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TMI Blog2022 (12) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of 2018 Competition Appeal (AT) No. 67 of 2018 Competition Appeal (AT) No. 68 of 2018 ( Justice Rakesh Kumar ) Member ( Judicial ) And ( Dr. Ashok Kumar Mishra ) Member ( Technical ) For the Appellant : Mr. Gaurav Mitra with Mr. Kartik Nagarkatti, Mr. Adit Singh, Advocates For the Respondent : Mr. Manish Vashist, Sr. Advocate with Ms. Avinash Sharma, Ms. Akanksha Kapoor, Mr. Siddhant Chaudhary, Advocates for CCI/R1. Mr. Davander Prasad, Dy. Director for CCI. JUDGEMENT JUSTICE RAKESH KUMAR, MEMBER (JUDICIAL) The aforesaid appeals were taken up for final hearing on 08.08.2022, 15.11.2022 and finally on 28.11.2022 after conclusion of hearing, Judgement was reserved. Despite the fact that on 08.08.2022 appellants counsel were appearing in Competition Appeal (AT) No.43/2018, 49/2018 and 67/2018, in other appeals there was no representation on behalf of the appellants. Accordingly while partly hearing the appeals and deferring hearing to 15.11.2022 it was observed that if on the next date there is none appearance of either of the parties, the Court may proceed ex parte. Again on 15.11.2022 except in Competition Appeal (AT) No.43/2018, 47/20218, 49/2018 and 68/2018 there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid appeals. The operative portion of the impugned order dated 01.05.2018 is reproduced hereinbelow:- 97. Thus, considering the totality of facts and circumstances of the present case, the Commission decides to impose penalty on OP-1, OP-2, OP-4, OP-5, OP-6 and OP-7 under Section 27 of the Act by taking into consideration the financial statements filed by them at the rate of 10 (Ten) percent of the average turnover of three financial years 2012-13, 2013-14 and 2014-15. The total amount of penalties imposed on the Ops are set out below: Amount- in rupees S. No Opposite Parties Turnover for 2012-13 Turnover for 2013-14 Turnover for 2014-15 Average Turnover for Three Years 10% of average turnover 1. Fortified Security Solutions (OP-1) 2,56,55,868 46,55,000 89,06,332 1,30,72,400 13,07,240 2. Ecoman Enviro Solutions Pvt. Ltd. (OP-2) 4,55,65,642 4,73,92,830 4,26,61,501 4,52,06,658 45,20,666 3. Lahs Green India Pvt. Ltd. (OP-4) 2,87,03,056 3,86,10,060 5,87,02,356 4,20,05,157 42,00,516 4. Sanjay Agencies (OP-5) 14,88,53,862 14,42,12,012 16,01,27,863 15,10,64,579 1,51,06,457 5. Mahalaxmi Steels 43,99,75,649 29,27,32,614 27,59,01,706 33,62, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied Security Solutions ('Fortified' for short), is engaged in the business of electronic security systems, sales and service, health and medical, equipment and instruments, sale-purchases and services. 5. The Complainant does not know the business activity carried on by Accused no. 2, Ecoman Enviro Solutions Private Limited (Ecoman' for short). 6.The Accused have, jointly and severally, committed the offence under section 3 of the Competition Act Section 3 is reproduced herein below 7.While bidding for tender numbers 34, 35, 44, 62 and 63 of 2014 floated by the Pune Municipal Corporation (PMC" for short), they eliminated competition and in order to grant legitimacy to achieving their nefarious design of scuttling competition, the Accused flouted the terms and conditions of the tender in collusion with PMC officials to qualify ineligible bidders 8.The modus operandi used by the Accused to give effect to their conspiracy to engage in collusive bidding strikes at the very root of fostering competition and protecting Indian markets against anti-competitive practices. This modus operandi has resulted in elimination of real competition and caused restricted participa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exclusion of the Corporation and to obtain wrongful and unlawful gain which the accused would not have obtained but for acting in contravention of Section 3 of the Competition Act in which process they have caused wrongful and unlawful loss to the State Exchequer 10. An analysis of the bids of the companies qualified technically shows that none of the companies is technically eligible. It will be seen from the tender notice issued in the name of Accused no. 3 that certain pre-qualification and technical criteria had been specified in order to be eligible and qualified to bid However, the MSW Department of the Accused no. 3, while purporting to act for Accused no 3 has technically approved companies that are not in the business of solid waste processing plants. A bare perusal of the Tender Notice would evince that the Accused No.2 did not even qualify the technical criteria because of lack of relevant experience. It will be further seen that not a single bidder has given the experience in the form required in Exhibit-8 Evidently, this was done to ensure a minimum of three technically-qualified bidders as mandated by paragraph 24.5 of PMC Commissioner's Office order No. