TaxTMI 
TaxTMI 
2020 (8) TMI 700
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....No.79-81 of 2012 has been filed against three Respondents by the Applicant/ FCI claiming compensation under Section 53N(1) of the Competition Act, 2002 (for short the 'Act'). 2. The Learned Counsel for the Applicant submits that an 'aggrieved entity' can file a compensation claim for the losses suffered due to the anticompetitive behaviour of an entity and that in the present case, the Respondents were found to have violated Section 3(3) of the Act by the Hon'ble Competition Commission of India (for short the 'CCI'), as per order dated 23.04.2012. The said finding became final, as per order of Hon'ble Supreme Court of India dated 08.05.2017. 3. The Learned Counsel for the Applicant brings it to the notice of this Tribunal that as against the 1st Respondent, the quantifiable loss suffered by the Applicant is as under: - Quantity Purchased kg. Actual purchase Price for FCI per unit INR/kg Actual Cost of Procurement for FCI INR Cost of Production as per CCI Order INR/ kg Competitive Selling Price per unit assuming 10% Profit margin INR/kg Total Cost to FCI at Competitive Prices INR Difference in Actual Cost & Competitive Cost in FCI INR EXCEL CROP LTD. (2....
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....ensation Application is as follows: - Serial No. Particulars Amount (INR) 1. Quantified loss suffered by the Applicant 6,87,32,250 2. Compound Interest at the rate of 18% p.a. from 31.03.2010 to 31.03.2018 18,98,70,828 3. Total Amount after Compound Interest 25,86,08,078 4. Litigation Cost 22,92,063 5. Filing Cost of present Application 3,00,000 Total Amount of Quantified Compensation Claimed against the Respondents 26,12,00,141 8. The Learned Counsel for the Applicant points out that the total compensation claimed against the Respondents is Rs. 26,12,00,141/- and that the Applicant has paid a sum of Rupees three lakhs towards the fees payable in terms of Rule 4 of the Competition Appellate Tribunal (Form and Fee for Filing an Appeal and Fee for Filing Compensation Applications) Rules, 2009. 9. The Learned Counsel for the Applicant contends that the Respondent Nos.1 to 3 take a plea that the Compensation Application filed by the Applicant centers around the assumption that Section 53N of the Act requires the existence of either the former Competition Appellate Tribunal (COMPAT)/ National Comp....
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....s under: - "11.2 The Committee noted that Section 53N currently does not allow application for compensation claims to be filed post determination of appeal by the Supreme Court. This may prejudice parties as they will be deprived from claiming any compensation, especially in cases where the CCI and the Appellate Tribunal do not find a contravention, but the Supreme Court finds a contravention." 13. The Learned Counsel for the Applicant contends that the Act does not prescribe a Limitation period for projecting an application under Section 53N of the Act and that under the earlier Monopolies and Restrictive Trade Practices Act, 1969, three years was considered to be a reasonable period of limitation. Indeed, it is the Applicant's submission that the period of Limitation is to be counted from the date of receipt of Hon'ble Supreme Court judgment dated 08.05.2017 and in this regard the Applicant places reliance on the judgment of the Hon'ble Supreme Court 'Union of India v. West Coast Paper Mills Limited - (2004) 2 SCC 747', (special page 754), wherein at paragraphs 15 and 16 it is observed as under :- "15. Even in relation to a civil dispute, an appeal is conside....
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....the 'lis' concerned in those orders was common and interlinked and on that basis only a single Application was filed. In this connection, the Learned Counsel for the Applicant informs this Tribunal that the Applicant/ FCI is willing to amend its present Application and file separate Applications with necessary filing fees and in the alternative it is willing to pay the differential filing fees also, if the same is permitted by this Tribunal. 18. According to the Learned Counsel for the Applicant, it being a public Body, operates entirely on public funds and the compensation it claims is also for the 'public purpose'. Also, the stand of the Applicant is that the foundation of the compensation claim under Section 53N of the Act is the findings of contravention by delinquent enterprise and when the delinquent enterprise assails the decision of the Hon'ble Tribunal in an Appeal under Section 53T of the Act, there is a chance that the Hon'ble Supreme Court may allow the Appeal, set aside the findings of violation and exonerate the delinquent enterprise. Moreover, in the event of this Tribunal adjudicating a compensation claim and awards damages to the claimant, before the disposal of....
