The Competition Appellate Tribunal (COMPAT) today, in what could
be termed as a landmark decision, remanded the cement cartel case
back to the Competition Commission of India (CCI) for fresh
The CCI, through an order dated 20 June 2012, had penalised 10
cement manufacturers in India, namely Associated Cement Company
Limited, Ambuja Cement Limited, Binani Cement Limited, Century
Textiles and Industries Limited, India Cement Limited, JK Cements
Limited, Lafarge India Private Limited, Madras Cement Limited,
Ultratech Cement Limited and Jaiprakash Associates Limited, to the
tune of INR 6307.32 crores for having engaged in cartel to fix
prices of cement and earn super-normal profits. This penalty was
imposed by the CCI @ 0.5 times the profit earned by the cement
manufacturers for the period 2009 – 2011. In a separate but
related matter Shree Cement Limited was also penalised to the tune
of INR 397.51 crores for being involved in the cement cartel. This
has been the highest penalty ever imposed by the CCI in a cartel
The cement manufacturers had appealed against this decision of
the CCI before the COMPAT, which was ongoing for almost three years
and met its conclusion today.
The COMPAT in its order dated 11 December 2015, has set aside
the matter on the ground of violation of principle that 'only
one who hears can decide', and has directed the CCI to hear the
matter afresh. The COMPAT while allowing the appeals, directed the
CCI to hear the cement manufacturers and pass fresh orders after
following just and fair procedure within a period of 3 months from
receipt of COMPAT order. The parties are also entitled to refund of
the 10% penalty deposited during the hearing of the case. The
parties have also been allowed to make all legally permissible
arguments before the CCI. The COMPAT gave directions to the CCI
that only the parties, who had already applied earlier for
conducting cross-examinations, be given an opportunity to do so.
The COMPAT also noted that it was time now for the CCI to lay down
comprehensive guidelines to conduct its proceedings in accordance
with the principles of natural justice to ensure just and fair
procedure. Shree Cement Limited's appeal too was allowed on the
grounds that the CCI order against it was based on the findings of
the main cement cartel case and therefore the findings of COMPAT in
that matter would be applicable to Shree Cement Limited's
appeal as well.
This decision is a welcome precedent for all the present and
future cases pending either before the COMPAT or the CCI, where
there is procedural prejudice caused to parties. However, it
remains to be seen as to how the CCI will adopt this decision and
make changes accordingly, if at all or move before the Hon'ble
Supreme Court of India challenging the COMPAT's decision.
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In the wake of liberalization and privatization that was triggered in India in early nineties, a realization gathered momentum that the existing Monopolistic and Restrictive Trade Practices Act, 1969 was not equipped adequately enough to tackle the competition aspect of the Indian economy.
The Legal Metrology Act, 2009 was passed by the Indian Parliament in order to repeal and replace The Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Enforcement) Act, 1985.
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