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of <h1>Competition Tribunal Adjusts Penalties for Collusive Bidding, Criticizes CCI's Penalty Calculations.</h1> The Tribunal upheld the finding of a breach of the Competition Act by the appellants, confirming the jurisdiction of the Competition Commission of India ... - Issues Involved:1. Jurisdiction of CCI on pre-notification acts.2. Evidence of collusive bidding and cartel formation.3. Validity of considering tenders from other organizations.4. Legality of investigating 2011 tender.5. Penalty imposition and calculation.Summary:1. Jurisdiction of CCI on Pre-notification Acts:The appellants argued that the act of submitting identical bids on 8.5.2009 could not be scrutinized by CCI as Section 3 was notified only on 20.5.2009. However, the Tribunal held that the process of bidding continued beyond 8.5.2009, including negotiations on 1.6.2009 and 17.6.2009, thus falling within the jurisdiction of CCI. The Tribunal emphasized that the term 'manipulating the process for bidding' u/s 3(3) covers all stages from tender notice to contract award.2. Evidence of Collusive Bidding and Cartel Formation:The Tribunal found substantial evidence of collusive bidding, noting consistent identical pricing by the appellants in tenders from 2007 to 2011. The identical pricing pattern and the boycott of the 2011 tender indicated a pre-concerted agreement among the appellants. The Tribunal rejected the appellants' defense that identical pricing was coincidental and not indicative of cartel behavior.3. Validity of Considering Tenders from Other Organizations:The Tribunal upheld the DG's consideration of tenders from other organizations, stating that the consistent pattern of identical pricing across various tenders supported the finding of a cartel. The Tribunal dismissed the argument that the DG exceeded his brief by investigating tenders beyond the specific tender mentioned in the initial information.4. Legality of Investigating 2011 Tender:The Tribunal rejected the appellants' argument that the DG had no jurisdiction to investigate the 2011 tender, as the CCI's order u/s 26(1) was broad enough to cover ongoing anti-competitive behavior. The Tribunal found that the appellants' boycott of the 2011 tender was part of a continued anti-competitive agreement.5. Penalty Imposition and Calculation:The Tribunal criticized the CCI for not providing reasons for imposing a penalty of 9% of the average three years' turnover. It emphasized the need for proportionality and relevant turnover in penalty calculation, especially for multi-product companies like United Phosphorous Ltd. and Excel Crop Care Ltd. The Tribunal adjusted the penalties based on the relevant turnover of ALP tablets, reducing the penalty for Sandhya Organic Chemicals Pvt. Ltd. to Rs. 15.70 lakhs, while setting penalties for United Phosphorous Ltd. and Excel Crop Care Ltd. at Rs. 6.94 crores and Rs. 2.91 crores respectively.Conclusion:The Tribunal confirmed the finding of breach of the Competition Act by the appellants but modified the penalties based on relevant turnover considerations. The appeals were dismissed with adjusted penalties.
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