10 cement manufacturing firms told to pay Rs 630 crore by June 24
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13/06/2013
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Tribune (New Delhi)
The Supreme Court today directed 10 cement manufacturing companies to pay Rs 630 crore by June 24 as a pre-condition for hearing their appeals against a penalty of Rs 6,300 crore imposed on them for artificially hiking cement prices by forming a cartel.
A vacation Bench comprising Justices Gyan Sudha Misra and SJ Mukhopadhaya asked the companies to deposit the amount, representing 10 per cent of the penalty, with the Competition Appellate Tribunal (COMPAT) which would hear their appeal against the order of the Competition Commission of India (CCI).
The CCI had slapped the penalty on the 10 companies following a complaint by the Builders Association of India. It was alleged that the companies formed a cartel for under-utilisation of capacity to jack up prices during the period of peak demand. The companies are ACC, Ambuja Cements Ltd, Ultratech Cements, JK Cements, India Cements, Madras Cements, Century Textiles, Binani Cements, Lafarge India and Jaiprakash Associates Ltd (JAL).
The COMPAT had directed them to deposit 10 per cent of the penalty by June 16 to facilitate hearing of their appeal, prompting them to challenge this order in the SC. Affirming the tribunal's order on the amount, the SC however extended the deadline for payment.
Counsel for the companies contended that the CCI had wrongly calculated the penalty amount by taking into account the profits of several cement companies, instead of restricting the exercise to the 10.
The 10 per cent of the penalty amount should be deposited with a nationalized bank until the disposal of their appeal, the SC said.
The cement companies were fined 50 per cent of their average profit for 2009-11 representing the period that had been subjected to investigation.