NCLAT stays Rs 200 crore penalty by CCI on Maruti Suzuki for now

National Company Law Appellate Tribunal today stayed the order of the Competition Commission of India that imposed a penalty of Rs 200 crore rupees on automaker Maruti Suzuki earlier this year.

In an interim relief granted to the carmaker, the NCLAT has also agreed to hear Maruti Suzuki’s appeal against CCI’s decision to impose the penalty. Until further orders from the appellate tribunal, CCI’s order for penalty will remain stayed.

Maruti Suzuki, however, is required to deposit 10 percent of the penalty amount with the NCLAT’s registry within a period of three weeks by way of fixed deposit receipts.

The competition watchdog had penalised the auto-giant in August this year for “indulging in anti-competitive conduct of Resale Price Maintenance (RPM) in the passenger vehicle segment.” The commission had directed Maruti Suzuki to “cease and desist” from indulging resale price management either directly or indirectly to deposit the penalty amount within a period of 60 days.

A recovery notice to give effect to the penalty was also issued by the commission while an appeal against the original order remained pending before the NCLAT. The tribunal today stayed the recovery notice also along with the penalty order.

The issue dates back to 2019 when the competition commission began its probe into the allegations that Maruti Suzuki was indulging in resale price management of its vehicles by restricting auto-dealers from offering discounts beyond the limit prescribed by the company. The probe culminated with the commission’s order in its suo moto case this August.

The carmaker, has challenged this order and claimed that the commission has erred in imposing the penalty. Among other things, the auto-giant claimed that the commission, while imposing the penalty, failed to show how the alleged resale price management agreement between the company and its dealers was causing appreciable adverse effect on competition in the relevant market – a requisite feature under the competition law while dealing with anti-competitive agreements.

The tribunal has concluded that the legal issues raised in the case need detailed consideration and has fixed the date for hearing the case on Dec 15.