Spare Parts Case: Court Seeks CCI Response on Mahindra, Tata Plea

New Delhi: The Delhi High Court on Friday sought response from the Competition Commission of India (CCI) on two Indian carmakers' plea challenging provisions of Competition Act as well as an order by the regulator imposing a penalty on them for violating trade norms in after-services market and spare parts.

A bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw also directed that till the next date of hearing, the order imposing penalty on Mahindra and Mahindra and Tata Motors "shall not be given effect to" as far as these two companies are concerned.

While Mahindra has been ordered by CCI to pay a fine of over Rs 200 crore, Tata was slapped with an amount of Rs 1,400 crore.

The court directed CCI to inform it whether the Competition Appellate Tribunal (COMPAT) is functional and also whether the Supreme Court is seized of any matter challenging provisions of the Competition Act, while the carmakers have been ordered to produce a copy of the August 25 order of the antitrust regulator imposing a fine on them.

The provisions challenged by the two companies pertain to the imposition of penalty (section 27(b) of the Act) and the holding of meetings by CCI (section 22) to adjudicate a matter.

Senior Advocate Gopal Subramaniam, appearing for Mahindra and Mahindra, contended that both provisions are ultra vires the constitution.

He said that under the Act, the competition watchdog regulator is arbitrarily imposing penalties without giving a hearing.

This view was echoed by senior advocate Abhishek Manu Singhvi, appearing for Tata, who said CCI is imposing penalty "as it sees fit".

They also contended that in the current case, the issue was heard by a seven-member quorum of CCI, however, the order under challenge was passed by only three members.