NCLAT DISMISSES CEMENTMAKERS’ PLEA AGAINST FINE
The National Company Law Appellate Tribunal (NCLAT) on Wednesday dismissed cement manufacturers’ plea challenging the order of fair trade regulator Competition Commission of India (CCI) to impose a penalty of ~67 billion for alleged cartelisation. A two-member NCLAT Bench headed by S J Mukhopadhaya dismissed a batch of petitions by 11 cementmakers. “The appeals are dismissed,” said the NCLAT, which now is an appellate authority over the CCI. In August 2016, the CCI had slapped a penalty of approximately ~67 billion on 11 cement firms.
In a setback to 10 major cement producers, the National Company Law Appellate Tribunal (NCLAT) on Wednesday dismissed their plea against the around ~63 billion penalty imposed by fair trade regulator the Competition Commission of India (CCI) over alleged cartelisation in the sector.
The appellate tribunal also upheld the quantum of penalty imposed by the CCI, observing that the fair trade regulator has imposed the minimum fine.
Some cementmakers as Ambuja Cement, Ramco, J K Cement and UltraTech said they were consulting their legal teams and intend to challenge the order before the Supreme Court. “We find no merit in these appeals. They are accordingly dismissed,” said a two-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya.
Regarding the ~63 billion penalty, the tribunal said: “So far as the quantum of penalty order is concerned, as we find that the CCI has imposed mere minimum penalty, no interference is called for against the same.” Passing an order on August 31, CCI had imposed a penalty of more than ~63 billion on 10 cement firms for cartelisation, along with their lobby group Cement Manufacturers’ Association. The makers are Ambuja Cements, ACC, Jaiprakash Associates, Century Textiles & Industries, Ramco Cements, JK Cement, India Cements, UltraTech, Nuvoco Vistas Corporation and Binani Cement.
CCI had also slapped a ~3.97 billion fine on Shree Cement Ltd for unfair businesses practices, through a separate order.
Commenting on the NCLAT
order, Ambuja Cement said: “While the company is yet to receive the order of NCLAT, it believes that on merits it has sufficient grounds for a successful appeal and intends to file the same with the Supreme Court.” JK Cement said: “The firm has been legally advised that it has a good arguable case on merits. Accordingly, the company shall file an appeal to Supreme Court to challenge the impugned order within the time prescribed under the law.” UltraTech said: “The detailed order is awaited, upon examining the same, the firm will take appropriate action, as advised by its lawyers.”
The CCI order had come after the Builders Association of India had alleged anti-competitive practices by the Cement Manufacturers’ Association
and 11 cement manufacturing companies. CCI then had probed the issue and passed an order on June 20, 2012, holding the cement makers guilty and imposing penalty.
Ramco Cements has said that it may go on appeal to the Supreme Court against the order of NCLAT.
Vaibhav Gaggar, CCI counsel, said this is a huge step forward for the competition regime in India and is sure to send out a very strong message within and outside the country. “Being close to a billion dollars, it is definitely going to worry a lot of people who thought that this regime did not have the teeth to hurt them if they were committing a crime,” he said.