19 February 2014

Competition law – Penalty on employee

The Competition Appellate Tribunal (COMPAT) has upheld personal penalty on employees of the company after noting that the persons were involved in the process of taking coordinated action together with other producers/directors in boycotting multiplexes for release of films.

Employees’ contention that they did not do anything in their.  personal capacity and that CCI should have proceeded against the company, was rejected by the Tribunal while also distinguishing the Supreme Court judgment in the case of Aneeta Hada - (2012) 5 SCC 661. The Tribunal held that the said decision, on negotiable instruments, was under the realm of criminal law while contravention of Section 3 of Competition Act lies in civil jurisprudence. It was noted that nature of liability in Section 138 read with Section 141 of the Negotiable Instruments Act is entirely different from the liability of the company contravening Section 3 of the Competition Act which takes care of the ‘acts done’ by the individuals also.

Noting that the employees were working tirelessly for getting the revenue share hiked for the producers and that they would have been viewed adversely by the company if they would have not succeeded, it was held that it cannot be said that they were not acting in the self-interest. Non-cooperation by the employees was also noted by the Tribunal in this regard. Further, the Tribunal upheld the Commission’s view that provisions of intellectual property laws did not have any absolute overriding effect on competition law and that plea of collective bargaining was not available in case where acts on part of producers’ associations were clearly anti-competitive and per-se in violation of Section 3 of Competition Act. [Nandu Ahuja v. Competition Commission of India – Order dated 17-1-2014 in Appeal Nos. 11to 13/2011]


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