competition commission

tay against penalty granted as strong doubt arose during further appeal on the scope of CCI’s powers

Competition Act : Penalties imposed by CCI were stayed where in appeal against order of CCI, a serious issue regarding scope of adjudicatory role of CCI had arisen

■■■

[2013] 35 taxmann.com 606 (CAT - New Delhi)

COMPETITION APPELLATE TRIBUNAL, NEW DELHI

Lafarge India Ltd.

v.

Competition Commission of India

JUSTICE V.S. SIRPURKAR, CHAIRMAN
RAHUL SARIN AND MRS. PRAVIN TRIPATHI, MEMBER

APPEAL NOS. 103 TO 113,122 TO 129 & 132 TO 134 OF 2012
I.A. NOS. 113,115,116,117,211,212, 214,218,219,
221 TO 225,232,233,259,260,267,268,270,274 & 275 OF 2012

MAY  17, 2013 

Section 22, read with sections 15 and 27, of the Competition Act, 2002 - Commission - Meetings of [Role of Commission] - Builder's Association of India filed an information under section 19 against Cement Manufacturers' Association and 11 other cement manufacturing companies alleging that they were controlling price of cement by limiting and restricting production and supply of cement as against available capacity of production - CCI held that those companies had contravened provisions of section 3 and imposed heavy penalty on them - In appeal, in light of rival contentions of parties, a serious issue had arisen as to what is in fact scope and ramification of amendment of sections 22 to 25 and whether CCI has an adjudicatory role at all as declared by Supreme Court in Brahm Dutt v. Union of India [2005] 57 SCL 429 case and in case of CCI v. Steel Authority of India Ltd. [2010] 103 SCL 269/7 taxmann.com 23 (SC) - This being a very complex question, would require not only consideration of section 22, but also section 15 and general regulations, which also were amended - Whether there was a prima facie case for granting of stay in respect of penalties - Held, yes [Para 37]

FACTS

 

Facts

■		The Builders' Association of India filed an information under section 19 against the Cement Manufacturers' Association and 11 other cement manufacturing companies alleging that under the umbrella of Cement Manufacturers' Association, the cement manufacturers were engaged in the monopolistic and restrictive trade practices in an effort to control the price of cement by limiting and restricting the production and supply of cement as against the available capacity of production for which they had divided the territory of India into five zones so as to enable themselves to control the supply and determine or fix exorbitantly high price of cement by forming a cartel in contravention of provisions of section 3.
■		The CCI referred this information for further investigation by the Director General. The Director General appears to have consulted 12 top companies and investigated into their affairs and on that basis, came to the conclusion that the companies were guilty of the contravention of section 3(1), 3(3)(a) and 3(3)(b).
■		That report was supplied to all the appellants and considering their objections, the CCI deduced that those companies had contravened the provision of the Act more particularly under section 3. The CCI imposed heavy penalties on the appellants.

The arguments of the appellants

■		The order of the CCI itself was non-est as it was signed by the Chairman of the CCI though he had not attended the meetings during which the appellant's counsel put in the oral arguments.
■		In considering the information and in awarding exemplary heavy penalties, the CCI was doing adjudicatory function and, therefore, the CCI was bound to respect and follow the principles of natural justice which was not done by the CCI.
■		The findings arrived at by the CCI were inferential in the nature and with no supporting evidence.
■		The only few cement manufacturers were cherry picked without there being any justifying reason for so doing.

The arguments of the CCI

■

The CCI, though was having adjudicatory function, however, it transacted its business in the meetings and even if the Chairman did not attend the meeting during the oral arguments, he ultimately attended the meeting held later on where there was a consideration of the written arguments and since the Chairman took active part in considering the written submissions, there was nothing wrong if he contributed his signature to the final order.

Issue involved

■

What is exact role of the CCI after amendment of sections 22 to 25 with effect from 12-10-2007?

HELD

 

■		A very substantial issue would be required to be decided in the light of rival contentions by the parties. That issue will be about the exact role of the CCI. [Para 33]
■		The adjudicatory role of the CCI was reiterated by the Supreme Court in CCI v. Steel Authority of India Ltd. [2010] 103 SCL 269/7 taxmann.com 23 case, wherein it was unequivocally held that the CCI had the adjudicatory functions in addition to regulatory and advisory functions. The Supreme Court also referred to another function of the CCI, which was advocacy. However, it seems that by the Amending Act No. 39 of 2007, sections 22, 23, 24 and 25 came to be amended with effect from 12-10-2007. [Para 34]
■		Section 22, as it existed prior to the amendment, provided for the benches and it was imperative that every bench should consist of at least one 'Judicial member'. It was provided by the Explanation to sub-section (3) that such judicial member meant a member who is, or has been, or is qualified to be a Judge of a High Court. The section, therefore, specifically took note of and stressed upon the adjudicatory role of the CCI as contemplated in Brahm Dutt v. Union of India [2005] 57 SCL 429 (SC). Once this section was amended and it was provided in new section 22 that the Commission would transact its business in the meetings and that all the questions in the meeting would be decided by a majority vote where Chairperson would have a casting vote in case of an equality of votes, the message was loud and clear that inspite of the specific observation of the Supreme Court, the adjudicatory role was done away with. [Para 34]
■		A serious issue has, therefore, arisen as to what is in fact the scope and ramification of this amendment and whether the CCI has an adjudicatory role at all as declared by the Supreme Court in Brahm Dutt case (supra) and in case of Steel Authority of India Ltd. (supra) India. Further, whether the CCI would be bound by the judicial discipline and the norms or it would only be an advisory, regulatory or an expert body, so as not to be bound by the strict judicial norms. The amendment to section 22 will have to be tested against the observations of the Supreme Court in Brahm Dutt's case (supra), which was prior to the amendment and Steel Authority of India Ltd. (supra) judgment which was subsequent to the amendment. This being a very complex question, would require not only the consideration of section 22, but also section 15 and the general Regulations, which also were amended. [Para 36]
■		In that view, there is a prima facie case for granting of stay at least in respect of the penalties, which are of very substantial nature. The total penalties would come in the range of Rs. 6,000 crores. While inflicting the penalties, the CCI has also taken into consideration, not only the 10 per cent turnover, gross-turnover and other factors, it has also taken into consideration the net profits earned by these appellants, which are to say the least fabulous. The Commission has chosen to impose the penalty at 0.5 times of the net profit for 2009-10, that too from 20-5-2009. It is pointed out by the Commission that the amount of 3 times of net profit calculated is higher than 10 per cent of the average turnover. In that view, the Commission has inflicted the penalties of 0.5 times of the net profit for one year that is from 2009 to 2010 that too taking from 20-5-2009 and 2010-11. Under such circumstances, stay is granted to the penalties, however with a condition that the appellants shall deposit 10 per cent of the penalties inflicted. [Para 37]

CASES REFERRED TO

 

Kingfisher Airlines Ltd. v. CCI [2011] 108 SCL 621/12 taxmann.com 285 (Bom.) (para 11), Brahm Dutt v. Union of India [2005] 57 SCL 429 (SC) (para 18) and CCI v. Steel Authority of India Ltd. [2010] 103 SCL 269/7 taxmann.com 23 (SC) (para 18).

