AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 705
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....on notes that cartelisation, including bid rigging, is a pernicious form of anti-competitive conduct under the provisions of Section 3 of the Act. None of the Opposite Parties or their individuals have been able to rebut the evidence found against them by the DG of having indulged in anti-competitive conduct and manipulating the bids/bid rigging in respect of tenders floated by the Department of Agriculture, State of Uttar Pradesh. The Commission finds that certain Opposite Parties and their individuals had also resorted to the production and submission of fake invoices and grant of false certificates for making some of the Opposite Parties eligible for participating in the bid process so as to effectively act as cover bidders in respect of the winning bidders. Some of the Opposite Parties did not even have prior experience and were later blacklisted. 133. In view of the foregoing, the Commission holds Yash Solutions, M/s Satish Kumar Agarwal, M/s Siddhi Vinayak, M/s Saraswati Sales Corporation, M/s Austere System Pvt. Ltd., Delicacy Continental Pvt. Ltd, Fimo Infosolutions Private Limited, M/s Toyfort and Chaitanya Business Outsourcing Pvt. Ltd. to have contravened the pr....
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.... that they could not derive any income from the soil testing tenders for never being involved in the business of soil testing, zero penalty would naturally arise out of nil income and nil turnover. Some of the Opposite Parties have prayed for mitigation of penalty on the grounds of being Micro Small and Medium Enterprises (MSME). 138. With regard to the submission of the Opposite Parties that they have derived no income from tenders in question and hence zero penalty would arise, the Commission finds no merit in the said submission and no narrow interpretation of the relevant turnover can be taken as suggested. The Commission, in this regard, reiterates its decision dated 03.02.2022 in Suo Motu Case No. 2 of 2020 (In Re: Alleged anti-competitive conduct by various bidders in supplying and installation of signages at specified locations of State Bank of India across India): "115. In relation to the contention that turnover derived from the Impugned Tender alone should be considered, it is noted that a bare perusal of the Excel Crop Care judgement makes it clear that nowhere it held or otherwise declared that relevant turnover should be limited to the turnover earne....
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....Agarwal Data not provided 28862103 33515936 62378039 31189020 1559455 3 M/s Siddhi Vinayak and Sons Data not provided 32595945 17884343 50480288 25240144 1262007 4 M/s Saraswati Sales Corp 14885150 17116200 8017141 40018491 13339497 666975 5 Austere Systems Pv Ltd 48529601 117043789 99960762 265534152 88511384 4425569 6 Delicacy Continental Pvt Ltd 14916478 78839582 94508248 197964308 65988103 3299405 7 Fimo Infosolutions Pvt Ltd 2186517 0 0 2186517 728839 36442 8 M/s Toyfort 27431913 25595204 20621192 73648309 24549436 1227472 9 Chaitanya Business Outsourcing Pvt Ltd 3365279 15821826 41552267 60739372 20246457 1012323 140. The Commission further deems it appropriate and necessary to impose penalty on the individuals identified above for being liable under Section 48 of the Act at the rate of 5 percent of their average income of the financial years 2017-18, 2018-19 and 2019-20 filed with the Commission. However, since M/s Satish Kumar Agarwal, M/s Siddhi Vinayak, M/s Sa....
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....y 10 Mr Praveen Kumar Agarwal (Managing Director, Yash Solutions) 1,49,265 One lakhs forty nine thousand two hundred and sixty five only 11 MR Rahul Gajanan Teni (Director Austere Systems 44,712 Forty four thousand seven hundred twelve only 12 Mr Ankur Kumar (Director, Delicacy Continental) 19,307 Nineteen thousand three hundred and seven only 13 Mr. Jai Kumar Gupta (Director, Fimo Info Solutions 21,447 Twenty one thousand four hundred forty seven only 14. MR. Nitish Kumar Agarwal (Director Chaitanya Business Outsourcing) 84,541 Eighty four thousand five hundred forty one. 142. The Commission directs the concerned parties to deposit the aforesaid penalty amounts within 60 days of the receipt of this order. It is ordered accordingly. 143. The Secretary is directed to forward copies of this order to all the Opposite Parties and their officials forthwith." 2. The Commission in terms of Section 27(a) of the Act directed the Appellant and others who were held liable in terms of Section 48 of the Act to cease and desist from indulging in practices which were found in the instant case to be in contravention o....
