MRTPC breather for Lafarge in 1990 cement cartelisation case

MRTPC breather for Lafarge in 1990 cement cartelisation case
Published: 19 September 2008

Allowing an application of the cement major Lafarge India Ltd, anti-monopoly watchdog MRTPC has relieved it from cartelisation charges in the cement industry for 1990, and observed that the company was not in existence at that time.

The Monopolies and Restrictive Trade Practices Commission said the cement plant, which was bought by Lafarge in 2000, was run by its previous owner Raymond Woolen Mills during 1990, against which it had passed an order that restrained around 35 cement firms along with their association CMA.

"Commission’s order would not apply to the applicant company for the reasons that it is not a successor company to Respondent No. 33 (Raymond) and it was no where in the management of the cement division bought by it from Raymond at the time of omission, in which inquiry was initiated," said the MRTPC bench headed by Justice O P Dwivedi.

The bench further said in respect of sales pact between Raymond and Lafarge, latter "does not incur any liability".

MRTPC bench observed that even after the transfer of business, Raymond Mills had its separate corporate identity and took part in MRTPC inquiry till end, and in compliance of its order, even filed an affidavit in December 2007.

"In such facts and circumstances, Lafarge India Ltd cannot be termed as successor," said the MRTPC bench rejecting submission of its investigative unit DGIR, which had contended that Lafarge had purchased the cement division as "going concern" and hence it was automatically liable.

In the application, Lafarge India had contended that it had bought the plant without any liability and even submitted a memorandum of agreement between it and Raymond.

However, apart from this case, MRTPC has charged Larafge, along with other players and CMA, with cartelising in the industry between December 2000 and January 2001.