COMPAT stays CCI's penalty on airlines

The commission had imposed a fine of Rs 257.91 crore on Jet Airways, Spice Jet and Indigo

The Competition Appellate Tribunal (COMPAT) on Monday has set aside an order passed by fair trade regulator Competition Commision of India (CCI) which had imposed a fine of Rs 257.91 crore on Jet Airways, Spice Jet and Indigo.

The tribunal has sent back the case to the commission and asked it to reconsider the appeals filed by the airlines and further investigate the case. "In the result, the appeals are allowed, the impugned order is set-aside and the matters are remanded to the Commission," the tribunal said in its order.

The tribunal held that the commission has failed to explain the reasons to the airlines on why it disagreed with the report of Garima Bhagat, that there was no sufficient evidence to prove any cartelization by the domestic carriers.

"Commission's failure to give notice to the appellants incorporating the reasons of its disagreement with the findings and conclusions recorded by the Jt. DG and giving them an effective opportunity to show that they had not formed any cartel for jacking-up fuel surcharge from time to time has not only resulted in gross violation of principles of natural justice, but has also caused prejudice to them," the tribunal said.

The tribunal's decision follows an appeal filed by the airline against the CCI order passed in November 2015. The CCI in its order had imposed a fine Rs 151.69 crore, Rs 63.74 crore and Rs 42.48 crore on Jet Airways, IndiGo and SpiceJet respectively.

The order was passed in response to a complaint filed by Express industry Council of India- the body of logistics companies which counts majors Blue Dart, Fedex and DHL among its members.

In its complaint, the body had argued that the levy of fuel surcharge at uniform rate from the same day amounted to cartelization and was detrimental to the interests of freight forwarders and consumers. It also alleged that although fuel surcharges were introduced as extra charges linked to fuel prices, there have been no corresponding decreases in fuel surcharges as fuel prices have declined.