₹301.6 Crore CCI Penalty on Grasim Remains Set Aside After Supreme Court Verdict

In a significant relief for Grasim Industries, the Supreme Court on Friday upheld the National Company Law Appellate Tribunal (NCLAT) order that had set aside the Competition Commission of India's (CCI) ₹301.6 crore penalty against the Aditya Birla Group company. The apex court also endorsed the tribunal's direction asking the competition watchdog to hear the matter afresh before taking a final decision.

A Bench comprising Justices J.B. Pardiwala and K. Vinod Chandran dismissed the CCI's appeal against the NCLAT's May 5 ruling, effectively reaffirming that Grasim must be given an opportunity to present its case wherever the regulator disagrees with the findings of its Director General (DG), the investigative arm of the commission.

The dispute dates back to March 2020, when the CCI imposed a penalty of ₹301.6 crore on Grasim, alleging that the company had abused its dominant position in the viscose staple fibre (VSF) market by charging discriminatory prices to customers and imposing unfair conditions on buyers.

However, the NCLAT found that while the CCI had departed from several conclusions reached by its Director General, it failed to notify Grasim about those disagreements or provide the company with an opportunity to defend itself. Calling this a violation of the principles of natural justice, the tribunal set aside the regulator's order and remanded the matter for fresh consideration.

The tribunal also clarified that it had not expressed any opinion on the merits of the allegations, directing the CCI to independently reconsider the case after granting Grasim a proper hearing.

The original CCI order had also directed Grasim to discontinue alleged unfair pricing practices, stop seeking customers' VSF consumption details, and introduce a transparent, publicly accessible and non-discriminatory discount policy.

The complaint had been filed against the Association of Man Made Fibre Industry of India, Grasim Industries, Thai Rayon, and Indo Bharat Rayon, with the latter three belonging to the Aditya Birla Group.

Viscose staple fibre (VSF) is a biodegradable, cellulose-based fibre widely used in apparel, home furnishings and hygiene products due to its softness, absorbency and versatility.