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investment and services to be provided and adversely affected domestic/local competition 14 A perusal of Accused no 2's IT return for AY 2012-13 shows net taxable income of Rs 1,97.910/- and tnx plus interest as Rs.2,07,091/- Le more than 100% of the taxable income. The turnover as per the certificates from the Chartered Accountants is between Rs 4,50 to Rs 4.75 Crores for the period 2012-13 and 2013-14 It is evident that the Accused no 2 did not have the financial strength to implement five projects worth Rs 14.82.94.580/ almost simultaneously. Additionally, tax plus interest paid for A Y 2012-13 and thirteen-fold jump in income in just one year in A.Y 2013-14 should have been legitimate subjects of enquiry warranting due diligence and most probably elimination of Accused no 2 resulting in re-evaluation of the bids or a re- tender This indicates that Accused no. 2 as L1 was pre- determined thus violating Section 3 of the Act The Complainant submits that a bare perusal of the company profile of Lahs Green India Pvt Ltd (Lahs for short) establishes that it is not in the business of processing plants for MSW A perusal of the Statement of Profit and Loss of Lots for y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cused no 2) and not of the company The certificate from the CA is also not for the Company The inescapable conclusion is that the company are either non-existent or not audited for fear of revealing unpalatable facts. All these eventualities are highly questionable d) in all the affidavits and indemnity bonds (except for Accused no 2). the name of the person signing the affidavit or the indemnity bond is not mentioned and the signatures are also not decipherable. This is an effort to hide identity to facilitate the same person signing differently for different companies e)Mahalaxmi Steel is authorised by Raghnath Industry Pvt Ltd as it's distributor in bid no. 63-014 Raghunath Industry Private Limited has, on its board, a person called Sonali Vijay Salunke who appears to be related to Bipin Vijay Salunke This person "S V Salunke has signed documents such as affidavit of Accused no. 2 Further Raghunath Industry Private Limited has its email ID as accounts@ecoman in showing its link with Accused no.2 f)Mahalaxmi Steel has placed an order on Labs in tender no. 62-2014, clearly showing complementary efforts amongst the bidders. g)None of the outstation bidders e.g. Lah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Eco-wiz authorized Sanjay Agency for tender nos. 62 & 63 and had earlier given a similar certificate in tender nos, 34 & 35 to LAHS Green. A careful scrutiny of the signatures points to the signature being copied on to the other document q)All the experience certificates submitted by Accused no.2 are from PMC. Only to show it's compliance with the technical requirement of having past experience with Other Municipal Councils, Accused no 2 has annexed documents purporting to be experience certificates, while in reality being more work orders The Accused No.2 has also failed to submit any document to evince one year's operation & maintenance experience as mandated in the Tender Notice at Exhibit 8(Supra). The zeal of awarding tender to Accused no 2 is gauged from the fact that the one year requirement of operational and maintenance experience has been done away with without any reason or justification r)The Complainant, by his email dated 25 April 2015, to the then Municipal Commissioner, Mr Kunal Kumar. sent a report of the same date informing him that Nagrik Chetna Manch had established a prima facie case and strongly urged upon him to consider taking appropriate actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enterprises, which are parties to such agreements: d. if it is established that the agreement has been entered into by a cartel, impose upon each entity included in that cartel, a penalty of ton per cent of its turnover for each year of the continuance of such agreement, whichever is higher e)Refer matters pertaining to corruption in the tender process to the Anti Corruption Bureau, Maharashtra State f)Direct the enterprises concerned to abide by such other orders as the Commission may pass and comply with the directions, including payment of costs, if