J U D G M E N T

(Hybrid Mode)

[Per: Ajai Das Mehrotra, Member (Technical)]

1.This appeal arises against the order dated 16th March, 2020 passed by the Competition Commission of India in Case No.62 of 2016 inter alia holding Appellant guilty of contravention of provisions engrafted under Section 4(2)(a)(ii), 4(2)(d) read with Section 4(1) of the Competition Act, with an amount of Rs.301.61 Crore(s) imposed as penalty. The Appellant has assailed the findings qua abuse of dominant position attributed to Appellant.

2. Another Competition Appeal (AT) No.11 of 2020 has been filed by the Textile Consumers Foundation against the same impugned order on the ground of inadequate penalty imposed on Grasim Industries.

3. It is submitted the following findings and directions have been given against the appellant in the impugned order viz.

i) the relevant market is the Market for supply of Viscose Staple Fibre (VSF) to spinners in India in which market the appellant enjoys the dominant position;

ii) the appellant charges unfair and discriminatory price for sale of VSF to its customers in contravention of Section 4(2)(a)(ii) read with Section 4(1) of the Act;

iii) the appellant has imposed supplementary obligations in contravention of Section 4(2)(d), read with Section 4(1) of the Act;

iv) the appellant must publish its discount policy which must be transparent and non-discriminatory to all the market participants, and to make it easily and publicly accessible;

v) appellant must not impose any end-use restriction on the buyers, who should be free to trade in VSF or use the same for any purpose including spinning.

4. Based on the aforesaid findings, the Commission has imposed a penalty of Rs.301.61 crores upon the appellant. It is argued that Commission’s direction in (iv) and (v) are intrusive, unreasonable and seek to impede the appellant’s legitimate entitlement to conduct its trade and business in a commercially reasonable manner and further these directions are contrary to the explicit findings contained in the investigation report of the Director General.

Arguments of the Appellant:

5. It is submitted if the Commission was to deviate from the DG’s report, the Commission ought to have given an opportunity to the appellant to show cause, as to why such deviation is necessary. The show cause notice should have set out the grounds on which the Commission would seek to deviate from the DG’s report.

5.1 In this regard Appellant urges two facts as important:

i) Alleged violation of the Act in relation to the alleged restriction on traders: The DG’s report has explicitly observed that the Appellant has no obligation to keep the traders in business and it cannot be faulted for not doing so and did not find any violation against the appellant in relation to the non-supply to traders by the Appellant in the alleged market for supply of VSF; and

ii) Alleged violation of the Act in relation to the pricing discount policy: It is argued that the DG’s report did not hold the appellant to be violative of the Act in relation to the alleged non-disclosure of its pricing/discount policy and noted that not dis