How Hyundai Motor won Rs 87 crore fine case against CCI – legal expert tells why it was ‘test of conscience’

By: | Published: October 11, 2018 9:03 PM

The Delhi bench of National Company Law Appellate Tribunal (NCLAT) recently passed a decision in the case of Hyundai Motor India Ltd vs CCI, setting aside a fine of Rs 87 crore by Competition Commission of India (CCI) for anti-competitive practices. 

How Hyundai Motor won Rs 87 crore fine case against CCI - legal expert tells why it was 'test of conscience'How Hyundai Motor won Rs 87 crore fine case against CCI – legal expert tells why it was ‘test of conscience’

The Delhi bench of National Company Law Appellate Tribunal (NCLAT) recently passed a decision in the case of Hyundai Motor India Ltd vs CCI, setting aside a fine of Rs 87 crore by Competition Commission of India (CCI) for anti-competitive practices.

The NCLAT on September 19 highlighted powers of the CCI in relation to the investigation report by the Director-General (DG), in which the tribunal held that the investigation report of the DG is merely an opinion to assist the CCI, and that while the Commission can refer to the DG report it must apply its judicial mind independently to come to any conclusion.

The CCI had imposed a penalty of Rs 87 crores on Hyundai Motor India Ltd by concluding that the company had indulged in anti-competitive practice under Section 3 and Section 4 of the Act. Upon appeal, the NCLAT observed that the CCI rather than deciding the case on its own understanding has solely referred to the DG’s investigation report and has merely reiterated the observations of the DG.

The CCI avoided its duty to arrive at its own reasoning based on the factors given under Section 19 of the Act which lays down the factors which must be considered by the commission, the NCLAT observed. The order is a welcome step as it streamlines the working of the Commission within the four corners of the Competition Act, 1962, says a law expert.

“This ruling is welcome as it lays down a ‘test of conscience’ for the Commission.  The Commissioner’s reliance on the DG’s report must be with the consideration that the report is merely for reference and not to mould the opinion of the Commission,” Aditya Bhattacharya, Joint Partner, Lakshmikumaran & Sridharan told FE Online.

The appellate tribunal relied upon the Supreme Court ruling on a CCI vs  Coordination Committee of Artistes and Technicians of West Bengal Film and Television case, where the Supreme Court “categorically” held that in cases of competition law, it is the duty of the DG as well as the CCI to decide the ‘relevant geographic market’ and ‘relevant product market’ before passing an order. The NCLAT held that in Hyundai’s case held both the DG and the CCI failed to consider these aspects and asked to refund any amount deposited by the company.

“In general terms, the ruling strongly puts forth that quasi-judicial bodies must adhere to its statutory responsibilities. What fell from the Appellate Tribunal in the Hyundai case is not new but the contents of the order clearly indicate that going forward NCLAT will very keenly observe all the working of the Commission and every action of the Commission must be based on specific evidence,” he added.

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