Supreme Court Upholds NCLAT Order on CCI's ₹301.61 Crore Grasim Penalty

The Supreme Court on Friday refused to stay the order of the National Company Law Appellate Tribunal (NCLAT) quashing the ₹301.61 crore penalty imposed by the Competition Commission of India (CCI) on Grasim Industries Ltd and remanding the matter to the competition watchdog for reconsideration.

Live Law reported that a Bench of Justices J.B. Pardiwala and K. Vinod Chandran dismissed the CCI’s appeal against the NCLAT’s order dated May 5, 2026, which held that the CCI violated the principles of natural justice by deviating from the findings of DG without issuing a show-cause notice to Grasim.

The NCLAT had directed the CCI to give Grasim an opportunity to respond wherever it intended to differ with the findings of the DG before deciding the matter afresh within a stipulated time.

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Fresh Adjudication:

Senior Advocate Sajan Poovayya, representing the CCI, submitted that the appellate tribunal has erred in concluding that the Commission has departed from the findings of the DG.

Grasim had 97 percent market share in the viscose staple fibre (VSF) market, he said, and contended that the NCLAT had erred in combining the role of buyers, traders and spinners while looking into the Commission's directions.

Poovayya further submitted that CCI had not issued any directions with regard to the traders and its observations were limited to spinners on the ground of alleged market disruption.

However, the Supreme Court was not convinced with the submissions and refused to interfere with the order of the NCLAT and dismissed the regulator’s appeal.

The dispute is over the CCI’s March 16, 2020 order that found Grasim guilty of abusing its dominant position in the VSF market under Section 4 of the Competition Act. Besides levying a penalty of ₹301.61 crore, the Commission had directed the company to formulate a transparent discount policy and not restrict end-use of buyers.

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Grasim has challenged the order before the NCLAT saying the Commission had gone beyond the findings of the DG.

The appellate tribunal noted that the DG did not view Grasim’s non-disclosure of its pricing policy as a violation but the CCI directed the company to make it public. In the same way, the Commission's direction to allow buyers to trade in VSF in effect included traders against the findings of the DG.

The NCLAT, citing earlier decisions of the erstwhile Competition Appellate Tribunal (COMPAT) in BCCI v. CCI and InterGlobe Aviation Ltd. v. CCI, said, “Whenever the CCI wants to differ with the DG findings, it should issue a show-cause notice and give a chance of being heard to the affected party before passing a final order.

The issue will now go back to the CCI for fresh adjudication as per the procedure laid down by the NCLAT after the Supreme Court declined to intervene.