Supreme Court stays 420 cr penalty imposed by CCI on Hyundai (for now)

The Supreme Court yesterday passed an in interim order in the challenge by Hyundai Motors India Limited to the Rs 420 crore penalty imposed on it by the Competition Commission of India (CCI)..In effect, the Bench of Justices AM Khanwilkar and Deepak Gupta stayed the imposition of the penalty on the automobile manufacturer..Back in 2014, the CCI imposed a fine totalling Rs. 2,544 crore on fourteen car manufacturers for restricting the sale and supply of genuine spare parts of automobiles in open market. Hyundai Motors India Limited and two others escaped the axe, with the CCI making it clear that it would pass a separate order against these three companies later after giving them an opportunity to present their case..In the meanwhile, Hyundai approached the Madras High Court challenging the jurisdiction of the CCI to expand the scope of the Director General’s investigation. A single judge eventually dismissed the petitions in February 2015. Appeals were filed against this verdict, which were then posted before the Division Bench..Then, vide an order dated July 27, 2015, the CCI confirmed the penalty of Rs. 420.26 crore on Hyundai for taking part in anti-competitive practices, despite the Madras High Court’s order not to take action against the automobile manufacturer. This punitive order was kept in abeyance by the CCI pending the disposal of the writ appeals, after it admitted oversight. The High Court was informed that the final order was erroneously passed owing to a communication gap between the CCI and their counsel..In July this year, a Division Bench of the Madras High Court dismissed the appeal filed by Hyundai, and confirmed the single judge’s order which had dismissed the writ petitions filed in 2011. In effect, Hyundai was liable to pay the penalty as per the CCI order passed in 2015..Hyundai has now approached the Supreme Court seeking a stay of the CCI order. Yesterday, the Bench issued notice in the petition and granted interim relief in terms of prayer (b) of the stay application..Senior Advocate P Chidambaram appeared for Hyundai in the Supreme Court..The case has its genesis in 2011, when the informant Shamsher Kataria contended before the CCI that the automobile manufacturers had indirectly determined the prices of spare parts and the repair and maintenance services. He had further alleged that such restrictive practices carried out by the automobile manufacturers in conjunction with their respective authorized dealers amounted to denial of market access to independent repair workshops..Read the order: