M/S. B. HIMMATLAL AGRAWAL versus COMPETITION COMMISSION OF INDIA & ANR.
[2018] 4 S.C.R. 496, Supreme Court of India, 2018
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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M/S. B. HIMMATLAL AGRAWAL
v.
COMPETITION COMMISSION OF INDIA & ANR.
(Civil Appeal No. 5029 of 2018)
May 18, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Competition Act, 2002:
s. 53B – Appeal under – Dismissal of – For non-compliance
of condition imposed for granting stay of operation of the impugned
order – Held: The condition was attached to the order of stay and
not for entertaining the appeal – Therefore, non-compliance of the
condition, would not warrant dismissal of appeal.
Allowing the appeal, the Court
HELD: 1. The order of the Competition Commission was
challenged by filing appeal under Section 53B of the Competition
Act, 2002.  Section 53B confers a right upon any of the aggrieved
parties mentioned therein to prefer an appeal to the Appellate
Tribunal.  This statutory provision does not impose any condition
of pre-deposit for entertaining the appeal.  Therefore, right to
file the appeal and have the said appeal decided on merits, if it is
filed within the period of limitation, is conferred by the statute
and that cannot be taken away by imposing the condition of deposit
of an amount leading to dismissal of the main appeal itself if the
said condition is not satisfied. Sub-section (3) of Section 53B
specifically casts a duty upon the Appellate Tribunal to pass order
on appeal, as it thinks fit i.e. either confirming, modifying or
setting aside the direction, decision or order appealed against.
It is to be done
after giving an opportunity of hearing to the parties
to the appeal.  It, thus, clearly implies that appeal has to be decided
on merits. The Appellate Tribunal, which is the creature of a
statute, has to act within the domain prescribed by the law/
statutory provision.  This provision nowhere stipulates that the
Appellate Tribunal can direct the appellant to deposit a certain
amount as a condition precedent for hearing the appeal. [Paras 6
and 7][499-F; 501-A-D]
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2. In the present case, the condition of deposit was attached
to the order of stay. In case of non-compliance of the said
condition, the consequence would be that stay has ceased to
operate as the condition for stay is not fulfilled. However, non-
compliance of the conditional order of stay would have no bearing
insofar as the main appeal is concerned.  Therefore, at the most,
stay could have been vacated.  The Appellate Tribunal, thus, had
no jurisdiction to dismiss the appeal itself.  The appeal is restored
which shall be decided by the Appellate Tribunal on merits. [Paras
6, 7 and 9][499-H; 500-A; 501-E; 502-A]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5029
of 2018.
From the Judgment and Order dated 21.12.2017 of the High Court
of National Company Law Appellate Tribunal in IA No. 84 of 2017 in
COA No. 24 of 2017.
Mohit Chaudhary, Kunal Sachdeva, Ms. Manju Jetley, Ms. Puja
Sharma, Ms. Tripti Podder, Balwinder Singh, Advs. for the Appellant.
Arjun Krishnan, Ankur Singh, Sumit Srivastava, Advs. for the
Respondents.
The Judgment of the Court was delivered by
A. K. SIKRI, J. 1. A neat question of law which arises for
consideration in this appeal is as to whether the order of the National
Company Law Appellate Tribunal (hereinafter referred to as the
‘Appellate Tribunal’) dismissing the main appeal itself of the appellant
herein for non-compliance of the direction to deposit the amount as a
condition for grant of stay, is justified and legal.
2. In
order to decide this question, it is not necessary to take stock
of the factual matrix in detail.  Narration of the following facts, which
are germane for deciding this appeal, would suffice.
The appellant herein is a partnership firm, engaged in the business
of transportation of coal and sand since 1981.  In Ju.ne, 2014, the
appellant firm participated in two tenders, bearing numbers 03/2014-15
and 06/2014-15 floated by the respondent No. 2 herein i.e. M/s. Western
Coalfields Limited.  The appellant firm was L-II and not the lowest
bidder for allotment of the tenders.  In June, 2015, the appellant firm
M/S. B. HIMMATLAL AGRAWAL v. COMPETITION
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received a notice from the Competition Commission of India, New Delhi
(hereinafter referred to as ‘CCI’) asking to show cause under Section
19(1)(a) read with Section 3 of the Competition Act, 2002 (hereinafter
referred to as the ‘Act’).  In the said notice, it was alleged that the
appellant firm was involved in anti-competitive and unfair trade practices
in collusion with nine other firms.  The appellant firm filed its reply.  The
CCI after considering the same passed orders under Section 26 of the
Act and directed the inquiry to be conducted by the Director General
(DG) of the CCI.  DG submitted its report after the inquiry giving his
findings to the effect that the appellant had indulged in anti-competitive
and unfair trade practices in collusion with the other firms.  The appellant
was given a chance to file its objections thereto.  After considering those
objections, the CCI passed orders dated September 14, 2017 affirming
the findings of the DG and imposed penalties on the appellant firm as
well as nine parties.  Insofar as appellant is concerned, penalty of Rs.3.61
crores has been imposed.
