M/S. B. HIMMATLAL AGRAWAL versus COMPETITION COMMISSION OF INDIA & ANR. on 18 May 2018

496

[2018] 4 S.C.R.

A

M/S. B. HIMMATLAL AGRAWAL

v.

COMPETITION COMMISSION OF INDIA & ANR.

(Civil Appeal No. 5029 of 2018)

BMay 18, 2018

[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]

Competition Act, 2002:

s. 53B – Appeal under – Dismissal of – For non-complianceCof condition imposed for granting stay of operation of the impugnedorder – Held: The condition was attached to the order of stay andnot for entertaining the appeal – Therefore, non-compliance of thecondition, would not warrant dismissal of appeal.

Allowing the appeal, the CourtD

HELD: 1. The order of the Competition Commission waschallenged by filing appeal under Section 53B of the CompetitionAct, 2002. Section 53B confers a right upon any of the aggrievedparties mentioned therein to prefer an appeal to the AppellateTribunal. This statutory provision does not impose any conditionEof pre-deposit for entertaining the appeal. Therefore, right tofile the appeal and have the said appeal decided on merits, if it isfiled within the period of limitation, is conferred by the statuteand that cannot be taken away by imposing the condition of depositof an amount leading to dismissal of the main appeal itself if thesaid condition is not satisfied. Sub-section (3) of Section 53BFspecifically casts a duty upon the Appellate Tribunal to pass orderon appeal, as it thinks fit i.e. either confirming, modifying orsetting aside the direction, decision or order appealed against.It is to be done after giving an opportunity of hearing to the partiesto the appeal. It, thus, clearly implies that appeal has to be decidedGon merits. The Appellate Tribunal, which is the creature of astatute, has to act within the domain prescribed by the law/statutory provision. This provision nowhere stipulates that theAppellate Tribunal can direct the appellant to deposit a certainamount as a condition precedent for hearing the appeal. [Paras 6and 7][499-F; 501-A-D]H

2. In the present case, the condition of deposit was attachedto the order of stay. In case of non-compliance of the saidcondition, the consequence would be that stay has ceased tooperate as the condition for stay is not fulfilled. However, non-compliance of the conditional order of stay would have no bearinginsofar as the main appeal is concerned. Therefore, at the most,stay could have been vacated. The Appellate Tribunal, thus, hadno jurisdiction to dismiss the appeal itself. The appeal is restoredwhich shall be decided by the Appellate Tribunal on merits. [Paras6, 7 and 9][499-H; 500-A; 501-E; 502-A]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5029of 2018.

From the Judgment and Order dated 21.12.2017 of the High Courtof National Company Law Appellate Tribunal in IA No. 84 of 2017 inCOA No. 24 of 2017.

Mohit Chaudhary, Kunal Sachdeva, Ms. Manju Jetley, Ms. PujaSharma, Ms. Tripti Podder, Balwinder Singh, Advs. for the Appellant.

Arjun Krishnan, Ankur Singh, Sumit Srivastava, Advs. for theRespondents.

The Judgment of the Court was delivered by

A. K. SIKRI, J. 1. A neat question of law which arises forconsideration in this appeal is as to whether the order of the NationalCompany Law Appellate Tribunal (hereinafter referred to as the‘Appellate Tribunal’) dismissing the main appeal itself of the appellantherein for non-compliance of the direction to deposit the amount as acondition for grant of stay, is justified and legal.

2. In order to decide this question, it is not necessary to take stockof the factual matrix in detail. Narration of the following facts, whichare germane for deciding this appeal, would suffice.

The appellant herein is a partnership firm, engaged in the businessof transportation of coal and sand since 1981. In Ju.ne, 2014, theappellant firm participated in two tenders, bearing numbers 03/2014-15and 06/2014-15 floated by the respondent No. 2 herein i.e. M/s. WesternCoalfields Limited. The appellant firm was L-II and not the lowestbidder for allotment of the tenders. In June, 2015, the appellant firm A

