NCLAT Stays Coercive Action Against HP Reseller Over CCI Penalty In Cartelization Case

The National Company Law Appellate Tribunal (NCLAT), Delhi, has stayed coercive action to recover the unpaid portion of penalties imposed on Orbit Techsol India Private Limited and its director by the Competition Commission of India (CCI) for alleged cartelisation with HP India and other resellers.

The tribunal passed the interim order in two appeals filed by Orbit Techsol and its director against the CCI's order imposing penalties on HP India and five of its resellers. It noted that the appellants had deposited 25% of the penalty amount, as required under the second proviso to Section 53B of the Competition Act, 2002, for entertaining an appeal.

A bench comprising Justice Sharad Kumar Sharma and Technical Members Arun Baroka and Indevar Pandey observed that although making the statutory pre-deposit did not automatically warrant a stay on recovery of the remaining penalty, the CCI's interests were protected by the statutory requirement.

"The prayer sought for by the appellant is being vehemently opposed by the respondent counsel contending thereof, that the statutory pre-deposit under the second proviso so itself may not be the reason to restrain the enforcement of the order, which has been otherwise passed in accordance with law.

To some extent, the learned counsel may be correct in saying that, but being conscious of the fact that the interest of the respondent is already protected by a statutory mandate of the second proviso and without making a reference to the yardstick of the earlier interim orders, those have been passed in the earlier competition appeals, we direct that no coercive action would be taken, as a case, the appellant for the balance amount."

The appeal arose from a suo moto order of the CCI on 13 July 2026. The commission had imposed a penalty of ₹126.87 crores on HP India and a combined penalty of ₹1.22 crores approximately, on its five resellers, respectively, for indulging in cartelisation in sale and supply of personal system products.

Out of the combined penalty ₹86 Lakhs was imposed on Orbit Techsol and a penalty over ₹1 Lakh was imposed on its director out the vicarious liability.

The Commission found that HP India sellers were engaged in dictating bid prices to resellers and manipulated participation of resellers in the GeM tenders by withholding authorisation, in order to benefit itself in contravention of Section 3(3)(d) read with Section 3(1) of the Act.

The Commission also found that its five resellers including Orbit Techsol were acting in collusion with HP India in contravention of Section 3(3)(d) read with Section 3(1) of the Act.

The appellants argued that on account of making a pre-deposit of 25% of the penalty amount, the balance 75% amount is normally stayed by the court. It was pointed out that prior to the pre deposit requirement, the court had a practice of directing to pay 10% of the amount and that a later amendment, made the 25% pre-deposit mandatory.

The appellant further submitted that ever since, the court has normally stayed the recovery of balance amount during the pendency of appeal in many other similar cases.

However the Commission opposed this view and submitted that there was no uniform order that in every case, mandatorily there has to be a stay on the recovery of balance amount. It was argued that the contention that there is a uniform practice was not correct.

The appellant pointed out that they were not trying to make out a precedent of the uniform practice

The matter is listed for further hearing in second week of Janauary