any: g. Pass such other orders or issue such directions as the Commission may deem fit in public interest" 8 After receipt of aforesaid information application, the CCI examined the same and on 29.09.2015 exercising power under Section 26(1) of the Act observed as follows: "18. The Commission has perused the above stated circumstantial and material evidences as submitted by the Informant. On examination of the evidences submitted by the Informant and consideration of the circumstances of the matter, the Commission, prima facie, convinced that there were meeting of minds amongst OP1, OP2, M/s Sanjay Enterprise and M/s Mahal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coman Enviro Solutions Pvt Ltd (OP-2), M/s Lahs Green India Pvt Ltd (OP-4), M/s Sanjay Agencies (OP-5) and M/s Mahalaxmi Steels (OP-^) in response to tender nos 34, 35, 44, 62 and 63 of 2014 floated by Pune Municipal Corporation (OP-3) for making OP-2 as the winner of the bid in the said cartel. Thus it is concluded that these Ops have indulged in bid-rigging and collusive bidding in response to the said tenders of OP-3 which is in contravention of provisions of Section 3(3)(d) r.w..s3(1) of the Act." 10. The DG during investigation also examined the involvement of officials of Pune Municipal Corporation and observed as follows and finally recorded conclusion in its report at Chapter IX which is reproduced hereinbelow:- "Conclusion 9.1 The present information was filed under Section 19(1)(a) of the Competition Act, 2002 by Nagrik Chetna Manch ("the Informant': 'IP) against M/s Fortified Security Solutions (OP- 1). M/s Ecoman Enviro Solutions Pvt. Ltd. (OP-2), Pune Municipal Corporation (OP-3), M/s Lahs Green India Pvt. Ltd. (OP-4), M/s Sanjay Agencies (OP-5), M/s Mahalaxmi Steels (OP-6) and M/s Raghunath Industry Pvt. Ltd (OP-7) alleging contravention of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eels (OP-6) to provide relevant documents for filing the tender. Since, the proxy/cover bidders did not have any experience or background in solid waste management, Shri Bipin Vijay Salunke arranged for authorization certificates as distributors from M/s Raghunath Industry Pvt. Ltd. (OP-7) in which his father Shri Vijay Raghunath Salunke is a Director, for them as being the authorized distributor of its composting machine. Further, Shri Bipin Vijay Salunke prepared the bank demand drafts for earnest money deposit for these proxy/cover hidders, uploaded the relevant documents for the tender online and also quoted the bid rates for the tenders on their behalf. All of this was orchestrated by Shri Bipin Vijay Salunke so that M/s Ecoman Enviro Solutions Pvt.) Ltd. emerged LI: 9.4 Evidences gathered during the investigation Several evidences were gathered during the course of investigation indicating that Shri Bipin Vijay Salunke is the key person behind this cartelization and bid rigging of the tenders. These evidences are broadly highlighted below: The phone numbers given as contact person detail for various bidders in the tenders were-9823766068 and 9822676668 which belong to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the cartel. Further, the report suggests that role of some of the officials of OP-3 Le. Shri Sanjay Atmaram Gawade (Assistant Municipal Commissioner) Shri Ravindra Krishna Mulay (Branch Engineer) and Shri Suresh Jagtap (Joint Municipal Commissioner, who telephonically conversed with Shri Bipin Vijay Salunke Shri Parimal Salunke should be examined vis-à-vis their locus standi if they were required to telephonically speak to Shri Bipin Vijay Salunke and/or Shri Parimal Salunke in connection with operation/maintenance/supervision of organic solid waste management plants installed earlier. Furthermore, the documents of M/s Ecoman Enviro Solutions Pvt. Ltd. were uploaded from one of the computer device of OP-3 (using IP address-114.143.199.34) in tender no. 21 of 2013. As such, there could be some assistance offered by some official of OP-3 to Shri Bipin Vijay Salunke which should also be examined by Pune Municipal Corporation (OP- 3). 