Rs44bn penalty on sugar mills: CAT remands case to CCP for rehearing
As per CCP, the decision was taking while hearing the appeals filed by PSMA and its member mills. In its order, the CAT directed that the matter be reheard by either the Chairperson or any other member of the Commission who was not a signatory to either of the earlier conflicting opinions.
It also directed that a final decision be issued preferably within 90 days. Following the tribunal's order, the decision of the Chairperson or the assigned member will settle the matter and determine the violations of competition law by PSMA and its member sugar mills.
In 2021, the CCP imposed the largest amount of penalty of nearly Rs44 billion (approximately above US$265 million) on 55 sugar mills and the PSMA for allegedly committing cartelisation, carrying out anti-competitive activities, collectively deciding the quantum of exports, etc.
The CCP's four-member bench had issued its order that was evenly divided in its opinion.
Chairperson Rahat Kaunain Hassan and Mujatba Lodhi supported the imposition of the penalty, while Bushra Naz Malik and Shaista Bano issued a dissenting opinion.
In order to break the deadlock, the then Chairperson exercised a casting vote under Subsection 5 of Section 24 of the Competition Act, 2010, through a note dated August 13, 2021—effectively converting the stalemate into a majority ruling that upheld the penalty.
The legality of this decision by Rahat became the central issue in the appeals.
In its order today, the CAT has ruled that the chairperson has no authority to exercise a casting vote in quasi-judicial proceedings under the Competition Act, 2010.
As a result, the Chairperson's opinion based on the casting vote has been set aside.
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