NCLAT stays Competition Commission's Rs 200 cr penalty on Maruti Suzuki

Appellate tribunal NCLAT on Monday stayed the Rs 200 crore penalty imposed by the Competition Commission on Maruti Suzuki but directed the car maker to deposit 10 per cent of the total amount within three weeks.

The amount has to be deposited with the Registrar of the National Company Law Appellate Tribunal (NCLAT).

A three-member NCLAT bench stayed the demand notice issued on October 27 to the car maker, subject to the condition of depositing 10 per cent of the penalty amount.

Passing an order, the appellate tribunal has also directed to list the petition filed by Maruti Suzuki India Ltd (MSIL) against the regulator "for admission" on December 15.

On August 23, the Competition Commission of India (CCI) imposed a penalty of Rs 200 crore on MSIL for restricting discounts offered by its dealers and directed the country's largest car maker to cease and desist from indulging in unfair business practices.

The stay is "subject to the payment of 10 per cent of the penalty amount imposed by the respondent, by way of fixed deposit receipt to and in favour of Registrar, NCLAT within three weeks from the date of passing of this order," the tribunal said in the order.

According to the CCI's order, MSIL was found indulging in anti-competitive conduct of Resale Price Maintenance (RPM) in the passenger vehicle segment by way of implementing discount control policy vis-a-vis dealers.

MSIL had an agreement with its dealers whereby the dealers were restrained from offering discounts to the customers beyond those prescribed by it. In other words, the company had a discount control policy and dealers who wanted to offer additional discounts were required to compulsorily seek the company's prior approval, the regulator had said.

During the proceedings before the NCLAT, senior advocate Abhishek Manu Singhvi, appearing for MSIL, questioned the "correctness, validity and legality" of the CCI order. He also submitted that the regulator has done a "serious error in passing" the impugned order by not defining relevant market and came to the wrong conclusion.

Additional Solicitor General Balbir Singh, appearing for the CCI, said MSIL had imposed penalties on the dealers in respect of additional discounts offered by them.