9.7 Claim of confidentiality No confidentiality has been claimed by the OPs vis-à-vis submissions, evidences etc. which were a part of this investigation proceedings and which have been recorded in this report. Accordingly, a single ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial applications whereas OP No.5 Sanjay Agency was a pharmaceutical dealer and stockist of drugs. OP 6 Mahalaxmi Steel being proprietorship firm was engaged in the steel trading business. The CCI in its order impugned elaborately discussed different issues which establishes categorical case of cartelisation in the alleged bid by the appellants. Even during enquiry by the CCI statement of appellant Manoj Kr, Proprietor of Respondent No.6/appellant in Competition Appeal (AT) No.543/2018, statement of OP5, OP No.4, OP No.7, statement of Mr Bipin Vijay Salunke, Proprietor of OP No.1-Director of Opposite Party No.2 was recorded wherein all the parties accepted their involvement. The CCI also examined the lesser penalty application filed by the appellants and thereafter the impugned order was passed, operative portion of which has already been quoted hereinabove. 14. Though in the present appeal there was no need to go into the merit of the case in view of order dated 16.07.2018 passed by this Tribunal, however, for clear appreciation of the fact we have noticed and discussed aforesaid facts. On 16.07.2018, Competition Appeal (AT) No. 43, 44, 45, 46 and 47 was taken and a Bench of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Appeal (AT) No.43/2018 has emphatically argued that learned CCI contrary to the law laid down by Hon'ble Supreme Court in Excel Crop Limited has considered the turnover. According to learned counsel for the appellant the penalty imposed by the CCI on the basis of three years turnover was incorrect. Mr. Mitra, learned counsel for the appellant has specifically referred to para 71 to 74 on the point of turnover which are reproduced hereinbelow:- 71) We have given our serious thought to this question of penalty with reference to 'turnover' of the person or enterprise. At the outset, it may be mentioned that Section 2(y) which defines 'turnover' does not provide any clarity to the aforesaid issue. It only mentions that turnover includes value of goods or services. There is, thus, absence of certainty as to what precise meaning should be ascribed to the expression 'turnover'. Somewhat similar position appears in EU statute and in order to provide some clear directions, EU guidelines on the subject have been issued. These guidelines do refer to the concept of 'relevant turnover'. Grappling with the same very issue, the judgment of the Competition Appeal Court of South Africa in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. Pertinently, Section 27(b) of the Act while prescribing the penalty on the 'turnover', neither uses the prefix 'total' nor 'relevant'. It is in this context, taking aid of the applicable and well-recognised principle of statutory interpretations we have to determine the issue. 74) In the absence of specific provision as to whether such turnover has to be product specific or entire turnover of the offending company, we find that adopting the criteria of 'relevant turnover' for the purpose of imposition of penalty will be more in tune with ethos of the Act and the legal principles which surround matters pertaining to imposition of penalties. For arriving at this conclusion, we are influenced by the following reasons: (a) Under Section 27(b) of the Act, penalty can be imposed under two contingencies, namely, where an agreement referred to in Section 3 is anti-competitive or where an enterprise which enjoys a dominant position misuses the said dominant position thereby contravening the provisions of Section 4. In case where the violation or contravention is of Section 3 of the Act it has to be pursuant to an 'agreement'. Such an agreement may relate to a particular product bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d capture a wide range of activities that fall outside the scope of the legislative purpose underlying it, and would fail to meet s.7 overbreadth scrutiny. There is, however, an alternative interpretation of s.13(1)(a) that renders it constitutional. Section 13(1)(a) can be read as expressing the general intention of s. 13(1) as a whole, and paras. 13(1)(b) through (h) can be treated as setting out specific examples of "impairment(s) of the quality of the natural environment for any use that can be made of it". When viewed in this way, the restrictions place on the word "use" in paras. (b) through (h) can be seen as imported into (a) through a variant of the ejusdem generis principle. Interpreted in this manner, s.13(1)(a) is no longer unconstitutionally overbroad, since the types of harms captured by paras. (b) through (h) fall squarely within the legislative intent underlying the section. In light of the presumption that the legislature intended to act in accordance with the constitution, it is appropriate to adopt this interpretation of s.13(1)(a). Thus, the subsection should be understood as covering the situations captured by paras. 