3. The appellant filed the statutory appeal thereagainst before the
Appellate Tribunal which was registered as Competition Appeal (AT)
No. 24/2017.  The appellant also prayed for interim stay of the penalty
order.  Arguments were heard on admission as well as on stay.  Vide
orders dated November 20, 2017, Appellate Tribunal
admitted the appeal.
It also granted stay on the orders of the CCI with the condition of
depositing 10% of the total penalty (i.e. a sum of Rs. 36,12,222/-) imposed
by CCI, to be paid by the appellant, within two weeks i.e. by December
4, 2017.  The appellant could not fulfill the said condition of deposit.
When the matter was taken up on December 4, 2017, the appellant
pleaded before the Appellate Tribunal that non-compliance because of
financial crunch which the appellant was facing.  The Appellate Tribunal,
however, passed orders dated December 4, 2017 to the following effect:
“By way of last opportunity, the appellant is given time till
20th December, 2017 to deposit 10% of the penalty amount,
failing which, the appeal stands disposed without referring further
to the bench”.
4. As per the appellant, since it was in deep financial trouble, it
could not deposit the amount by December 20, 2017 in spite of all bona
fide intentions.  The appellant accordingly filed I.A. No. 84 of 2017 on
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December 18, 2017 seeking modification of orders dated December 4,
2017.  It was stated in the said application that it had incurred net loss of
Rs.3,72,45,393.94 for the Financial Year 2016-17 and, therefore, was
not in a position to deposit the said amount.  The request of the appellant
was, however, not acceded to and vide orders dated December 21, 2017,
the Appellate Tribunal has dismissed I.A. No. 84 of 2017.  At the same
time, it has dismissed the appeal of the appellant as well for non-
compliance of its order dated December 4, 2017.  The order dated
December 21, 2017 reads as under:
“21.12.2017 – We find no ground made out to modify our interim
order dated 20th November, 2017.  In fact, the stay order was
passed on the request of the learned counsel for the appellant and
the amount having not deposited within the time, last opportunity
was given on 4th December, 2017 to deposit the amount.  In terms
of the order dated 4th December, 2017 the appeal now stands
disposed off without further reference to the Bench.
  In view of the order aforesaid dated 4th December, 2017, both
the IA No.84/2017 and Competition Appeal (AT) No. 24/2017
stands disposed off for non-compliance of the Appellate Tribunal.”
 5. A pure legal submission which is advanced by the learned
counsel for the appellant is that even if the appellant could not comply
with orders dated December 4, 2017 vide which conditional stay was
granted directing the appellant to deposit 10% of the
penalty amount, the
maximum effect thereof was to vacate the stay granted and the Appellate
Tribunal was not legally justified in dismissing the appeal itself.  This
submission of the appellant commends acceptance, having due force
and substance in law.
6. From the facts narrated above, it is apparent that order of the
CCI was challenged by filing appeal under Section 53B of the Act. Along
with this appeal, the appellant had also filed application for stay of the
operation of the order of the CCI during the pendency of the appeal.
Appeal was admitted insofar as stay is concerned, which was granted
subject to the condition that the appellant deposits 10% of the amount of
penalty imposed by the CCI.  It needs to be understood, in this context,
that the condition of deposit was attached to the order of stay.  In case
M/S. B. HIMMATLAL AGRAWAL v. COMPETITION
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of non-compliance of the said condition, the consequence would be that
stay has ceased to operate as the condition for stay is not fulfilled.
