BackDelhi HC reserves order in disputes between CCI and shoe firms
The issue is whether CCI can impose penalties on firms for not filing an undertaking for a cease and desist order against them even if they don't violate the order
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The Delhi high court on Monday reserved its order in two similar cases involving the Competition Commission of India (CCI). Justice Vibhu Bakhru said that the issue that arises is whether the CCI can impose penalties on enterprises for not filing an undertaking for a cease and desist order passed against them even when there is no violation of the cease and desist order itself.
Simply put, whenever the antitrust regulator finds a violation of any provision of the Competition Act, it passes a cease and desist order asking the company to refrain from indulging in the anti-competitive practices it has been found guilty of. The enterprise is required to give an undertaking within a prescribed period of time to the effect that it will not indulge in such practices.
It is not disputed that if a company continues to indulge in such practices, the CCI can take action against it. However, what is not settled is, what happens if a company does not file this undertaking or there is a delay in filing the undertaking.
The CCI, believing that it can impose a penalty in such a case, imposed fines on two companies. The companies are challenging this penalty. The judge rebuked the CCI on Monday, calling its action “complete non-application of mind and abuse of power" but reserved judgment in the two cases.
The case arose when the CCI imposed a penalty of ₹ 6.25 crore on 11 companies in a case relating to bid rigging and market allocation in a tender for supply of jungle boots, shoes used by the military and para-military forces while operating in the jungle. The order had been challenged by the companies before the Competition Appellate Tribunal where their appeal is still pending.
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