13(1)(b) through (h), and any analogous situ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apart from strict literal construction then that construction should be preferred to the strict literal construction. Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. Furthermore, in the instant case we are dealing with an artificial liability created for counteracting the effect only of attempts by the assessee to reduce tax liability by transfer. It has also been noted how for various purposes the business from which profit is included or loss is set off is treated in various situations as assessee's income. The scheme of the Act as worked out has been noted before. In Southern Motors vs. State of Karnataka and Others 24, the Court explained the task that is to be undertaken by a Court while interpreting such statutes: "33. The following excerpts from Tata Steel Ltd. (supra), being of formidable significance are also extracted as hereunder. Xxx xxx xxx "25. In Oxford University Press v. Commissioner of Income Tax [MANU/SC/0052/2001]:(2001) 3 SCC 359, Mohapatra, J. has opined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce a rational construction. In such a case the court may read into the statutory provision a condition which, though not expressed, is implicit in construing the basic assumption underlying the statutory provision.... 34. As would be overwhelmingly pellucid from hereinabove, though words in a statute must, to start with, be extended their ordinary meanings, but if the literal construction thereof results in anomaly or absurdity, the courts must seek to find out the underlying intention of the legislature and in the said pursuit, can within permissible limits strain the language so as to avoid such unintended mischief." (iii) The principle of strict interpretation of a penal statute would support and supplement the aforesaid conclusion arrived at by us. In a recent Constitution Bench judgment in the case of Abhiram Singh and Others v. C.D. Commachen (Dead) by L.Rs. and Ors. 25, this Court scanned through the relevant case law on the subject and applied this principle even while construing "corrupt practice" in elections which is of a quasi criminal nature. We would like to reproduce following discussion from the said judgment : "98. Election petitions alleging corrupt practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'maximum penalty' imposed in all cases be prescribed on the basis of 'all the products' and the 'total turnover' of the enterprise. It would be more so when total turnover of an enterprise may involve activities besides production and sale of products, like rendering of services etc. It, therefore, leads to the conclusion that the turnover has to be of the infringing products and when that is the proper yardstick, it brings home the concept of 'relevant turnover'. (vi) Even the doctrine of 'proportionality' would suggest that the Court should lean in favour of 'relevant turnover'. No doubt the objective contained in the Act, viz., to discourage and stop anti-competitive practices has to be achieved and those who are perpetrators of such practices need to be indicted and suitably punished. It is for this reason that the Act contains penal provisions for penalising such offenders. At the same time, the penalty cannot be disproportionate and it should not lead to shocking results. That is the implication of the doctrine of proportionality which is based on equity and rationality. It is, in fact, a constitutionally protected right which can be traced to Article 14 as well as Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. It needs to be repeated that there is a legislative link between the damage caused and the profits which accrue from the cartel activity. There has to be a relationship between the nature of offence and the benefit derived therefrom and once this co-relation is kept in mind, while imposing the penalty, it is the affected turnover, i.e., 'relevant turnover' that becomes the yardstick for imposing such a penalty. In this hue, doctrine of 'purposive interpretation' as well as that of 'proportionality' overlaps. In fact, some justifications have already appeared in this behalf while discussing the matter on the application of doctrine of proportionality. What needs to be repeated is only that the purpose and objective behind the Act is to discourage and stop anti-competitive practice. Penal provision contained in Section 27 of the Act serves this purpose as it is aimed at achieving the objective of punishing the offender and acts as deterrent to others. Such a purpose can adequately be served by taking into consideration