Although the tribunal stayed the penalty, the cease and desist order will continue

The Competition Appellate Tribunal (COMPAT), on Friday, ordered 10 cement producers, including UltraTech, Ambuja and ACC, and Cement Manufacturers’ Association (CMA) to deposit Rs.630 crore as it hears their appeal against a record amount of penalty imposed by Competition Commission of India (CCI) last year.

The amount COMPAT asked some of the biggest cement manufacturers and their lobby group CMA to cough up within four weeks works out to 10 per cent of the Rs.6,307 crore fine that the anti-trust body Competition Commission of India had fixed for alleged price fixing.

The companies include Aditya Birla Group-member UltraTech Cement, Holcim-controlled Ambuja Cements and ACC, Jaiprakash Associates, India Cements, Madras Cements, and the Indian unit of France’s Lafarge SA.

While cement makers are yet to take a call on whether to challenge the interim order before the Supreme Court, industry sources say a few of them are actually mulling the option.

Interim order

“... we would chose to grant stay to the penalties, however, with a condition that the appellants (cement makers) deposit 10 per cent of the penalties inflicted (by CCI),” COMPAT said in its order directing cement firms to deposit the amount within a month. “We also make it clear that if the penalties are not so deposited, the appeal shall be treated as dismissed without further reference to the Court,” it added.

The three-member bench, headed by Justice V. S. Sirpurkar, said that if the penalties were not so deposited, the appeal shall be treated as dismissed without further reference to the court.

Cement makers along with the industry lobby group CMA had challenged the order of the fair trade regulator CCI imposing Rs.6,300 crore penalty for forming a cartel.

Penalty stayed

Although the tribunal stayed the penalty, the cease and desist order would continue against them as the tribunal “prima facie” found no wrong in CCI’s findings against them.

Final hearing

“As regards the orders of ‘cease and desist’, we do not find anything wrong at least prima facie. We, therefore, refuse to stay that order against the appellants, including the CMA,” the bench said.

The matter would now come up for final hearing in August.

As per the interim order, Ultratech has to deposit Rs.117.5 crore, Ambuja Cement Rs.116.30 crore, ACC Rs.114.76 crore, India Cement Rs.18.74 crore, JP Associates Rs.132.36 crore, Binani Cement Rs.16.73 crore, Madras Cement Rs.25.86 crore, JK Cements Rs.12.85 crore, Century Textiles Rs.27.4 crore and CMA Rs.7.3 lakh.

Reacting to the interim order, Lafarge India said it would comply with the order of the Tribunal. At the same time, it said that the company “believes it has strong arguments to set aside the order of the Competition Commission.”

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