SC clips penal powers of CCI, says penalty should be on 'relevant market turnover'

 May 08, 2017 10:44 PM IST | Source: CNBC-TV18

The CCI powers to levy fines might be limited and could impact the pending cases with the Supreme Court and the Competition Appellate Tribunal (COMPAT).

The Supreme Court has curbed powers of the Competition Commission of India (CCI) saying that penalty that the anti-trust body levies can only be a percentage of ‘relevant market turnover’ and not of the ‘total turnover’, as it does currently.

The CCI powers to levy fines might be limited and could impact the pending cases with the Supreme Court and the Competition Appellate Tribunal (COMPAT).

In previous cases, CCI had put penalty on basis of total turnover of the three agro-chemical companies. In 2013, COMPAT changed this penalty to ‘relevant turnover’.

Following this, CCI had moved the Supreme Court in 2014.

Dhanendra Kumar, former Chairman of CCI welcomed the decision and said that this should be the guiding principle for CCI going ahead.

The companies facing penalty will see some relief post this judgment, said competition law expert Vaibhav Gaggar.

Pending cases of CCI:

2017 – Rs 591 crore penalty on Coal India.

2016 – Rs 6,715 crore penalty on 11 cement companies.

2015 – Rs 420 crore penalty on Hyundai and Rs 257 crore penalty on Jet Airways, SpiceJet and IndiGo.

2014 – Rs 2,554 crore penalty on 14 car companies.2011: - Rs 630 crore penalty on DLF.