Delhi HC allows 14 carmakers to move NCLAT against CCI Rs 2,544-crore fine

Published: April 11, 2019 2:20:30 AM

The companies fined by the CCI include Tata Motors, Maruti Suzuki, Mahindra & Mahindra, Honda Cars India, Volkswagen India, Ford India, Mercedes–Benz and Toyota Kirloskar.

In August 2014, the CCI had slapped a combined penalty on the carmakers for indulging in unfair practices in the spare parts market, stating that the companies did not make genuine spare parts freely available in the open market.

By Pritish Raj

The Delhi High Court on Wednesday allowed 14 carmakers to move National Company Law Appellate Tribunal (NCLAT), challenging Competition Commission of India’s Rs 2,544-crore penalty imposed on them.

In August 2014, the CCI had slapped a combined penalty on the carmakers for indulging in unfair practices in the spare parts market, stating that the companies did not make genuine spare parts freely available in the open market.

The court has given a time of nine weeks to the companies to approach the NCLAT over the matter.

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The companies fined by the CCI include Tata Motors, Maruti Suzuki, Mahindra & Mahindra, Honda Cars India, Volkswagen India, Ford India, Mercedes–Benz and Toyota Kirloskar.

In its 2014 order, the CCI had noted that the companies were abusing their dominant position vis-a-vis component makers, which it said was helping these companies make exorbitant profits at the cost of car owners.

“Carmakers implicitly controlled the spare-parts business and were really making extraordinary margins,” the fair trade regulator had said.

In their defence, the carmakers said they had a restrictive spare-parts policy to make sure customers buy only genuine parts. Fakes were widely available in the market and authorities were unable to stop the sale of fakes, they said.

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The CCI took up the case on a complaint filed by one Shamsher Kataria in 2011, against three carmakers — Honda, Volkswagen and Fiat.

He alleged these companies were selling spares only through their dealers and not in the open market.

These companies were earning extraordinary margins through such a policy, he had alleged.

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