NCLAT sets aside CCI’s Rs 301.6-cr penalty on Grasim Industries, directs fresh hearing

The tribunal observed that the CCI did not provide a chance to Grasim Industries to present their arguments, after it differed from the findings of DG, its probe Unit.

The Competition Commission of India (CCI) had imposed a penalty on Grasim Industries in March 2020 for allegedly abusing its dominant position with respect to supply of VSF to spinners in India in which it has a dominant position.

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The order was challenged by Grasim before the NCLAT, which is also an appellate authority over CCI, which asked the regulator to hear afresh.

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A two-member National Company Law Appellate Tribunal (NCLAT) bench said the CCI itself has “differed from findings of the DG”, its probe unit, regarding their directions for disclosure of discounting/pricing policy and sale to “buyers” who can trade the VSF.
In such cases, where is a difference between CCI and DG, it “requires the Commission to give opportunity to the opposite party (Grasim)”, said the NCLAT while citing previous judgments.NCLAT said CCI “had omitted to give notice” to the Grasim Industries regarding the disagreement and has thereby “deprived” the Aditya Birla Group firm “an opportunity to defend itself” against the proposed actions.

“We set aside the impugned order and remand it back to the Commission with a direction to provide an opportunity to the Appellant wherever the Commission differs with the findings of the DG and to decide the case expeditiously in a time-bound manner,” NCLAT said.

The NCLAT also made it clear that it has “not commented on the merits of the case” while passing the order, the CCI “should not be influenced by anything contained in this judgement”.

CCI in its order had said it had abused its dominant position in the market for supply of VSF to spinners in India by charging discriminatory prices to its customers, besides imposing supplementary obligations upon them.

The CCI has directed the company to “refrain from adopting unfair/discriminatory pricing practices and also refrain from seeking the consumption details of VSF from the buyers”.

Further, the watchdog had asked Grasim Industries to put in place a discount policy, which is transparent and non-discriminatory to all market participants, and to make it easily and publicly accessible/available.

A complaint alleging unfair business practices was filed against Association of Man Made Fibre Industry of India, Grasim Industries, Thai Rayon, and Indo Bharat Rayon. The three companies are part of the Aditya Birla Group.

VSF is a versatile, biodegradable, cellulosic fiber used widely in fashion apparel, home textiles, and non-woven hygiene products.

Known for its soft texture, high absorbency, and excellent drape, VSF is often blended with cotton, polyester, or linen to enhance comfort, durability, and fabric quality.