TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 567
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.... failing which the petitioner would be liable to pay interest at the rate of 1.5 percent for every month of delay. The said penalty was imposed upon the petitioner by the CCI under Section 27 of the Act. 3. The petitioner also impugns the demand notices dated 17.01.2017 and 14.12.2018. By the said demand notices, the petitioner has been directed to pay an amount of Rs. 32,76,000/- as interest for a delay of fourteen months in payment of the penalty, in terms of Regulation 5 of the CCI (Manner of Recovery of Monetary Penalty) Regulations, 2011 (hereafter 'the Recovery Regulations'). 4. The aforesaid penalty has been imposed on the petitioner on account of being involved in 'bid rigging' in collusion with three other companies and thus violating the provisions of Section 3 of the Act. The petitioner had filed an appeal in Competition Appellate Tribunal (hereafter 'COMPAT') challenging the imposition of the aforesaid penalty. On 05.10.2015, COMPAT granted an interim stay on the order dated 10.07.2015 and subsequently, by an order dated 16.12.2016, reduced the penalty imposed on the petitioner. During the pendency of the appeal, a demand notice dated 01.10.2015 was issued to the peti....
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....t and they were given an opportunity to be heard on 14.05.2015. 11. After hearing the objections advanced by the aforesaid companies, the CCI passed an order dated 10.07.2015 holding the petitioner and the said companies guilty of violating the provisions of Section 3(3) of the Act. A penalty at the rate of two percent of the average annual turnover was imposed on the said companies, which was computed at Rs. 1,56,62,00,000/-. 12. Aggrieved, the petitioner filed an appeal (being Appeal No. 96/2015) before the COMPAT impugning the order dated 10.07.2015. Similar appeals were filed by the other three companies as well. All the appeals were heard together and on 05.10.2015, COMPAT passed an order granting a stay on the order dated 10.07.2015 subject to the aforesaid companies depositing 10% of the penalty with the Registry of COMPAT. 13. In the meanwhile, a demand notice dated 01.10.2015 was issued to the petitioner, calling upon it to pay the penalty of Rs. 1,56,62,00,000/- as imposed by the order dated 10.07.2015 within a period thirty days. It was further stated that the failure to deposit the aforesaid amount within the stipulated time period would attract simple interest at th....
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.... the Act, assailing the order dated 19.12.2016 passed by COMPAT. The said appeal is currently pending before the Supreme Court. 19. In December, 2018, the CCI passed an order dated 06.12.2018 directing the petitioner to deposit a sum of Rs. 32,76,000/- as interest. Pursuant to the aforesaid order, the petitioner received a recovery notice dated 14.12.2018 calling upon the petitioner to deposit the aforesaid amount within a period of fifteen days, failing which the petitioner would be liable "for appropriate action under the provisions of the Act and the relevant regulations" The aforesaid notice was issued in view of the decision of National Company Law Appellate Tribunal (NCLAT) in Competition Appeal (AT) No. 590/2015 captioned "SCM Soilfert Ltd. & Anr. v. CCI" on the issue of payment of penalty notwithstanding the pendency of an appeal before the appellate court. In the aforesaid matter, by an order dated 8.08.2018, it was held that the petitioner is liable to pay the interest in terms of the demand notice issued by the CCI. 20. Aggrieved, the petitioner filed the present petition. 21. As observed hereinbefore, the only question that arises for consideration of this Court is w....
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....the submission that Regulation 5 of the Recovery Regulations indicated that interest was required to be paid even if the demand had been stayed by a superior court. 25. Mr. Bansal, learned counsel appearing for CCI countered the submissions made on behalf of the petitioner. He referred to Regulation 5 of the Recovery Regulations and contended that interest on delayed penalty was statutorily payable. He also contended that if the penalty was reduced or modified and interest had been collected on the entire penalty, an amount commensurate with the reduction was required to be refunded to the concerned enterprise. According to him, it also emphasized the statutory scheme of levy of interest on delayed payment of penalties. He relied upon the decision of the Supreme Court in the State of Rajasthan and Anr. v. J.K. Synthetics Limited : (2011) 12 SCC 518 in support of his contention that interest was liable to be paid even for the period when the demand had been stayed, if the interim stay of the demand is ultimately vacated. He contended that the petitioner was not absolved of its payment liability solely for the reason that it had preferred an appeal against the said demand. Reasons ....
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....not have the effect of relieving the consumer of its obligation to pay interest (or late payment surcharge) on the amount withheld by them by reason of the interim stay, if and when the writ petitions are dismissed ultimately. The said principle was based on the following reasoning : (SCC pp. 779-80, para 11) "11......Holding otherwise would mean that even though the Electricity Board, which was the respondent in the writ petitions succeeded therein, is yet deprived of the late payment surcharge which is due to it under the tariff rules/regulations. It would be a case where the Board suffers prejudice on account of the orders of the court and for no fault of its. It succeeds in the writ petition and yet loses. The consumer files the writ petition, obtains stay of operation of the Notification revising the rates and fails in his attack upon the validity of the Notification and yet he is relieved of the obligation to pay the late payment surcharge for the period of stay, which he is liable to pay according to the statutory terms and conditions of supply - which terms and conditions indeed form part of the contract of supply entered into by him with the Board. We do not think that a....
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....ately after the validity of the notification dated 17.2.1992 was upheld, they could not be made liable to pay interest. All these contentions were rejected by this Court on the ground that the principle of restitution was a complete answer to the said submissions. 22. This Court held (South Eastern Coalfields case [(2003) 8 SCC 648], SCC p. 663, para 26) "26. ... The principle of restitution has been statutorily recognized in Section 144 of the Code of Civil Procedure, 1908. Section 144 of the CPC speaks not only of a decree being varied, reversed, set aside or modified but also includes an order on par with a decree. The scope of the provision is wide enough so as to include therein almost all the kinds of variation, reversal, setting aside or modification of a decree or order. The interim order passed by the Court merges into a final decision. The validity of an interim order, passed in favour of a party, stands reversed in the event of final decision going against the party successful at the interim stage. Unless otherwise ordered by the Court, the successful party at the end would be justified with all expediency in demanding compensation and being placed in the same situat....