CCI tells Madras HC it will not enforce penalty on Hyundai for now

Competition watchdog had imposed a penalty of Rs 420 cr on Hyundai for anti-competitive practices

The Competition Commission of India (CCI) has today submitted to the Madras High Court that it would not enforce the penalty of Rs 420 crore it has imposed on Hyundai Motor India Ltd (HMIL), for anti-competitive practices in the sale of its spare parts through authorised dealers alone, as the Court has earlier asked the competition watchdog not to issue final order.

HMIL has earlier filed a petition seeking the Court to stay the CCI's order, as it is against the Court's direction in April 13, 2015, to continue the enquiry and the final orders shall not be passed.

When the matter was taken up for hearing today, G Rajagopalan, additional solicitor genral of India, submitted that there was a miscommunication, which resulted in CCI pronouncing the order even though the Court has asked it not to pass final order. He added that the authority will not enforce its order till the final order is passed by the Court on the matter.

The court took the submission on record and posted the matter for hearing to next month.

Meanwhile, the BMW withdrew its appeal filed in the Madras High Court against CCI, with liberty to raise the same grounds in any forum.

The company earlier this year approached the Court against a single Judge order in favour of the the competition watch dog allowing it to expand its investigation to all car manufacturers in a petition against three car manufacturers.

It may be noted that in an order In an order issued on July 27, 2015, Hyundai was directed to deposit Rs 420 crore within 60 days. The amount is two per cent of the three-year average turnover of Hyundai.

Hyundai has filed a petition with the Madras High Court, seeking stay of the order issued on July 27, 2015 is contemptuous and is liable to be stayed by the Court. It has also initiated seperate proceedings for contempt.

It also alleged that the order was passed without providing an opportunity to the company to cross examine their witnesses, which was granted to the other 14 companies.

The issue started with a complaint registered with the CCI seeking action against three companies for restrictive practices in trade. The CCI asked the Director General, CCI to investigate on all car manufacturers for the same.

Hyundai and BMW has approached the Madras High Court against this order. In an order on BMW India's petition, a single Judge dismissed all the contentions raised by the company and said that the DG has not overstepped the jurisdiction vested on them by the Act.

Later, in its petition, Hyundai received an order from the division bench comprising of Satish K Agnihotri and Justice M Venugopal, which said, "Let enquiry go on. However, final orders shall not be passed."

The CCI's order imposing penalty came after this order. It was on this matter the CCI has today submitted it would not enforce the order till the High Court order comes.

According to earlier reports, in August 2014, CCI had imposed penalties amounting to Rs 2,554 crore on 14 other car makers in the same case.

Those charged of failing to sell spare parts in the open market included Honda Siel, Fiat, Volkswagen, BMW, Ford, General Motors, Hindustan Motors, M&M, Maruti Suzuki, Mercedes-Benz, Nissan Motors, Skoda, Tata Motors and Toyota Kirloskar Motors.