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2018 (9) TMI 2129
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....he Competition Act, 2002 ('the Act') impugning the joint tender floated by Public Sector Oil Marketing Companies (PSU OMCs/OMCs) on 02.01.2013 for procurement of anhydrous alcohol ('ethanol', hereafter) being in contravention of the provisions of Section 3 of the Act. Besides, it was also alleged that suppliers of ethanol -which mainly comprise sugar mills - have contravened the provisions of Section 3 of the Act by rigging bids submitted pursuant to the said tender, by quoting an exorbitant price for supply of ethanol to OMCs. 2. As the issues involved in both the Informations were similar and related, the Commission through a common order dated 27.05.2013 passed under Section 26(1) of the Act directed the Director General (DG) to investigate the matter. In the said order, it was noted by the Commission that the Informations revealed that pursuant to the notification dated 02.01.2013 issued by Ministry of Petroleum & Natural Gas, Government of India (MoP&NG) regarding mandatory 5% blending of ethanol with motor spirit/gasoline, the Government owned public sector Oil Marketing Companies (OMCs) viz. Indian Oil Corporation Limited (IOCL)/Hindustan Petroleum Corpora....
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....d cases involved similar issues/allegations. Directions to the DG 4. As detailed above, the Commission, after considering the entire material available on record, vide its separate orders passed under Section 26(1) of the Act, directed the Director General (DG) to cause an investigation to be made into the matter and submit a report. Investigations by the DG 5. The DG, after completing the investigation, filed a common Investigation Report dated 20.07.2015. It was concluded by the DG that ISMA had violated the provisions of Section 3(3)(a), 3(3)(b) read with Section 3(1) of the Act. The conduct of EMAI was also found to be in violation of Section 3(3)(a) of the Act. However, allegations against NFCSF were not found to be substantiated. Similarly, the allegations levelled against OMCs were also not found to be substantiated. So far as the allegations against the bidders who participated in the tender in respect of the depots located in UP, Gujarat and Andhra Pradesh were concerned, the DG concluded that the following identified parties (bidders) had violated the provisions of Section 3(3)(d) of the Act: Uttar Pradesh (i) Bajaj Hindusthan Ltd. (....
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....to make further investigation/analysis and submit a Supplementary Investigation Report on the specific issues identified in the said order. 8. The DG has since submitted the Supplementary Investigation Report to the Commission after addressing the issues highlighted by the Commission and has concluded that no contravention of the provisions of the Act is made out against any of the bidders who participated in the bidding, in respect of the various depots located in State of Maharashtra. Consideration of the DG Reports by the Commission 9. The Commission, on consideration of the main Investigation Report, cross-examination report and other material available on record, decided vide its order dated 28.03.2017 to proceed against the following 20 sugar mills which, apart from including the 14 originally arrayed bidders who had participated in the bids for supply of ethanol to depots in UP/Haryana/Punjab, also included the bidders [who, though not made OPs, mentioned in Case No. 21 of 2013 but against whom the DG recorded finding of contravention namely (a) Sahakari Khand Udyog Mandal Ltd., (b) Shree Ganesh Khand Udyog Sahakari Mandli Ltd., (c) Shri Kamrej Vibhag Sahakari Khand....
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....le 'The Upper Ganges Sugar & Industries Limited' and the erstwhile 'The Oudh Sugar Mills Limited' have merged with 'Avadh Sugar & Energy Limited' pursuant to an order dated 02.03.2017 of the National Company Law Tribunal. Thus, effectively, there are 19 sugar mills in the array of Opposite Parties (13 sugar mills of UP, 4 sugar mills of Gujarat and 2 sugar mills of Andhra Pradesh) apart from 3 trade associations and 3 PSU OMCs. Replies/Objections/Submissions of the Parties 13. The parties filed their respective replies/objections/post-hearing written submissions to the Report of the DG besides making oral submissions. Replies/objections/submissions of the Informants 14. Out of the 6 Informants in the present batch of cases, only two Informants appeared and out of them, only one (India Glycols Limited/IGL) filed its objections/suggestions to the DG report and the same are noted in the succeeding paras. 15. Supporting the conclusions of the DG that the conduct of the OPs was in violation of the provisions of Section 3(3)(d) of the Act, it was submitted that the conclusion of the DG in exonerating PSU OMCs and NFCSF, was not correct. The delibera....
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.... upon and given any credence in the eyes of law. Replies/objections/submissions of the Opposite Parties Replies/objections/submissions of Indian Sugar Mills Association (ISMA) 21. It was submitted that Cabinet Committee on Economic Affairs (CCEA) vide its Press Release dated 22.11.2012 made public its approval for pricing of bio-ethanol procurement by PSU OMCs for Ethanol Blended Petrol (EBP) Programme. However, as no gazette notification was issued by MoP&NG for implementation of the mandatory ethanol blending with petrol, the meeting convened for 06.12.2012 by ISMA did not take place. The next meetings scheduled for 19.12.2012 and 27.12.2012 also could not take place as very few members came to attend the said meetings. 22. It was submitted that the DG not only disregarded the evidences provided by ISMA but also misinterpreted the statements made by other witnesses that supported ISMA's stand. It was further submitted that mere holding of meetings by an association is not anti-competitive in itself unless it is proved that the purpose for holding such meetings was anti-competitive. Calling of meetings by ISMA for discussion over policy and other industry related i....
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.... association of ethanol manufacturers based in Maharashtra. It was stated that barring few exceptional cases, none of the members of the association had been paying any fees to the association. Whenever a meeting was held, a copy of notice of the meeting together with the agenda were sent by e-mail/fax to the members. In such meetings, no decisions were taken with regard to commercial matters such as production targets or price bids/quantities to be quoted by the members in response to the tenders floated by OMCs. Such matters were to be decided by individual members and the association had no role to play in such decisions. 28. Further, EMAI did not have any association/affiliation with ISMA and NFCSF. It was pointed out that the association members who were from the private sector (and not the cooperative sector) might be members of ISMA. EMAI, however, did not have any information with regard to such memberships. The President of the association was also a Director of NFCSF by virtue of holding a position as the President of Maharashtra State Cooperative Sugar Factories Federation Ltd. There was no correspondence between the association, ISMA and NFCSF. 29. With regard to ....