Gopal Subramanium, Parag Tripathi, Samir Gandhi, Karan Vir Khosla, Ms.Hemangini Dadwa, Iqbal Chagla, Ashwath Rau, Ms. Anu Tiwari, Ms.Gargi Yadav, Ramji Srinivasan, Dr. Abhishek Manu Singhvi, Mrs. Pallavi S. Shroff, Ms. Shweta Shroff Chopra, Harman Singh Sandhu, Yaman Verma, Ms.Sangeetha Mugunthan, Ms.Kabita Das, Rook Ray, L. Nageshwara Rao, Pramod B. Agarawala,Prashant Mehra, Ravi Kadam, Aspi Chimoy, Pravin H. Parekh, Ms. Sonali Basu Parekh, Sameer Parekh, Dr.V.K. Agarwal, Anand S. Jha, Aditya Sharma, Utsav Trivedi, Ms. Nupur Sharma, C.S. Vaidyanathan, Hari Shankar, Ms.Kanika Chaudhary Nayar, Vikram Sobti, Udayan Jain, Ms. Nidhi Singh, A.N. Haksar, G.R. Bhatia, Ms.Chitra, Sudhir Gupta, Virender Goswami, Arvind Datar,Abhinay, T. Srinivasa Murthy, Rahul Bajaj, Krishnan Venugopal, P.K. Bhalla, Shyam Dewan, Pramod B. Agarwala, Abhinav Malhotra, Prashant Mishra, Vikas Singh Jangra, Aditya Verma, Dushyant Dave, Manas Kumar Chaudhari, Ramesh Singh, Vijay Chauhan and Sagardeep Rathi, Pranjal Prateek for the Appellant. Balbir Singh, Abhishek Singh Baghel, Ms.Monica Benjamin,Abhishek Yadav, Mayank Bansal, Ms. Shabistan Aquil, O.P. Dua and Shubham for the Respondent.

ORDER

 

Mr. Justice V.S. Sirpurkar, Chairman - This order will govern the following 11 Appeals. They are filed by :-

1.		Associated Cement Corporation - Appeal No. 108/2012 133/2012
2.		Gujarat/Ambuja Cement Ltd. -Appeal Nos. 110/132 of 2012
3.		Grasim Cement / Ultratech Cement Ltd. -Appeal No. 104/126 of 2012
4.		Cement Manufacturing Association - Appeal No. 103/122 of 2012
5.		Jai Prakash Associated Ltd. -Appeal Nos. 107/129 of 2012
6.		India Cements Ltd. - Appeal Nos. 106/134 of 2012
7.		J.K Cements (JK Group) - Appeal Nos. 112/128 of 2012
8.		Century Textiles & Industries Ltd.(Century Cement)- Appeal Nos. 113/124 of 2012
9.		Madras Cement Ltd.-Appeal Nos. 111/123 of 2012
10.		Binani Cement Ltd. - Appeal Nos. 109/125 of 2012
11.		Lafarge India Pvt. Ltd.-Appeal Nos. 105/127 of 2012

When these appeals came before us, we had issued notice on the merits as well as on the stay application by order dated 13-09-2012. By the same order we had directed that no coercive steps should be taken against the appellants for recovery of the penalty ordered by the Competition Commission of India ('CCI" hereinafter) till 11-10-2012. Thereafter, during the hearing on 11-10-2012, it was pointed out by the appellants that they were not served with the complete orders inasmuch as the confidential information was not disclosed to a particular appellant. The learned counsel arguing for the CCI agreed to supply the order copies maintained under Regulation 35(13) of the General Regulations, 2009. The appellants had also sought for relief to amend their Appeal Memos on the basis of the fresh copy of the order including the confidential data. Accordingly, the appellants amended their Memo of Appeals. Seven Appellants amended Memo of Appeals while the remaining did not file any amended Memo of Appeals. All those amendments were allowed by order dated 6th December, 2012. While arguing for stay, it was found that there were some common issues which pertain to very validity of the order passed by the CCI. The learned counsel for the appellant urged that those common issues should be addressed first and thereafter appeal should be argued individually heard on the basis of the individual facts pertaining to that particular appellant. This suggestion was accepted by the counsel for the CCI and the interim protection granted was extended up to 29th January, 2013 and by order dated 30-1-2013 these appeals along with the second group of the appeals were ordered to be heard in third week of February, 2013. The first group which covers Appeal Nos. : 105 of 2012 by Lafarge India Ltd.; 110 of 2012 by Ambuja Cement Ltd.; 108 of 2012 by Associated Cement Corporation ; 103 of 2012 by Cement Manufacturers Association; 104 of 2012 by Ultra Tech Cement Limited; 106 of 2012 by India Cement Limited; 107 of 2012 by Jai Prakash Association Ltd.; 109 of 2012 by Binani Cement Limited and 11of 2012 by Madras Cement Limited are in the first group while the remaining 14 appeals consist of the second group.

