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The Division Bench of the Madras High Court on Monday asked the Competition Commission of India (CCI) not to pass any order against Hyundai Motor India in India till the court gives its final order.
The Bench, however, did not give a stay on the single-judge order, which asked South Korean auto major Hyundai Motor's arm to take part in the CCI's ongoing investigation against all the major car makers in India for the alleged violation of trade norms in after-services market and spare parts.
The CCI is investigating alleged market abuse by some car manufacturers, including Hyundai Motor India, based on a January 2011 complaint against Honda, Volkswagen and FIAT. In April 2011, the CCI extended its probe to other manufacturers as it was of the view they were also following a similar practice.
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Monday’s ruling by Justice Satish K Agnihotri and Justice M Venugopal came in response to a petition filed by Hyundai against the single-judge order, which was passed last month.
The single-judge Bench had observed that the director-general, the CCI's investigation arm, did not exceed its brief by extending the investigation to all players in the sector - a charge made by the car makers.
The order was passed by Justice V Ramasubramanian last month, against the petitions filed by Hyundai and BMW, which had stated in their petitions that the DG did not have the power to expand the scope of investigation. Nissan had also filed a petition in this connection, but it later withdrew it with the option of approaching the Appellate Tribunal.
The original equipment manufacturers (OEMs) have also argued that the CCI used suo-motu power to expand the scope of its investigations to include the entire car sector even though it had originally received a complaint against three automobile firms - Honda, Volkswagen and FIAT.
It also questioned whether the anti-trust regulator had the authority to expand its investigations on its own when the complainant had not named a company in the original complaint. When the matter came up for hearing on Monday, the Bench posted the matter for a later date for final hearing and asked the CCI not to pass any order until then, while allowing the watchdog to question the company.
In August 2014, the CCI had slapped a combined penalty of Rs 2,554 crore on 14 car makers for failing to sell spare parts in the open market. The watchdog said it wanted to make the components market more broad-based, user-friendly and less expensive for consumers.
The penalties were imposed on Mahindra & Mahindra, Tata Motors, Toyota Kirloskar, Honda, Volkswagen India, Fiat, Ford India, General Motors India, Nissan Motor India, Hindustan Motors, Mercedes-Benz India, Maruti Suzuki, Skoda Auto India, and BMW.
The DG alleged the OEMs violated the competition norms with respect to their agreements with local original equipment suppliers and the terms of their pacts with authorised dealers.
