Madras High Court asks Competition Commission of India to probe alleged Steel Industry cartelization; DGP to probe alleged Cement Cartel

The Madras High Court on Thursday directed the Director General, Investigation of the Competition Commission of India (CCI) to proceed with the probe into allegations of caretlisation by steel manufacturers within four months. .In another case, the Court directed the Director General of Police (DGP) of Tamil Nadu to take action on a complaint alleging cartelization in the cement industry, after being informed that a March 6, 2021 complaint on the issue has been forwarded to the DGP by the Central Bureau of Investigation (CBI)..Both orders were passed by Justice V Bhavani Subbaroyan this morning on two petitions, one filed by the Coimbatore Corporation Contractors Welfare Association and the second by the Class I Contractor Welfare Association-Mangadu. .The petitions were filed through Advocates-on-Record, S Doraisamy, and V Elangovan.Advocate S Doraisamy appeared in the matter today..Competition Commission to probe allegations of cartelisation in Steel Industry.The Court took on record the submission made by the Coimbatore Corporation Contractors Welfare Association that steel manufacturers were controlling its supply, creating artificial scarcities thereby, leading to an increase in the price of steel to make abnormal gains. .To probe these allegations, the petitioner had earlier made representations to the CBI and the Police, the Court was told. The Court had earlier asked the CBI to get instructions and to file a counter affidavit. .The CBI today submitted that it has forwarded the complaint to the CCI since there were allegations of anti-competitive practices by cement players and manipulation of prices to the detriment of the government and the public..The complaint dated March 6, 2021, was forwarded to the CCI on April 30, 2021, to take necessary action since the CBI has no jurisdiction in the matter, the Court was told..Seeing that the matter had already been forwarded to the Director General, Investigation, Competition Commission on April 30, 2021, the Court took the view that the matter can be proceeded with in accordance with law by the CCI within four months from date of receipt of copy of the order..DGP to take action on complaint forwarded in Cement cartelisation case.Similar allegations of cartelisation were made with respect to major cement players i.e. the creation of artificial scarcities in supply to increase the price of cement. .The Court took on record the petitioner's submission that due to the non-availability of cement, which is a basic ingredient for construction, contractors and the public suffer as they have to pay more to purchase cement..In this petition by the Class I Contractor Welfare Association-Mangadu as well, the Court noted the CBI's stance that it does not have the jurisdiction to probe the matter. .The CBI further informed that a letter has been forwarded to the DGP on April 26 to take action on the petitioner's complaint..In view of the same and the CBI's submission that it has no jurisdiction, the Court proceeded to direct the DGP to take action on the complaint of the petitioner. .The petitioner had raised allegations against major cement players in India, including ACC Limited, Ambuja Cements Limited, Grasim Cement, Ultra Tech Cement Limited, Jaiprakash Associate Limited, The India Cements Limited, JK Cement Limited, Century Textiles and Industries Limited, The Ramco Cements Limited, Binani Cement Limited and Lafarge India Private Limited..It was highlighted that a cement bag was priced at Rs 385 in Tamil Nadu during July 2019. Five months prior to this, it was sold at Rs 340. However, the cost was increased by 13.23% and cement is now sold at Rs 420-430, it was submitted.."The increase of the cement was not made on the basis of any increase of cost of the manufacturing materials. Because of sudden increase of the cement price business was heavily affected. Because of the sudden increase of the cement price up to 25% between July 2019 to April 2021, the contractors and the consumers have to incur heavy loss ... Due to their large market share in the Indian market, ACC Limited and Ambuja Cements Limited are in a position to fix price and also curtail competition by controlling the supply of cement in the market," the petitioner contended..The petitioner further accused ACC Limited and Ambuja Cements of leading the acts of cartelisation by cement manufacturers over the past couple of decades. As per the petitioner, this is evident from enquiries made into the functioning of their holding company, Holcim, by various courts and commissions. In this regard, it was also stated that action has earlier been taken against the Holcim Group for anti-competitive activities all over the world..While so, it was also noted that the State had earlier submitted before the Madras High Court that the State government does not have the power to regulate the price of cement as the "cement industry is deregulated.".The same submission was made in a counter-affidavit filed in response to a writ petition by the Coimbatore Corporation Contractors Welfare Association last year, wherein the State's refusal to regulate cement price hikes was challenged..After the CBI's decision to forward the complaint and the Court's order passed today, the matter is now expected to be probed by the DGP.