2. The proceedings against the appellants in the second group were pending under the old MRTP Act. However, after the repeal of the MRTP Act, they came to be treated as pending under this Act because of Section 66 of the present Competition Act, 2009 (Act for short). It is seen that the appeals under the first group are against the orders passed by the CCI wherein the CCI was activated by the informant i.e. Builders' Association of India and since the appellants covered by the first group were awarded with the penalties by the CCI, the CCI did not choose to award separate penalty against the appellants in the second group with the exception of M/s. Shree Cement Ltd. represented by Shri Dushyant Dave, Sr. counsel. The penalties inflicted by the CCI are as follows :-

Name	Net profit 209-10 taking into account period of contravention Post Notification i.e. 20-5-2009 on pro-rata basis (in Rs. crores	0.5 times of Net Profit as calculated in column 2 (in Rs. crore)	Net Profit 2010-11 (in Rs. crores)	0.5 times of Net Profit as calculated in column 4 (in Rs. crore)	Total (in Rs. crore)
ACC Ltd.	969.92	484.96	1,325.26	662.63	1147.39
Ambuja Cement Ltd	1064.19	532.10	1,263.81	631.81	1163.91
Binani Cement	244.13	122.07	90.50	45.25	167.32
Century Textiles Ltd.	308.43	154/22	239.60	119.80	274.02
India Cements Ltd	306.85	153.43	68.10	34.05	187.48
J K. Cement	194.46	97.23	62.62	31.31	128.54
Lafarge India	566.61	283.31	413.40	206.70	49001
Madras Cements Ltd.	306.27	153.14	210.97	15.49	258.63
Ultratech Cement Ltd	946.74	473.37	144.23	72.12	1175.49
Jaiprakash Associates Ltd.	1479.43	739.71	1167.78	583.89	1323.60

Name	Gross turnover for 2008-09 (in Rs. crores)	Gross turnover 2009-10 (in Rs. crore)	Gross turnover 2010-11 (in Rs. crore)	Average Turnover for three years	Penalty at rate of 10% on average turnover (in Rs. crore)
Cement Manufacturer Association	9.27	6.65	5.99	7.30	0.73

Thus, they are substantial penalties.

3. The learned counsel arguing for the appellants prayed for passing of the blanket stay order in view of their objections to the legality of the impugned order passed by the CCI. Thus, the question of the stay became essentially linked with the submission on the merits of the whole matter. According to the learned counsel for the appellants firstly there were some basic defects in the order which would render the same non-est. And, therefore, the appellants claimed the blanket stay of the orders of the penalty. It was also suggested that even on individual merits, the appellants were entitled to the grant of blanket stay.

4. Insofar as the basic contention regarding the shortcomings in the order the learned counsel went on to formulate the common issues and raised contentions thereon. They, however, sought the permission to address even on the individual facts in each appeal in support of their plea for blanket stay. Each appellant culled out these common issues and addressed us extensively on the common issues as well as on the merits in support of their contention for the blanket stay. The learned counsel for the informant - Builders' Association of India and also the CCI also addressed us extensively opposing the grant of stay. We have now to see on the basis of the rival contentions raised as to whether the appellants are entitled for the blanket stay of the impugned order by the CCI.

5. The Builders' Association of India filed an information under Section 19 of the Act on 26-7-2010 against the Cement Manufacturers' Association and 11 other cement manufacturing companies. In their complaint they alleged violation of the provisions of Sections 3 and 4 of the Act by the appellants. In their information they describe themselves as a Society registered under the Societies Registration Act and asserted that the Cement Manufacturers Association of India was the representative body of the companies manufacturing cement and that it has 46 members. All the appellants herein were described as the members. It is alleged that under that umbrella of the cement manufacturers engaged in the monopolistic and restrictive trade practices in an effort to control the price of cement firstly by limiting and restricting the production and supply of cement as against the available capacity of production. The said cement manufacturers in connivance with their representative body Cement Manufacturers Association indulged in collusive price fixing for which they have divided the territory of India into five zones so as to enable themselves to control the supply and determine or fix exorbitantly high price of cement by forming a cartel in contravention of provision of Section 3 of the Act. It was alleged that the appellants herein i.e. Cement Manufacturing companies collectively held more than 57.23% of the market share in India and thus enjoyed the position of dominance and went on arbitrarily increasing the price of cement which price was unfair and thus had abused their dominance in contravention of Section 4 of the Act. It was alleged further that though Associated Cement Company (ACC hereinafter) and Gujarat Ambuja Cement Ltd., (GAC hereinafter) had ceased to be the Members of the CMA w.e.f. 1-11-2009 and had controlled approximately 21% market share in India amongst themselves and they had fallen out only to keep their activities of cartelization under a veil since they had actively participated in the price benchmarking exercise of CMA. It was alleged that the prices per bag were similar to the prices of other cement manufacturers who continued to be the members of the opponent. The news release was also relied upon in support of this complaint. According to the informant, these two opponents were leading the acts of cartelization by the cement manufacturers association over the past twenty years. It was pointed out that their holding company, Holcim has been penalized and held guilty of acts of anti-competitive activities in some other countries. It was specifically pointed out that the original opponent No. 12 i.e. Lafarge India which was a subsidiary of the French building materials major was already been fined in 1994, 2002 and 2008 for committing irregularities by different jurisdictions which suggested that it is a habitual offender of the provisions of the competition acts. It was then alleged that the original opponent Nos. 2 and 3 and original opponent No. 4 to 12 including the other appellant had collectively controlled the supply of cement and though they had large capacities they deliberately controlled the supply, produce less cement and increase the market price the cement and resulted in market price of the cement. It was then alleged that in addition to creating the artificial scarcity the opposite party including the appellants sought the objective of causing artificial increase in the price of the cement. It was pointed out that irrespective of the areas and regions and the availability of the cement or artificial scarcity thereof in the markets, the cement prices were increasing constantly causing adverse affect on the real estate and affecting the interest of the consumers at large. It was pointed out further that there were cease and desist order passed in past in RTPE No. 99/1990 and RTPE No. 21/2001. It was pointed out that these cement manufacturers had set up their cement manufacturing units at different places in India and though they were having different costs of production and transportation. They uniformly and simultaneously increased prices at the same time and that is the common feature in respect of all the five zones namely North, East, West, South and Central.

6. Relying on some statistics it was pointed out that the growth in the construction sector decreased from 10.10% from 2007 to 2010 and so also the growth in the real estate sector had come down in these three years. The growth in the cement sector had also witnessed a downward trend on 2006 to 2009 and the utilization of the installed capacity of the cement manufacturers came down to 85% to 94%. However, it started growth in the cement sector increased to 11.68%. However, in spite of the growth in production of cement, the utilization of installed capacity got reduced. From this, it was urged that despite the slow down the cement industry earned profit margins of 26% on the turn over of Rs. 45,717 crore. It was pointed out that through the inter se agreements Rs. 5/- were increased per bag of cement between December, 2008 to February, 2009. In addition, the cement manufacturers increased the price between Rs. 10/- to Rs. 27/-per bag upto April-June, 2009. The price was further increased in the range of Rs. 5/- to Rs. 15/- per bag from December, 2009 upto January, 2010. It was pointed out further that some manufacturers were getting the benefit by using 'fly-ash' and thus increased quantity of product of cement manifold without any increase in the production cost or input costs. Since the 'fly-ash' was provided to the cement manufacturer by the thermal power plants which was primarily owned or controlled by the government or semi-Government undertakings at zero cost.

