COMPAT by its order dated March 1, 2016 has directed CCI to
reconsider penalties imposed on the 47 LPG manufactures for
big-rigging in procurement of 14.2 KG LPG cylinders in IOCL.
As a background to the case, the CCI by its order dated February
24, 2012 had imposed penalty of 7% of the preceding three years
turnover on 47 LPG manufacturers for bid-rigging in procurement of
14.2 KG LPG cylinder by IOCL.
Through COMPAT's judgment dated December 20, 2013, the order
of CCI was upheld on merits. However, COMPAT directed
re-consideration by the CCI on the question of penalties imposed on
the LPG cylinder manufacturers.
Upon re-consideration, the CCI upheld the original penalty
imposed at the rate of 7% of the turnover on all the parties except
in case of M/s Confidence Petroleum Ltd, the penalty on was reduced
on account of error of calculation in the original order.
This order of CCI dated August 6, 2014 was appealed by the LPG
COMPAT, through its latest judgment dated March 01, 2016 has
again set-aside the order of CCI dated August 6, 2014. The COMPAT
has set-aside the order on essentially two considerations. Firstly,
the COMPAT held that the CCI had not considered the relevant
turnover of the LPG manufacturers while imposing penalties, and
instead had imposed the penalty on average of total turnover of LPG
manufacturers. Secondly, the COMPAT opined that CCI had not given
due weightage to the mitigating factors pleaded by many of the LPG
manufacturers for reduction of penalties, such as nature of
anticompetitive agreement, appreciable adverse effect on
competition, financial health of the enterprise and market
(Source: Order dated March 1, 2016. For full text see COMPAT
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