the relevant turnover. It is in the public interest as well as in the interest of national economy that industries thrive in this country leading to maximum prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout giving detailed reason for taking higher 10% of the average turnover has committed serious error, particularly in view of the fact that most of the appellants were either proprietorship firm or a small company. He submits that discretion is also required to be exercised in accordance with law. He submits that according to him the discretion has incorrectly been exercised by CCI. On the point of exercising discretionary power jurisdiction, Mr. Mitra, learned counsel has placed reliance on para 85 to 89 of the Excel Crop Care Ltd case (supra). On aforesaid ground it has been argued that neither on merit impugned order is sustainable nor the penalty imposed can be considered as reasonable. 17. The Learned counsel for appellants in remaining appeals adopting the arguments of Mr. Mitra, learned counsel have also argued that even though the appellants had filed lesser penalty applications, same were not considered in accordance with law as well as provisions contained in Regulation 2009. 18. Besides making oral submission, learned counsel for the appellant in Competition Appeal (AT) No.49/2018 has also filed Notes of Written submission which is reproduced hereinbelow: "1. The Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated which results in zero dumping. 2. The Appellants are highly reputed in their business circle due to their commitments and ethical practices towards Swachh Bharat Abhiyan Mission and have no antecedents of any violation in its business. 3. It is submitted that the Ld. Commission has failed to appreciate that the actions of the Appellant No. I have had no appreciable adverse effect" ["AAE"] on competition in India, so as to amount to contravention of Section 3 of the Act. It is submitted that the presumption as to AAE in the case of Section 3(3)(d) is a rebuttable presumption, as can be seen from Section 19(3) of the Act. It is submitted that the Ld. Commission has erred in concluding at paragraph 86 at pg. 172 in the impugned order that the Appellants have failed to rebut the presumption. While arriving at the said erroneous finding, the Ld. Commission has not considered that as a matter of fact, from 2013 to 2015, there were insufficient participants in similar tenders of the PMC, due to which the dates had to be extended. It also finds mention in the Appellant No. I's LPR Application at pg. 384 @ 395-6, Vol. II. However, no comment whatsoever has been made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : ii. That the Appellant No. 1 has co-operated and in fact provided vital disclosures to enable the investigation, at the first instance itself; iii. That even as recorded by the Commission, the Appellant No. I was the one to disclose the modus operandi of the cartel (para 116@ pg. 186); iv)That as a matter of fact, from 2013 to 2015, there were insufficient participants in similar tenders of the PMC, due to which the dates had to be extended. However, no comment whatsoever has been made by the Ld. Commission on the above. It is submitted that this aspect, which has been ignored by the Commission, also has a bearing on the question of 'appreciable adverse effect! 8. The Ld. Commission failed to take note that the Appellants had another business with Mr. Bipin Vijay Salunke i.e. the Appellants were acting as a dealer for Mr. Bipin Vijay Salunke's company named Ecoman Enviro Solutions Private Limited, a leading company in a field of decentralized solid waste management having an advanced technology in composting. Accordingly, Mr. Bipin Vijay Salunke had access to all the details of the Appellants which have been misused by him. 9. The investigation by DG revealed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vital disclosure so as to form a prima facie opinion as to cartelisation. As a matter of fact, it can be seen from the DG Investigation report (pg. 415, Vol. II @ pg. 442, 448 & 455) that the fact that the bids were submitted from a common IP address for the Subject Tenders was discovered by the DG vide PMC's letters dated 25.8.2016 & 14.9.2016 ie. much later than the LPR Application by the Appellant No. 1. 