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.... sub-contracted the work awarded to it to M/s Saraswati Sales in various regions of Uttar Pradesh. The Commission also noted that M/s Satish Kumar and M/s Siddhi Vinayak indulged in cover bidding in Tender No. 1 and Tender No. 2 to let Yash Solutions which emerged as L1 in both the tenders. Further, it was observed that Yash Solutions emerged as successful bidder in the regions of Bareilly and Moradabad for the years 2017-18 and 2018-19, whereas Austere Systems appeared to have won tenders for the year 2017 for regions of Jhansi and Meerut and for the regions of Saharanpur and Meerut for the year 2018. Based on the above analysis, the Commission was of the prima facie view that, despite being competitors, these entities appeared to have manipulated the process of bidding in the soil testing tenders in the state of Uttar Pradesh by indulging in bid rigging, in contravention of provisions of Section 3(1) read with 3(3)(d) of the Act. 4. Accordingly by order dated 30.01.2020 exercising powers under Section 26(1) of the CCI directed Director General to cause an investigation and submit report. The Director General was also in terms of the order granted liberty that if during investi....
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....visions in the year 2017 and Moradabad and Aligarh divisions in 2018. The Investigation Report concluded that Yash Solutions in collusion with M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales and Chaitanya Business Outsourcing had rigged the bids in the years 2017 and 2018 issued by various divisions of the Department of Agriculture, Govt of UP. During investigation it was established that the proprietor of M/s Saraswati Sales Corporation i.e. Mr. Naresh Kumar Sharma was also responsible under Section 48 of the Act, besides another proprietor and directors and other proprietorship etc. After receipt of the Investigation Report again proper opportunity was given to the parties including the appellant and finally on 04.04.2022 order was passed against the appellant and others both under Section 27(a) and 27(b) of the Act which has been assailed in the present Appeal. 7. Mr. Ashutosh Kumar, learned counsel for the appellant assailing the impugned order at the very outset has argued that it is not in dispute that the appellant firm tender was not accepted rather tender work was allotted to M/s Yash Solutions. To elaborate his submission, learned counsel for the Appellant ha....
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.... that there was no reason for holding appellant guilty in the present case and the Commission has committed serious error in passing the impugned order against the appellant. 10. On the point of penalty the learned counsel for the Appellant has referred to running page 303 which is part of written submission submitted by the appellant, M/s Saraswati Sales Corporation, before the CCI. He has referred to para 8 wherein the appellant detailed the steps in determining effective/relevant turnover of the judgement of the Hon'ble Supreme Court in the case of Excel Crop Care Ltd Vs CCI. He submitted that the Learned CCI while considering the turn over has incorrectly taken the "total turnover" whereas only the "relevant turnover" was to be taken into account and submitted that monetary penalty imposed by the CCI is not in accordance with the law. 11. Mr Vaibhav Gaggar, learned counsel appearing on behalf of the CCI while controverting the submissions of the learned counsel for the Appellant submits that the case of Yash Solutions as well as of Austere Systems may not be looked into in isolation. He submits that learned counsel for the appellant have tried to only substantiate that du....