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.... quoted by the manufacturers were in fact inflated prices or prices fixed by cartelization, they would have offered to supply much higher quantities to OMCs. 33. It was also submitted that a cartel is formed to sell a product at higher/inflated price not consistent with the market price. The sales invoices, produced by EMAI, of its members before the DG showed that the members of the association had in fact supplied higher quantity of ethanol to private parties (chemical industry) as compared to the quantity and price submitted in the tender floated by OMCs. 34. It was stated that the DG without any reason arrived at a conclusion that none of the members of EMAI had quoted price below Rs. 40,000/- per KL whereas the data showed to the contrary that the members of the association had quoted prices varying from Rs. 38/- to Rs. 48/- per litre. Hence, the statement of the President of the association had no correlation with the newspaper report and the tenders filled by the members of EMAI. Merely because OMCs had negotiated with ethanol suppliers which qualified in the tender (L1) and had reduced the price to Rs. 36/Rs. 37 per litre, did not imply that the price quoted by them w....
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....ndal Ltd., Shree Ganesh Khand Udyog Sahakari Mandli Ltd., Shri Kamrej Vibhag Sahakari Khand Udyog Mandli Ltd. and Shree Mahuva Pradesh Sahakari Khand Udhyog Mandli Ltd.(Sahakari/Ganesh/Kamrej/Mahuva) 41. Replies by these OPs were filed through common counsel and are essentially similar in nature except the figures which are specific to each sugar company. Hence, the same are summarized together. 42. These OPs are cooperative societies registered under the Gujarat Co-operative Societies Act, 1961. The member farmers of such societies are the ultimate owners through their shareholdings in sugar mills. Such mills work on the principle of "no profit no loss" and the surplus of income over expenditure is passed on to the member farmers who have supplied sugarcane during the year to the mills. 43. Adverting to the bids submitted by these companies in response to the subject tender, it was pointed out that during the Financial Year 2012-13, the cost of raw material incurred by these companies for producing ethanol was Rs. 33.829, 32.25, 33.68 and 33.06 per litre respectively. 44. It was further stated that the demand for rectified spirit and ethanol in Gujarat is high because ....
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....no secret or clandestine meeting held between the answering OPs and other sugar factories. In the absence of evidence of any meeting and/or exchange of verbal and/or written communication amongst the parties, the DG ought to have closed the investigation. It was further submitted that the close similarities of the tender prices quoted by the OPs in Gujarat was a mere coincidence and such coincidences did not contravene any of the provisions of the Act. 49. It was further submitted that the OPs had supplied huge quantities of ethanol to private chemical industries at much higher prices than those quoted in the tender for supply of ethanol to OMCs. It was also pointed out that the sugar industry in the country is not a freely competitive industry. The production of ethanol by a sugar factory depends upon the following factors: (a) Ethanol quota depends upon the production of rectified spirit as per the policy of the Government. (b) Only 50% ethanol can be produced of the total quantity of rectified spirit produced by the sugar factory. (c) Non-lifting of ethanol in time by OMCs also deterred the sugar factories from filling high quota for supply of ethan....
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.... (d) of the Act. 53. It was submitted that the sales invoices produced by the OPs before the DG showed that they had in fact supplied higher quantity at higher price of ethanol to private parties (chemical industries) as compared to the quantity and price quoted by them in the tender floated by OMCs. 54. With regard to appreciable adverse effect on competition, it was submitted that even if there was a cartel and/or agreement to supply ethanol at an agreed price, it could not be below the then prevailing market prices and such a consensus could not be said to be an agreement which was likely to cause appreciable adverse effect on competition within India. The definition of "agreement" includes any arrangement, understanding or action whether it is formal or in writing. The expression of such views did not amount to any arrangement, understanding or action. It was also placed on record that the production cost of ethanol during the Financial Year 2012-13 was Rs. 42.11, 39.65, 41.55, 41.80 per litre respectively for the answering OPs whereas the prevailing market rate was Rs. 40 to 45 per litre. It was stated that these OPs quoted the rate of Rs. 42,100 each per KL each. All th....
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.... total sales of the OP. Further, by supplying some quantity to OMCs, the OP expected to earn better margin from pharma sector by about Rs. 2 per litre. 60. It was stated that there was no price approval process for the ethanol tender and only oral approval of the management was taken after considering the prevailing prospective market conditions. Also, there were no pre-bid meetings with other competitors or associations and it did not attend any of the ISMA meetings inspite of being its member. 61. It was further clarified that, total production of ethanol by OP was about 7500 KL per annum, out of which about 4000 KL was supplied to regular pharma companies and the balance 3600 KL was decided to be supplied to OMCs. Thus, 1800 KL each was offered to Rajmudhry and Vijayawada terminals. 62. In view of the above, it was prayed that the DG Report be rejected and an order be passed as the Commission deems fit and proper in the interest of justice. Replies/objections/submissions of Sri Sarvaraya Sugars Ltd. (Sri Savaraya) 63. In its reply, the answering OP raised a preliminary objection stating that the DG had unilaterally impleaded the company without any direction of th....
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....volume of sales over a consistent period and in the interest of nation with intent to diversify its total market. 67. Also, the OP did not submit a bid for other terminals in Andhra Pradesh or outside due to lack of quantity of ethanol and distance of other terminals from the factory of OP. Further, it was submitted that though both the parties quoted same basic price of Rs. 38600/- per KL but the quantities for which these prices were quoted differed. The DG erred in taking into consideration basic prices quoted by both the parties which were for different volumes of ethanol. If the ratio of basic rate was to be divided with quantity the parties were willing to supply, then the present OP would in fact be offering a higher rate as compared to the rate offered by Andhra Sugars. 68. It was denied that the answering OP attended or participated in any meeting of bidders or any meeting convened by ISMA in relation to the impugned tender. It was submitted that only one meeting held on 24.01.2013 was organized by ISMA after the release of the tender and no representative of the OP attended the said meeting. In fact, the schedule of the meeting was already circulated on 17.12.2012 i....
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....endation by MoP&NG, from the year 2010 to 2012 started purchasing ethanol at a fixed basic price of Rs. 27 per litre. The basic price of Rs. 27 per litre was kept as interim in nature which later on became final. 74. It was also stated that in the State of UP itself, the bid basic prices ranged from Rs. 34 to Rs. 37.50 per litre. In fact, the basic prices of ethanol globally were in the range of Rs. 70 to Rs. 90 per litre which was almost double the domestic rates. 75. With regard to Net Delivered Cost, it was submitted that as per the tender process, the bidders were required to quote basic price of ethanol and Net Delivered Cost which included basic price, taxes and freight charges. The L1 was to be determined by net delivered cost and not on the basis of basic price. 76. Adverting to identical or similar pricing, it was submitted that identical prices by themselves do not prove cartelization. The OMCs had invited bids for 110 depots. However, bids were made only for 71 depots. Of these, identical bids were found only in 5 depots and this can be sheer coincidence resulting from the fact that the sugar industry is highly regulated and the pricing of the most important cos....
