Delhi HC asks car makers to challenge CCI's Rs 2,500 cr penalty order in NCLAT

The Delhi High Court on Wednesday told 14 car makers, who were slapped with a total penalty of over Rs 2,500 crore by CCI for alleged violation of trade norms, that they can challenge the decision in the National Company Law Appellate Tribunal (NCLAT).

A bench of Justices S Ravindra Bhat and Prateek Jalan passed the verdict on the pleas of the car manufacturers which had moved the high court against the Competition Commission of India (CCI) order of August 2014.

The bench said the companies are at liberty to move to NCLAT for the relief within six weeks as the "remedy lies there".

On August 25, 2014, the CCI had slapped a total penalty of Rs 2,545 crore on 14 car manufacturers, including Honda, Volkswagen and FIAT, in India after finding them guilty of violating trade norms in the spare parts and after-services market.

Apart from them, Maruti Suzuki, Nissan, Honda Siel Cars India, Tata Motors, Volkswagen India, Fiat India Automobiles, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra and Mahindra, Mercedes-Benz India, Skoda Auto India and Toyota Kirloskar Motor have also been penalised.

The CCI order had come on a complaint filed in January 2011 against Honda, Volkswagen and FIAT. In April 2011, the CCI extended its probe to other manufacturers it found were following a similar practice.

As per the CCI order, these car companies were found to have violated competition norms with respect to their agreements with local Original Equipment Suppliers (OESs) as well as in terms of pacts with authorised dealers.

The commission had also found that these companies, which were found to be dominant in the after-services markets for their respective brands, abused their dominant position affecting around two crore car customers.