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2020 (3) TMI 1446 - AT - Companies LawNon-notification of acquisition of Novartis Animal Health in India (NAH India), a business with sales of only INR 93.0 crores and assets of only INR 36.2 crores - Section 53B (1) and (2) of the Competition Act, 2002 - HELD THAT:- The Commission has failed to appreciate that the Notification dated 04.03.2011 was squarely applicable to the present transaction on the basis of an erroneous interpretation which is contrary to the intention of the exemption as expressed by the Government itself vide a notification dated 27.03.2017 (Subsequent Notification) and Press Release dated 30.03.2017 - The intention behind the Notification dated 04.03.2011 issued by the Central Government under Section 54 of the Act was to exempt certain transactions due to their small size. The intention of the Government is made clear by the Press Release dated 30.03.2017 where it is stated that "combinations falling within the threshold limits would not require to be filed before the Competition Commission of India. The reform is in pursuance of the Government's objective of promoting Ease of Doing Business in the country and is expected to make India a more attractive destination for Foreign Direct Investment. The notification is expected to enable greater freedom to industry in taking legitimate business decisions towards further accelerating India's economic growth." This makes it clear that the Central Government did not wish that the CCI interfere in acquisition of an enterprise that was de minimis or acquisition of assets that were de minimis. For the purpose of the calculation of assets and turnover what is being acquired is relevant, as the assets/turnover of what is left over with the sellers after the acquisition will have no role to play in the context of the business conducted by the purchaser post-acquisition - In the present case, the 'Stock and Asset Purchase Agreement' covering the global portion of the transaction dated 22nd April, 2014 was publicly announced and notified under the merger control laws in several jurisdictions around the world, including the United States and the European Union. The transaction was cleared in each jurisdiction and closed on 1st January, 2015. Since the turn over attributed to the business acquired was Rs. 93.9 Crores and the value of the assets being acquired was Rs. 36.2 Crores, the 'enterprise's' acquired assets of the value being more than Rs. 250 Crores or turn over not more than Rs. 750 crores, the Appellant is exempted from the provision of Section 5 of the Act and was not required to notify in terms of Section 6(2) of the Act - The delegated legislation, namely The Competition Commission of India (Procedure in Regard to the Transaction of Business Relating to Combinations) Regulations, 2011 which states that in case of an acquisition, the obligation to file the notice is with the acquirer is contrary to the express statutory provision and the intent thereof. The Commission having failed to appreciate the aforesaid position and in view of finding as recorded, the impugned order is set aside - appeal is allowed.
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