7. The complaint was also made of the non-utilization of the capacity to produce by giving the statistics. It is pointed out that the price increase from Rs. 255 per bag to Rs. 258 per bag in the year 2009 itself. Much statistics was relied upon in the information to suggest that the price of cement per bag was kept on rising due to cartelization and the increase was between Rs. 5/- to maximum of Rs. 39/- per bag. It was urged that the raise in prices of cement in all the zones cannot be directly attributed to increase/decrease in demand as conditions in five zones were different. It was urged that decrease in the capacity utilization from 94% to 82% in 2009-10 was intentional act on the part of the opposite parties to gain by arbitrarily fixing and escalating the prices. It was urged that the cement manufacturers working as cartel chose to intentionally under-utilize their plants and continuously produce less than the demand for cement on account of decreasing capacity utilization from 83.33% in April, 2009 to 79.63% in March, 2010. An interview of Shri N. Srinivasan, Managing Director of India Cement Limited, the fourth largest cement producer in India was also relied upon by the informant who had claimed that cement industry had added 78 million tones between 2006-07 and 2009-10. It is pointed out that cement rose by in the range of Rs.10/- per bag to Rs. 27/-per bag upto January-March, 2009 and further by Rs. 5 to Rs.15 per bag upto January, 2010. Relying on the memorandum dated 15-11-2006 of the CMA addressed to the Finance Minister the informant claimed that per bag cost of cement should be Rs. 160 however that price was raised to Rs. 350/- per bag, thanks to the concerted action by the cement manufacturers. They pointed out that the gross profit by M/s. ACC and Gujarat Ambuja Cements Ltd. increased substantially. It is pointed out that as per the news item in the Economic Times dated 28-11-2009 forecasted the increase in price in cement in future. All the cement manufacturers took the clue and increased price per bag uniformly in December, 2009. This fact was also reported in Business Standard in its issue dated 3-12-2009. A reference is made to the appointment of Standing Committee by the Ministry of Commerce and Industry. On the basis of these averments, it was urged that all these cement manufacturers had firstly contravened Section 3 by cartelizing and fixing prices and secondly had abused its dominance in the market in contravention of Section 4.

8. The CCI referred this information for further investigation by the Director General. The Director General appears to have consulted 12 top companies and investigated into their affairs. The DG deduced the profit margins being more than 25%. It is seen by him that CMA on the direction by the Department of Industrial Policy and Promotion was regularly collecting and submitting the data which was earlier collected by the Development Commissioner of Cement Industry. The CMA thus was collecting indicative retail and wholesale prices of cement from across the country. On the basis of the analysis he found that there was continuous positive growth in the cement prices for the last five to six years. According to him, the price of cement is rising faster than input prices. It was found by the DG that price which was about Rs. 150/- per bag in 2004-05 increased to Rs. 300/- per bag in March, 2011 whereas the cost of sale had increased only by 30% and thus there was no nexus between cost of sale and the sale price. The DG also deduced that the prices were increased not on the basis of the cost of production but on the basis of the prices charged by the competitors. The price of cement is changed by the market leaders was one of the factors for the increase in prices. The DG found communications between the companies and the dealers which reflected the price to be charged. It did not show any reason for the change in prices. He also found that there was no authentic data of demand of cement nor was their any formal system or mechanism of collection of data thereby deduced by the DG that the contention by the manufacturers that the price solely dependant on the market toot back is not tenable. The DG had also referred to the report of the Tariff Commission indicating that the price charged by the cement companies was unreasonably high and there was lot of scope for correction in their prices. After conducting the analysis of cost audit report of the companies, the DG deduced that the cost of sales which also includes the cost of production varies from unit to unit within a group and also between the companies. However, the data showed that the margin per bag of cement is Rs. 38 to Rs. 45 showing that some manufacturers were able to charge prices which was quite high and above competitive level. As regards the existence of the agreement, the DG deduced that there was no direct evidence but only circumstantial evidence. It was found that the co-efficient of correlation of change in prices or the movement of the prices of all the companies is positive and was very close to each other giving a strong indication of price parallelism. The price of the cement used to move upward in the country in the given time period. According to the DG the price parallelism was on account of the prior consultation amongst cement manufacturers and the market leaders have to play role in the same. The examination of small players showed that they simply follow the trend of major players. The DG deduced that there was no reason for price parallelism. The movement of price of the companies in the same range and in the same direction was not possible unless the prior consultation and discussion.

9. The DG also found the decrease and downward trend in the capacity utilization. This was a major factor according to DG. According to the DG, therefore, there was concerted decision of low capacity utilization so that a higher prices could be charged and abnormal profits earned. The DG found positive co-relation among all the leading manufacturer. In the particular region dispatch the data for the period of two years from January, 2009 to December, 2010 in case of the top companies was identical. According to the DG this was not possible unless there was some kind of meetings. The DG also found the production parallelism as a result of the concerted behaviour by manufacturers. Insofar as the geographical markets are concerned, DG found that the markets were divided by the manufacturers into five regions. The top companies had market shares in one or more geographical markets which allowed them to earn maximum profit by charging unreasonable price. It was found that the big players normally trigger the price rise which is neatly followed by the other small manufacturers. He also found that the press and media were exploited and used for the price rise. The big players used TV and media predicting the price hike in the near future which sent the signal regarding the price rise to all.

10. It was also found that their existed exchange of price information amongst the members of CMA on weekly basis across the country and CMA collected data in 34 different zones on retail and wholesale price of CMA. This according to the DG was not permissible. According to the Director General, the common platform of the CMA was being used for collection and dissemination the price of the different companies helping the manufacturers to take the decision about the future price rise. It was also found that a high power committee of the CMA was formulated and the prices were discussed in the meetings held on 3-1-2011, 24-2-2011 and 4-3-2011 after which the prices of the cement of all the top companies who were present in these meetings had increased. Two of these meetings were held in Hotel Orchid, Mumbai and were also attended by the ACC though they had resigned from the membership of the CMA and it was obvious that these two companies was acted in co-relation to the ulterior motive of profit earning. It was excluded that in the guise of the meeting of the High power committee, cement manufacturers were entering into some arrangements to manipulate the price of cement. Thus it was also held by the DG that it was clear that CMA was providing a platform. CMA was also engaged in publication for internal circulation between the members which information contained the details of production in respect of each plant of the cement companies. Thus the minute details of production, dispatch of each company became known to member companies to exchange production related information and decide production strategy in line with other companies. It was on this basis, the DG came to the conclusion that the companies were guilty for the contravention of Section 3(1),3(3)(a) and 3(3)(b) of the Act. This report was supplied to all the appellants who filed their objections.

