The Supreme Court has issued a notice in MRF’s appeal of the NCLAT’s tyre cartelisation judgment.
CCI fined Apollo Tyres Rs 425.53 crore, MRF Ltd Rs 622.09 crore, CEAT Ltd Rs 252.16 crore, JK Tyre Rs 309.95 crore, and Birla Tyres Rs 178.33 crore in 2018.
The Supreme Court issued a notice on September 25 in an appeal by tyre producer MRF Limited against the National Company Law Appellate Tribunal (NCLAT), requesting the Competition Commission of India (CCI) to issue a fresh decision in the case of alleged tyre company cartelisation.
The case was also linked to an appeal filed by CCI against the same ruling by the Supreme Court. The case is now expected to be heard in the second week of October 2023.
The Supreme Court admitted CCI’s appeal against NCLAT’s ruling in April 2023, but did not stay the order, therefore CCI will have to re-consider the case.
In December 2022, the NCLAT asked the CCI to issue a new order, noting the necessity to re-examine mathematics and accidental errors, as well as to reconsider the penalty, in order to save the domestic tyre sector.
A two-member NCLAT found inaccuracies in the calculation of the % rise in price by the Director General, the CCI’s investigating arm, and the revised statistics appear to demonstrate the absence of price parallelism.
According to the tribunal, CCI must also consider local industry promotion because the Competition Act mandates it to consider the country’s economic development.
The NCLAT decision came in response to appeals made by key tyre manufacturers such as Ceat, Apollo Tyres, JK Tyre, MRF, Birla Tyres, and the Automotive Tyre Manufacturers Association (ATMA) against the CCI verdict.
The CCI slapped penalties of more than Rs 1,788 crore on tyre businesses in 2018.
On August 31, 2018, the fair trade regulator issued an order penalizing tyre manufacturers. However, the order was not transmitted to them until February 2022, when the Supreme Court gave its final approval.
An appeal was filed before the Madras High Court shortly after the CCI issued the order in 2018, and it was dismissed on January 6, 2022. This was challenged further before the Supreme Court, which dismissed the plea on January 28, 2022.
After nearly four years, the CCI transmitted the order to the tyre firms, which subsequently approached the NCLAT.
CCI fined Apollo Tyres Rs 425.53 crore, MRF Ltd Rs 622.09 crore, CEAT Ltd Rs 252.16 crore, JK Tyre Rs 309.95 crore, and Birla Tyres Rs 178.33 crore. ATMA, its trade organisation, was also fined Rs 8.4 lakh.