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.... Informant selectively picked up just 12 bids which coincidentally had been the same and conveniently left out the remaining 189 bids in which the parties had bid differently. Further, out of 64 parties which bid for the tender, only 9 had cases of common bids. It was averred that it was next to impossible to rig the bids in the absence of collusion with other parties. Hence, the only logical explanation for similar bids would be a mere coincidence. 82. With regard to the allegation of the DG that Bajaj quoted identical bids, it was submitted that Bajaj bid in 10 depots and matching NDC was present only in one of the depots and that too with only one of the bidders and, as such, the same could be attributed to mere coincidence. 83. It was also submitted that for the purpose of finalization of tender, NDC is relevant and not the basic price an aspect which was ignored by the DG with result the Investigation Report continued to harp on the basic price and not NDC. It was pointed out that in case of Bajaj, it was only one place i.e. depot of Mathura where NDC of Bajaj was tallying with only one bidder. It was also highlighted that there was no similarity in NDC quoted by bidders....
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....ly on policy matters related to sugar, ethanol, cane, etc. 87. With reference to ISMA's e-mail pertaining to the meeting which was to be held on 06.12.2012, it was submitted that it proved that the meeting was held to discuss policy matters. The said e-mail in no way proved that any discussion regarding the ethanol tender was to take place. It was submitted that the finding of the DG in this regard were merely speculative as no recorded minutes of the meetings of ISMA for the whole period of investigation had been cited in the Investigation Report. 88. With regard to call records between Bajaj employees and ISMA office bearers, it was submitted that except for the details of calls made, no incriminating evidence as to the details of conversation made during such calls by way of tape recorded voices had been cited as specific evidence in the Investigation Report. Mere making of phone calls between office bearers of trade association and the executives of the members of the association during period of investigation could not be construed to hold that these calls were made with ulterior motive of fixing prices unless there was substantial evidence to the contrary. 89. In....
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....t is 95.5% and in ethanol, it is 99.9%. By assuming ENA rate of Rs. 31 per litre to be the base, the additional cost only on account of alcohol shall be a minimum of Rs. 1.5 per litre. Besides, it was pointed out that there are other costs also which go on to determine the price of ethanol. 93. The suggestion of the DG that since a large quantity of ethanol was required there was incentive for bidders in UP to cartelize, was denied. It was submitted that though the total requirement of these depots was approximately 40 crore litres, the offered quantity was only about 33 crore litres, however the contracts were awarded for about 26 crore litres only. 94. Faulting the DG Report for taking KSCM's quote in arriving at a competitive benchmark price, it was submitted that the general rule for taking a sample across globe is to take average of few players/bidders in the normal market conditions and not solitary examples. If the lowest finalized price is the only criterion to arrive at a benchmark price, it is not understood as to why the basic price of Rs. 31.50 per litre finalized by Shakumbari was not considered as a benchmark price. It was also alleged that price quoted and ....
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....x body of about 256 mostly private sugar mills of the country actively involved towards representing the industry before various fora. It was admitted that the answering OP is one of the members of ISMA. It was also stated that the allegation that ISMA was actively participating in discussions with the Government for increase in then ongoing price of Rs. 27 per litre, was based on misleading facts. It was stated that the price of ethanol at Rs. 27/- was interim price fixed by the Government (CCEA) with a promise to provide final price. However, since the final price was not declared, the price at which ethanol was supplied during the entire four year period i.e., from 2008-09 to 2011-12 was Rs. 27/- per litre which could not be considered as actual market price. 99. Lastly, it was submitted that the quantities for different locations were bifurcated as per the past experience and practice besides various other factors such as: (i) to prevent the risk of not getting any order, (ii) to reduce the risk of non-supply, (iii) to ensure regular and an uninterrupted supply and (iv) to get better opportunity to get maximum bid quantity. 100. It was also pointed out that though the DG ....
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....or reject the tender. It was also pointed out that as there was no assurance of the contractual quantity granted even after being held successful in the tender, the entire basis of the allegation of cartelization disappeared. Thus, it was submitted that if OMCs considered the rates discovered under the tender process were prejudicial to them or to the general public, OMCs could have cancelled the tender and called for a re-tender. 106. Moreover, it was submitted that it was upto OMCs to place an indent for supply of quantities as even after allocation of quantities, such quantities were not confirmed, as stated above. To buttress the submission, it was stated that even though Triveni was successful in respect of three Depots of Meerut (Partapur), Mathura and Agra (Tundla) for the quantities of 6000 KL, 2500 KL, 1000 KL respectively, the indents placed for these three depots were only for 4719 KL, 2461 KL and NIL respectively. Thus, the allegation that Triveni could have predicted the quantities in the future while making its bid was baseless. 107. It was further submitted by the OP that the DG was wrong in taking the price of Rs. 33.70 per litre quoted by KSCM as the basic pr....
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....n to reduce price as per tender terms and conditions. 114. On comparison of prices with KSCM, it was submitted that the observation of the DG that KSCM reduced its price while private players did not reduce, was totally wrong and could not be sustained both in given facts and as per the law. 115. Further, as KSCM offered to supply very less quantity in tender bid as per its small production capacity, balance quantity was to be supplied by other L2, L3 etc. bidders. Hence, OMCs entered into negotiations with the answering OP and only one unit of Simbhaoli i.e. Chilwaria Distillery in UP matched the price offered by KSCM for supplying the balance quantity of ethanol to Kanpur and Lucknow Depots as these depots having huge requirement were near to the Unit of the OP and supply/transportation cost was less in comparison to other depots. Had Simbhaoli not supplied the balance quantity at these two depots, stock lying with Chilwaria Unit would have been left unsold. Therefore, the DG's observation that there was violation of the Act by Simbhaoli was totally incorrect. 116. It was further submitted that the DG's observation that L1 bidders did not reduce price because of ....
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....per litre, it was submitted that the same was based on actual average realization from sale of RS which was Rs. 32.84 per litre at the relevant time. It was also submitted that Dhampur had only two successful bids out of the 6 depots it bid for within the State of UP. The total turnover generated by Dhampur through the 2013 tender amounted to Rs. 65.43 crore. Dhampur could have generated a potential revenue of Rs. 125.60 crore through supply to UP depots had it matched OMCs' benchmark price in all 6 depots at which it participated. At the allegedly cartelized margin of Rs. 1.5 per litre, this worked out to a mere Rs. 2.34 crore as against a total revenue of Rs. 1488.61 crore of the company in the FY 2012-2013. However, while attributing motive and profit maximization, the DG had failed to take this into consideration. The DG had also ignored the fact that the same parties alleged to have cartelized for depots in UP, had quoted different prices for depots located outside State of UP. 122. Challenging the observation of the DG that a quote of Rs. 35 per litre would have been the basic competitive price, it was submitted that OMCs themselves had worked out a benchmark price for....
