V.S. Sirpurkar, Chairman.
1. M/s. Shree Cement (the "Appellant") was found guilty of breach of sections 3(3)(a) and 3(3)(b) read with section 3(1) of the Competition Act, 2002 (hereinafter referred to as the 'Competition Act'). On that account the Competition Commission of India (hereinafter the 'CCI') in case No. RTPE 52 of 2006 imposed a fine of Rs.397.51 crores on the Appellant. This amount was calculated on the basis of net profit of the Appellant from 20th May, 2009 to 31st March, 2011. The CCI ordered 0.5 times of this net profit. It is this order of imposing penalty which is sought to be stayed.
2. It may be mentioned that the proceedings against twelve cement manufacturing concerns were initiated by the MRTP Commission, taking suo-moto notice of an article in The Economic Times on 9th May, 2006 and 29th June, 2006. The said step was taken in view of a sharp raise in the cement prices from 2003-2005. It was Rs.125/- to Rs.145/- per bag, upto December 2005, but the price reached Rs.210/- to Rs.230/- per bag from January 2006. On the basis of this, a thorough investigation was ordered to be made by the DG (IandR) under the MRTP Act. However, the said investigation could not be completed. As many as 41 cement manufacturers were approached by the DG (IandR) on the basis of allegation of formation of a cartel. This report could not be finalized and the MRTP Act, 1969 itself came to be repealed. Sections 3 and 4 of the Competition Act were brought on the statute book with effect from 20th May, 2009. The CCI held a meeting on 24th June, 2010 and under section 26(1) directed the Director General to conduct the investigation. The matter which remained pending before the MRTP Commission, came to be transferred before the CCI under Section 66(6) of the Act and it was on that basis that the CCI took the notice and directed the investigation. RTPE 52 of 2006 which was pending before the MRTP Commission, thus continued before the CCI under the provisions of section 66(6).
3. However, a separate information was also filed by Builders' Association of India before the CCI, which was registered as Case No. 29 of 2010 under Section 19(1) of the Act. This was against 11 cement manufacturing companies and very strangely the Appellant, Shree Cement was not made a party therein. Needless to mention that in RTPE 52 of 2006, the CCI proceeded against Shree Cement along with other 11 cement manufacturing companies. The CCI found all the cement companies guilty of sections 3(3)(a) and 3(3)(b) in Case No. 29 of 2010 and proceeded to inflict penalties against those companies. In RTPE 52 of 2006, Shree Cement, the Appellant was found guilty of contravention of section 3(3) of the Competition Act, along with other cement companies. However, since other companies were already awarded penalty in Case No.29 of 2010, separate penalty was not awarded to them and therefore, in RTPE 52 of 2006 only Shree Cement came to be penalised. Appeals were filed by the other companies, who were penalized in Case No.29 of 2010 and so also by the present Shree Cement against the order passed in RTPE 52 of 2006.
4. While deciding the question of interim relief, this Tribunal passed a detailed order in CCI Case No. 29 of 2010 on 17th May, 2013 and ordered that other directions issued by the CCI could not be stayed, the penalty would be liable to be stayed, provided those companies deposit 10% of the penalty ordered against each of them. At that time since M/s. Shree Cement was not before this Hon'ble Tribunal in Case No. 29 of 2010, therefore, no orders came to be passed in respect of M/s. Shree Cement. Hence, it is now felt necessary to pass an order regarding interim relief in case of M/s. Shree Cement.
5. Shri Dushyant Dave, Sr. Advocate representing the M/s. Shree Cement raised contentions whereby firstly, he argued for setting aside the order of the CCI altogether. In the alternative, the learned senior counsel prayed for a blanket stay on penalty.
6. The learned counsel canvassed before us that it was an old case of MRTP Commission, which came to be transferred under section 66(6) of the Competition Act before the CCI. He, therefore, urged that the inquiry before the CCI pertained not to the period after 20th of May, 2009, when section 3 and 4 came on the anvil, but to the period prior to it and as such the inquiry suffered jurisdictional error. However, during the debate, the learned counsel contended that it could not be said that the CCI did not have the jurisdiction, particularly in view of the clear language of section 66(6). Therefore, there would be no jurisdictional question to be decided. The learned counsel, however, contended that the CCI on the basis of that inquiry could not have found the Appellant guilty of the breach of section 3 because the earlier inquiry pertained to the period prior to 20th May, 2009, when sections 3 and 4 came on the anvil. The contention is clearly incorrect, for the simple reason, that in its meeting on 24.06.2010, the CCI had directed the DG to do a thorough inquiry into the matter, which was not restricted only to the period prior to 20th of May, 2009. The concerned period, in fact was extended right upto 2011. It has been clarified by the CCI in its impugned order that the concerned period of breach was not prior to 20th of May, 2009, but it pertained to that date upto the year 2010-2011. It can also be seen that under section 26(1), the CCI considered the question of the inquiry and directed a total inquiry. When we see the order dated 24.06.2010, it is clear from the order that the CCI had ordered a thorough inquiry and complete investigation and the investigation was not to be restricted to the pre May 2009 period. It must be seen here that the CCI has suo-moto powers to order an investigation and indeed, one of its duty is to see that competition law is not breached, which is clear from the language of section 18 of the Competition Act. Under the circumstances, it has to be held that the inquiry ordered by the CCI was not pertaining to the pre Act period, but it pertained to the period when the Act and more particularly sections 3 and 4 were invoked. In that view, we do not find any jurisdictional error by the CCI in ordering the inquiry.
