CCI penalises firms found guilty of bid rigging and cartelization in Indian Railways tenders

CCI penalises firms found guilty of bid rigging and cartelization in Indian Railways tenders

Reetu | Apr 27, 2022 |

CCI penalises firms found guilty of bid rigging and cartelization in Indian Railways tenders

CCI penalises firms found guilty of bid rigging and cartelization in Indian Railways tenders

The Competition Commission of India (CCI) has issued a final order against eleven (11) companies/firms that were deemed to have violated the anti-competitive agreements provisions of Sections 3(3)(a), 3(3)(b), 3(3)(c), and 3(3)(d) of the Competition Act, 2002 (Act) read with Section 3(1). The action was started after the North Western Railways filed a reference on their behalf.

CCI discovered that these companies/firms engaged in cartelization in the supply of High Performance Polyamide Bushes (HPPA) and Self Lubricating Polyester Resin Bushes (SLPR) to the Indian Railways by determining prices, allocating tenders, controlling supply and market, co-ordinating bid prices, and manipulating the bidding process, directly or indirectly. Regular e-mail and WhatsApp discussions between the parties, quoting of identical/ comparable rates by some parties, filing of bids from the same IP addresses by specific parties in close vicinity, and other evidence were presented in the case. Four (04) of the eleven (11) entities were CCI reduced penalty applicants. A cartel member may contact the Commission by filing an application for a lighter penalty in exchange for providing complete, true, and vital disclosures about the putative cartel to the Commission under Section 46 of the Act.

In addition, the CCI found fourteen (14) persons from these eleven (11) entities to be accountable for the anti-competitive behaviour of their respective companies/firms under Section 48 of the Act.

CCI imposed penalties @5% of the average turnover/ income upon the companies/ firms and their respective individuals found guilty of violating the provisions of the Act. Giving benefit of reduction in penalty under the provisions of Section 46 of the Act of 80% to first lesser penalty applicant and its individuals, 40% to second lesser penalty applicant, 30% to third lesser penalty applicant and its individuals, and 20% to fourth lesser penalty applicant and its individuals, CCI directed the parties to pay penalties totaling to approx. INR 1.16 crores, besides issuing a cease-and-desist order.

The order was passed in Ref. Case No. 03 of 2018 and a copy of the order is available at CCI website at www.cci.gov.in.

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