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....ders of Aligarh, Bareilly and Moradabad in the year 2018. A. 22. Yes, the said orders and experience certificate were issued by my company. Q. 23. Why did you sublet the work of Soil testing to the aforesaid firms? A. 23. I do not know. Q. 24. Before giving sub-contract to M/s Siddhi Vinayak & Sons and M/s Satish Kumar Agarwal, did you ever visited their soil testing labs to ensure if they have all the necessary infrastructure such as Machine, and trained manpower to conduct the Soil Samples testing? A. 24. No. Q. 25. Where is/was their soil testing labs situated? A. 25. I do not know. Q. 26. Did your Firm entered into any agreement or MoU with M/s Siddhi Vinayak & Sons and M/s Satish Kumar Agarwal, for carrying out the soil testing work for your Firm? A. 26. I do not know. Q. 27. I am showing you the relevant extracts of the statement dated 12.01.2021 i.e Q. 18, 19 & 22 (Exhibit - 6), submitted by Sh. Satish Kumar Agarwal, Proprietor of M/s Satish Kumar Agarwal. A. 27. Yes, I have seen. Q. 28. In view of the above said statement on oath by Sh. Satish Kumar Agarwal it is clear that yo....
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....isions. A. 23. I do not remember. Q. 24. Were the aforesaid Commercial Invoices issued by the seller to your firm? A. 24. I do not know. Q. 25. How is the said Invoice submitted by you in the Bareilly Moradabad tenders are having common Account Number 1532236 and Serial Number IC74DC173313 for Your firm & the Invoice of Siddhi Vinayak & Sons (Exhibit - 13 & 14)? A. 25. I do not know. Q. 26. How is the said Invoice submitted by you in the Moradabad tenders is having same Account Number 1532236 and Serial Number IC74DC173313 for Your firm & the Invoice of Saraswati Sales Corporation submitted in the Bareilly & Moradabad tenders (Exhibit-15 &16)? A. 26. I do not know. Q. 27. How is the said Invoice submitted by you in the Moradabad tenders are having same Account Number 1532236 and Serial Number IC74DC173313 for Your firm & the Invoice of M/s Yash Solutions Pvt Ltd submitted in the Bareilly & Moradabad tenders (Exhibit-17 & 18)? A. 27. I do not know. Q. 30. I am showing the letter received from M/s Thermo Fisher Scientific India Private Limited confirming that no sale of any ICP-OES machine was m....
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....so notes that M/s Saraswati Sales, which had no experience, infrastructure such as soil testing machine and manpower for conducting soil testing work, had participated in the soil testing tenders of 2018 for Bareilly, Moradabad and Aligarh divisions and had also submitted fake invoices for the purchase of ICP-OES soil testing machine in the soil testing tenders of 2018 for which the Commission has already recorded its view in the preceding paragraphs. The Commission also heeds the fact that Mr. Naresh Kumar Sharma of M/s Saraswati Sales, in his statement before the DG, admitted that the said invoices were arranged by Mr. Praveen Kumar Agarwal of Yash Solutions, and that Mr. Praveen Kumar Agarwal in his statement agreed with the aforesaid statement of Mr. Naresh Kumar Sharma. The relevant extracts from the statements of Mr. Naresh Kumar Sharma and Mr. Praveen Kumar Agarwal are as under: Extract from the statement of Mr. Naresh Sharma of M/s Saraswati Sales: "Q. 10. How did you procure Invoices for purchasing of ICP-OPs machine which is used for soil testing as shown in (Exhibits - 5 & 6 above)? A. 10. The said invoices were arranged by Sh. Praveen Agarwal and I have no know....
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.... documents and EMD for submitting the same to the Agriculture department. Sh. Praveen Agarwal informed me that he needed a supporting bid/cover bid from my firm in support of his firm Yash Solutions so that his bid is not rejected due to insufficient number of bids. I had submitted supporting bids to help Sh. Praveen Agarwal's firm Yash Solutions during the tenders issued in 2017 and 2018. Q. 3. How did Sh. Praveen Agarwal request you to help him? A. 3. During a personal meeting in 2017 when the soil testing tenders issued by UP Government, Sh. Praveen Agarwal requested me for submitting supporting bid/cover bid to help his firm Yash Solutions in the said tender. Q. 4. Why did you agree to submit supporting bids/cover bids to help Sh. Praveen Agarwal's firm namely Yash Solution? A. 4. Because I had very long and good family relationship with Sh. Praveen Agarwal, I decided to help him in the aforesaid tenders." 61. From the above, it is clear that there was no other reason for M/s Saraswati Sales to submit bids in the 2018 tenders of soil testing for Bareilly, Moradabad and Aligarh divisions with fake and fabricated documents other than t....