11. After considering the objections raised which pertained to the individual case of the appellants and after giving opportunity of hearing the CCI deduced that these companies had contravened the provision of the Act more particularly under Section 3 of the Act. The CCI in its impugned order has recorded the contentions raised by the individual manufacturers in great detail. Initially the objection was taken that the DG had taken into consideration the data prior to 20-5-2009. The CCI however rejected this objection holding that the DG had relied upon only the dominance of the company as a whole and conduct of the parties in general and mere examination of the data belonging to the prior period did not suggest that the provisions of the Act were applied retrospectively. In this the DG as also the CCI relied on the decision of High Court of Bombay in Kingfisher Airlines Ltd. v. CCI [2011] 108 SCL 621/12 taxmann.com 285. It was also held by the Commission that DG had used the data only pertaining to the post Act period. Objections was also taken on some other grounds namely :-

1.		Failure to provide opportunity to cross-examination
2.		Non-supply of the Tariff Commission Report which was relied upon by the DG.
3.		Inclusion of incorrect facts in the information.
4.		The incorrect reliance on motivated information and the members representative.

However, the CCI rejected all these objections in the nature of preliminary objection. It has held that firstly parties were given full opportunities. It was also held that the relevant portion of the Tariff report was available to the parties which they could have seen by an inspection and thirdly it was held that the name of the JK Group was wrongly mentioned. However, it was obvious that though the DG had issued notice to JK Group. JK Lakshmi Cement Ltd. came on record though notice was not issued. CCI held that they were taking into consideration the case of JK Cements Limited only. The CCI also held that there was no question of motivation on the information filed by Builders Association. Having rejected the so called preliminary objection, the Commission went on to frame 8 issues in all. They are :-

Issue I:	Whether the Opposite Parties have violated the provisions of section 4 of the Competition Act, 2002 as has been alleged by the inform ant?
Issue 2:	Whether the acts and conduct of the Opposite Parties are subject matter of examination under section 3 of the Act?
Issue 3:	Whether there exists an agreement or arrangement among the cement companies named as the Opposite Parties under which they share details of cement prices, production and capacities among each other using the platform of CMA? If yes;
Issue 4:	Whether they have indulged in directly or indirectly determining the prices of cement?
Issue 5:	Whether they have indulged in limiting and controlling the production and supply of cement in the market?
issue 6:	Whether there is a case of production and dispatch parallelism among the Opposite Parties?
Issue 7:	Whether the aforesaid acts of the Opposite Parties have caused increase in the prices of cement?
issue 8:	If so, whether the Opposite Parties have contravened the provisions of section 3 (3) of the Competition Act, 2002?

After thoroughly examining the records which are voluminous in nature and running into more than thousand pages, the CCI ultimately passed the impugned order. The stay of which is being sought now apart from its being set aside.

12. The impugned order of the CCI is unanimously passed and all the seven Members have put in their signatures including the Chairman Shri Ashok Chawla.

13. For claiming the stay of the operation and effect of the impugned order the appellant would have to establish a strong prima facie case in their favour. The learned counsel appearing for the appellants have extensively addressed us contending that they have very strong case and the order inflicting very heavy penalty on them is incorrect in law as well as on facts.

14. It was firstly submitted by Shri Gopal Subramanium, learned senior Counsel appearing for the Lafarge that the order itself is non-est as it was signed by the Chairman of the CCI and in fact he had not attended the meetings during which the appellant's counsel put in the oral arguments. Thus the principle of "he who hears decides" was breached in this case as Chairman had not heard the matter at all. The learned counsel also pointed out that if a Member of the Tribunal who has not heard the arguments at all puts his signature on the order then he actually gives an impression that he is a part of the decision making process and if in reality he was not the part of the decision making process because of his absence from the concerned meetings then apart from a basic illegality it also amounts to denial of natural justice. The learned counsel in support of this proposition has relied on number of authorities. The learned counsel also urged that in considering the information and in awarding exemplary heavy penalties, the CCI was doing adjudicatory function and therefore the CCI was bound to respect and follow the principles of natural justice.

15. This contention raised by Shri Gopal Subramanium was relied upon by the other learned counsel appearing for the other appellants.

16. The learned counsel Shri Iqbal Chhagla appearing in Appeal No. 110 of 2012 in Ambuja Cements raised a contention that since the CCI was inflicting the penalties it was acting as a quasi-criminal Court. The learned Senior Counsel argues that therefore the standard of proof required was "beyond reasonable doubt" whereas such standard was not adopted by the CCI which went on to adopt the standard adopted in the civil cases that being "preponderance of probability". The learned senior counsel was at pains to point out that the findings arrived at by the CCI were inferential in the nature and with no supporting evidence. The learned counsel therefore urges that the order cannot stand. Voluminous case law was relied upon by the learned senior counsel in support of his argument. According to the learned counsel insofar as the finding on the charge of price fixing was concerned it was a result of non-application of the mind on the part of the CCI. The learned counsel questioned that if the price went down which was clear from the facts, there could be no inference of the price fixing. The learned counsel also urged the only few cement manufacturers were cherry picked without there being any justifying reason for so doing.

17. Shri Ramji Srinivasan appearing in Appeal No. 108 of 2012 urged similar to the contention by Shri Inqbal Chhagla that this was a clear exercise of considering the cases only of 11 or 12 cement manufacturers. He wondered as to what was the methodology to pick up only few cement manufacturers when there were admittedly more than 40 cement manufacturers in the country. The learned counsel also urged that there was complete dearth of direct evidence to support the findings by the CCI. The learned counsel also urged that there was a failure on the part of the CCI to afford the opportunity to cross-examine six witnesses whose evidence was recorded by the Director General. He pointed out that though an opportunity was sought for to cross-examine them, it was refused. Shri Ramji Srinivasan also urged that there was a denial of natural justice inasmuch though a request for the documents was made that was not granted. By reference to various documents, the learned counsel pointed out that this resulted in grave injustice.

