2023 (5) TMI 665 - AT - Companies Law

Levy of penalty - grievance is that the Commission has not imposed suitable penalty upon the Respondents in terms of the provisions of the Act - Section 27 in the Competition Act, 2002 - HELD THAT - Section 27 of the Act provides that if the Commission after inquiry finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the orders mentioned in the said provision - The Commission found that it would be just and expedient to invoke only the provisions of Section 27(a) of the Act which further provides for a direction to any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be. Thus, from a careful reading of Section 27, it appears that the Commission has the jurisdiction either to pass all or any of the order which are so mentioned in the said Section. In the present case, the Commission has invoked Section 27(a) of the Act. There is no reason to interfere in the well-considered order passed by the Commission - Appeal dismissed.

Summary

Issues involved:
The appeal challenges the order of the Competition Commission of India regarding the imposition of penalties under the Competition Act, 2002.

Detailed Summary:

Issue 1: Imposition of Penalty
The appeal was filed by the Chief Materials Manager, Eastern Railway, contesting the Competition Commission's decision not to impose penalties on the respondents as per the provisions of the Act. The Commission found multiple parties to have contravened specific sections of the Act during the period 2009 to 2017. While the Commission directed the parties to cease and desist from such practices, it refrained from imposing monetary penalties due to various factors. These factors included the cooperation of the parties during the investigation, the economic situation due to the global pandemic, and the small turnover of some parties, particularly Micro Small and Medium Enterprises (MSMEs). The Commission emphasized the importance of correcting market distortions and disciplining market behavior for the Act's objectives to be met. The Commission warned the parties to adhere strictly to the Act in the future to avoid serious consequences.

Issue 2: Legal Provisions
During the hearing, the appellant's counsel failed to specify the provision of law requiring the imposition of penalties, while the respondent's counsel referred to Section 27(a) of the Act. Section 27 of the Competition Act, 2002, empowers the Commission to pass various orders after finding contraventions, including directing parties to discontinue certain actions, imposing penalties, awarding compensation, modifying agreements, and recommending actions to the Central Government. The Commission invoked Section 27(a) in this case, directing the parties to cease cartel behavior and comply with the Act to meet its objectives.

Conclusion:
The Appellate Tribunal upheld the Commission's decision to invoke Section 27(a) of the Act and not impose monetary penalties in this case. The Tribunal found no merit in the appeal and dismissed it without costs, as the Commission's order was well-considered and supported by the circumstances outlined in the impugned order. No other issues were raised during the proceedings.