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....nol, freight charges etc. which were less for KSCM. However, this aspect was not considered by the DG. 126. With regard to meetings at ISMA's office on 06.12.2012 and 27.12.2012, it had been acknowledged by Shri Arvind Jain of Dhampur that he visited ISMA office on 06.12.2012 and 27.12.2012. However, it was stated that no official meeting took place as the notification had not been issued and only a few members came to ISMA office and that too at different times. 127. Further, reliance by the DG upon call data records of Shri G.K. Thakur of ISMA with bidders just before closing of the tender to base finding of cartelization, was also challenged. It was submitted that apart from the number of events affecting the industry, it was the first time that OMCs had floated an e-tender and this was the first occasion on which bidding was to take place electronically. Hence, it was submitted that it was normal in such circumstances, where an entirely new method of tender participation had been introduced, for industry participants to talk to one another regarding the various queries/clarifications/issues they may face. Further, it was also pointed out that the DG called for and exa....
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....imony. Hence, the DG has wrongly relied upon e-mail in support of his conclusion of communication regarding price and quantity amongst the bidders. 132. With regard to call details, it was submitted that the DG had brought on record details of 13 calls made by Shri G.K. Thakur, ISMA to Shri Dilip Seksaria, Balrampur. From the analysis of the said call details, it could be deciphered that out of the 13 calls made by Shri G.K. Thakur, ISMA to Shri Dilip Seksaria, Balrampur, 8 calls were made either prior to the issuance of the tender or after the date of submission of bids by Balrampur in the tender on 27.01.2013. For the remaining calls, it was pointed out that Balrampur regularly interacted with ISMA in relation to industry issues that ISMA takes up with the Central and State Governments from time to time. 133. On similarity in bids, it was submitted that basic price quoted by Balrampur was independently determined and was the highest amongst all the bidders in UP. Further, not only did Balrampur refrain from quoting an identical price, but its quote was only in the outer range of all the bids made in the tender. Accordingly, it could not be said that the price quoted by Balr....
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....cular with respect to supplies made by Balrampur under the tender. 137. It was also pointed out that the tender was awarded only post-negotiation by OMCs whereas there was no provision in the tender documents for negotiation with L1 bidder. However, negotiation was a practice followed by OMCs and admitted by the DG. There was no possibility and therefore no incentive for cartelization since the quoted price was not the final awarded price. 138. From a comparative analysis of base price of UP, Tamil Nadu and Maharashtra, it was submitted that both Maharashtra and Tamil Nadu had higher base price in comparison to UP. Analysis of the final price of Maharashtra and Tamil Nadu, decided post-negotiation, highlighted the fact that the same was either low or higher than the benchmark price plus 10% as decided by OMCs. 139. With regard to benchmark price, it was submitted that where the prices of L1 bidders were above the benchmark price, the final price was negotiated with the bidders after enhancing the benchmark price by 10%. However, the DG has not considered the revised benchmark price in its analysis. 140. Lastly, it was submitted that in the absence of any evidence to est....
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....osed tender. 146. It was further submitted that the call data record of Shri Arvind Jain did not reveal that even a single call was either made to or received from any person connected with or employed by the answering OP. This therefore established beyond doubt that neither the answering OP nor any of its representatives had ever been in touch with any person whatsoever of the competitors in relation to any discussion relating to subject tender. 147. From the cross-examination of Shri Uday M. Gore, the Chief Operations Manager of BPCL and the industry coordinator on behalf of OMCs, it is seen that as per the CCEA guidelines issued on 22.11.2012, the procurement of ethanol was to be decided by market determined forces. Accordingly, the finalization of the tender was to take place on the basis of L1 procurement price. In this regard, it was submitted that in any tendering procedure, the tender has to be finalized on the basis of net delivered cost and the basic price was of no consequence in the bidding process. 148. It was also pointed out that the statement of Shri Gore in cross-examination established beyond doubt that the prices and terms on which OMCs bought ethanol wa....
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....d in bid-rigging. Replies/objections/submissions of K M Sugar Mills Ltd. (K M Sugar) 152. Challenging the finding of the DG that the bidders cartelized as the private players did not agree to reduce L1 prices upto benchmark prices fixed by OMCs, it was submitted that the said finding was flawed and incorrect. 153. It was further stated that the finding of the DG that prices of RS/SDS during the relevant period were between Rs. 26 to 28 per litre, was incorrect as RS and SDS were two different products altogether and the prices were also different. The price of RS during the relevant period was Rs. 32 (approx.) as per the statements made by the bidders before the DG. It was also pointed out that no CENVAT Credit was allowed on RS and the finding of the DG in this regard was incorrect and against the statutory provisions. Both ENA and RS were treated exactly in the same way as CENVAT Credit. 154. Adverting to the finding of the DG that the net realized sales price of ENA at the time of tender was @ Rs. 31 per litre, it was stated that even if the price of ENA was considered to be as stated by the DG, the benchmark price arrived at by the DG for ethanol @ Rs. 33 per litre ....
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....ny substance and incorrect. In all such cases where the final negotiated price offered by the L1 bidder was more than the benchmark price, not even a single unit was allotted and the entire depot was left by OMCs. Thus, the very act of OMCs not accepting even a single bid which was more than the benchmark price clearly showed that the OMCs were under no compulsion and were not pressurized, as alleged by the DG. 159. It was stated that the answering OP was regularly making supply of SDS to the Informants/chemical manufacturers and the rates were different for different buyers depending on the quantity purchased, period of purchase, production, prevailing market price, duration of supply, location of plant, freight etc. 160. It was also stated that the OP was not a member of EMAI and did not attend any of its meetings. It was also pointed out that the only allegation in this regard was with respect to a meeting convened by ISMA which was stated to be attended by the representative of the answering OP on 06.12.2012. In this regard, it was submitted that the said meeting was convened much before the floating of the tender and as such it was incomprehensible as to how a person who....
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....e placed on record. Thus, the finding of the DG that freight charges were quoted not based on actual prices but only to reach closer to the NDC of other private players, was incorrect. 166. In view of the above, it was submitted that the report of the DG is a nullity being against the material on record, contrary to evidences and the answering OP be exonerated of the allegations levelled against it. Replies/objections/submissions of Kisan Sahkari Chini Mills Ltd. (KSCM) 167. The learned counsel appearing on behalf of KSCM supported the findings of the DG report as no finding of contravention qua it was recorded. Replies/objections/submissions of Uttam Sugar Mills Limited (Uttam Sugar) 168. At the outset, it was submitted that the DG's findings against Uttam Sugar were bereft of any supporting evidence and did not meet the test of "preponderance of probabilities". The circumstantial evidence relied on by the DG did not establish any infringement by Uttam Sugar. At best, the DG findings only showed parallel conduct by Uttam Sugar, which on its own and in the absence of 'plus factors', was insufficient to establish culpability. 169. Further, it was submit....
