Developers get relief from Competition Appellate Tribunal
The total penalty is to the tune of Rs 6307.32 crore
May 27, 2013
Source : The Times of India

 

MUMBAI: The Builders' Association of India (BAI), the apex body of builders and contractors and the only representative body which takes up the concerns and grievances of builders to the state and central governments, recently scored a major victory against alleged cartelisation by the cement industry.

Competition Appellate Tribunal confirmed that 10 per cent of the penalty imposed by the Competition Commission of India on June 20 last year has to be paid within one month. The total penalty is to the tune of Rs 6307.32 crore which is to be incurred by the Cement Manufacturers' Association, ACC, Ambuja Cement, Ultra Tech, Grasim Cements, Lafarge India, JK Cement, India Cements, Madras Cements, Century Cements and Binani Cement. They have all been accused of creating a cartel to indulge in unfair trade practices.

 

Anand Gupta, Honorary General Secretary of BAI said "The order was read out by Justice Mr V.S. Sirpukar, Chairman of the Competition Tribunal and brings to a conclusion this long-standing problem which has caused much hardship and loss to builders and the construction industry as a whole. In a similar case, a penalty of Rs 397.51 crore was imposed on Shree Cements and the Competition Commission directed the company to deposit the penalty amount within a period of 90 days. He disclosed that the association and the concerned cement firms moved the tribunal initially for a stay on depositing the penalty amount and also to quash the impugned order on various grounds."

 

Shankarbhai Desai, Trustee of BAI, said that during the first four days of listing the matter for hearing, the tribunal did grant a stay on depositing the penalty imposed by the Competition Commission and on December 6 last year, the Chairman of the Competition Appellate Tribunal ordered the said cement companies to come out with an application on the common grounds applicable to all of them. Accordingly, these companies moved applications for taking up the matter maintaining that when the final hearing of the Competition Commission took place on February 21 , 22 and 23, 2012 only six members of the commission were present..

 

They also alleged that the Commission did not allow witnesses to be cross-examined and that there was no direct evidence with regard to cement manufacturers indulging in cartelisation and thus the orders of the commission needed to be remanded and sent back to the commission for reconsideration. The tribunal gave 29 companies the opportunity to put forth their arguments but the matter did not come up for hearing on January 29 and 30, 2013. But in February and March a marathon hearing and other case hearings took place with senior counsels participating from the cement companies and the BAI. On March 18 , the orders were reserved.

Anand Gupta said "It is a major relief for developers and as well as for consumers." The BAI established in 1941, has over 14,000 business houses as direct members with 134 centers spread across the length and breadth of the country. It has 50,000 indirect members through its 67 plus affiliated associations.

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