B

C

D

E

F

G

H

Areceived a notice from the Competition Commission of India, New Delhi(hereinafter referred to as ‘CCI’) asking to show cause under Section19(1)(a) read with Section 3 of the Competition Act, 2002 (hereinafterreferred to as the ‘Act’). In the said notice, it was alleged that theappellant firm was involved in anti-competitive and unfair trade practicesin collusion with nine other firms. The appellant firm filed its reply. TheBCCI after considering the same passed orders under Section 26 of theAct and directed the inquiry to be conducted by the Director General(DG) of the CCI. DG submitted its report after the inquiry giving hisfindings to the effect that the appellant had indulged in anti-competitiveand unfair trade practices in collusion with the other firms. The appellantCwas given a chance to file its objections thereto. After considering thoseobjections, the CCI passed orders dated September 14, 2017 affirmingthe findings of the DG and imposed penalties on the appellant firm aswell as nine parties. Insofar as appellant is concerned, penalty of Rs.3.61crores has been imposed.

D

3. The appellant filed the statutory appeal thereagainst before theAppellate Tribunal which was registered as Competition Appeal (AT)No. 24/2017. The appellant also prayed for interim stay of the penaltyorder. Arguments were heard on admission as well as on stay. Videorders dated November 20, 2017, Appellate Tribunal admitted the appeal.EIt also granted stay on the orders of the CCI with the condition ofdepositing 10% of the total penalty (i.e. a sum of Rs. 36,12,222/-) imposedby CCI, to be paid by the appellant, within two weeks i.e. by December4, 2017. The appellant could not fulfill the said condition of deposit.When the matter was taken up on December 4, 2017, the appellantpleaded before the Appellate Tribunal that non-compliance because ofFfinancial crunch which the appellant was facing. The Appellate Tribunal,however, passed orders dated December 4, 2017 to the following effect:

“By way of last opportunity, the appellant is given time till20[th] December, 2017 to deposit 10% of the penalty amount,failing which, the appeal stands disposed without referring furtherGto the bench”.

H

4. As per the appellant, since it was in deep financial trouble, itcould not deposit the amount by December 20, 2017 in spite of all bonafide intentions. The appellant accordingly filed I.A. No. 84 of 2017 on December 18, 2017 seeking modification of orders dated December 4,2017. It was stated in the said application that it had incurred net loss ofRs.3,72,45,393.94 for the Financial Year 2016-17 and, therefore, wasnot in a position to deposit the said amount. The request of the appellantwas, however, not acceded to and vide orders dated December 21, 2017,the Appellate Tribunal has dismissed I.A. No. 84 of 2017. At the sametime, it has dismissed the appeal of the appellant as well for non-compliance of its order dated December 4, 2017. The order datedDecember 21, 2017 reads as under:

“21.12.2017 – We find no ground made out to modify our interimorder dated 20[th] November, 2017. In fact, the stay order waspassed on the request of the learned counsel for the appellant andthe amount having not deposited within the time, last opportunitywas given on 4[th] December, 2017 to deposit the amount. In termsof the order dated 4[th] December, 2017 the appeal now standsdisposed off without further reference to the Bench.

In view of the order aforesaid dated 4[th] December, 2017, boththe IA No.84/2017 and Competition Appeal (AT) No. 24/2017stands disposed off for non-compliance of the Appellate Tribunal.”

5. A pure legal submission which is advanced by the learnedcounsel for the appellant is that even if the appellant could not complywith orders dated December 4, 2017 vide which conditional stay wasgranted directing the appellant to deposit 10% of the penalty amount, themaximum effect thereof was to vacate the stay granted and the AppellateTribunal was not legally justified in dismissing the appeal itself. Thissubmission of the appellant commends acceptance, having due forceand substance in law.

6. From the facts narrated above, it is apparent that order of theCCI was challenged by filing appeal under Section 53B of the Act. Alongwith this appeal, the appellant had also filed application for stay of theoperation of the order of the CCI during the pendency of the appeal.Appeal was admitted insofar as stay is concerned, which was grantedsubject to the condition that the appellant deposits 10% of the amount ofpenalty imposed by the CCI. It needs to be understood, in this context,that the condition of deposit was attached to the order of stay. In case A

B

C

D

E

F

G

Aof non-compliance of the said condition, the consequence would be thatstay has ceased to operate as the condition for stay is not fulfilled.However, non-compliance of the conditional order of stay would haveno bearing insofar as the main appeal is concerned. Right to appeal isstatutorily provided under Section 53B of the Act, which reads as under:

B“53B. Appeal to Appellate Tribunal. —

(1) The Central Government or the State Government or a localauthority or enterprise or any person, aggrieved by any direction,decision or order referred to in clause (a) of section 53A mayprefer an appeal to the Appellate Tribunal.