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....r an unreasonably long delay. The Commission has rejected this contention by a wholly wrong approach in taking into consideration that the foreign exchange payable to Reserve Bank of India was still due and, therefore, the claim is alive. The claim of the respondent is from the Bank. At any rate, as stated earlier, when the claim was made for indemnifying the losses suffered from the Corporation, it was clear to the parties about the futility of awaiting any longer for collecting such amounts from the foreign bank. In those circumstances, the claim, if at all was to be made, ought to have been made within a reasonable time thereafter. What is reasonable time to lay a claim depends upon the facts of each case. In the legislative wisdom, three years' period has been prescribed as the reasonable time under the Limitation Act to lay a claim for money. We think that period should be the appropriate standard adopted for computing reasonable time to raise a claim in a matter of this nature. For this reason also we find that the claim made by the respondent ought to have been rejected by the Commission." 21. The Learned Counsel for the Applicant cites the decision of Hon'ble Supreme....
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.... 23. Apart from the above, the Learned Counsel for the Applicant relies on the decision of Hon'ble Delhi High Court in 'M.S. Shoes East Ltd. v. M.R.T.P. Commission and Ors. - (2003) SCC OnLine Del 988' wherein at paragraph 29 it is observed: - "29. Their Lordships of the Supreme Court aptly observed in the Corporation Bank (supra) that even when the Legislature has not specified any statutory time limit, the claim has to be filed within reasonable time. The Court further held what is reasonable time to lay claim depends upon the facts of each case. In the Legislative wisdom three years period has been prescribed to lay a claim for money. The Court observed that the period of three years is reasonable time to raise a claim in a matter of this nature. The claim which has been sought by the petitioner is in the nature of a money claim and on the analogy of Corporation Bank's case (supra), the claim ought to have been filed within statutory period of three years. The Commission has correctly appreciated the ratio of the Corporation Bank. It was also submitted by the Counsel for the respondent that the Commission has been consistently following the ratio of Corporation Ba....
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....oes not mention about the possibility of filing of a Compensation Application 'arising from' an order of Hon'ble Supreme Court in an Appeal against order of the Appellate Tribunal. Moreover, it is the plea of the 1st Respondent that the 'Competition Law Review Committee Report' dated 26.07.2019 submitted to the 'Ministry of Corporate Affairs' also clearly mentions that Section 53N of the Act, as currently framed, does not contemplate the filing of a 'Compensation Application' after the order of the Hon'ble Supreme Court and has proposed an amendment to permit a 'Compensation Application' arising from the Hon'ble Supreme Court's order. 29. The Learned Counsel for the 1st Respondent contends that a Compensation Application under Section 53N of the Act cannot be filed after an order of the Appellate Tribunal merges into an order of Hon'ble Supreme Court. In this connection, the Learned Counsel for the 1st Respondent brings it to the notice of this Tribunal that when the present Compensation Application was filed on 11.07.2019 before this Tribunal, neither the findings of the Commission, nor the order of the Appellate Tribunal were in existence because of the fact that the ord....
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....or be swallowed up. Merger in law is defined as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an absorption or swallowing up so as to involve a loss of identity and individuality. (See Corpus Juris Secundum, Vol. LVII, pp. 1067-68.)" "44. To sum up, our conclusions are: (i) Where an appeal or revision is provided against an order passed by a court, tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law." 33. The Learned Counsel for the 1st Respondent refers to the decision of Hon'ble Supreme Court 'S.S. Rathore vs. State of MP - (1989) 4 SCC 582' (at special page 589), wherein at paragraph 14 it is observed as under: - "14. The distinction adopted in Mohammad Nooh case [AIR 1958 SC 86 : 1958 SCR 595] between a court and a tribunal being the appellate or the revisional authority is one without any l....