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....tter further and appeal in the court, as he was aware of the fact that both his concerns have submitted manipulated documents in the said tenders. 68. The Commission further notes that Mr. Naresh Kumar Sharma, of M/s Saraswati Sales, initially feigned ignorance with respect to the submission of bids by his proprietorship concern in the soil testing tenders in question. However, when he was confronted with the authorisation letter issued by him in favour of Mr. Vivek Saxena, an employee of Yash Solutions, he stated that his signatures may have been misused. In another statement recorded before the DG, he stated that Mr. Vivek Saxena was his authorised signatory and had discussed with him before bidding in the said tenders and the bid was submitted with his consent and knowledge. The relevant extracts from the statement of Mr. Naresh Kumar Sharma are as under: "Q. 37.I am showing you authorization letter (Exhibit- 11 & 12) issued in respect of Shri Vivek Saxena to represent & sign on behalf of the firm Saraswati Sales Corporation for various Tenders. The said documents have been submitted in soil testing tenders in Bareilly and Moradabad division in 2018. I am showi....
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....utions. 71. The Commission notes that, in response to the notices of the investigation dated 25.03.2021 regarding common IP address for submission of e-bids, Mr. Satish Kumar Agarwal of M/s Satish Kumar and M/s Siddhi Vinayak and Mr. Praveen Kumar Agarwal of Yash Solutions, vide their affidavits, submitted that, being technically incapable, they could not submit any clarifications in the matter. Further, Mr. Naresh Kumar Sharma of M/s Saraswati Sales could not comment as to how the same IP address was used in submitting the said bid. In this regard, the Commission, in agreement with the DG finding, observes that it is highly inconceivable as to how all the aforesaid bidders, who were independent entities having separate ownership, had a common IP address, which indicates collusion and cartelisation by Yash Solutions, M/s Siddhi Vinayak, M/s Saraswati Sales and M/s Satish Kumar Agarwal in the soil testing tenders of 2018. 72. The Commission observes that the evidence on record coupled with the statements of the individuals of the above-mentioned Opposite Parties point to their complicity in manipulating the tenders issued by the Department of Agriculture, Governmen....
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....r 2017-18, 2018-19 and 2019-20. According to him neither there is any error in recording finding of involvement of appellant nor there is any defect in the impugned order so far as imposition of penalty is concerned. 14. After conclusion of the reply made by learned counsel for the CCI, learned counsel for the Appellant in rejoinder has taken this Tribunal to running page 164 of the brief particularly para 7.21.8 and running page 166 para 7.21.11 of the Investigation report i.e. questions put to proprietor of the Saraswati Sales Corporation i.e. Mr. Naresh Kumar Sharma during cross examination by the DG i.e. Question No.8 which is as follows:- "8. Who else was associated with you/your firm for Soil testing work? A.8. Shri Parveen Agarwal, who is residence of Sahukara, Bajaria Moti Lal, is a family friend and also my neighbour and he used to come regularly to meet me. Shri Parveen Agarwal is involved in Jewellery related business. Once he requested me to provide copies of my Pan Card, Aadhaar Card, Character Certificate and Experience Certofocates/ Shri Agarwal told me that he will be using these documents in some business being carried out by him. Shri Agarwal ....
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.... bellow:- "95.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 production. Therefore, it cannot be said that purpose of the Act is to 'finish' those industries altogether by imposing those kinds of penalties which are beyond their means. It is also the purpose of the Act not to punish the violator even in respect of which there are no anti-competitive practices and the provisions of the Act are not attracted. 96. We may mention that Mr. Kaul, learned Additional Solicitor General had referred to the statutory regimes in various other countries in his....