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....ld to have contravened the provisions of the Act by the DG. 174. It was also highlighted that Uttam Sugar was an insignificant player besides being a new entrant. Its distillery was facing serious teething problems and could not operate at full capacity initially and was conducting operational trials till February 2013. Uttam Sugar was never an L1 bidder for the ethanol tender. On the contrary, it incurred penalties with respect to the said tender. 175. In sum, it was submitted that the DG's findings failed to establish any contravention of the Act by Uttam Sugar. Accordingly, it was prayed that Uttam Sugar ought to be exonerated from the present proceedings. Replies/objections/submissions of Dalmia Bharat Sugar & Industries Ltd. (Dalmia) 176. The DG Report failed to identify or substantiate the existence of any agreement, arrangement and understanding of Dalmia with the other OPs. It also failed to point to any advantage accrued to Dalmia out of such alleged agreement amongst the bidders of the tender. It further failed to consider that the participation of Dalmia in the tender was guided by its own business and commercial considerations such as forfeiture of earne....
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....itted that the DG report had erroneously ignored the business and commercial factors that guided not only Dalmia's decision to participate in the tender, but also the quantities that were quoted by Dalmia. The DG Report, for reasons or logic that were not apparent on a plain reading of the text thereof, had erroneously concluded that there was no basis for the quantities quoted by Dalmia in the tender. The quantity of 4,500 KL constituted only 18.75% of Dalmia's total installed capacity and the same was quoted due to past failure to deliver as per the tendered quantity contained in those tender documents as a result of shut down of its sole distillery by the UP Excise Authorities. It was pointed out that under the previous tender, Dalmia had to supply only 5,500 KL, which it failed to supply. Further, as a result of this previous failure, Dalmia had to also forego its earnest money deposited in support of its bid under the previous tender. Dalmia's commitment to its existing customer base was another important factor and it would have been a risky and loss making proposition to quote higher quantities for the tender. The DG report had also clearly ignored the fact that ....
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....der was specifically used for the purposes of producing motor-grade fuel, it was difficult to ascertain a market price for the same. ENA is the closest form of ethanol in terms of purity and was already selling at Rs. 33/- per litre. Accordingly, Dalmia factored in the additional cost of distillation of ENA, overhead expenses and after adding a reasonable profit margin, quoted Rs. 35.3 per litre as the basic price for the purpose of placing its bid under the terms and conditions of the tender. 182. Furthermore, the DG ignored the fact that the ex-factory cost of production of ethanol, as deemed to be appropriate by the DG, was without inclusion of costs for procurement of molasses, cost of packaging, overhead expenses, cost of electricity, etc. It was submitted that while determining the basic price of ethanol to be quoted for the tender, Dalmia had factored in the market price of molasses and the market price of electricity consumed in production of ethanol for the tender to determine the final basic price of Rs. 35.3 per litre. 183. With regard to the freight charges and taxes used to fix quoted prices, it was submitted that the DG's findings are contrary to materials a....
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....le supply of ethanol in the country. The impact of demand and supply could be seen from the statement in the DG Report that 'in UP, where the capacity was in excess- the basic prices quoted were generally below Rs. 37/-. In other parts particularly in Maharashtra and Gujarat where the demand of other products of alcohol are very good, the producers charge higher prices in the tender issued by OMCs'. Thus, despite acknowledging the existence of the forces of demand and supply, the DG Report continued on its pre-decided disposition to return a finding of collusion against the ethanol manufacturer(s) and their association(s). 188. Further, the DG based its findings on identical prices quoted by some of the bidders (Bajaj, Dhampur, Upper Ganges/Oudh Sugars, Mawana, Sir Shadilal-Shamli) for some of the depots. In fact, post the analysis of the conduct of ISMA/EMAI/NFCSF, the entire section up to the final analysis was devoted to the conduct of the above mentioned five bidders in relation to identical pricing in the said tender. Despite analyzing the conduct of only 5 bidders in detail, the DG Report found all the private manufacturers violating the Act solely on the basis of ....
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....ble to accept the fact that the prices of ethanol increased due the increased demand arising out of the tender issued by OMCs. In fact, even an existence of an 'agreement' or conclusive proof of meeting of minds has not been proved by the DG. 195. It was further submitted that while analyzing the conduct of ISMA as well as EMAI, the DG Report completely ignored the legitimate objectives of trade associations i.e. to voice the concern of the industry against the Government and other stakeholders. The DG Report failed to consider that the pressure being applied by industry association(s) was part of their legitimate role as industry association of ethanol manufacturers as well as a representative of the interests of ethanol manufacturers especially in light of the fact that losses were being incurred to the tune of Rs. 5 per litre by the ethanol manufacturers. 196. In view of the above, it was prayed that the observations in the DG Report against Seksaria be rejected. Replies/objections/submissions of Sir Shadi Lal Enterprises Ltd. (Shamli Distillery & Chemical Works) (Sir Shadilal/Shamli) 197. Denying the findings made by the DG, it was stated that the answering ....
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.... the Commission. The first issue is whether PSU OMCs have infringed the provisions of Section 3 of the Act by floating a joint tender dated 02.01.2013 for procurement of ethanol under the EBP Programme. The second issue is whether the sugar mills which participated in the said tender rigged the bids in contravention of the provisions of Section 3 of the Act. 204. Accordingly, the following two issues require determination in the present cases: i. Whether the joint tender floated by OMCs is in violation of provisions of Section 3(1) read with Section 3(3) of the Act? ii. Whether the tender floated on 02.01.2013 by PSU OMCs was rigged by sugar mills/ISMA/EMAI/NFSCF in contravention of the provisions of Section 3 of the Act? Issue No. I Whether the joint tender floated by OMCs is in violation of provisions of Section 3(1) read with Section 3(3) of the Act? 205. Before examining the issue, it would be appropriate to note the background of the Ethanol Blended Petrol Programme ("EBP Programme"). This programme was introduced by Government of India (GoI) keeping in mind the beneficial effects it would have for the agriculture sector as well as towards the cou....
