National Company Law Appellate Tribunal upholds the Competition Commission of India's penalty order against signages firm in a bid-rigging case
National Company Law Appellate Tribunal ("NCLAT") upheld the order passed by the Competition Commission of India ("CCI") whereby it imposed a penalty on Amreesh Neon Private Limited ("ANPL") and its managing director (collectively referred to as the "Appellants") for indulging in bid-rigging in the e-tenders floated by the SBI Infra Management Solutions Private Limited, for the supply and installation of signages at specified locations of the State Bank of India in 2018 ("Tenders").
Background
On February 3, 2022, CCI found 7 (seven) companies including ANPL and its managing director for indulging in bid-rigging cartel in the Tenders, in contravention of Section 3(3) of the Competition Act, 2002 (as amended) ("Competition Act") (referred to as the "CCI Order"). Accordingly, it inter alia imposed a penalty of INR 32.15 lakhs (Indian Rupees thirty-two lakh fifteen thousand) on ANPL and INR 31,200 (Indian Rupees thirty one thousand two hundred) on its managing director. For a summary of the CCI Order, refer to JSA Competition Law Newsletter for February 2022.
Proceedings before NCLAT
Aggrieved, the Appellants challenged the CCI Order before NCLAT, inter alia contending that: (a) the penalties imposed are disproportionate to their involvement and role in the Tenders; (b) CCI erred by considering the total turnover of ANPL instead of relevant turnover relating to the products linked to the Tenders, disregarding the principles laid down by Supreme Court of India ("SC") in Excel Crop Care vs. CCI1; and (c) the turnover linked to the Tender pertains only to illuminated products, however CCI has also considered the revenue generated from unrelated products such as unilluminated products, furniture, and trading activities.
NCLAT observations
The NCLAT upheld the CCI Order, and inter alia noted that: (a) ANPL's principal business activity is signage, with all segments of its turnover linked to this core business, making ANPL's argument of segmental turnover distinctions artificial and untenable; (b) CCI adopted a lenient approach in imposing monetary penalties on the opposite parties, including ANPL, most of whom are micro small and medium enterprises ("MSMEs"); and (c) the CCI Order was previously challenged by different opposite parties in 2 (two) separate appeals, both of which resulted in NCLAT upholding the CCI Order. Subsequently, the NCLAT said order was appealed to the SC, where it was dismissed. Accordingly, NCLAT dismissed the appeal.
(Source: NCLAT Order dated October 16, 2024)
NCLAT dismisses appeal filed by Travel Association of India against CCI order exonerating Balmer Lawrie and others
NCLAT dismissed an appeal filed by Travel Association of India ("TAI") against the order passed by CCI through which it exonerated Department of Expenditure, Government of India ("DOE"), Balmer Lawrie & Co. Limited ("Balmer") and Ashok Travels and Tours ("Ashok Travels") from allegations of refusal to deal, in contravention of Section 3(4) of the Competition Act.
Background
In 2010, TAI filed a complaint before CCI, alleging that DOE, Balmer, and Ashok Travels2 had entered into an arrangement whereby DOE issued an office memorandum directing all government departments to procure travel tickets exclusively from Balmer and Ashok Travels. CCI dismissed the complaint and noted that: (a) DOE does not constitute an 'enterprise' under the Competition Act, as its primary activities pertain to be policy-making rather than commercial business activities; and (b) the arrangement between DOE, Balmer, and Ashok Travels does not qualify as a vertical agreement, negating any claim of refusal to deal. Aggrieved, TAI appealed to the erstwhile Competition Appellate Tribunal ("COMPAT"), which upheld CCI's order, and no further appeal was filed before SC.
In 2020, TAI filed another complaint before CCI on same grounds, which CCI dismissed ("CCI Order").
Proceedings before NCLAT
Aggrieved, TAI challenged the CCI Order before NCLAT, which noted that TAI's second complaint intends to repeat the same facts, against the same parties, with identical prayers previously rejected. NCLAT noted that CCI and erstwhile COMPAT had already exonerated DOE, and that these issues could not be re-litigated as no party should face proceedings twice for the same cause. Consequently, the NCLAT, while dismissing the appeal also imposed cost of INR 5 lakhs (Indian Rupees five lakhs) on TAI.
(Source: NCLAT Order dated October 25, 2024)
Footnotes
1. (2017) 8 SCC 47.
2. Balmer and Ashok Travels are travel agents in which the Government of India has a shareholding.
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