KSD ZONNE ENERGIE LLP v. COMPETITION COMMISSION OF INDIA

What happened

The petitioner, a small solar power LLP, took a term loan of Rs.13.25 crores from Canara Bank sanctioned on 12 July 2016 at 16.20 per cent, reduced to 11.00 per cent from 6 March 2018. By a letter of 11 January 2021 the bank retrospectively charged 14.45 per cent from 4 September 2018 to 16 July 2020, demanding about Rs.76,75,894 as back interest and calling the 11 per cent a branch error; it offered a switch to repo-linked lending at 10.80 per cent on payment of the dues, converted interest arrears of Rs.1,11,67,000 into a funded interest term loan, withheld title documents when the petitioner tried to move the loan, and issued SARFAESI demand notices on 24 January 2024 and 14 May 2024. On 27 November 2024 the petitioner filed information under section 19(1)(a) alleging abuse of dominance and an anti-competitive agreement with valuers. The Commission, by an order of 19 May 2025 under section 26(2), held that Canara Bank with a 5.73 per cent share was not dominant, the rate changes were contractual and the allegation of an agreement with valuers had no evidence, and closed the matter. The petitioner pleaded breach of natural justice because it was not heard or told of the meeting.

Questions before the court

• Is an informant entitled to notice and hearing before the Competition Commission closes its information under section 26(2), and is a writ maintainable against the closure order?

Why the court ruled this way

Section 36(1) says the Commission is guided by natural justice, but the content of natural justice depends on the nature of the function and the remedies available (paragraphs 23 to 28). Swadeshi Cotton Mills holds that a statute providing a full post-decisional hearing excludes the pre-decisional hearing, and sections 53A and 53B give a full appeal to the NCLAT against a section 26(2) order (paragraphs 28, 29 and 22). In Competition Commission of India v. Steel Authority of India the Supreme Court held that the prima facie stage is departmental and administrative, and that the hearing right arises only after closure, before the Tribunal; the paragraph 91 observations cover section 26(2) and are part of the ratio (paragraphs 30 to 37). That view has been followed in Mahindra Electric, Bharti Airtel and the Supreme Court's decision of 26 September 2025 in Competition Commission of India v. Kerala Film Exhibitors Federation (paragraphs 38 to 45). Parliament inserted express hearing requirements elsewhere but not in section 26(2), and the NCLAT in Karnataka Power Corporation's case rejected the same plea, its appeal being dismissed by the Supreme Court on 24 April 2026 (paragraphs 46 to 59). Samir Agrawal confirms that an informant can appeal, and time spent in a writ court is no sufficient cause for delay (paragraphs 60 to 65).

Controlling point

The Commission was not required to hear the informant before closing the complaint, and the statutory appeal to the NCLAT was the appropriate remedy.

Order and next steps

The writ petition was dismissed with liberty to appeal to the National Company Law Appellate Tribunal under section 53A against the order of 19 May 2025; no opinion was expressed on the merits and all rights and contentions were left open.

Practical implications

An informant whose complaint the Commission closes under section 26(2) should file an appeal before the NCLAT within the time in section 53B, not a writ petition, and cannot rely on the time spent in writ proceedings as sufficient cause.

Limits of this ruling

• The Court did not decide whether Canara Bank is dominant or abused any position, and its observations on the doctrine of merger depend on the Supreme Court order of 24 April 2026 having been passed in a civil appeal after hearing.