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....9. Thus, pursuant to a notification dated 02.01.2013 issued by the Ministry of Petroleum & Natural Gas, Government of India, regarding mandatory 5% blending of ethanol with motor spirit/gasoline, the government owned public sector oil marketing companies (OMCs) viz. IOCL/HPCL/BPCL invited quotations from alcohol manufacturers for supply of ethanol through a joint tender dated 02.01.2013 which was issued by BPCL on behalf of OMCs - as the coordinator of the tender process. Through the joint tender, OMCs invited sealed tenders under the two bid system i.e. technical bid and price bid from ethanol suppliers. The supply was to be made available to various depots/terminals of OMCs across the country for a period of one year w.e.f. 01.03.2013. The Informant - India Glycols Limited-, has alleged that OP- 1 to OP-3 in Case No. 21 of 2013 i.e. Indian Sugar Mills Association (ISMA), National Federation of Cooperative Sugar Factories Limited (NFCSF) and Ethanol Manufacturers Association of India (EMAI) persuaded the OMCs to come out with a joint tender for the purpose of procuring ethanol. The said joint tendering by OMCs was alleged to be an agreement amongst horizontal players to procure et....
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....ent's directive of blending ethanol with petroleum, it becomes desirable for them to float a joint tender and distribute equitably the ethanol procured amongst themselves. The Commission notes that issuance of separate tenders may lead to a situation where the OMC issuing the tender first, would be able to procure all or most of the available quantity of ethanol, whereas the remaining OMCs issuing tenders thereafter may only be able to procure the left over quantity, if any. Thus, such a mechanism would have led to more market imperfections due to the rational expectation on the part of the suppliers where the producers and suppliers use past events to predict future business operations. Hence, the remaining quantity may demand higher price in accordance with basic economic theory of demand and supply. In such a scenario, the other OMCs might not be able to procure even the available ethanol in the market. In fact, they might be actually priced out of the market. Moreover, the entire existing system of equitable distribution and functional coordination would also be seriously hampered in case separate tendering is conducted. 215. Moreover, the Commission also noted that sinc....
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....ercise and to attain equitable distribution of procured ethanol amongst OMCs, to carry out the mandate of the Government. Such a procedure has also saved wastage of time, money and resources of the stakeholders besides minimizing the attendant costs to the national exchequer. 219. It may be observed that previously also, the same issue of joint tendering by OMCs was agitated by India Glycols Limited by filing Case No. 14 of 2012 before the Commission. The Commission vide its order dated 26.07.2012 closed the case finding no violation of any of the provisions of the Act. Issue No. II Whether the tender floated on 02.01.2013 by PSU OMCs was rigged by sugar mills/ISMA/EMAI/NFSCF in contravention of the provisions of Section 3 of the Act? 220. Before analyzing the bidding pattern in respect of the impugned tender of 2013 floated by OMCs for procurement of ethanol, it is observed that earlier the Government of India fixed price of Rs. 27 per litre for procurement of ethanol from the sugar mills which remained unchanged between 2009-10 to the date of the present tender in 2013. As per the terms and conditions of the tender, the L1 for each depot was to be decided on the basis....
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.... to cost, demand and supply. There was no participation in the tender process in the States of Madhya Pradesh, Chhattisgarh, Odisha, Bihar and Jharkhand. 224. At this stage, it would be appropriate to deal with a preliminary and jurisdictional issue raised by some of the Opposite Parties that the DG exceeded its remit by examining the conduct of the bidders who were not arrayed as Opposite Parties in the present batch of Informations. It was contended that the DG had unilaterally impleaded such companies without any direction of the Commission and issued probe letters seeking replies and appearance. It was further submitted that only the Commission can pass orders for impleadment or discharge of a party from the case and the DG possesses no such power or authority. As there was no order passed by the Commission to implead such OPs, the findings of the DG qua them must be set aside. 225. The Commission has examined this preliminary/jurisdictional issue in light of the material available on record. In this regard, it is noted that though the bidders of other States, except UP, were not named specifically as Opposite Parties in any of the Informations, their details were mention....
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..... The same are noted below: 230. Further, the details of quantity quoted and offered in respect of the above depots have also been tabulated and the same are noted below: 231. To sum up, the details of benchmark prices, L1 prices and negotiated prices in respect of depots located in UP are noted below: 232. To address the issue of whether there was a cartel and bid-rigging by the Opposite Parties and other bidders who participated in the tender issued by OMCs in January, 2013 in violation of the provisions of Section 3(3) read with Section 3(1) of the Act, an analysis of the bid data collected by the DG with respect to the said tender has been undertaken. It is observed that bids for supply of ethanol were invited for 13 depots located across Uttar Pradesh viz., Allahabad, Aonla, Baitalpur, Banthra, Gonda, Kanpur, Karari/Ambabai (Jhansi), Lucknow, Mathura, Mughalsarai, Najibabad, Partapur (Meerut), Tundla and 16 bidders viz., Bajaj, Balrampur, Dalmia, Dhampur, K.M. Sugar, K.S.C.M, Manakpur, Mawana, Oudh, Seksaria, Shamli, Simbhaoli, Simbhaoli (Brijnathpur), Triveni, Upper Ganges, Uttam Sugar participated in the same. 233. From the data relating to basic price and NDC as....
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....t (NDC) of all the private bidders of UP are very close to each other and the same is found to be mostly in the range of Rs. 41700 to Rs. 42,500 per KL. (iii) There appears to be a visible synergy and correlation amongst the private bidders as far as Basic prices and Net delivered cost quoted by them are concerned particularly in respect of depots of UP. (iv) At many depots the basic prices of bidders are found to be identical. (v) At some of the depots the Net delivered cost are also found to be exactly identical. (vi) The quantities quoted by the bidders in UP almost matched with the quantity required at almost every depot. (vii) There were 13 private players who participated in 13 depots of UP, yet the total quantity offered by the players was close to the total required quantity. (viii) At some of the depots like Kanpur, Mathura where there were 8 bidders, still the offered quantity clinically matched with the required quantity. 239. On a closer examination of the behavioral conduct of the bidders in respect of procurement for depots located at UP, it emerges unmistakably that bids were quoted in a very narrow price range....
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....nation defies any rationale as it would be too much of coincidence that the required and offered quantities matched so clinically. In fact, the DG went on to examine the plea taken by some of the suppliers that the decision qua selection of depots and quantities offered was based on their past experience. On a detailed comparison of the quantities offered by the bidders in the previous years vis-à-vis the tender year of 2013 by the DG, it emerged that no co-relation existed between the quantities quoted in the current tender and the supplies made by the respective parties in previous years. This only strengthens the collusive arrangement entered into by the bidders in respect of the supplies to be made at the depots located in UP. 242. The afore-detailed pattern of bidding is indicative of concerted understanding amongst the bidders. In this regard, the Commission further examined as to whether there was any agreement amongst the bidders on a particular price band. From the data analysed in the earlier part of the order in respect of the depots located at UP, the Commission notes that the lowest basic price quoted was by KSCM of Rs. 34000 per KL. In this regard, it is obs....