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.... The law does not permit any court/tribunal/ authority/ forum to usurp jurisdiction on any ground whatsoever in case such an authority dos not have jurisdiction on the subject-matter." (b) In the decision of Hon'ble Supreme Court 'P. Malaichami v. M. Andi Ambalam and Ors. - (1973) 2 SCC 170' at page 170, it is held that even in the case of constitutional Court like the High Court, when it causes a Statutory Tribunal to hear election petitions under the Representation of the People Act, 1951, its jurisdiction is limited and further its powers are wholly the creature of the statute under which it is conferred with the power to hear election pettions. (c) In the decision 'Khoday Distilleries Ltd. & Ors. v. Sri Mahadeshwara Sahakara Sakkare Karkhane Limited, Kollegal - (2019) 4 SCC 376' (at special page 378 and 379) wherein it is observed and held as under:- "The doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger. The superior jurisdict....
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....strued too strictly nor too liberally. The principle of "appeal being a statutory right and no party having a right to file appeal except in accordance with the prescribed procedure" is now well settled." (f) In 'M/s Jindal Steel & Power Limited vs. Competition Commission of India & Ors. and M/s. Prints India v. Springer (India) Pvt. Ltd.', the Competition Appellate Tribunal in Appeal No.45 of 2012 with I.A. No.210 of 2012 on 03.04.2013 at paragraph No.26 observed as under: - "26. Shri Billimoria argued in terms of the doctrine of casus omissus. According to him, there was a need for supplying the casus omissus particularly in Section 53A(1)(a). We do not agree. It is a time tested law that the courts are reluctant to supply the words to the legal provisions. That can be done only in few exceptional circumstances like the legal provision being rendered absurd or being rendered meaningless in the absence of the words which is sought to be added. We do not think that there is such a situation in the present appeals. We have pointed out that the Apex Court has closed the issue on that count and we cannot therefore venture to supply some different interpretation or....
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....007 (UTPE No.160 of 2007)' wherein at paragraph 13, it is observed as under: - "13. The learned counsel for complainant has not brought to our notice any pronouncement by any Court, including the Hon'ble Supreme Court of India, whereby the complainant was absolved from the responsibility of explaining the delay except in saying that the act is silent about the limitation. The learned counsel has not been able to show us any authority on the question. It is then tried to be argued that the period of limitation will start not from the first date of commission of default, but will start from the last date of the commission of default if the nature of the default committed by the respondents is continuous in nature. We have deliberately stated the facts above along with the dates of the correspondence which went on between the parties stretching maximum in favour of the complainant. We do not find any justification as to how the non-return of collaterals could be complained of only in 2007 when admittedly the collateral securities were refused for the first time in somewhere in the year 1993 and when the bank ultimately returned the collaterals in March 2001. As regards the no....
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....ndent vehemently submits that the scheme of Section 53N of the Act does not permit the filing of a single Compensation Application against more than one 'enterprise' because it uses the term 'enterprise' and not 'enterprises', which unambiguously reveal the intention of Parliament that separate applications are to be filed against each 'enterprise' when claiming compensation under Section 53N of the Act. 41. The Learned Counsel for the 1st Respondent submits that a Compensation Application under Section 53N of the Act is not an 'Independent proceeding' and that a Compensation Application may be filed only after the order of CCI or the Appellate Tribunal determines that a violation of the Act had taken place. 42. The Learned Counsel for the 1st Respondent urges before this Tribunal that the instant Compensation Application is to be dismissed because of the fact that the Applicant has come before this Tribunal with 'unclean hands'. 43. The Learned Counsel for the 2nd Respondent contends that the Competition Commission of India passed an order (under Section 27 of the Act) against the Respondents on 23.04.2012, which was partially upheld by the former COMPAT on 29.10.2013. In....
