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TMI Blog2019 (2) TMI 2122X X X X Extracts X X X X X X X X Extracts X X X X ..... or upon its own knowledge or upon information received from any person, the Commission, if of opinion that there exists a prima facie case, shall direct the Director General (DG) to cause an investigation to be made into the matter. On a bare reading of this provision, it is abundantly clear that causing of investigation to be conducted by Director General is entirely dependent on existence of a prima facie case warranting such investigation. Unless the Commission is satisfied that a prima facie case exists, the Informant (where information has been received from any person) has no vested right to seek investigation into alleged contravention of provisions Section 3(1) or Section 4(1) of the Act. The Appellant Informant who was neither an OEM nor an SI and was not in the fray for bidding qua the tender in question raised competition concerns on the basis of wild allegations without any substance. The circumstances projected by him, in absence of any incriminating evidence, would not justify drawing inference of complicity of Respondents 2 and 3 in bid rigging/ collusive bidding. The Appellant-Informant has miserably failed to make out a prima facie case warranting causing of an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which-- (a) directly or indirectly determines purchase or sale prices; (b) limits or controls production, supply, markets, technical development, investment or provision of services; (c) shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way; (d) directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition: Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services. Explanation - For the purposes of this sub-section, "bid rigging" means any agreement, between enterprises or persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce of production, etc. or entails bid rigging or collusive bidding. This includes cartels but excludes joint venture agreements. Therefore, it would be imperative for an Informant to demonstrate that there was an agreement between enterprises or persons or their associations engaged in identical or similar business which inter-alia resulted in bid rigging or collusive bidding, directly or indirectly. Agreement postulates meeting of minds. The Informant shall have to lay evidence, direct or circumstantial, before the CCI that an agreement was entered into between such enterprises, persons or their associations engaged in identical or similar trade in respect of the prohibited activity which resulted in bid rigging or collusive bidding. It is only then that such agreement can be presumed to have an appreciable adverse effect on competition. 5. Adverting to the facts of the case in hand, be it seen that the Appellant alleged bid rigging/ collusive bidding by 'Hitachi Systems Micro Clinic Pvt. Ltd.' (Respondent No.2) and 'IL&FS Technologies Ltd.' (Respondent No.3) in the tender floated by 'Bharat Heavy Electricals Ltd.' (BHEL) for procurement of PCs and Peripherals. The Appellant cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, in respect of Group-A Items only Respondents 2 and 3 submitted the bids as its requirement comprised of providing maintenance and other services for five year lease period. The CCI also noted that four bids were submitted for Group-B Items, which did not contain maintenance provision. In Commission's view stringent operative requirements could be a factor in restricting bids in respect of Group-A Items. The Commission was of the view that low participation in bidding process of Group-A Items in the given circumstances would not necessarily be indicative of any concerted action. The Commission dismissed the allegation of supportive bid on the Part of Respondent No. 3 in favour of Respondent No. 2 on the ground of both being connected to HP and having business links as there was no evidence to suggest that these Respondents were engaged in bid rotation. It also did not attach any significance to the factum of some officials of one Respondent earlier working with another Respondent holding that in IT Industry this was a routine affair and meeting of minds for purposes of bid rigging/ collusive bidding could not be inferred from such proximity. The Commission was of the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or Section 4(1) of the Act. The Informant has to demonstrate that there is substance in the allegations leveled in the information and he will fairly succeed in establishing that the Respondents are engaged in anti- competitive agreements. Raising of competition concerns on the strength of bald allegations without any shred of evidence would not absolve the Informant of his obligation to make out a prima facie case warranting causing of investigation by DG. It is indisputable that direct evidence would seldom be available in cases of bid rigging or collusive bidding. However, inference of complicity in anti-competitive activities would be available only on the basis of proved facts. Merely because the bidders while exercising their choice of quoting products, opt for a particular manufacturer, which may be attributable to a variety of factors, would not necessarily justify meeting of minds. This observation equally applies in the facts and circumstances of instant case where Respondent No. 2 emerged as L-1 in the bidding process while he was found to have quoted quite a few products of HP for Group-A Items. The successful bidder had not only the choice to quote product of a parti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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