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..../- per KL, the private players who were having advantage of economies of scale and integrated units could match or quote below Rs. 34000/- per KL. (ix) The prices quoted by the bidders have been stated to be based on the prevailing prices of similar products i.e. RS/SDS/ENA. The prices of RS/SDS during the relevant period were between Rs. 26 to 28 per litre. Prices of ENA were about Rs. 33 per litre. However, on sale of ENA the Cenvat credit is not allowed to manufacturers, whereas RS and Ethanol sales get Cenvat credit which means the net realisation from ENA was about Rs. 2 per litre lower than the sales price. This makes the net realised sales price of ENA at the time of tender to be Rs. 31 per litre. (x) Considering the price of Rs. 34/per litre quoted by KSCM, the calculation of Rs. 33/- per litre as a benchmark price was further justified for analysing the competitive price for the purpose of tender. It is also noted that KSCM further agreed to reduce the prices during negotiation upto Rs. 33.70 per litre. (xi) It is also noted that the other bidders in the depots where KSCM had participated agreed to reduce their prices to the level of Rs. 33.70 du....
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....s but was only based on estimates. The factories of these two companies are situated at a distance of 200 -250 KM from Mathura. Another bidder Simbhaoli Sugars who is located only about 100 Km. from Mathura quoted a figure of Rs. 1574/- per KL on account of freight charges. Further, when asked about the actual freight charges paid by them, Bajaj has stated that they paid freight of Rs. 1380/- per KL against the quoted freight of 925/- per KL. Similarly DSM has actually made freight payment of Rs. 1129/- onwards as against the quoted freight of Rs. 925/- Thus, there was no real basis or correlation between the freight quoted and the actual freight while submitting the figures of freight charges in their respective bids by the bidders. The fact that two main components of NDC being basic price and freight charges were not based on any real working or calculations and yet they were exactly identical in the case of a number of bidders cannot be accepted as a mere coincidence. Similarly the analysis of other depots where identical NDC has been quoted by the bidders has revealed the same result. Aonla Depot At Aonla depot DSM and Shamli have quoted NDC of Rs. 4....
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.... depot and factory, identical freight charges have been quoted by the bidders. Such conduct can only be an outcome of collusive behavior and not the result of free market forces. 249. The Commission also finds no merit in the plea that the DG has only picked few depots and players for the purpose of investigation to arrive at a finding of contravention against few bidders leaving the rest. The Commission notes that bidding was depot-wise and therefore the DG was justified in focussing investigation on the depots where the bidding pattern appeared to be collusive. The DG has conducted a detailed investigation after examining the bidding patterns of various depots. In these circumstances, the plea of some of the parties that the DG cherry picked only few depots and bidders, is not only untenable but has no basis in law or in facts. The infringing bidders can derive no sustenance from the fact that no collusive conduct was found or was otherwise present in respect of the remainder of the depots or the bidders. 250. It has also been argued by some of the parties that there is no direct evidence of collusion and the entire finding of the DG is just based on circumstantial evidence....
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.... 254. It is observed from the above that identical bids were submitted in Gujarat by four bidders viz. Shree Kamrej Vibhag Sahakari Khand Udyog Mandli Limited, Sahakari Khand Udyog Mandai Limited, Mahuva Pradesh Sahkari Khand Udyog Mandai Ltd. and Shri Ganesh Sahkari Khand in respect of Hazira depot. It is also noted that The Andhra Sugars and Sri Sarvaya Sugars have quoted exactly identical figure for basic price as well as NDC for Rajamunduri depot. 255. The representatives of the aforesaid sugar mills were confronted by the DG. In the depositions recorded by the DG, the parties have not been able to give any plausible justification for similarities in basic price as well as the NDC. The freight charges quoted by them were also noted by the DG to be without any basis. There was no earlier discovered price which could have resulted in similarity in the rates of all the bidders. No plausible explanation was furnished by the bidders in respect of identical pricing. 256. In view of the above, the Commission is of the considered opinion that similarities upto decimal figures cannot be an outcome of a price discovered through a competitive bidding process but is the result of ....
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....ysis in respect of the 20 bidders who submitted their respective bids for 11 depots in State of Maharashtra viz. Akola, Akolner, Khapri, Loni, Manmad, Miraj, Solapur, Shirud, Chandrapur, Vashi and Wadala. It is noticed that no bid was submitted for Chandrapur depot. A brief account of the bids submitted in respect of the depots in State of Maharashtra is noted below: 260. At this stage, it would be appropriate to note the details of the bids in respect of different depots of State of Maharashtra and the same are tabulated below: 261. On a careful perusal of the bidding pattern and submissions/depositions of bidders in respect of the various depots (10) where bids were submitted in State of Maharashtra, the Commission is of the considered opinion that, unlike the bidding pattern (prices and quantity) in UP and Andhra Pradesh, bids for net delivered cost were not similar in respect of such 10 depots. In so far as Loni depot is concerned, basic price of few bidders matched. It is observed that Ajinkyatara Sahakari Sakhar Karkhana Limited and Mumbai Fabrics Private Limited quoted the same basic price of Rs. 40,000/- per KL whereas Raosahebdada Pawar Ghodganga Sahakari Sakhar Kark....
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.... the details of these meetings in their statement recorded under oath by the DG. The representatives of following companies have confirmed that they attended the meeting convened by ISMA in December 2012 in respect of supply of ethanol: i) Bajaj Hindusthan Sugar- Shri Amit Agarwal and Shri J.P. Shah ii) Dhampur Sugar Mills - Shri Arvind Jain iii) Balrampur Chini Mills - Shri Dilip Seksaria iv) Triveni Engineering- Shri Anil Khatri v) Upper Ganges & The Oudh Sugar -Shri Mahesh Agarwal & Shri Shishir Agarwal vi) Simbhaoli - Shri Rakesh Kumar Singh vii) Seksaria- Shri Ramesh Chandra Singhal and Shri B.P. Agarwal viii) KM Sugars- Shri B.M. Shrivastava ix) Mawana - Shri Rajesh Dhingra x) Dalmia Bharat- Shri Gopendra Singh xi) Sir Shadilal-Shamli - Shri Manoj Goyal xii) Uttam Sugar - Shri Sanjay Govil 267. The DG also obtained e-mails of Shri G.K. Thakur, Director-Policy (Sugar & By-products), ISMA [the then Dy. Head-Policy (Sugar & By-products)] from the service provider. It appears from the e-mails that Shri Thakur sent e-mails to ethanol manufacturers in respect of meetings t....
