The Competition Appellate Tribunal (COMPAT) vide its recent
order dated December 11, 2015 while allowing the appeals of the 10
appellants has set aside the order of the Competition Commission of
India (CCI) dated June 20, 2012 against 9 cement manufacturing
companies (La Farge, ACC, Ambuja , Ultratech, India Cements, JK
Cements, Madras cements, Binani cements, Jaiprakash Associates) and
the Cement manufacturers Association (CMA) vide which a cumulative
penalty of INR 6,316.59 Crores was imposed on all the parties to
the cartel, as held by CCI.
Interestingly, this order has been passed by COMPAT on a
procedural violation and not on merits. The violation related to
the signing of the impugned order dated June 20, 2012 of CCI by the
Chairman, CCI though the Chairman was not present at the time of
final hearings of the matter on the three dates (February 21, 22
and 23, 2012) on which arguments were advanced by the counsels of
The Hon'ble COMPAT, after a lengthy analysis of the
contentions of each side, the history of the enactment of the
Competition Act, 2002 (the Act) and the judicial precedents on the
core issues i.e. (1) whether in exercise of its adjudicatory
functions , the CCI acts as a quasi-judicial body and as such
,bound to comply with the principles of natural justice and (2)
whether non-compliance of an important facet of natural justice,
namely, "only the one who hears should decide" has the
effect of rendering the impugned order a nullity",
remitted the matter to CCI and directed the CCI to pass fresh
orders within a period of three months from the date of receipt of
Noticeably , the Hon'ble COMPAT , agreeing with the
contention of the Appellants and particularly the moot issue of
violation of natural justice, held, inter-alia, that
"...the law on the issue can be summarized to the effect
that the very person/ officer ,who accords the hearing to the
objector must also submit the report/ take decision on the
objection and in case his successor decides the case without giving
a fresh hearing , the order would stand vitiated having been passed
in violation of the principles of natural justice".
The Hon'ble COMPAT at the end also observed that "the
time has come for the CCI to lay down guidelines for conducting the
investigation/inquiry in consonance with the rules of natural
Comment:This order of the Hon'ble
COMPAT is a landmark decision which, irrespective of (1) the merits
of the case i.e. whether there was a cartel of the cement
manufacturers or not, and (2) whether CCI decides to challenge it
in the appeal to Supreme court or not, would be remembered as one
of the most significant reversal of the decision of CCI on
procedural issues i.e. violation of the principles of natural
justice ,which in our opinion, will pave way for the establishment
of a well defined and fairer procedural regulatory structure in CCI
in times to come.
(Source: COMPAT Order dated December 11, 2015. For full text
see COMPAT websitewww.compat.nic.in/)
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