Madras HC asks Hyundai to participate in CCI's investigation

The Madras High Court today asked the Korean automajor Hyundai to take part in the Competition Commission of India's ongoing investigation against all the major car makers in country for alleged violation of trade norms in after-services market and spare parts.

Division bench of Justice Satish K Agnihotri and Justice M Venugopal ruling comes in response to a petition filed by Hyundai against a single judge order, which was passed last month.

The judge had observed that the Director General, CCI's investigation arm, did not overstep. One of the allegations made by the car makers was that the DG has overstepped by extending the investigation to all the players in the industry.

The order was passed by Justice V Ramasubramanian last month, against the petitions filed by Hyundai and BMW, who have earlier stated (in there petitions) that the DG don't have power to expand the scope of investigation and it can't go beyond the referred companies.

The OEMs have also argued that CCI used suo motu power to expand the scope of its investigations, to include the entire car industry even though it had originally received a complaint against three automobile firms - Honda, Volkswagen and FIAT.

It also questioned whether the anti-trust regulator had the authority to expand its investigations on its own even if the complainant had not named a company in the original complaint.

Against this Order, Hyundai filed an appeal in which it requested the bench to stay the single judge order.

After hearing the arguments of G Rajagopalan, Additional Solicitor General of India, who represented CCI and senior counsel R Muthukumara Swamy, who represented Hyundai, today the bench refused to give stay on the order passed by Justice Ramasubramanian and asked Hyundai to participate in the investigation.

While the CCI's proceedings has to go on, it is subject to the final outcome of the pending appeal before the division bench, said the bench while posting the matter for next month.

In August 2014, CCI slapped a combined penalty of Rs 2,554 crore on 14 car makers for failing to sell spare parts in the open market. The watchdog said it wanted to make the components market more broad based, user friendly and less expensive for consumers.

The DG alleged the OEMs have violated the competition norms with respect to their agreements with local Original Equipment Suppliers and the terms of their pacts with authorised dealers.

Most of the companies have moved to different courts against CCI.

Hyundai, Nissan (which later withdrew its petition) and BMW moved to Madras High Court and have questioned whether the anti-trust regulator had the authority to expand its investigations on its own even if the complainant had not named a company in the original complaint.

The complaint against Honda, Volkswagen and FIAT was filed in January 2011. Subsequently, in April 2011, CCI extended its probe to other manufacturers as it was of the view they were also following a similar practice.

Hyundai obtained a stay order from the Madras High Court against CCI's proceedings in February 2013. Nissan also moved to the Madras High Court, which in September 2013, but later it withdrew with the option of approaching the Appellate Tribunal.

CCI's penalties have been imposed on Mahindra and Mahindra, Tata Motors, Toyota Kirloskar, Honda, Volkswagen India, Fiat, Ford India, General Motors India, Nissan Motor India, Hindustan Motors, Mercedes-Benz India, Maruti Suzuki, Skoda Auto India and BMW.