The Compat gave its observations on a petition filed by five people on whom the CCI had imposed a fine of Rs 25,000 per day.
Setting aside the order of the Competition Commission of India (CCI), Compat said: We have not found any such application of mind and it seems that the direction was given as a matter of course. In the absence of any reason, as to why such directions were necessary, we are unable to agree with the Commission in spite of its finding of breach of its directions... We, therefore, allow this appeal and quash the penalties inflicted in the impugned order. The impugned order is set aside and the appeal stands allowed.
The CCI had said that if account books of the company were not supplied within 30 days, the penalty was to be R50,000 per day for the next 30 days and R1 lakh per day till the penalty amount culminates to R1 crore.
On its part, Compat said CCI cannot asks for documents without stating prima-facie as to why the examination of the books of accounts was required. Compat said: Section 43 is not meant to give an untrammelled and uncontrolled discretion to the commission to ask for any information from anybody.
Section 43 of the Competition Act, 2003 gives power to the CCI to impose penalty for non-compliance with directions issued by it and its investigation arm director general (DG).