C

(2) Every appeal under sub-section (1) shall be filed within aperiod of sixty days from the date on which a copy of thedirection or decision or order made by the Commission is receivedby the Central Government or the State Government or a localDauthority or enterprise or any person referred to in that sub-sectionand it shall be in such form and be accompanied by such fee asmay be prescribed:

Provided that the Appellate Tribunal may entertain an appealafter the expiry of the said period of sixty days if it is satisfied thatEthere was sufficient cause for not filing it within that period.

(3) On receipt of an appeal under sub-section (1), the AppellateTribunal may, after giving the parties to the appeal, an opportunityof being heard, pass such orders thereon as it thinks fit, confirming,Fmodifying or setting aside the direction, decision or order appealedagainst.

(4) The Appellate Tribunal shall send a copy of every order madeby it to the Commission and the parties to the appeal.

G

(5) The appeal filed before the Appellate Tribunal undersub-section (1) shall be dealt with by it as expeditiously as possibleand endeavour shall be made by it to dispose of the appeal withinsix months from the date of receipt of the appeal.”

H

7. The aforesaid provision, thus, confers a right upon any of theaggrieved parties mentioned therein to prefer an appeal to the AppellateTribunal. This statutory provision does not impose any condition of pre-deposit for entertaining the appeal. Therefore, right to file the appealand have the said appeal decided on merits, if it is filed within the periodof limitation, is conferred by the statute and that cannot be taken awayby imposing the condition of deposit of an amount leading to dismissal ofthe main appeal itself if the said condition is not satisfied. Position wouldhave been different if the provision of appeal itself contained a conditionof pre-deposit of certain amount. That is not so. Sub-section (3) ofSection 53B specifically cast a duty upon the Appellate Tribunal to passorder on appeal, as it thinks fit i.e. either confirming, modifying or settingaside the direction, decision or order appealed against. It is to be doneafter giving an opportunity of hearing to the parties to the appeal. It,thus, clearly implies that appeal has to be decided on merits. The AppellateTribunal, which is the creature of a statute, has to act within the domainprescribed by the law/statutory provision. This provision nowherestipulates that the Appellate Tribunal can direct the appellant to deposit acertain amount as a condition precedent for hearing the appeal. In fact,that was not even done in the instant case. It is stated at the cost ofrepetition that the condition of deposit of 10% of the penalty was imposedinsofar as stay of penalty order passed by the CCI is concerned.Therefore, at the most, stay could have been vacated. The AppellateTribunal, thus, had no jurisdiction to dismiss the appeal itself.

8. We may mention that the learned counsel appearing for theCCI had referred to the judgment of this Court in the case of UltraTech Cement Ltd. v. Competition Commission of India & Ors.[1]. Saidjudgment has no application to the facts of this case. That was a casewhere the appellant had challenged the jurisdiction of the AppellateTribunal to pass conditional order i.e. deposit of 10% of the penalty as acondition for grant of stay. It was argued that the Appellate Tribunal didnot have any power to impose such a condition for grant of stay. Thischallenge was rejected by the Court holding that Appellate Tribunalcould pass a conditional stay order. No such issue, that has arisen in theinstant appeal, was raised therein, namely, whether the Tribunal coulddismiss the appeal itself if the condition attached to the grant of stay isnot complied with.

1Civil Appeal Nos. 4766-4767 of 2013 with Ors. decided on June 12, 2013

AB

C

DE

F

G

H

A9. Accordingly, we allow this appeal and set aside that part of theimpugned order whereby the appeal of the appellant is dismissed andrestore the appeal which shall be decided by the Appellate Tribunal onmerits. We, however, make it clear that as far as stay of the penaltyorder is concerned, that stood vacated for non-compliance of the conditionof deposit of 10% of the penalty and, thus, there is no stay of the CCIBorder in favour of the appellant.

No cost.

CKalpana K. Tripathy

Appeal allowed.

D

E

F

G

H