18. Shri Vaidyanathan, learned Senior Counsel appearing in Appeal Nos. 106 of 2012 and134 of 2012 supported the arguments of Shri Chhagla and pointed out that the CCI was a quasi-judicial body as per two judgments of the Hon'ble Supreme Court. They being :- Brahm Dutt v. Union of India [2005] 57 SCL 429 and CCI v. Steel Authority of India Ltd. [2010] 103 SCL 269/7 taxmann.com 23. It was pointed out by the learned counsel that in both the cases the Hon'ble Supreme Court had held that the function of the CCI was of adjudicatory nature. He also supported the argument of Shri Gopal Subramanium on the issue of the Chairman contributing his signature to the impugned order though he was not present to hear any oral arguments. Reliance was put by him on Sections 26(1), 26(8), 27, 33, 35, 36(2) etc. to buttress his contentions that the CCI has to "determining" the issue and this task of "determination" makes it an adjudicatory body.

19. Shri V. Gupta appearing on behalf of Binani Cement in Appeal Nos. 109 and 125 of 2012 pointed out that the Binani was holding only 2% of the market which was insignificant. He also pointed out that there was no allegation against the Binani in the information nor was any relief claimed against the same. According to him the whole process was faulty as Director General should not have restricted himself only to the parties who were named in the information but there should have been a thorough investigation of the whole cement manufacturing sector by investigating all the cement manufacturing companies. He was also at pains to point out that Binani Cement was not a Member of the Cement Manufacturers' Association nor was its data available to the Cement Manufacturers' Association in its 34 centre from which CMA used to collect data regarding the wholesale and retail price of the cement in the market.

20. Shri Krishnan Venugopal appearing in Appeal No. 112 of 2012 in J.K. Cements predominantly relied upon the procedural defects both by the Director General as well as by the CCI. The learned counsel contends that though the documents were sought for but they were never supplied. He also pointed out that one of the learned Members Smt. Geeta Gouri was the Head of the Economic Division of the CCI and she should have ordinarily not taken part since the same Economic Division of CCI had supplied the man power to Director General for investigation in this matter on the request of the D.G. He urged that thus there was an institutional bias on the part of Smt. Geeta Gouri. He also supported the argument by Shri Gopal Subramanium that the Chairman, who is signatory to the order was not present during three days when the oral arguments were proceeded. He also complained that at times the Members during the hearings used to leave and were not available. He thus contended that all the Members were not there at all times of the days when the matter were heard. He also pointed out that the Chairman had participated only in the deliberations in the subsequent meetings which was wholly incorrect. The learned counsel also relied on number of cases. Finally, the learned counsel urged that the CCI has not given any justification of the penalty and the same tends to be arbitrary.

21. Shri A.N. Haksar, Sr. advocate appearing for J.P. Cement urged that it was wrong to suggest that the CCI had only regulatory function. The learned counsel commented on Sections 13, 15 and 22 of the Act and pointed out that judicial matters can never been settled by voting and for that matter the use of casting vote is wholly unknown where functions are adjudicatory. He also supported the other contentions raised by the other counsel.

22. Shri Arvind Datar appearing on behalf of Madras Cement in Appeals Nos. 111 and 123 of 2012 invited our attention to the amendment of the General Regulations (Regulation 20). He also invited our attention to the directions issued on 15th September, 2010. Inviting our attention to Regulation 20 the learned counsel pointed out that there need be no application for cross-examination and cross-examination is a right of the parties which has been trampled. He also pointed out that the selection of only few companies for investigation was faulty and the DG had committed an error. He also pointed out that there was no data available of the South Zone where Madras Cement was operating. He took us through the statistics and pointed out the defective approach.

23. Shri Parikh, learned counsel appearing on behalf of Ultra Tech Cement painstakingly invited our attention to the defects in the procedure. The learned counsel pointed out the said procedure adopted by the DG and the CCI breached the rules of natural justice. He pointed out that though specific opportunities were sought for, yet no opportunities were given for cross-examination nor were the documents supplied. The learned counsel has filed a chart and pointed out that all arguments pressed into service were not taken consideration.

24. Shri Krishnan Venugopal, learned senior counsel appearing on behalf of J.K. Group invited our attention to the fact that they had never attended any meeting. They sought for the documents but they were not provided. He also pointed out about the mix up of J.K. Lakshmi Group and pointed out that their market share was merely 1.7%. He wondered as to how he came to be considered as a leading manufacturer.

25. Dr. Singhvi appeared for Associated Cement Company in Appeal No. 108/2012 and urged that there was a selective cherry picking of the concerns. He also invited our attention that the same was true of the period as well as the data. The learned counsel invited our attention to the data and pointed out that the whole data was misread. The learned counsel also urged that ACC could not be guilty of cartelization as they were not the members of the CMA though they had attended the meetings. He urged that there were 50 manufacturers in the country and 300 mini manufacturers which had resulted in the loss of market share of so called the big companies in favour of the smaller players. He took us to the three meetings of the Association and pointed out that his client was not the member of the association from 1-11-2009.

26. Shri Sham Diwan appearing on behalf of the Century Textile in Appeal No. 113 of 2012 pointed out that there was non-supply of documents and there was no opportunity offered for cross-examination. He pointed out that there was no cut in the production.

27. During the debate, it was pointed out that after the three meetings dated 21-02-2012, 22-02-2012 and 23-02-2012 during which oral arguments were heard there was a meeting on 14-03-2012 when the Chairman attended. Our attention was invited to that meeting. It was clear in that meeting the written submissions of the appellants were considered. However, it was pointed out that some concerns had not filed their written arguments before the CCI at all. Thus at least insofar as those companies are concerned, they did not have the benefit of being heard by the Chairman nor did they have the benefit of their contentions considered. The learned counsel Shri Vaidyanathan pointed out that no written submissions were filed by Lafarge, India Cement and Binani Cements.

