2026 (1) TMI 1164 - AT - Law of Competition

Use of Crystalline Durability Admixture in heavy infrastructure projects: nationwide market accepted, no dominance or anti-competitive conduct found, appeal dismissed

The note addresses market delineation and competition-law liability concerning the use of Crystalline Durability Admixture in heavy infrastructure ... Bid rigging and abuse of dominant position - violation of Section 4 of the Competition Act, 2002 - allegations of cartelisation under Section 3(1) read with Section 3(3)(a) and 3(3)(b) - HELD THAT:- The relevant product market as provided by the Appellant is “Use of Crystalline Durability Admixture (CDA) in Heavy Infrastructure Projects (HIPs)”. The CCI has agreed with this delineation of the product market in the impugned order. However Relevant geographic market as submitted by the Appellant is Maharashtra. The CCI has, however, delineated the whole of India as the relevant geographic market. Appellant in the Information filed has not even alleged, let alone support the contention that CDA is used only in Maharashtra. Therefore, the delineation of the relevant geographic market as Maharashtra is without any basis and has, hence, it is found that it has been correctly rejected by the Commission. The Appellant has not challenged the delineation of the relevant geographic market as the whole of India, rather it has submitted that the MSRDC is dominant in the whole of India. The Appellant has relied upon a list of road projects named as expressways and has stated that the requirement of CDA was very high in the Mumbai-Pune Expressway - the meagre data provided by the Appellant gives no basis to conclude that MSRDC’s requirement was so high that it could be treated as a dominant enterprise in the whole of India, especially when it was doing one road project. MSRDC is not a consumer of CDA but is a consumer of construction services and MSRDC has only fixed eligibility conditions for purchase of CDA by contractors. The Appellant states that the condition of IRC accreditation by MSRDC was unfair and discriminatory. This contention deserves to be rejected outright. As correctly held by the Commission, mere prescription of IRC accreditation as an eligibility criterion by MSRDC does not, by itself, amount to unfairness or discrimination under the Act - there are no infirmity in the conclusions of the Commission that MSRDC is not dominant in the relevant market and in the absence of dominance, the question of abuse of dominance under Section 4 does not arise. It is not found the conduct of Respondent No.2 – MSRDC which is found to be a non-dominant enterprise and therefore, there is no requirement for a reference by the Commission to another statutory authority. We do not find any infirmity in such a conclusion and the Commission could not have recommended to other such statutory authorities under Section 21A as it had not found any anti-competitive conduct by MSRDC as was found to be not a dominant enterprise under Competition Act, 2002 - there are no infirmity in the order of the Commission that the Commission has no jurisdiction over the unfair and discriminatory conduct of a non-dominant enterprise. The Appellant is always free to approach other statutory authorities for appropriate relief as per the applicable laws. Commission in its ordinary meeting could have sought a reply from the opposite party which in itself does not mean that the Commission found a prime facie case, for if the Commission had found a prima-facie case, it would have proceeded further in the matter. Furthermore, the Commission has power to conduct preliminary conference under Regulation No. 17 of the Competition Commission of India General Regulations, 2009 to invite the Information provider or any other person to form an opinion as to whether a prime facie case exists. No person can be condemned unheard. However, since the proceedings were closed, the non- receipt of reply was of no consequence, as the order has been passed on the basis of the material on record, which showed no prima facie case - there are no procedural lapse on the part of the Commission. The Commission was correct in its approach and decision in not directing for investigation by the DG before arriving at a decision to form a prima facie opinion. Further it is concluded that R4 has not entered into an agreement with R5 and R6 regarding provision of the product called CDA to R2 and limiting its supply, and there are no violation of Section 3(1) r/w Section 3(3) (a) and Section 3(3) (b) of the Act. It is also concluded that prescribing IRC accreditation by R2 as a condition for inclusion in the IVL does not violate provisions of Section 4(2)(a)(i) and 4(2)(c) of the Act. There are no infirmity in the orders of the Commission and accordingly the Appeal is dismissed. Issues: (i) Whether the allegations of cartelisation under Section 3(1) read with Section 3(3)(a) and 3(3)(b) are made out against the accused entities; (ii) Whether Maharashtra State Road Development Corporation (MSRDC) abused a dominant position in contravention of Section 4(2)(a)(i) and Section 4(2)(c) by prescribing IRC accreditation and in its preparation of the Identified Vendors List; (iii) Whether the Competition Commission of India erred in not directing the Director General to investigate under Section 26(1) and instead closing the matter under Section 26(2).Issue (i): Whether the allegations of cartelisation / anti-competitive agreement under Section 3(1) read with Section 3(3)(a) and 3(3)(b) are established against R4, R5 and R6.Analysis: The Tribunal examined whether the challenged arrangements fall within Section 3(3), which applies to agreements between enterprises engaged in identical or similar trade at the same horizontal level. The relationship between R4 and R5 was found to be vertical (importer and foreign parent/related entity) and R4/R5 form part of the same group under explanation (b) of Section 5. There was no evidence that R4 and R5 operated as competitors in the same market in India or entered into horizontal arrangements fixing prices or limiting supply.Conclusion: The allegations of cartelisation under Section 3(1) read with Section 3(3)(a) and 3(3)(b) are not made out and the finding in favour of the respondents on this issue is upheld.Issue (ii): Whether MSRDC abused a dominant position under Section 4(2)(a)(i) and Section 4(2)(c) by prescribing IRC accreditation and by inclusion of certain vendors in the Identified Vendors List.Analysis: The Tribunal accepted the Commission's delineation of the relevant product market as Crystalline Durability Admixture (CDA) in Heavy Infrastructure Projects and the geographic market as India. MSRDC's activities were confined to Maharashtra and it was not shown to be a dominant player in the nationwide market for CDA. The mere prescription of IRC accreditation as an eligibility criterion, without evidence of dominance or discriminatory abuse in the relevant market, did not constitute abuse under Section 4.Conclusion: There is no contravention of Section 4(2)(a)(i) or Section 4(2)(c) by MSRDC; the Commission's closure under Section 26(2) on this ground is sustained.Issue (iii): Whether the Commission committed a procedural error by not directing an investigation by the Director General and by closing the matter under Section 26(2) despite the lack of a reply from MSRDC.Analysis: Formation of a prima facie opinion under Section 26(1) is a precondition to ordering an investigation. The Tribunal reviewed the material on record and the Commission's procedural steps, including forwarding the information and awaiting a reply. The absence of a reply did not, by itself, create a prima facie case requiring investigation. The Commission may form its view from the information itself and invoke Regulation 17 where appropriate; here the material did not show a prima facie contravention.Conclusion: The Commission did not commit a procedural error in not directing an investigation; closure under Section 26(2) was justified.Final Conclusion: The Tribunal finds no infirmity in the Competition Commission of Indias order closing the matter under Section 26(2); the appeal is dismissed and the Commissions conclusions on Sections 3 and 4, and its procedural decision not to order an investigation, are upheld.Ratio Decidendi: Where alleged anti-competitive conduct involves entities that are vertically related or part of the same group and the claimant fails to establish that those entities operated at the same horizontal level in the relevant geographic and product market, Section 3(3) does not apply; and where the alleged offender is not dominant in the relevant market delineated, mere prescription of an eligibility criterion by a procuring authority does not constitute abuse under Section 4.