The NCLAT set aside a CCI decision, which had found Grasim Industries Limited (‘Grasim’) liable for abusing its dominant position in the market for the supply of Viscose Staple Fibre (‘VSF’) to spinners in India. A penalty of approximately INR 300 crore (~ USD 31 million) had been imposed on Grasim by CCI.

The CCI had disagreed with two of the DG’s findings, which were in Grasim’s favour, but did not provide Grasim notice of the intention to arrive at a different conclusion or a hearing. On appeal, Grasim contended that the CCI failed to uphold the principles of natural justice and due process requirements.

NCLAT held that wherever the CCI disagrees with the findings of the DG’s investigation, it must issue a show-cause notice and provide a reasonable opportunity of being heard. The NCLAT also observed that Section 26 of the Competition Act had been amended (with effect from September 2024) to incorporate this due process requirement into the legislation’s express language.

Grasim argued that the entire CCI Order was a composite, non-severable whole, resulting in the imposition of a single penalty. This was accepted by the NCLAT, which set the entire CCI Order aside and remanded the matter for fresh consideration.