16. The Ld. Commission has observed at para 115 at pg. 185/186, Vol. 1 that by the time the Appellant No. 1 herein approached Ld. Commission with its LPR Application, the Commission already had some evidence which showed involvement of OP-4 in the cartel. viz: i) Consecutive or very closely numbered DDS submitted by OP-4 and other bidders towards EMD; (ii) Preparation of DDS by OP-4 by debiting the account of Shri. Bipin Vijay Salunke; (iii) Call Data Records of Appellant No. 2 and Bipin Vijay Salunke and Shri Parimal Salunke showing exchange of several calls between them and use of common IP address for uploading of tender documents. In this regard, it is submitted that the above details were not sufficient to reach any prima facie conclusion as to cartelization, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Appellants in paragraphs 3, 4 and 5 hereinabove, are reiterated in support of Appeal No. 67/2018 filed by the Appellants herein. In view of the above submissions, it is most respectfully prayed that this Hon'ble Tribunal may be pleased to allow Appeal No. 49/2018 and Appeal No. 67/2018 thereby setting aside the Orders impugned therein. And if the above Appeals are not allowed, the Appellants who are registered under MSME Act, considered to be backbone of the Indian economy, committed towards "Swachh Bharat Abhiyan Mission" will have to face irreparable loss and damage of their image and reputation in their business circle and society at large. 19. In all the appeals, Mr. Manish Vashist, learned senior counsel has appeared on behalf of the Respondent/CCI. However, other respondents who were proforma respondents have preferred not to appear and participate in the argument. Mr Vashist, learned senior counsel for the CCI emphasised that in view of the fact that all the appellants had filed leniency application under Section 46 of the Act read with Rule 5 of the Regulation 2009 it will be deemed that all the appellants had admitted their guilt and as such they were not e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead of giving a complete waiver, chooses to give only a reduction for the penalty amount he must indicate in his order that he has applied his mind in that regard. In this view, there is no warrant for the proposition that the Commissioner, if satisfied of the compliance of conditions, has only one choice i.e. to waive the penalty in entirety. Otherwise, it may mean that Commissioner can in a case where conditions are not satisfied, reduce the penalty amount. When conditions are not satisfied, Commissioner cannot do either. Only when the said conditions are satisfied that the occasion arises for the Commissioner to exercise his discretion - not before. 10.Section 18-8 is analogous to section 273-A of the Income Tax Act, 1961 where under also a similar discretion has been conferred on the Commissioner of Income Tax for either reducing the penalty or granting waiver of the entire penalty. It is understood in clear terms that the said discretion in Income Tax Act is to be exercised in a reasonable and fair manner. The decision of the Bombay High Court [Purshottam Thackersey vs. K.N. Anantrama Ayyar (1985) 154 ITR 438] cited before us only shows that the order of the Commissioner dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Municipal Corporation was in regular touch with one of the main player in the present case regarding which phone details were also collected. Those circumstances suggest that there was a conspiracy for illegal gain to the main player which was loss to public exchequer. Accordingly he submitted that besides dismissing the aforesaid appeals it is also required to issue some direction to conduct an enquiry regarding commission of criminal offence, if any by the parties. 22. Besides making oral submissions on behalf of CCI a summary Note of Notes of Written Submissions has been filed which is reproduced hereinbelow: "1. In terms of the order dated 16" July 2018, limited notice was issued with regard to the quantum of penalty imposed by the R-1/CCI only. 2. The aforesaid Appeals have been preferred by the Appellants with regard to the final order dated 01 May 2018 passed by the R-1/CCI in Case No. 50/2015 titled Nagrik Chetna Manchy Fortified Security Solutions & Others. [Impugned Order] 3. Briefly stated, on the basis of an Information filed by Nagrik Chetna Manch [Respondent No. 2 herein] against Fortified Security Solutions [Respondent No. 3 herein). Ecoman Enviro Solutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respective lesser penalty applications filed by the parties. 