The National Company Law Appellate Tribunal (NCLAT) has set aside a ₹301.6 crore penalty imposed on Grasim Industries by the Competition Commission of India (CCI), directing the regulator to conduct a fresh hearing in the case related to alleged abuse of dominance in the viscose staple fibre (VSF) market.
The tribunal observed that the CCI had failed to provide Grasim an adequate opportunity to present its arguments, particularly after it differed from the findings of its investigative arm, the Director General (DG). It noted that in situations where the Commission disagrees with the DG’s conclusions, the affected party must be given a fair chance to respond.
A two member NCLAT bench held that the CCI had “omitted to give notice” to Grasim regarding its disagreement with the DG’s findings, thereby depriving the company of an opportunity to defend itself. The tribunal accordingly set aside the order and remanded the matter back to the CCI, instructing it to rehear the case in a time bound manner.
Importantly, the appellate body clarified that it has not commented on the merits of the case, and the CCI should proceed independently while reconsidering the matter.
The original order, passed by the CCI in March 2020, had found Grasim guilty of abusing its dominant position in the supply of VSF to spinners in India. The regulator had alleged that the company engaged in discriminatory pricing practices and imposed additional obligations on buyers. It had also directed Grasim to adopt a transparent and non-discriminatory discount policy and refrain from seeking consumption related data from customers.
The case stems from a complaint filed against industry players including Grasim Industries, Thai Rayon, and Indo Bharat Rayon, all part of the Aditya Birla Group.
VSF, a biodegradable fibre widely used in textiles and hygiene products, remains a critical raw material in India’s textile value chain, making the outcome of the case significant for the broader industry.
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