India: CCI Dismisses Allegations Of Cartelization Against 10 Entities

On November 1, 2019, the CCI dismissed allegations of bid rigging among 10 entities¹ in collusion with Tamil Nadu Textbook and Educational Services Corporation ('TNTESC').² The allegations were made by M/s Manjeet Plastic Industries ('MPI'). It was alleged that TNTESC published a tender to procure 7.187 million school bags by entering into a rate contract for one year as per specifications laid down in the tender. Subsequently, TNTESC issued two separate amendments amending the initial tender conditions and allowing the applicants to participate through a consortium of up to three entities.

MPI alleged that TNTESC had abused the tender process through such amendments, extended undue favour to some entities, who despite not being school bag manufacturers were able to participate in the tender process. MPI also alleged collusive practice amongst the 10 entities since the samples submitted by these entities contained specific common markings (in violation of the tender conditions). Further, the Informant submitted that an interim injunction had been granted by the Madras High Court on opening of financial bids by the TNTESC.

The CCI in its order clarified that at the outset no case for vertical restraints or abuse of dominance had been made out and proceeded to evaluate the allegations of cartelisation.

After further assessment, the CCI observed the submissions made by MPI seemed like mere conjectures and there was no evidence to substantiate the claims. The CCI also relied on its precedents, where it had observed that the tendering authority or procurer has a choice to set the terms and conditions of the tender and the conduct of the procurer is not examined under Section 3(3) of the Act. Further, allegations of price parallelism in submission of bids could not be examined since the financial bids were not opened by the TNTESC pursuant to the interim order passed by the Madras High Court. Thus, the CCI dismissed the matter under Section 26(2) of the Act.

Footnotes

1 Charanpaaduka Industries Private Limited, XO Footwear Private Limited, Infinity Footwear Private Limited, Vinishma Technology, Sumaja Electro Infra, M B Rubber Private Limited, H B Rubber Private Limited, B.N.G. Fashion Gear Private Limited, Liberty Shoes and Lawreshwar Polymers.

2 Case No. 27 of 2019, Order dated November 1, 2019.

Originally published January 17, 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.