NCLAT dismisses cement makers’ plea against Rs 6,300 crore CCI penalty for cartelisation

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NEW DELHI: In a setback to 10 major cement producers, the National Company Law Appellate Tribunal on Wednesday dismissed their plea against the around Rs 6,300 crore penalty imposed by fair trade regulator CCI over alleged cartelisation in the sector.

The appellate tribunal also upheld the quantum of penalty imposed by the Competition Commission of India (CCI), observing that the fair trade regulator has imposed the minimum fine.

Some cement makers as Ambuja Cement, Ramco, JK Cement and UltraTech said they are consulting with 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 Rs 6,300 crore 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 Rs 6,300 crore on 10 cement companies 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 Rs 397.51 crore 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 company 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.”

Ramco Cement also said it proposes to move the Supreme Court against the NCLAT order.

Leading cement maker UltraTech said: “The detailed order is awaited, upon examining the same, the Company 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 (CMA) 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.

This was challenged by them before the Competition Appellate Tribunal (previous appellate authority), which set it aside on December 11, 2015, asking the CCI to pass a fresh order.

Later on August 31, 2016, CCI passed a fresh order, holding them guilty of violating the Competition Act, 2002 by acting in concert to fix cement prices as well as limit and control the production and supply in the market.

This was again challenged by the cement manufacturers before NCLAT, which now has appellate jurisdiction over CCI, which upheld the fair trade regulator’s order.

“We have noticed that the Commission not only looked into ‘Sate-wise Market’ but also ‘Region-wise Market’ and range of percentage change in prices between 2007-2011,” NCLAT said, adding that CCI has also highlighted the unprecedented trend for the percentage increase in the prices in all the five regions.

Source: Press Trust of Indai