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1. The   appellants   SCM   Solifert   Limited   and   another   are   in appeal under section 53T of the Competition Act, 2002 (hereinafter referred  to   as  “the  Act”) as  against the  final  judgment and  order dated   30.08.2016   passed   in   Appeal   No.59   of   2015   by   the Competition Appellate Tribunal thereby affirming the order passed by the Competition Commission of India under section 43A of the Act. 

2. The   Competition   Commission   of   India   initiated   the proceedings against the appellants on whom due to the failure to notify a proposed combination as required under section 6(2) of the Act, the penalty of Rupees Two crores was imposed under section 43A   of   the   Act.   On   3.07.2013,   the   appellants   had   purchased 2,89,91,150 shares of Mangalore Chemicals and Fertilisers Limited (in   short   referred   to   as   “the   MCFL”)   constituting   24.46   paid   up share capital of the MCFL on the Bombay Stock Exchange.

5. The   appellants   filed   a   notice   disclosing   details   of   the   first acquisition and notifying the second acquisition under Section 6(2) of the Act with the Commission on 22.04.2014 within thirty days of the   public   announcement   pursuant   to   the   Regulations,   2011   for the   acquisition   of   1.7   percent   of   the   MCFL.   The   Competition Commission vide its order dated 30.07.2014 under section 31(1) of the Act approved the proposed combination, however, directed to initiate   penalty   proceedings   against   the   appellants   under   section 43A of the Act. Pursuant to that, a show cause notice was issued on the ground of failure to notify in accordance to section 6(2) of the Act, in regard to first and second acquisitions of shares.

6. It   was   the   case   on   behalf   of   the   appellants   that   first acquisition was made solely for the purpose of investment under Entry   I   of   Schedule   I   of   the   CCI   (Procedure   in   regard   to   the Transaction   of   Business   Relating   to   Combinations)   Regulations, 2011,   (hereinafter   referred   to   as   "the   Competition   Regulations"). Thereby,  it  assumed  exemption   from  the   notification.  It  was   also urged that the second acquisition was notified to the Commission within the stipulated time of 30 days as specified in section 6(2) of the Act. The purchase was not consummated because as per the Escrow Agreement dated 28.04.2014, the shares purchased in the second acquisition were credited to a specifically designated Escrow account   of   J.M.   Financial   Services   Limited.   The   sole   purpose   of entering   into   an   escrow   agreement   was   that   the   transaction   was not   consummated   prior   to   approval   of   the   Commission.   The Commission   has   imposed   the   penalty   of   2   crores;   the   appellate tribunal has affirmed the order. The Commission has held that the appellants have violated section 6(2) of the Act by failing to notify the proposed combination.

9. To appreciate the rival submissions, it is necessary to refer to certain provisions contained in the Act. Section 6 of the Act deals with   regulation   of   combinations   and   the   same   is   extracted hereunder:

“Section 6: Regulation of combinations  (1)   No   person   or   enterprise   shall   enter   into   a combination, which causes or is likely to cause an appreciable   adverse   effect   on   competition   within the   relevant   market   in   India   and   such   a combination shall be void.