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The National Company Law Appellate Tribunal (NCLAT) has upheld a Competition Commission of India’s (CCI) order holding soil testing agencies guilty of cartelisation. However, the NCLAT Division Bench comprising Justice Rakesh Kumar, Member (Judicial) and Ashok Kumar Mishra, Member (Technical) remanded the matter back to CCI for determining the quantum of penalty afresh.
The Appellate Tribunal also urged CCI to take a lenient view in the penalty matter.
It maybe recalled that the matter was initiated by the CCI suo motu based on the complaint alleging bid rigging in respect of e-tenders floated by the Department of Agriculture, Government of Uttar Pradesh for soil sample testing.
While ordering investigation, the CCI noted that the bidders manipulated the bidding process. After a detailed probe, the investigation arm of CCI submitted a report finding nine firms cartelising the process.
Subsequently, the CCI forwarded investigation report to the firms found guilty with an opportunity for oral hearing.
On analysis and assessment of evidence and other materials on record, CCI, in its order issued in April this year, observed that the firms have cartelised in the tenders by submitting fake invoices and false experience certificates to influence the bidding process for achieving the pre-determined objectives. The competition panel also noted in its order that the firms could not rebut the findings of investigation.
Accordingly, CCI held all nine firms guilty of contravention of the provisions of Section 3 of the Competition Act, 2002 which prohibit anti-competitive agreements, including cartelisation. A cumulative penalty of ₹2.22 crore was imposed on them.
The penalty was calculated @5% of the average turnover and income of the firms and their respective individuals. The firms found guilty of cartelisation by CCI are: Yash Solutions, Siddhi Vinayak & Sons, Saraswati Sales Corporation, Austere Systems Pvt. Ltd., Delicacy Continental Pvt. Ltd., FimoInfosolutions Private Limited, Toyfort, Chaitanya Business Outsourcing Pvt. Ltd. and Satish Kumar Agarwal.
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