Supreme Court admits cement companies’ appeal against 6300 cr penalty upheld by NCLAT
The Supreme Court on Friday admitted a batch of appeals filed by cement companies that were directed to pay a cumulative penalty of Rs 6,300 crore for cartelisation.
The Bench of Justices Rohinton Nariman and Navin Sinha also held that the interim order passed by the National Company Law Appellate Tribunal (NCLAT), which directed the companies to deposit 10 per cent of the penalty along with an undertaking to pay the remainder amount at an interest of 12 per cent per annum, would continue to operate.
On a complaint filed by Builders Association of India back in 2010, Ambuja Cements, ACC Limited, Jaiprakash Associates, Cement Manufacturers’ Association, Century Textiles, Ramco Cements, India Cements, UltraTech Cements, Nuvoco Vistas, Binani Cement and JK Cement were found guilty of contravening Sections 3(3)(a) and (b) of the Competition Act, 2002.
In June 2012, the CCI had found 11 cement companies guilty of cartelization on the basis of price parallelism, production parallelism and dispatch parallelism, and had imposed a penalty at the rate of 0.5 times of their profit for the years 2009-10 and 2010-11.
This order was appealed against in the now defunct Competition Appellate Tribunal (COMPAT), which set aside the CCI order and remanded the case for fresh adjudication vide an order dated December 11, 2015.
The CCI went on to uphold its decision and the imposition of penalty amounting to Rs. 6300 crore on the companies. In a separate order, a penalty of 397.51 crore on Shree Cements was upheld.
This order was then challenged by the companies before the NCLAT. In July this year, the NCLAT upheld the decision by which the CCI imposed a cumulative penalty of Rs. 6,300 crore on eleven companies forming part of the cement cartel.