2018 (11) TMI 94 - AT - Law of Competition

Tribunal Confirms Penalty Interest Demands; Appellants Urged to Report Calculation Errors to Commission.

SCM Soilfert Ltd. And Anr Versus Competition Commission of India

The Tribunal dismissed the Interlocutory Application filed by the Appellants seeking rectification or modification of the interest amount on the penalty ... Rectification/modification of the interest amount on penalty imposed - Section 43A of the Competition Act, 2002 - case of appellant is that there being partial order of stay and part of the amount having been deposited with the COMPAT and later on total amount of ₹ 2,00,00,000/- (Rupees Two Crores) having been deposited with the COMPAT, the Appellants are not liable to pay any interest. Held that:- Similar issue fell for consideration before the Hon’ble Supreme Court in State of Rajasthan and Anr. Vs. J.K. Synthetics Limited and Anr. [2011 (7) TMI 1300 - SUPREME COURT OF INDIA], where it was held that whenever there is an interim order of stay in regard to any revision in rate or tariff, unless the order granting interim stay or the final order dismissing the writ petition specifies otherwise, on the dismissal of the writ petition or vacation of the interim order, the beneficiary of the interim order shall have to pay interest on the amount withheld or not paid by virtue of the interim order. As the case of the Appellants is covered by the decision of the Hon’ble Supreme Court in J.K. Synthetics Limited, we are not inclined to interfere with the demand notice, so far it relates to interest - appeal dismissed - decided against appellant. Issues:Rectification/modification of interest amount payable by appellants on penalty imposed by Competition Commission of India under Section 43A of the Competition Act, 2002.Analysis:1. The Appellants filed an Interlocutory Application seeking rectification/modification of the interest amount, if any, payable on the penalty imposed by the Competition Commission of India under Section 43A of the Competition Act, 2002.2. The Competition Commission imposed a penalty of Rs. 2,00,00,000 on the Appellants, and subsequent demand notices were issued for the penalty amount.3. An appeal was made to the Competition Appellate Tribunal (COMPAT), which initially stayed the penalty order conditionally. The appeal was later dismissed, leading to further demand notices for penalty recovery.4. The Hon'ble Supreme Court intervened, staying the demand notice conditionally and later dismissing the appeal without addressing the interest issue, leading to a subsequent demand notice for interest payment by the Commission.5. The Appellants argued that since they had already deposited the full penalty amount, the demand for interest was unjustified.6. Legal counsels debated whether the Appellants were liable to pay interest due to the partial stay order and subsequent full payment of the penalty amount.7. The Tribunal referred to a Supreme Court case, 'State of Rajasthan and Anr. Vs. J.K. Synthetics Limited and Anr. (2011) 12 SCC 518,' which established the principle that beneficiaries of interim stay orders must pay interest on withheld amounts once the stay is vacated.8. Citing the aforementioned legal precedent, the Tribunal declined to interfere with the demand notice for interest, as the Appellants' situation aligned with the principles outlined in the Supreme Court judgment.9. The Tribunal advised the Appellants to notify the Commission of any calculation errors and dismissed the Interlocutory Application without costs.This detailed analysis of the judgment highlights the legal proceedings, arguments presented by both parties, relevant legal principles, and the final decision of the Tribunal based on established legal precedents.