7. The learned counsel then went on to suggest that there was a separate report produced by the DG in respect of Case No.29 of 2010 and the DG still produced a different report in RTPE 52 of 2006. The learned counsel was at pains to point out that in the order in that case the CCI extensively relied on the report of DG produced in Case No. 29 of 2010. He further urged that inspite of relying on report of DG in Case No. 29 of 2010, that report was not supplied to the Appellant while deciding RTPE 52 of 2006. The learned counsel went one step ahead and contended that inspite of the fact that report was demanded by the Appellant by a separate application, that application was specifically rejected by the CCI on the ground that the Appellant was not a party to Case No.29 of 2010. From this, the learned counsel urged that the basic principle of natural justice was trampled, firstly, by rejecting the demand of the report in Case No. 29 of 2010 and then relying on that report extensively while deciding RTPE 52 of 2006. As against this, the counsel appearing for the CCI pointed out that the report in Case No. 29 of 2010 was almost identical to the report in RTPE 52 of 2006. He also showed his willingness to supply the copy of the report at this stage. The learned counsel on behalf of CCI strenuously urged that there was absolutely no prejudice caused to the Appellant, as the examination of the two reports would show that they were practically identical. He also urged that it was incorrect to say that the CCI relied on the report in Case No. 29 of 2010, though the CCI might have referred to that report at some places. He pointed out that there was absolutely no prejudice caused, whatsoever, to the Appellant due to the alleged non- supply of the report and as such there was no question of setting aside the order of CCI in this Appeal.
8. Shri Dave, learned counsel relied on a number of Hon'ble Supreme Court judgments on this issue regarding the right of the party to get a copy of the document on the basis of which the party was being proceeded against. The main case relied upon by the learned counsel was that of Kashinath Dikshita vs. Union of India (UOI) and Ors, (1986) 3 SCC 229. There were also some other cases relied upon by the learned counsel, they being Bishambhar Nath Kohli and Ors. vs. State of Uttar Pradesh and Ors., AIR 1966 SC 573 and Election Commission of India and Ors. vs. Dr. Manmohan Singh and Ors., (2000) 1 SCC 591. The learned counsel on behalf of CCI also cited a judgment of the Hon'ble Supreme Court in the matter of Managing Director, ECIL Hyderabad and Ors. vs. B. Karunakar and ors., (1993) 4 SCC 727. All the Hon'ble Supreme Court judgments deal with the question of supply of documents and the opportunity to be given to the parties thereby to defend their case. The judgment in Kashinath Dikshita vs. Union of India and Ors. and Managing Director, ECIL Vs. B. Karunakar pertain to service jurisprudence, wherein it has been held that where the prosecution relies on a particular documentary piece of evidence, such documents must be made available to the delinquent. The judgment in Bishambhar Nath Kohli and ors. vs. State of Uttar Pradesh and Ors. is by a bench having five Judges and is in the realm of the dispute pertaining to Evacuee Property Ordinance 1 of 1949, which was continued by Act 44 of 1954. Here also the Apex Court found fault with the procedure adopted by the Custodian-General in not giving an opportunity to the legal representatives of Ram Chand Kohli to lead evidence in rejoinder to the evidence relied upon by the State. Arguing strenuously, Shri Dave suggested that had the DG's report in Case No. 29 of 2010 been made available, he would have an opportunity to lead evidence against the observations made in that report and since that report was never served upon him, though asked for, that opportunity has been lost and thus the proceedings before the CCI have been rendered illegal. As regards the last case relating to Election Commission of India and Ors. vs. Dr. Manmohan Singh and Ors., it also pertains to the opportunity to offer the evidence. The Apex Court has commented that the Electoral Registration Officer has to inform the holder of the office of the substance of such evidence, so as to enable him to rebut in the course of inquiry and no inquiry can be initiated in the absence of such opportunity being given.
9. In our opinion, at this stage the reliance on all these four cases will be of no consequence for the purpose of interim orders, for the simple reason that these cases pertain to altogether different subject. The two of them are in the realm of service law, while the other two are in the realm of the general principle of natural justice and election law, where a duty is laid to supply the copy of the documents relied upon in evidence and providing the opportunity. There can be no dispute on the principles in all these four cases, however, in our opinion, these principles at the stage of interim relief will not be apposite to the present case.
10. It is on the basis of these contentions that the learned counsel seeks absolute stay of the penalty.
11. The Appellant has a prima-facie case because of which we have ordered the final arguments in this case. However, when we examine the matter on merits, we do not find anything different than the other cement manufacturers, who have been dealt in Case No. 29 of 2010. We shall certainly examine the question of non-supply of DG's report in Case No. 29 of 2010 to the Appellant at the final hearing, however, at this stage, we are of the firm opinion that it will not be proper to allow the Appeal by setting aside the judgment on account of the alleged denial of natural justice to the Appellant. When we see the matter on merits, the case of the Appellant is almost identical with the other cement manufacturers, who have already been dealt with by us, where we had ordered the stay of penalty on condition that the Appellants deposits 10% of the penalty ordered by the CCI. We will chose to pass the same order in this Appeal too in terms of the order passed in Appeal Nos. 105 of 2012, 110 of 2012, 108 of 2012, 103 of 2012, 104 of 2012, 106 of 2012, 107 of 2012, 109 of 2012, 111 of 2012, 112 of 2012, 113 of 2012, 134 of 2012, 122 of 2012, 123 of 2012, 124 of 2012, 125 of 2012, 126 of 2012, 127 of 2012, 128 of 2012, 129 of 2012, 132 of 2012, 133 of 2012.