28. All these arguments were met with by Shri Balbir Singh, advocate for the CCI, who first urged that the CCI though was having adjudicatory function, however, it transacted its business in the meetings. The counsel cited the examples of the jurisdiction like Australia and New Zealand where also the Competition Commission of India transacted the business in the meetings. Our attention was invited to the amendments made to earlier Sections 22, 23, 24 and 25. Relying on Section 22, the counsel urged that the Commission had to transact its business through the meetings, unlike the un-amended Section 22 and unlike un-amended Section 22 there were no more benefits for the purpose of hearing and now the whole business was to be transacted in the meetings, where all the questions coming up before the meeting are to be decided by a majority of members present and voting. It was also pointed out that the quorum for such meeting was three members. The learned counsel therefore urged that even if the Chairman did not attend the meeting during the oral arguments, he ultimately attended the meeting held on 14-03-2012 where there was a consideration of the written arguments and since the Chairman took active part in considering the written submissions, there was nothing wrong if he contributed his signature to the final order. In this behalf, the learned counsel also pointed out to the provisions of Section 15 and more particularly Clause (c) thereof, which provides that "No act or proceeding of the Commission shall be invalid merely by reason of - any irregularity in the procedure of the Commission not affecting the merits of the case". The learned counsel argued that even if it is taken that the contribution by the Chairman of his signature to the impugned order was held to be improper, it would at the most be viewed as an irregularity of the matter, which did not have any affect on the merits of the matter. The learned counsel urged that this was so because admittedly in the meeting where the written submissions were considered, there was a full quorum and even if the Chairman was excluded, yet there was a full quorum and therefore, there was no question of any illegality if the Chairman put his signature on the order. He pointed out that there was absolutely no prejudiced caused, nor was there any question of breach of natural justice, merely because the Chairman signed the judgment. According to him, the judgment was valid since it was passed by more than three members, even if the signature of the Chairman must be ignored. Our attention was also invited to Regulations 29 and 40 of the General Regulations. It was pointed out that as per Regulation 29, the parties could declare to the Commission whether they would make oral submissions or file written arguments during the course of an inquiry. The learned counsel relying on this provision 29(1), said that this suggested that making oral submissions was optional and it was not necessary that a party would make the oral submissions. According to the learned counsel, this provision in a way diminished the importance of the oral hearing, since the hearing was not compulsory. Our attention was also invited to Regulation 40, wherein it was provided that any failure to comply with the regulations, would not invalidate any proceeding, merely by reason of such failure, unless the Commission was of the view that such failure had resulted in miscarriage of justice. According to the learned counsel, there was no miscarriage of justice in this case. The learned counsel also pointed out that such miscarriage of justice had to be shown by the appellants. As regards the other argument that there was non-application of mind on the part of the CCI, the learned counsel pointed out that there was clear cut evidence of carteling in this case, in view of the observations of the Commission in paragraph 6.5.31 and 6.5.36. Relying on those observations, the learned counsel urged that there was no question of any non-application of mind on that count. The learned counsel also relied on Section 79 (f) of the Indian Electricity Act as also Sections 92 and 94 of Indian Electricity Act and Regulation 20. He urged that at the most this could be an irregularity. According to him, when the oral arguments were made, the quorum was complete and therefore, it was a valid meeting. Insofar as the question of institutional bias is concerned, the learned counsel described the report of the Economic Division to be by an expert hired by CCI. He pointed out that the experts could be hired by CCI. He pointed out that in view of the request made by the DG, the expert was provided. The learned counsel was at pains to point out that this report was neither considered, nor vetted by the CCI before it went to the DG from the expert. The learned counsel urged that at any rate there could be no personal bias on the part of Smt. Geeta Gouri merely because she was heading the Economic Division. As regards the failure to give opportunity of cross-examination, the learned counsel pointed out that there were three sets of witnesses. The first set was the insiders of the company, the second set was the outsiders and the third set was consisting of builders or consumers. The counsel therefore, pointed out that in reality there could not have been any cross-examination of the witnesses of the first and second set. At any rate, according to the learned counsel, the CCI had given good explanation about the cross-examination aspect. He pointed out that again the refusal to allow cross-examination may at most amount to irregularity in procedure, which would not affect the merits of the matter in any manner. The learned counsel pointed out that there was a clinching and unquestionable evidence on record in shape of minutes of 84th meeting of the Managing Committee of the Cement Manufacturers' Association held on 15th March, 2007 in Mumbai as also the minutes of 92nd meeting of the Managing Committee of the Cement Manufacturers' Association held on 26th March, 2009 in New Delhi, which showed a clear cut evidence of carteling on the part of the cement manufacturers. According to the learned counsel, in the meeting dated 15-03-2007, prices were discussed and all attempts were made to establish before the Hon'ble Union Finance Minister and Hon'ble Union Minister of Commerce and Industry as also the Secretary of Ministry of Commerce and Industry that a pre-budget ruling cement prices had been lower than the inflation adjusted prices prevailing in 1995. The learned counsel pointed out that the minutes suggested that the cement prices were discussed. So also from the minutes of the meeting dated 26th March, 2009 and it was shown by the learned counsel that there was a discussion about the cement prices and Jaypee Cement had agreed to supply the cement to the Government department during the month of March 2009 at the rate of Rs.245/- per bag. He pointed out that the minutes further record that other suppliers also responded by offering similar special rate in Government supplies and assuring to meet the requirements. From this, the learned counsel urged that there could be no doubt about the carteling activities of the cement manufacturing companies and the further fact was established that CMA provided platforms to the members for evaluation and determination of impact of incidence of tax on cost. The learned counsel referred to the paragraph 6.5.33 and pointed out that the cement companies were interacting at the platform of CMA, sharing information about cost, prices, production and capacities which discussion facilitated interactions among the members for determination and fixation of both prices and production. Our attention was also invited to the fact of collection of prices of cement companies from all over the India. In this behalf, our attention was invited to the 95th meeting of the Managing Committee of CMA held on 30-11-2009 in New Delhi. The learned counsel also relied on the further observations. In short, the learned counsel urged that whatever would have been the cross-examination, one fact was certain that all the members of CMA and more particularly the appellants herein were availing of the platform of CMA.

29. Our attention was also invited by the learned counsel to the contents of paragraph 6.5.37, 6.5.38 and 6.5.39 and we were taken through the thorough discussion by the CCI. From all this, the learned counsel urged that there was no question of any prejudice caused in view of the voluminous material regarding the carteling and price fixing at the instance of the appellants.

30. The learned counsel did not, however, address us on the merits of appeals of the individual cement manufacturer companies. There is a huge data available, which was considered and discussed by the CCI individually also. Even during the debate on the question of stakes, some learned counsel questioned the findings on the merits also. These merits pertain to the market share of the individual companies and their sales.

31. There can be no dispute that procedural irregularities complained of by the learned counsel during the debate and the question of stay were inextricably connected with the individual merits, which entirely depend upon the statistics regarding the sale and profit as also the prices by the individual companies.

32. The learned counsel for the appellants urged that on account of the irregularities in the procedure, which we have discussed above, we would be justified in setting aside the order at this stage only. We do not agree, as the so called procedural irregularities are inextricably connected with the individual merits of the claims made in these appeals by the cement manufacturing companies. For example, it may be able to show that a particular company did not raise the prices or did not hold back the production on the basis of the statistics provided. It is therefore not be feasible at this stage to hear and dispose of the appeals without consideration of the individual merits depending upon the statistics of each company. At the same time, it cannot be denied that very substantial points have been raised by the appellants and those points have also been substantially met by the learned counsel appearing for the CCI as also by Shri Dua appearing for Builders' Association, Informant in this matter.

