2018 (5) TMI 1140 - SC - Indian Laws

Non-compliance with pre-deposit - whether the order of the National Company Law Appellate Tribunal dismissing the main appeal itself of the appellant herein for non-compliance of the direction to deposit the amount as a condition for grant of stay, is justified and legal? - section 53B of the Competition Act, 2002. Held that - provisions of Section 53B of the Act confers a right upon any of the aggrieved parties mentioned therein to prefer an appeal to the Appellate Tribunal. This statutory provision does not impose any condition of pre-deposit for entertaining the appeal. Therefore, right to file the appeal and have the said appeal decided on merits, if it is filed within the period of limitation, is conferred by the statute and that cannot be taken away by imposing the condition of deposit of an amount leading to dismissal of the main appeal itself if the said condition is not satisfied - Position would have been different if the provision of appeal itself contained a condition of pre-deposit of certain amount. That is not so. The Appellate Tribunal, which is the creature of a statute, has to act within the domain prescribed by the law/statutory provision. This provision nowhere stipulates that the Appellate Tribunal can direct the appellant to deposit a certain amount as a condition precedent for hearing the appeal. In fact, that was not even done in the instant case. It is stated at the cost of repetition that the condition of deposit of 10% of the penalty was imposed insofar as stay of penalty order passed by the CCI is concerned. Therefore, at the most, stay could have been vacated. The Appellate Tribunal, thus, had no jurisdiction to dismiss the appeal itself. Appeal restored which shall be decided by the Appellate Tribunal on merits.

Summary

Issues:
1. Justifiability of the National Company Law Appellate Tribunal's order dismissing the main appeal for non-compliance with the direction to deposit the amount as a condition for the grant of stay.

Analysis:
1. The judgment deliberates on the question of law regarding the validity of the National Company Law Appellate Tribunal's decision to dismiss the main appeal due to the appellant's failure to comply with the directive to deposit a specific amount as a condition for granting a stay. The appellant, a partnership firm engaged in coal and sand transportation, challenged penalties imposed by the Competition Commission of India (CCI) for anti-competitive practices. The Appellate Tribunal admitted the appeal and granted a stay on the CCI's orders with a condition to deposit 10% of the penalty amount. The appellant failed to meet this condition due to financial constraints, leading to the dismissal of the appeal by the Tribunal.

2. The appellant contended that non-compliance with the deposit condition should only result in the vacation of the stay, not the dismissal of the appeal itself. The judgment highlighted the statutory right to appeal under Section 53B of the Act, emphasizing that the statute does not mandate a pre-deposit for entertaining an appeal. The Tribunal's jurisdiction is limited to deciding the appeal on its merits, as specified by the law, without the authority to demand a deposit as a prerequisite for hearing the appeal.

3. The judgment distinguished a previous case where the issue revolved around the Tribunal's power to impose conditions for granting a stay, which was deemed permissible. However, in the present case, the question was whether the Tribunal could dismiss the appeal for non-compliance with a stay condition. The Court ruled in favor of the appellant, setting aside the dismissal order and reinstating the appeal for a merit-based decision by the Appellate Tribunal. The stay on the penalty order was lifted due to non-compliance with the deposit condition, clarifying that there is no ongoing stay in favor of the appellant.

4. In conclusion, the judgment underscores the distinction between imposing conditions for stay and dismissing an appeal for non-compliance with such conditions. It upholds the appellant's right to have the appeal heard on its merits without being prejudiced by a deposit requirement attached to the stay order. The decision ensures that the appeal process remains fair and in accordance with statutory provisions, safeguarding the appellant's legal entitlement to appeal without arbitrary impediments.