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....08.03.2018. Therefore, it is the clear cut stand of the 2nd Respondent that the present Applicant is well within its rights to apply for compensation before the Appellate Tribunal even when the matter was appealable and is pending before the Hon'ble Apex Court. 49. The Learned Counsel for the 3rd Respondent submits that the Compensation Application (AT) No.01 of 2019 filed by the Applicant is not maintainable and is to be dismissed because of the reason that Section 53N of the Act does not permit filing of a single Application claiming compensation against multiple parties. At this stage, the Learned Counsel for the 3rd Respondent projects an argument that the language used in Section 53N of the Act makes it clear that an application can only be filed against 'single enterprise' and not against 'three enterprises', as has been done by the Applicant in the instant case. 50. The Learned Counsel for the 3rd Respondent contends that the Applicant had misled this Tribunal by making payment of Rupees thee lakhs lakhs in terms of Rule 4 of the Competition Appellate Tribunal (Form and Fee for Filing an Appeal and Fee for Filing Compensation Applications) Rules, 2009, as against the p....
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....ribunal and further that all the three interim orders referred to by the Applicant were in an application filed prior to the determination of an Appeal by the Hon'ble Supreme Court, which is in accordance with Law enumerated under the Act. Furthermore, it is the stand of the 3rd Respondent that 'interim orders' cannot be read as laying down any proposition of law and they do not have any precedent value as per decision in 'State of Assam v. Barak Upatyaka D.U. Karmachari Sanstha - (2009) 5 SCC 694 (paras 21 and 22)' and 'Ram Parshotam Mittal and Others v. Hotel Queen Road Pvt. Ltd. and Others - (2019) SCC OnLine SC 699 (para 64)'. 55. Yet another argument advanced on behalf of the 3rd Respondent is that it is a settled Law that a jurisdiction can be conferred only by a statute or legislative function and a Court/ Tribunal cannot derive jurisdiction apart from the statute. 56. The Learned Counsel for the 3rd Respondent cites the decision in'Uber India Systems Pvt. Ltd. v. CCI & Ors. - (2019) 8 SCC 697' (at special page 700) wherein at paragraph 5 and 6 it is observed as under: - "5. There are two important ingredients which Section 4(1) i....
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....ned Counsel for the 3rd Respondent contends that when an Appeal under Section 53T of the Act is pending before the Hon'ble Supreme Court, there was no stay except payment of penalty amount and there is no fetter for this Tribunal to proceed further. 61. This Tribunal has heard the Learned Counsel appearing for the Applicant and the Respondents and noticed their contentions on the issue of maintainability of the Compensation Application (AT) No.01 of 2019. 62. It is to be pertinently pointed out that the Section 53N of the Act speaks of 'Awarding compensation' and a mere perusal of the ingredients of the said Section unerringly point out that the said Section does not contemplate a Limitation period for projecting an 'Application'. It is an axiomatic principle in Law that when no time limit is prescribed, based on the 'Doctrine of Laches' the relevant proceedings ought to have been filed within a reasonable period of time and that failure to do so results in serious prejudice and harm to the concerned party and adversely affects the ability of the said party to defend itself. 63. In fact, the Competition Act, 2002 does not either by reference or in comparison provide for an....