33. A very substantial issue would be required to be decided in the light of rival contentions by the parties. That issue will be about the exact role of Competition Commission of India. It was stated in Brahm Dutt case (supra) by the Hon'ble Supreme Court as under :-

"....if an expert body is to be created as submitted on behalf of the Union of India consistent with what is said to be the international practice, it might be appropriate for the respondents to consider the creation of two separate bodies, one with expertise that is advisory and regulatory and the other adjudicatory. This followed up by an appellate body as contemplated by the proposed amendment, can go a long way, in meeting the challenge sought to be raised in this Writ Petition based on the doctrine of separation of powers recognized by the Constitution. Any way, it is for those who are concerned with the process of amendment to consider that aspect. It cannot be gainsaid that the Commission as now contemplated, has a number of adjudicatory functions as well."

34. The adjudicatory role of the Competition Commission of India was reiterated by the Hon'ble Supreme Court in Steel Authority of India Ltd.case (supra), wherein it was unequivocally held that the CCI had the adjudicatory functions in addition to regulatory and advisory functions. The Hon'ble Supreme Court also referred to another function of the CCI, which was advocacy. However, it seems that by the Amending Act No.39 of 2007, Sections 22, 23, 24 and 25 with effect from 12-10-2007 came to be amended. Section 23 relating to distribution of business of Commission amongst the Benches, Section 24 providing for procedure for deciding a case where Members of a Bench differ in opinion, Section 25 relating to jurisdiction of the Bench came to be deleted altogether. While Section 22, which provided for the Benches for exercising the jurisdiction powers and authority of the Commission, came to be wholly substituted by the present Section 22. Section 22 as it existed prior to the amendment, provided for the Benches and it was imperative that every Bench should consist of an at least one 'Judicial Member'. It was provided by the explanation to Sub-Section 3 that such Judicial Member meant a Member who is, or has been, or is qualified to be a Judge of a High Court. The Section, therefore, specifically took note of and stressed upon the adjudicatory role of the CCI as contemplated in Brahm Dutt (supra) judgment. Once this Section was amended and it was provided in new Section 22 that the Commission would transact its business in the meetings and that all the questions in the meeting would be decided by a majority vote where Chairperson would have a casting vote in case of an equality of votes, the message was loud and clear that inspite of the specific observation of the Hon'ble Supreme Court, the adjudicatory role was done away with.

35. The Statement of Objects and Reasons in Competition (Amendment) Bill 2006, Bill No. 18, which was earlier to 2007 Bill mentions in para 3 (b) as under :-

"3. The competition (Amendment) Bill, 2006 inter alia, seeks to make the following amendments to the Competition Act so as to address various legal issues and to make the CCI fully operational on a sustainable basis namely :--

(a)		to provide that CCI would be an expert body which will function as a market regulator for preventing anti- competitive practices in the country and it would also have advisory and advocacy functions in its role as a regulator;
(b)		to omit the provisions relating to adjudication of disputes between two or more parties by the CCI and to provide for investigation through the Director General in case there exist a prima-facie case relating to anti competitive agreements or abuse of dominant position under the Competition Act 2002 and conferring power upon the CCI to pass orders on completion of an inquiry and impose monetary penalties and in doing so the CCI would work as a colleqiiims and its decisions would be based on simple majority."

Paragraph (c) relates to the establishment of the Competition Appellate Tribunal (CAT), which is to be headed by a retired Judge of Supreme Court or Chief Justice of a High Court. There are other observations also. This Statement of Objects and Reasons is dated 24th February, 2006. In this bill also Sections 23, 24 and 25 were sought to be omitted while Section 22 was sought to be amended by omitting the reference to the Benches of the Competition Commission of India. There also in place of the Benches, it was provided that the Commission would transact its business in the meetings. Curiously enough in the Statement of Objects and Reasons dated 9th August, 2007, which was a Statement of Objects and Reasons for Competition Amendment Bill 2007 being Bill No.70 of 2007 a significant change took place, where the earlier mentioned 3(b) was deleted. However, Section 22 as was proposed in the earlier Bill remained the same. In fact, what was changed in the Statement of Objects and Reasons, was the portion of 'omitting the provisions relating to adjudication of disputes'. In the wake of this, though the Statement of Objects and Reasons of Act No.39 of 2007 does not speak about the omitting the adjudicatory role, in fact the said adjudicatory role stands deleted because of substitution of the old Section 22 by a new one introduced by that Amendment Act 39 of 2007.

36. A serious issue has, therefore, arisen as to whether what is in fact the scope and ramification of this amendment and whether the CCI has an adjudicatory role at all as declared by the Hon'ble Supreme Court in Brahm Dutt case (supra) and in case of Steel Authority of India Ltd.(supra) India. Further, whether the CCI would be bound by the judicial discipline and the norms or it would only be an advisory, regulatory or an expert body, so as not to be bound by the strict judicial norms. The amendment to Section 22 will have to be tested against the observations of the Hon'ble Supreme Court in Brahm Dutt case (supra) which was prior to the amendment and Steel Authority of India Ltd. (supra) judgment which was subsequent to the amendment. This being a very complex question, would require not only the consideration of Section 22, but also Section 15 and the General Regulations, which also were amended.

37. In that view, we find that there is a prima-facie case for granting of stay at least in respect of the penalties, which are of very substantial nature. The total penalties would come in the range of Rs.6000 crores. While inflicting the penalties, the CCI has also taken into consideration, not only the 10% turnover, gross-turnover and other factors, it has also taken into consideration the net profits earned by these appellants, which are to say the least fabulous. The Commission has chosen to impose the penalty at 0.5 times of the net profit for 2009-10 that too from 20th of May, 2009. It is pointed out by the Commission that the amount of 3 times of net profit calculated, is higher than 10% of the average turnover. In that view, the Commission has inflicted the penalties of 0.5 times of the net profit for one year that is from 2009 to 2010 that too taking from 20th May, 2009 and 2010-11. Under such circumstances, we would chose to grant stay to the penalties, however with a condition that the appellants deposit 10% of the penalties inflicted. We make it clear that the deposit of the penalty should be within one month from today. We also make it clear that if the penalties are not so deposited, the appeal shall be treated as dismissed without further reference to the Court.

38. As regards, the orders of 'cease' and 'desist', we do not find anything wrong at least prima-facie. We, therefore, refuse to stay that order against the appellants, including the Cement Manufacturers Association.

39. All stay applications are disposed of in above terms.

40. The matter now be posted for further hearing.