), and 4(2)(d) of the Act.

• Previously , in 2019, similar allegations had been made by JSW Paints and Balaji Traders, against Asian paints Ltd. After investigation , the CCI dismissed the complaints in 2022, finding no violation.
•   On 1 July 2025, the CCI passed an order under Section 26(1) forming a prima facie opinion that Asian Paints’ conduct warranted investigation and directed the Director General (DG) to investigate within 90 days.
• A draft order was mistakenly uploaded, later replaced by the final signed order.
• Asian Paints filed a writ petition before the Bombay High Court.

Petitioners Argument

1. The Petitioner contended that when a previous complaint by JSW Paints and Balaji Traders, based on substantially similar facts, had already been investigated and finally decided by the CCI in 2022. The CCI must record specific reasons justifying why a fresh inquiry is being initiated.

The impugned order did not explain why Birla Opus’ complaint was distinguishable from the earlier JSW/Balaji complaints. This amounted to non-application of mind and violation of administrative law principles.

• The Petitioner argued that the CCI was jurisdictionally barred from entertaining the complaint filed by Birla Opus. Since the allegations related to abuse of dominance in the same market, the CCI ought to have closed the matter under Section 26(2-A).The CCI failed to expressly consider and apply Section 26(2-A), which according to the Petitioner was mandatory, not discretionary
• Asian Paints stated that before the CCI formed a prima facie view, it should have been provided with the chance to be represented.Asian Paints would have proven the following if such a hearing had been allowed that the accusations made  were repeated and the  CCI had already determined that there was no abuse of dominance.
• The petitioner argued that Birla Opus’s information was obviously insufficient to establish a prima facie allegation. Like others previously dismissed, the accusations were speculative, ambiguous, and unsupported. Therefore, rather than ordering an investigation, the CCI ought to have rejected the information at the threshold.
• The Petitioner pointed out that:
• The CCI first uploaded one order on 1 July 2025, and
• Later replaced it with another order of the same date containing material differences.

According to the Petitioner, this demonstrated procedural irregularity, a lack of openness, and arbitrary decision-making.

• Although the order under Section 26(1) is administrative, the Petitioner argued that it must still, Reflect proper application of mind, and Address statutory bars like Section 26(2-A).

Respondents/Defendants Arguements

The Arguments made led by Senior Counsel Mr. AspiChinoy for Competition Commission of India (Respondent No. 1)and by Senior Counsel Mr. Mustafa Doctor for Birla Opus Paints (Respondent No. 2) :

1. The main contention made by CCI was that an order passed under Section 26(1) of the Competition Act, 2023 is that it is Administrative in nature rather than judicial. It merely records a prima facie opinion and directs the Director General to conduct an investigation. Since such an order does not determine any rights or impose any penal consequences on the opposite party and it also does not affect their substantive legal position at that stage.
2. The CCI further contended that the High Courts should refrain from interfering at the Section 26(1) stage, because the order made at such a stage is purely preliminary and only directs an investigation. Since no final determination of rights is made at this point, judicial review on merits is impermissible, and the courts ought not to scrutinise or evaluate the correctness of the CCI’s prima facie opinion.
3. The CCI argued that Section 26(2-A) is only an enabling provision that allows closure of duplicate matters to avoid repetition, but it does not bar the CCI from investigating a later complaintespecially where the parties, facts, legal provisions, or material differ. Accordingly, Asian Paints had no vested right to prevent the inquiry at the threshold.
4. The CCI also emphasised that the present complaint was not identical to the earlier JSW/Balaji matter, as it was brought by a different complainant, involved new factual allegations, and invoked additional statutory provisions. Therefore, the pre-condition for invoking Section 26(2-A) was not satisfied.

Court’s Analysis

• Nature of orders given under Section 26(1) : The Court reaffirmed the well-settled position that orders passed by the CCI under Section 26(1) are administrative and in nature, rather than judicial. These orders do not definitively establish the parties’ rights; rather, they only guide an investigation. As a result, there is no inherent right to a hearing at this early stage, and the CCI has complete dCiscretion over whether or not to grant a hearing.
• Courts interpretation of Section 26(2-A): The interpretation of Section 26(2-A), formed the core issue, the Court held that the provision does not impose a jurisdictional bar upon the CCI from entertaining subsequent complaints. Instead, it was inserted to avoid duplication of effort and ensure speedy proceedings, and not restrictive. The Court clarified that the CCI is expected to apply Section 26(2-A) only where it decides toclosea subsequent complaint on the ground that the issues are substantially identical. However, anew complaint supported by fresh facts cannot be barred simply because a similar matter had earlier been dismissed.
• Distinction Between Earlier and Present Complaint: The Court also pointed out that, in contrast to the current complaint, which is filed by a different party, it also invokes additional statutory provisions, and is based on factual allegations that are newly found, the earlier complaint, which was filed by JSW/Balaji, was dismissed mainly for the lack of supporting evidence. As a result, the two complaints could not be considered similar, and Section 26 (2-A) could not be applied because there is no repetition.

Hence, the division bench rejected the challenge made to the impugned order made by Asian Paints and dismissed the writ petition, holding that there was no defect in CCI’s decision to form a prima facie opinion and to direct the Director General to investigate allegations made by Birla Opus.  By doing so, the Court maintained the legality of Section 26(1) of the Competition Act and permitted to proceed with  the inquiry. Additionally, the Court made it clear that the rights of  Asian Paints’ are unaffected by this initial phase and that they would have a chance to refute the accusations at the appropriate time.

Conclusion

The Bombay High Court ruled that orders made under Section 26(1) are administrative in nature because they just start an investigation and do not establish rights, hence there is currently no entitlement to a prior hearing. It further made clear that Section 26(2-A) is a provision limiting repetitive litigations and does not prohibit new complaints in cases involving new parties or facts. The writ petition was denied and the  investigation was permitted to proceed since the Birla Opus complaint was different from the previous JSW/Balaji case. The decision upholds the CCI’s independence during the investigation phase.

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Author Name- Aastha Parab