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....9. In the instant case, earlier the CCI passed the order on 03.04.2012 (under Section 27 of the Competition Act, 2002) and rendered a finding that the Respondents had violated Section 3 of the Act etc. It was also found out that the Respondents had consistently overcharged the Applicant and their conduct had led to the losses being incurred by the Applicant. It is quite evident that the erstwhile COMPAT on 29.10.2013 passed an order affirming the findings of the CCI. In regard to the issue of 'turnover' the COMPAT observed that the penalty would be based solely on the 'turnover' of the relevant business, i.e., business of Aluminum Phosphate Tablet (ALP). When the Respondents and the Hon'ble Commission projected their Appeals before the Hon'ble Supreme Court by assailing the findings of the COMPAT, the Hon'ble Supreme Court upheld the decision of the erstwhile COMPAT in totality. 67. It may not be out of place for this Tribunal to significantly point out that in the decision 'Uma Shankar Sharma v. The State of Bihar & Anr. - AIR 2005 Patna 94' wherein a Decree Holder being aggrieved by the impugned order challenged the same in Second Appeal, which resulted into a Decree passed by....
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....e the Hon'ble Supreme Court in appeal proceedings and when the original order of CCI dated 23.04.2012, which was affirmed by COMPAT on 29.10.2013 and finally the same attained finality with the judgment of Hon'ble Supreme Court in Appeal on 08.05.2017, it is crystal clear that the Compensation Application (AT) No.01 of 2019 (being a money claim) filed on 11.07.2019 (in the absence of any fixed time limit) is well within a reasonable period of three years' time and no laches can be attributed on the part of the Applicant in this regard. 72. Coming to the aspect of the Compensation Application (AT) No.01 of 2019 being filed against the Respondents claiming compensation in a single application, against all the three enterprises, it is to be pointed out that Section 53N, no doubt speaks of filing of an application by Central Government or State Government or a 'Local Authority' or any enterprise or any person to make an application to the Appellate Tribunal to adjudicate on claim for compensation that may arise from the findings of the Commission or under Section 42-A or under sub-section (2) of Section 53-Q of the Act and to pass order for the recovery of compensation from any ente....
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....pees three lakhs in regard to its claim for compensation from the Respondents. At this juncture, it is useful for this Tribunal to make a relevant mention of Rule 4 of the Competition Appellate Tribunal (Form and Fee for Filing an Appeal and Fee for Filing Compensation Applications) Rules, 2009, which reads as under: - "4. Fee. - (1) Every memorandum of appeal and compensation application shall be accompanied with a fee provided in sub-rule(2) and such fee may be remitted in the form of demand draft drawn in favour of Pay and Accounts Officer, Ministry of Corporate Affairs, payable at New Delhi. (2)(i) The amount of fee payable in respect of appeal and compensation application made to the Appellate Tribunal shall be as follows:- APPEAL Amount of penalty imposed Amount of fees payable 1. Less than twenty thousand rupees : Rs. 1,000 2. Twenty thousand or more rupees but less than one lakh : Rs. 2,500 3. One lakh or more rupees : Rs. 2,500 plus Rs. 1,000 for every additional one lakh of penalty or fraction thereof, subject to a maximum of Rs. 3,00,000. COMPENSATION APPLICATION Amount of compensation claimed Amount....
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....e an Office Memorandum to the Applicant/ FCI, requiring it to pay the said sum within 14 days from the date of receipt of such Memorandum. On such receipt of the said Memorandum, the Applicant/FCI shall pay the necessary fees. Resultantly, if any amendment is to be carried out by the Applicant in the Compensation Application (AT) No.01 of 2019 at relevant paragraph, the same may be carried out by through Learned Counsel for the Applicant within one week thereafter and the amended copy of the Compensation Application (AT) No.01 of 2019 (if required) may be filed before the Office of the Registry by the Applicant side, by serving advance copy to the Respondents' side. 76. In view of the foregoing qualitative and quantitative upshot of discussions and also this Tribunal taking into account of all the facts and circumstances of the present case in a conspectus fashion, comes to a resultant conclusion that in the present case, the 'cause of action' firstly arose from the decision of the CCI's order dated 23.04.2012, which was later affirmed by the COMPAT on 29.10.2013 and attained finality by means of the Hon'ble Supreme Court judgment dated 08.05.2017 (Civil Appeal No.2480 of 2014, ....