High Court grants 3-weeks protection to Mercedes Benz from CCI's order

Written by Press Trust of India | New Delhi | Updated: Sep 25 2014, 16:38pm hrs
Mercedes"We will pass the same order given in the BMW India case. You (Mercedes) move the Madras High Court," a bench of Justice Vibhu Bakhru said. (Reuters)
The Delhi High Court today granted Mercedes Benz India Pvt Ltd three weeks interim protection from Competition Commission of India (CCI) order imposing a penalty of Rs 23.08 crore on the luxury car maker for allegedly violating trade norms in after-services market and spare parts.

"We will pass the same order given in the BMW India case. You (Mercedes) move the Madras High Court," a bench of Justice Vibhu Bakhru said.

On September 22, the court stayed the operation of the order of CCI for three weeks against BMW and had asked the car manufacturing firm to move the Madras High Court which had already issued a "blanket order" on September, 2013 staying the investigation in the matter.

On August 25, 2014, CCI had fined BMW and 13 other companies, including Mercedes-Benz India Pvt Ltd, Rs 2,554 crore for allegedly violating trade norms in the spare parts and after-services market and the same was to be deposited within 60 days.

For each entity, the individual fine amounted to two per cent of their average turnover.

Apart from seeking a stay on the fine, Mercedes has also challenged CCI's legal proceedings on alleged anti-competitive practice of selling spare parts at higher prices.

Mercedes has said Maruti Suzuki India Ltd and BMW have already got a stay order from the Delhi High Court, so it too should be treated on par with them.

It said CCI had suo motu expanded the scope of the investigations into the entire car industry even though it had originally received a complaint against three automobile firms - Honda, Volkswagen and FIAT.

It also questioned whether the anti-trust regulator had the powers to expand the scope of investigations on its own even if the complainant had not named a company in the original complaint.

Besides Mercedes Benz, the other companies on which penalties have been imposed were Mahindra and Mahindra Ltd, Tata Motors Ltd, Toyota Kirloskar Motor Pvt. Ltd, Honda Cars India Ltd, Volkswagen India, Fiat Group Automobiles India Pvt. Ltd, Ford India Pvt. Ltd, General Motors India Pvt. Ltd, Nissan Motor India Pvt. Ltd, Hindustan Motors Ltd, BMW, Maruti Suzuki and Skoda Auto India Pvt. Ltd.