7. While considering the lesser penalty applications, one of the crucial/ determinative factor adopted by the competition authorities is the timing of the leniency application. Whether it was filed at the threshold which could enable the CCI to pass an order for investigation after having prima facie view? Or such leniency application has been filed during the course of investigation when the DG already have found material evidence and information/evidence provided by leniency applicant improves the investigation further? These rationale/ justifications are quite evident from the language of Section 46 of the Competition Act, 2002 read with CCI (Lesser Penalty) Regulations, 2009 which provides for different sets of reductions for the first, second, third/ subsequent lesser penalty applications. 8. In the instant case, it is to be noted that the tenders were floated by the PMC during the period December 2014 to March 2015. The Information was filed before the CCI on 11th June 2015, that after 3 months from the date of last tender. The CCI found prima facie case and ordered for investigation on 29th September 2016. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtion of the impugned order which we have quoted in the present order. We are of the opinion that disclosure made in leniency application admitting involvement amounts to confession. If confessional statement is also corroborated even by some sort of evidence one is precluded to assail an order imposing penalty/punishment on such confession. Moreover, in the present case at the time of admission itself it was admitted by the appellants that the appeal may be heard on the point of penalty only. So far as point which has been raised from the appellant side regarding calculation of turnover in view of Excel Crop Care Ltd judgement (supra) on going through the impugned order it is evident that CCI has also examined and considered the Excel Crop Care judgement which has been discussed in para 94, 95, 96 of the impugned order which are quoted hereinbelow: "94. As regards the penalty to be imposed under Section 27 of the Act, the Commission finds that OP-1, OP-2, OP-4, OP-5, OP-6 and OP-7 entered into an arrangement to rig the bids pertaining to Tender nos. 34, 35, 44, 62 and 63 of 2014 floated by PMC for 'Design, Supply, Installation, Commissioning, Operation and Maintenance of Municip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gives justification for penalising the infringer on the one hand and the right of the infringer in not suffering the punishment which may be disproportionate to the seriousness of the Act. No doubt, the aim of the penal provision is also to ensure that it acts as deterrent for others. At the same time, such a position cannot be countenanced which would deviate from 'teaching a lesson' to the violators and lead to the 'death of the entity' itself......" 96. In view of the foregoing, Commission is of the view that in the peculiar facts of this case where OPs have admittedly submitted cover bids but are not engaged in the solid waste management i.e. the activity relating to which bid-rigging has taken place, interpretation of 'turnover' in Excel Crop Care case would not be applicable. This is because imposition of penalty on the basis of relevant turnover in this case would imply that no penalty would be leviable on several Ops who have indulged in bid rigging in contravention of the provisions of the Act. This would result in an anomalous situations and would render the objective of the Act infructuous. Evidently, this cannot be and was not the purpose or intent of the judgement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as different other reasons are the same as such the said appeal is also required to be remitted back on the same terms as indicated above. 27. Before parting with this order we are of the opinion that if some fact disclosing commission of conspiracy and by the act of such conspiracy state exchequer is suffered and such fact is brought to the notice of this Tribunal, this Tribunal may not shut its eyes. We are conscious of the fact that in an appeal filed under the Competition Act we may not travel beyond the impugned order and we may discharge our function in terms of the provisions contained in the NCLAT Rules, but after noticing a fact disclosing something which may on enquiry establishes commission of cognisable offence, instead of shutting eyes it is required to direct for conducting enquiry. In the present case it has been noticed that in the information petition which was filed by the informant it is evident that the informant had alleged that conspiracy and collusion by Accused No.1 and 2 alongwith technically ineligible company (nevertheless qualified) on the one hand and personnel of PMC Accused No.3 on the other hand as a result and by giving effect to this fraud Accused ..... X X X X Extracts X X X X X X X X Extracts X X X X
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