The NCLAT on Tuesday set aside a CCI order, imposing a penalty of Rs 38.05 crore on 18 sugar mills and two trade associations in 2018 in a case related to a joint tender floated by oil marketing companies for procurement of ethanol for blending with petrol. The appellate tribunal said the order passed by the fair trade regulator Competition Commission of India "suffers from illegality" and "does not comply with the requirement of adherence to the principle of natural justice".
The quorum of CCI that heard the final arguments did not pass the necessary orders within a reasonable period of time, and by the time, the orders were pronounced in the case, one member was not present in at least four later hearings, and two members had demitted office, and therefore they did not participate in the decision making nor sign and authenticate the final order, said the National Company Law Appellate Tribunal (NCLAT).
A two-member NCLAT bench also said that CCI passed the order on September 18, 2018, after almost 13 months when the hearing in the case was concluded, and it was reserved for order on February 28, 2017.
"Such an inordinate delay in passing the order made it inform as the members would not be able to recall all the oral arguments from their memory, and further due to the passage of time some members retired, which meant that the order was passed by only three members as against five members who heard the case on all the dates, which made the order non est due to such basic infirmities," said a bench comprising Justice Rakesh Kumar and Alok Srivastava.
The NCLAT said it was of the opinion that the fair trade regulator should have given an opportunity for an oral hearing to the companies after the supplementary investigation report was received from the Director General (DG), the investigation arm of CCI.
CCI had imposed a total penalty of Rs 38.05 crore on 18 sugar mills and two trade associations for bid rigging with regard to a joint tender floated by oil marketing companies (OMCs) for procuring ethanol for blending with petrol.
Besides, the regulator also directed the sugar mills and the associations - Indian Sugar Mills Association (ISMA) and Ethanol Manufacturers Association of India (EMAI) - to "cease and desist" from indulging in conduct that has been found to be in contravention of Section 3 of the Competition Act.
Section 3 pertains to anti-competitive agreements.
The sugar mills which were penalised include Bajaj Hindusthan (Rs 12.35 crore), Simbhaoli Sugars (Rs 2.29 crore), Avadh Sugar & Energy (Rs 3.72 crore), Balrampur Chini Mills (Rs 4.28 crore), Mawana Sugars (Rs 2.45 crore), Dalmia Bharat Sugar & Industries (Rs 3.92 crore) and Andhra Sugars (Rs 1.65 crore).
ISMA has to pay Rs 46.94 lakh, and EMAI has been fined Rs 22,000.
It was alleged that the sugar manufacturers who had participated in the joint tender manipulated the bids by quoting similar rates and in some cases, identical rates through an understanding and collective action.
In this matter, the tribunal on November 29, 2018, directed to deposit of 10 per cent of the penalty amount in the form of FDR (Fixed Deposit Receipt) before its registrar.
"Since we have, through this judgment, set aside the Impugned Order of the Learned Competition Commission of India, we direct that the FDRs deposited by the Appellants may be released to them by the Registrar, NCLAT, within fifteen days of this judgment," said 71-page-long NCLAT order.
Source Name : Economic Times