2025 (3) TMI 1068 - CCI - Law of Competition

Anti-competitive agreements - abuse of dominant position - contravention of the provisions of Section 3 and 4 of Competition Act 2002 - engaging in non-transparent and arbitrary processes in the awarding of contracts and issuance of a Request for Proposal (RFP) - HELD THAT - With regard to the violation of Section 3 of the Act the Commission notes that it prohibits anti-competitive agreements which include but are not limited to cartel and bid-rigging. The Commission notes that the Informant has alleged tacit agreement between OP-1 and OP-2 in awarding tender however it has not provided any evidence or material which could indicate bid rigging in violation of Section 3 of the Act. Accordingly the Commission deems it appropriate not to proceed further on the basis of such unsubstantiated allegations. As far as allegations under Section 4 is concerned the Informant has alleged that OP-1 awarded the Work Order to OP-2 despite it having no prior experience or relation whatsoever with the PM SHRI Scheme and abused its dominant position under Section 4 of the Act. Further OP-2 abused its dominant position by issuing an RFP which is faulty restrictive and defective. The Commission is of the view that the alleged conduct of OP-1 in appointing OP-2 as PMC and further issuance of faulty RFP by OP-2 themselves are not amenable under the province of Section 4 of the Act without any supporting evidence. Simply selection or non-selection of an agency as PMC or issuance or non-issuance of RFP or issuance of defective RFP by an entity cannot be said to be abusive in terms of Section 4 of the Act unless and until there are availability of ingredients of the same as required under the Act. As stated these issues lie within the precinct of the freedom of the procurer. The Commission based on the facts and circumstances and analysis carried out does not find it appropriate to examine the conduct of OP-1 and OP-2. Accordingly the Commission has refrained from delineating relevant market and assessment of dominance as required under the provisions of the Section 4 of the Act. Conclusion - The Commission is of the view that no prima facie case of contravention of either Section 3 or Section 4 of the Act is made out in the present matter against OP-1 and OP-2. Accordingly the Information is ordered to be closed forthwith in terms of the provisions contained in Section 26(2) of the Act. Consequently no case for grant for relief(s) as sought under Section 33 of the Act arises and the same is also rejected. Application disposed off.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment involve alleged contraventions of Sections 3 and 4 of the Competition Act, 2002. Specifically, the issues are:

1. Whether the actions of the Navodaya Vidyalaya Samiti (OP-1) and RailTel Corporation of India Ltd. (OP-2) constitute anti-competitive agreements under Section 3 of the Act.

2. Whether OP-1 and OP-2 abused their dominant positions in the market, contravening Section 4 of the Act, by engaging in non-transparent and arbitrary processes in the awarding of contracts and issuance of a Request for Proposal (RFP).

ISSUE-WISE DETAILED ANALYSIS

1. Alleged Violation of Section 3 of the Act

Relevant legal framework and precedents: Section 3 of the Competition Act, 2002, prohibits anti-competitive agreements, including cartels and bid-rigging. The Commission evaluates whether there is evidence of a tacit agreement between parties that restricts competition.

Court's interpretation and reasoning: The Commission observed that the Informant alleged a tacit agreement between OP-1 and OP-2 in awarding the tender. However, no evidence or material was provided to substantiate claims of bid-rigging or any violation of Section 3.

Key evidence and findings: The Informant failed to present any substantial evidence indicating a contravention of Section 3. The allegations were deemed unsubstantiated.

Application of law to facts: Without concrete evidence of an anti-competitive agreement, the Commission found no grounds to proceed with an investigation under Section 3.

Treatment of competing arguments: The Commission did not find any competing arguments compelling enough to warrant further investigation.

Conclusions: The Commission decided not to proceed with the allegations under Section 3 due to lack of evidence.

2. Alleged Violation of Section 4 of the Act

Relevant legal framework and precedents: Section 4 of the Act addresses abuse of dominant position, where an entity uses its position to affect competitors or the market adversely.

Court's interpretation and reasoning: The Commission considered whether OP-1's selection of OP-2 and OP-2's issuance of a restrictive RFP constituted an abuse of dominance. The Commission noted that the freedom of the procurer is a key principle, allowing them to set terms based on their requirements.

Key evidence and findings: The Commission found that the Informant did not provide sufficient evidence to demonstrate that the actions of OP-1 and OP-2 amounted to an abuse of dominance. The Commission emphasized the procurer's right to set procurement terms.

Application of law to facts: The Commission determined that the mere selection or non-selection of an agency or the issuance of an RFP does not constitute abuse unless there is clear evidence of anti-competitive conduct.

Treatment of competing arguments: The Commission highlighted the lack of evidence supporting the Informant's claims and reiterated the procurer's discretion in setting procurement criteria.

Conclusions: The Commission concluded that no prima facie case of abuse of dominance was established under Section 4, and therefore, no further examination of the conduct of OP-1 and OP-2 was warranted.

SIGNIFICANT HOLDINGS

The Commission held that:

- "Simply selection or non-selection of an agency as PMC or issuance or non-issuance of RFP or issuance of defective RFP by an entity cannot be said to be abusive in terms of Section 4 of the Act unless and until there are availability of ingredients of the same as required under the Act."

- The Commission emphasized the importance of the procurer's freedom to set procurement terms, stating that such choices are "sacrosanct in a market economy."

- The Commission decided not to delineate the relevant market or assess dominance due to the lack of evidence supporting the allegations.

Final determinations on each issue:

- The Commission ordered the closure of the Information under Section 26(2) of the Act, finding no prima facie case of contravention of Sections 3 or 4.

- The request for interim relief under Section 33 was also rejected.

Confidentiality of the Informant's identity was granted for three years as per Regulation 36(1) of the Competition Commission of India (General) Regulations, 2024.