Bombay High Court refuses to set aside CCI probe against Asian Paints

The Bombay High Court recently refused to interfere with the Competition Commission of India’s (CCI) decision to order an investigation into an alleged abuse of dominance by Asian Paints Limited [Asian Paints Limited Vs CCI & Ors].

The Division Bench of Justices Revati Mohite Dere and Dr. Neela Gokhale passed the judgment on August 7. However, the ruling was made public more recently.

"We do not find any infirmity in the impugned order passed by the CCI under Section 26(1) of the Act ... We find no merit in the petition. The petition is accordingly dismissed," the Court held.

The case concerns a complaint filed by Grasim Industries Limited (Birla Opus Paints) before the CCI in December 2024, soon after it entered the decorative paints market. Grasim alleged that Asian Paints abused its dominant position by offering arbitrary discounts, coercing dealers, and restricting supply and logistics arrangements.

On July 1, 2025, the CCI directed its Director General (DG) to conduct an investigation into the allegations under Sections 4(2)(a)(i), 4(2)(c), and 4(2)(d) of the Competition Act, 2002. The order was first uploaded on July 1 and replaced the next day with a signed version, prompting Asian Paints to challenge it before the High Court.

Asian Paints argued that the CCI had already dismissed similar allegations made by JSW Paints and Sri Balaji Traders in 2022 after a detailed DG probe. It contended that by virtue of Section 26(2-A) of the Act, inserted in 2023, the Commission was barred from re-inquiring into “the same or substantially the same facts and issues.” The company also claimed it was denied the right to be heard before the investigation was ordered.

The Bench accepted the CCI’s explanation that the July 1 upload was only a draft order mistakenly posted. It noted,

“The unsigned order uploaded on 1st July 2025 was inadvertently uploaded and, upon discovering the error, the correct signed order dated 1st July 2025 was uploaded on 2nd July 2025.”

The Court emphasised that both versions had the same effect — a direction to the DG to investigate — and therefore, there was no substance in the grievance made by Asian Paints with respect to the two orders.

On the interpretation of Section 26(2-A), the judges held that the provision was clarificatory and enabling rather than mandatory.

“Section 26(2-A) only empowers the Commission to close a matter if the same or substantially the same facts and issues raised in the information have already been decided by the Commission in its previous order,” the Bench explained.

Rejecting Asian Paints’ contention on any such jurisdictional bar, the Court clarified,

“Section 26(2-A) cannot be interpreted to create an embargo on the CCI to entertain a subsequent complaint … Conversely, where the CCI decides not to close the case and directs the DG to investigate, it is not required to give reasons why Section 26(2-A) is not applicable.”

The judges distinguished the earlier JSW/ Balaji complaints, pointing out that they were rejected after the DG’s report, as there was no adequate material supporting the representation. In contrast, Grasim’s complaint invoked different statutory provisions and contained fresh factual material.

Finally, citing the Supreme Court’s rulings in SAIL and Bharti Airtel, the Bench reiterated that a Section 26(1) order is administrative in nature. It added that at the present stage, Asian Paints cannot claim a right to be heard before the initiation of a CCI probe.

“There is no inherent right of hearing at the stage of formation of a prima facie opinion. Whether or not to afford such hearing is a matter of discretion with the CCI, guided by the facts and circumstances of each case," the judgment said.

The petitioner, Asian Paints Limited, was represented by Senior Advocates Darius Khambata and Sharan Jagtiani with Advocates Ameya Gokhale, Harman Singh Sandhu, Nitika Dwivedi, Kriti Kalyani, Chintan Gandhi, Anushka Bhardwaj and Swarupini Srinath, instructed by Shardul Amarchand Mangaldas & Co.

The Competition Commission of India (CCI) was represented by Senior Advocate Mustafa Doctor with Advocates Ravi Kini, Abhay Itagi and Vidhi Bhasin, instructed by MV Kini Law Firm.

Grasim Industries Limited (Birla Paints Division) was represented by Senior Advocate Aspi Chinoy with Dr. Abhinav Chandrachud, Sneha Jaisingh, Jaidhara Shah, Neeraja Barve and Akshay Ayush, instructed by Bharucha & Partners.

[Read Judgment]