2015 (3) TMI 197 - HC - Companies Law

Jurisdiction to levy penalty by Competition Commission of India (CCI) - Sections 3 and 4 of the Competition Act, 2002 - Principles of natural justice - Held that - This Court is of the opinion that the petitioner's argument of lack of jurisdiction is misplaced as neither CCI nor Competition Appellate Tribunal (COMPAT) lack inherent jurisdiction to decide the petitioner's first submission as to whether Act, 2002 applies to the proceedings or not. This Court is of the view that issues of applicability of Act, 2002 or Monopolies and Restrictive Trade Practices Act, 1969 and levy of penalty are not equivalent to lack of inherent jurisdiction to decide the case. Consequently, in the opinion of this Court, it is only the CCI and COMPAT which have the jurisdiction to decide the issue of applicability of Act, 2002 as well as the issue of levy of penalty thereunder. As far as the issue of principles of natural justice is concerned, this Court is of the opinion that both COMPAT and CCI have adhered to it and parties have been given not only liberal, but a full hearing even at the interlocutory stage. The issue as to whether two reports prepared by the Director General, namely, Case No.29/2010 and RTPE 52/2006 are practically identical, would be examined by the COMPAT at the final hearing stage. This Court is also in agreement with the prima facie conclusions arrived at by COMPAT in its impugned order. Moreover, this Court is of the view that COMPAT has also passed similar orders requiring other cement manufacturers to pre-deposit ten per cent of the penalty imposed on them by CCI. In the light of said orders, this Court is of the view that the impugned order is fair and reasonable and requires no interference at this interlocutory stage in writ proceedings. - Decided against the appellant.

Issues Involved:
1. Jurisdiction of the Competition Commission of India (CCI) to levy penalty.
2. Violation of principles of natural justice.
3. Maintainability of the writ petition.
4. Requirement to pre-deposit a percentage of the penalty.

Detailed Analysis:

1. Jurisdiction of the Competition Commission of India (CCI) to levy penalty:
The petitioner argued that the CCI lacked jurisdiction to levy penalties for actions that occurred before the enforcement of Sections 3 and 4 of the Competition Act, 2002, which came into force in 2009. The petitioner emphasized that the inquiry pertained to a period prior to 2009. However, the court noted that the CCI had directed an inquiry into the matter on 24th June 2010, which extended the period of investigation up to 2011. Therefore, the court found no jurisdictional error by the CCI, as the CCI had the authority to conduct investigations and levy penalties for actions occurring after the enforcement of the relevant sections of the Act.

2. Violation of principles of natural justice:
The petitioner contended that the order imposing the penalty violated the principles of natural justice because the report from Case No. 29/2010, which was relied upon, was not furnished to the petitioner. The respondent countered that the reports from Case No. 29/2010 and RTPE 52/2006 were practically identical, and no prejudice was caused by not supplying the report. The court agreed with the respondent, stating that the issue of whether the two reports were practically identical would be examined at the final hearing stage by COMPAT. The court found that both COMPAT and CCI adhered to the principles of natural justice, providing a full hearing even at the interlocutory stage.

3. Maintainability of the writ petition:
The respondent argued that the writ petition was not maintainable because the petitioner had an alternative remedy by way of an appeal under Section 53T of the Competition Act, 2002. The court referred to the Supreme Court's ruling in Whirlpool Corpn. v. Registrar of Trade Marks, Mumbai, which held that a writ petition is maintainable on limited grounds, such as violation of fundamental rights, principles of natural justice, or lack of jurisdiction. The court concluded that the writ petition was maintainable but found the petitioner's argument of lack of jurisdiction to be misplaced, as CCI and COMPAT had the jurisdiction to decide the applicability of the Act and the levy of penalties.

4. Requirement to pre-deposit a percentage of the penalty:
The petitioner challenged the interlocutory order requiring them to deposit ten per cent of the penalty amount. The court noted that COMPAT had passed similar orders for other cement manufacturers, requiring them to pre-deposit ten per cent of the penalty imposed by CCI. The court found the impugned order to be fair and reasonable, requiring no interference at this interlocutory stage in writ proceedings.

Conclusion:
The court dismissed the writ petition and applications, upholding the COMPAT's order requiring the petitioner to deposit ten per cent of the penalty amount. The court found no jurisdictional error by the CCI, determined that the principles of natural justice were adhered to, and concluded that the writ petition was maintainable but lacked merit on the grounds presented.

← Previous Next →