National Company Law Appellate Tribunal | While deciding the appeal, Rakesh Kumar, J., and Dr. Ashok Kumar Mishra (Technical Member), held that once the penalty is reduced based on leniency application filed by the appellants showing their involvement in cartelisation, their right to appeal on merit against order of the CCI can be deemed to have been forfeited.
The respondents Crown Beers India Ltd. and SABMiller India Pvt. Ltd. filed a leniency application under Section 46 of the Competition Act, 2002 (“Act 2002”) read with Regulation 5 of the Competition Commission of India (Lesser Penalty) Regulations, 200, (“LPR”) against all other respondents alleging cartelisation in relation to the production, marketing, distribution and sale of Beer in India. Competition Commission of India (“CCI”) held appellants United Breweries Ltd, Carlsberg India Ltd and All India Brewers Association (Respondent 5) guilty of contravention of provisions 3(3)(a), 3(3)(b) and 3 (3)(c) read with Section 3(1) of the Act 2002. The appellants challenged the order of CCI before this Tribunal.
Contentions of the appellant
CCI must consist of a judicial member while adjudicating the case.
CCI cannot form an opinion and pass an order based on the leniency application filed by appellants.
The order forming prima facie case and directing enquiry under Section 26(1) of the Act 2002 based on leniency application was not valid.
The Tribunal referred to Section 8 of the Act 2002 and held that it is nowhere evident in the provision that CCI must consist of a Judicial Member.
The Tribunal opined that since the appellant had already admitted in the leniency application regarding their involvement in the cartelization the appellants were not justified to argue on merit of the case or point out any fault in the impugned order. Once they have admitted their involvement, they were only entitled to question the imposition of penalty.
The Tribunal referred to Section 3(1)(2) of the Act 2002 and Section 120-A of Penal Code, 1860 and opined that an agreement in between two and more than two persons or association to commit illegal act can be termed as conspiracy or cartelization. The Tribunal further referred to Sections 306(1), Section 308(1) of the Criminal Procedure Code, 1973 and concluded that leniency application is like admission of guilt in a cartel.
The Tribunal stated that once the penalty of appellants was reduced based on leniency application showing their involvement, their right to appeal on merit against order of the CCI can be deemed to have been forfeited.
The Tribunal held that in the leniency application filed by one appellant disclosed involvement of other appellants in violation of Section 3 of the Act 2002. Hence, the CCI was well within its jurisdiction under Section 19 of the Act 2002 to treat the leniency application as suo motu case.
Thus, the Tribunal dismissed the appeals and upheld the imposed penalty.
[Pawan Jagetia v. CCI, 2022 SCC OnLine NCLAT 1620, decided on 23-12-2022]
Advocates who appeared in this case :
For Appellants: Abir Roy, Vivek Pandey, Sukanya Vishwanathan, Subodh Prasad Deo, Swarnim Shrivastava, Rinki Singh,Mr Gopal Subramaniam,Sr Advocate, Dr. Aditya Sondhi, Sr. Advocate, Nisha Kaur Uberoi, Gautam Chawla, Rahat Dhawan, Shivangi Chawla, Aditi Khemani, Prerana De, Samriddha Gooptu, Ishan Arora, Ravisekhar Nair, Abhay Joshi, Param Tandon, Sahil Khanna, Rajshekhar Rao, Sr. Advocate, Shashank Gautam, Sreemoyee Deb, Rajat Moudgil, Swapnil Singh Shekhawat, Aashna Manocha, Advocates;
For Respondents: Manas Kumar Chaudhuri, Sagardeep Rathi, Aman Singh Baroka, Pranjal Prateek, Subodh Prasad Deo, Swarnim Shrivastava, Rinki Singh, Manish Vashisht, Sr. Advocate, Balaji Subramanian, Arav Kapoor, Akash Kundu, Mridul Vats, Vanshay Kaul, Davander Prasad, Dy. Director (Law) CC, Aakash Kumbhat, Manika Brar, Atreyee Sarkar, Dr. Aditya Sondhi, Sr. Advocate, Nisha Kaur Uberoi, Gautam Chawla, Rahat Dhawan, Shivangi Chawla, Aditi Khemani, Prerana De, Samriddha Gooptu, Ishan Arora, Advocates.