COMPAT by its order dated February 17, 2016 has upheld the order
of CCI closing the case for bid-rigging for supply of Axle Mounted
Disk Braking System (ADBMS) to Indian Railways.
In the instant case, the investigation related to quoting of
identical prices in three emergency purchase tenders by the
opposite parties, M/s Faiveley Transport (India) Pvt. Ltd. and M/s
Knorr Bremse India Pvt. Ltd. for procurement of ADBMS by Rail Coach
Factory, Kapurthala, Punjab(RCF) (collectively referred as
"respondent") . The Appellant , the Deputy Chief
materials Manager of Rail Coach Factory, Kapurthala, who had filed
the reference in CCI , alleged that the respondents took advantage
of the limited competition in the market for supply of AMDBS and
refused to provide cost break-up and proper justification for the
rates quoted by them, which showed that their conduct was
anticompetitive. The reference was sent to the Director General
(DG) for investigation by CCI.
The Director General (DG) during the investigation, found
evidence of bid rigging since the rates quoted by the two suppliers
(who were the only suppliers approved by the Research and Design
Organization (RDSO) of the Indian Railways) were identical in each
of the three tenders under inquiry. However, CCI closed the
reference of the Railways on grounds that mere identical rates by
the respondents did not prove cartelization.
The Hon'ble COMPAT, agreeing with the views of CCI, while
dismissing the Appeal observed that "in an oligopolistic
market like the one in question, the identity of price quoted by
the bidders is not an unusual feature. The players in a limited
market are aware of the price quoted by each other in one or the
other bid and it is a normal tendency to quote the same price in
response to the next tender. Therefore, identical price quoted by
the respondents for the items of AMDBS did not constitute
sufficient evidence of cartel formation and in the absence of other
plus-factors, it is not possible to record a finding that the
respondents had acted in violation of Section 3(3)(d) read with
Section 3(1) of the Act". The Hon'ble COMPAT placed
reliance upon a Supreme Court judgment in re: Union of India Vs.
Hindustan Development Corporation and Others. [1993 (3) SCC 499]
Source: Order dated February17, 2016. For full text see
COMMENT:This order passed by
COMPAT is a unique order since by this order the Hon'ble
Tribunal has admitted an appeal filed by an Informant against an
Order of CCI when no such appeal is prescribed by the Act. The
Hon'ble Tribunal apparently did not consider it necessary to go
into the legal issue of challenge to its jurisdiction itself, since
it was not in the interest of the Informant /Appellant to raise
this issue and the order has been passed without issuing notice to
the respondents or to CCI. Whether this order sets up a precedent
against the celebrated judgment of the Hon'ble Supreme Court
deciding this very issue in the case of CCI vs. SAIL (2010) 10 SCC
744 ,remains to be seen.
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