Competition Appellate Tribunal (COMPAT) by its order dated May 17, 2016 has set aside CCI’s order dated April 15, 2014 wherein CCI had imposed penalty of Rs. ,773 Crores on Coal India Limited for imposing unfair and discriminatory conditions in its fuel supply agreements with various customers.
COMPAT considered whether the orders passed by CCI are vitiated due to violation of the principles of natural justice, i.e., one who hears must decide.
In one of the appeals, it was alleged that the CCI comprising the Chairperson, Mr. Ashok Chawla and three Members namely – Dr. Geeta Gouri, Mr. Justice (Retd.) S.N. Dhingra and Mr. S.L. Bunker heard the arguments on 16th and 17th July, 2013. However, the final order was passed on 09.12.2013 by the CCI comprising the Chairperson, Mr. Ashok Chawla and five Members namely – Dr. Geeta Gouri, Mr. Anurag Goel, Mr. M.L. Tayal, Mr. Justice (Retd.) S.N. Dhingra and Mr. S.L. Bunker (Mr. Anurag Goel and Mr. M.L. Tayal were not party to the hearing held on 16th and 17th July, 2013) whereby penalty @ 3% of the average turnover of preceding three years total amounting to INR 1773.05 crores was imposed on Coal India Limited. Similar allegations were also made in the connected appeals.
COMPAT disagreed with the CCI’s contention that the CCI functions as an executive/administrative body and is thus not bound by the principles of natural justice and fairness. It reiterated the Supreme Court’s position that the functions performed by the bodies like the CCI which are clothed with the power to decide the rights of the parties or pass order adversely affecting a person are quasi-judicial in nature and are bound to comply with different facets of the principles of natural justice.
Thus COMPAT allowed the appeals and remitted the matters to the CCI for deciding the issues arising out of the information filed by Maharashtra State Power Generation Company Limited, Gujarat State Electricity Corporation Limited, Madhya Pradesh Power Generating Corporation Limited, West Bengal Power Development Corporation Limited, Sponge Iron Manufacturers Association and GHCL Ltd. afresh. The CCI has been directed to dispose-off the matters within 2 months. (Source: Order dated May 17, 2016. For full text see COMPAT website-www.compat.nic.in)