However, non-compliance of the conditional order of stay would have
no bearing insofar as the main appeal is concerned.  Right to appeal is
statutorily provided under Section 53B of the Act, which reads as under:
“53B. Appeal to Appellate Tribunal. —
(1)  The Central Government or the State Government or a local
authority or enterprise or any person, aggrieved by any direction,
decision or order referred to in clause (a) of section 53A may
prefer an appeal to the Appellate Tribunal.
(2)  Every appeal under sub-section (1) shall be filed within a
period of sixty days from the date on which a copy of the
direction or decision or order made by the Commission is received
by the Central Government or the State Government or a local
authority or enterprise or any person referred to in that sub-section
and it shall be in such form and be accompanied by such fee as
may be prescribed:
     Provided that the Appellate Tribunal may entertain an appeal
after the expiry of the said period of sixty days if it is satisfied that
there was sufficient cause for not filing it within that period.
(3)  On receipt of an appeal under sub-section (1), the Appellate
Tribunal may, after giving the parties to the appeal, an opportunity
of being heard, pass such orders thereon as it thinks fit, confirming,
modifying or setting aside the direction, decision or order appealed
against.
(4)  The Appellate Tribunal shall send a copy of every order made
by it to the Commission and the parties to the appeal.
(5)  The appeal filed before the Appellate Tribunal under
sub-section (1) shall be dealt with by it as expeditiously as possible
and endeavour shall be made by it to dispose of the appeal within
six months from the date of receipt of the appeal.”
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7. The aforesaid provision, thus, confers a right upon any of the
aggrieved parties mentioned therein to prefer an appeal to the Appellate
Tribunal.  This statutory provision does not impose any condition of pre-
deposit for entertaining the appeal.  Therefore, right to file the appeal
and have the said appeal decided on merits, if it is filed within the period
of limitation, is conferred by the statute and that cannot be taken away
by imposing the condition of deposit of an amount leading to dismissal of
the main appeal itself if the said condition is not satisfied.  Position would
have been different if the provision of appeal itself contained a condition
of pre-deposit of certain amount.  That is not so.  Sub-section (3) of
Section 53B specifically cast a duty upon the Appellate Tribunal to pass
order on appeal, as it thinks fit i.e. either confirming, modifying or setting
aside the direction, decision or order appealed against.  It is to be done
after giving an opportunity of hearing to the parties to the appeal.  It,
thus, clearly implies that appeal has to be decided on merits.  The Appellate
Tribunal, which is the creature of a statute, has to act within the domain
prescribed by the law/statutory provision.  This provision nowhere
stipulates that the Appellate Tribunal can direct the appellant to deposit a
certain amount as a condition precedent for hearing the appeal.  In fact,
that was not even done in the instant case.  It is stated at the cost
of
repetition that the condition of deposit of 10% of the penalty was imposed
insofar as stay of penalty order passed by the CCI is concerned.
Therefore, at the most, stay could have been vacated.  The Appellate
Tribunal, thus, had no jurisdiction to dismiss the appeal itself.
8. We may mention that the learned counsel appearing for the
CCI had referred to the judgment of this Court in the case of Ultra
Tech Cement Ltd. v. Competition Commission of India & Ors.1.  Said
judgment has no application to the facts of this case. That was a case
where the appellant had challenged the jurisdiction of the Appellate
Tribunal to pass conditional order i.e. deposit of 10% of the penalty as a
condition for grant of stay.  It was argued that the Appellate Tribunal did
not have any power to impose such a condition for grant of stay.  This
challenge was rejected by the  Court holding that Appellate Tribunal
could pass a conditional stay order.  No such issue, that has arisen in the
instant appeal, was raised therein, namely, whether the Tribunal could
dismiss the appeal itself if the condition attached to the grant of stay is
not complied with.
  1Civil Appeal Nos. 4766-4767 of 2013 with Ors. decided on June 12, 2013
M/S. B. HIMMATLAL AGRAWAL v. COMPETITION
COMMISSION OF INDIA & ANR. [A.K. SIKRI, J.]
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9.  Accordingly, we allow this appeal and set aside that part of the
impugned order whereby the appeal of the appellant is dismissed and
restore the appeal which shall be decided by the Appellate Tribunal on
merits.  We, however, make it clear that as far as stay of the penalty
order is concerned, that stood vacated for non-compliance of the condition
of deposit of 10% of the penalty and, thus, there is no stay of the CCI
order in favour of the appellant.
No cost.
Kalpana K. Tripathy
 Appeal allowed.