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....arers could have very well requested the members to actively participate in the said EBP Programme and what was the further requirement of calling the meeting of senior executives on 06.12.2012 ahead of AGM, Shri Thakur could not give any convincing explanation apart from the averments that it is not necessary that all the members manufacturing ethanol would have been present in any AGM or any other meetings. The said explanation of Shri Thakur has no legs to stand. Shri Thakur was also asked to give the agenda of said meeting, but he could not provide the same. He was also asked whether any presentation was prepared for discussion in respect of EBP Programme to which he replied in negative. The above facts coupled with the conduct of ISMA in hiding the details of meeting leads to the conclusion that the ISMA was taking an active role in providing a platform to all the competing bidders of UP for discussion and coordination amongst themselves in order to obfuscate the whole bid process of OMCs. 271. It is also noted that ISMA has invited Bajaj Hindusthan, a non-member, to the meeting. Neither Shri Verma, DG nor Shri G.K. Thakur, could give any logical explanation in respect of i....
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....could have been successful without Bajaj being a party to such concerted effort. Such actions coupled with evasive responses of ISMA representatives lead to inescapable conclusion that ISMA acted as fulcrum to the whole arrangement. Furthermore, the DG obtained call data records (CDRs) of Shri Thakur and analysed them in great detail. It emerges from such details that Shri Thakur of ISMA was frequently interacting with the representatives of bidding companies during the relevant period. In fact, the DG noted that on 21.01.2013, Shri Thakur was interacting with a number of representatives of the OPs in the evening. Even on the last date of submission of bids i.e. 28.01.2013, Shri Thakur was found to be in communication with such representatives of ethanol manufacturers. Crucially, the DG noted that the interactions stopped after 28.01.2013. 273. Further, the Commission finds it strange that ISMA does not maintain register of visitors and the records of communications. No register of attendance of members attending the meetings of ISMA were produced. 274. Some of the bidders claimed that they have not attended the meetings convened by ISMA and also submitted that there was no c....
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....idders across the country had created a benchmark of Rs. 37 per litre. In Uttar Pradesh, where the capacity was in excess, price quoted was below Rs. 37 per litre. On the contrary in states like Gujarat and Maharashtra, where the demand was high, suppliers were attempting to increase the prices. Statement of Shri Patil was recorded by the DG. He was confronted by the aforesaid newspaper clipping to which he responded that his views/statement were wrongly construed and that he had also requested the concerned newspaper to publish a corrigendum/rebuttal. 278. Furthermore, the DG has also highlighted that the members of EMAI are mainly based in Maharashtra. The members of EMAI were found to have followed the lead given by the President, EMAI in his press statement that the price of ethanol should be more than Rs. 40/- litre. It also emerged that EMAI conducted two meetings (on 09.01.2013 and 21.01.2013) after the announcement of tender where all the members were called to Mumbai. 279. On a careful perusal of the conduct of EMAI as noted hereinabove, there is no doubt that the behavior of the bidders was influenced by EMAI and such conduct of EMAI is found to have contravened the....
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....ipulating the process for bidding. 283. In case of agreements as listed in Section 3(3) (a) to (d) of the Act, once it is established that such an agreement exists, it will be presumed that the agreement has an appreciable adverse effect on competition; the onus to rebut the presumption would lie upon the parties. In the present case, the OPs could not rebut the said presumption. Further, the OPs have not been able to show how their impugned conduct resulted in accrual of benefits to consumers or made improvements in the production or distribution of the goods in question. In fact, far from accrual of any benefits, the impugned conduct of the OPs had virtually sabotaged the Government of India's flagship programme which was conceived to have beneficial effects on the agricultural sector besides improving the environment footprint. 284. As the bidders are sugar companies engaged in similar business of manufacturing of sugar and its by-products, and are therefore, operating at the same level of the production chain, allegations of anti-competitive agreements, decisions or practices among them squarely stand covered within the ambit of Section 3(1) read with Section 3(3) of ....
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....e to the joint tender floated by OMCs have colluded in submitting the bids by quoting collusive prices and sharing quantities using the platform of ISMA and signals provided by EMAI. Conclusion 288. In view of the above discussion, the Commission is of the considered view that the sugar mills, as detailed below, who participated in the bidding process in respect of the depots located in UP/Gujarat/Andhra Pradesh in response to the joint tender floated by OMCs on 02.01.2013 have colluded in submitting the bids by quoting collusive prices and sharing quantities and thereby contravened the provisions of Section 3(3)(d) read with Section 3(1) of the Act. Further, the impugned conduct of ISMA is found to have violated the provisions of Section 3(3)(a)/(b) read with Section 3(1) of the Act. Also, the conduct of EMAI is held to be in violation of the provisions of Section 3(3)(a) read with Section 3(1) of the Act by providing their platforms to sugar mills in facilitating rigging of impugned tender. 289. Accordingly, the sugar mills and ISMA/EMAI are directed to cease and desist from indulging in conduct that has been found to be in contravention of the provisions of the Act, as ....
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....n respect of the tender floated by PSU OMCs for procurement of ethanol and as such, for the purposes of determining the relevant turnover for this infringement, revenue from sale of ethanol alone has to be taken into account. 294. Having determined the relevant turnover, the Commission now proceeds to calculate appropriate percentage of penalty. 295. It may be noted that the twin objectives behind imposition of penalties are: (a) to reflect the seriousness of the infringement; and (b) to ensure that the threat of penalties will deter the infringing undertakings. Therefore, the quantum of penalties imposed must correspond with the gravity of the offence and the same must be determined after having due regard to the mitigating and aggravating circumstances of the case. The Commission is also guided by the judgment of the Hon'ble Supreme Court of India in Excel Crop case (supra) which enunciates the principle of proportionality. Proportionality achieves balancing between two competing interests: harm caused to the society by the infringer which gives justification for penalising the infringer on the one hand and the right of the infringer in not suffering the punishment whic....
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....n caused to such parties particularly when the parties have been heard at length on many days in these proceedings. As far as their responses to the said DG Report are concerned, the parties have essentially sought parity in treatment for UP bidders vis-à-vis bidders of Maharashtra. The detailed analysis made in this order makes it amply evident that the bidding pattern of these two States was not comparable. In any event, the infringing parties can claim no equity based on exoneration of other set of bidders when there is no material on record to base any finding of contravention in respect of the bidders who participated for the depots located in Maharashtra. 302. The Commission also finds no merit in the plea raised by Dhampur that it was denied opportunity to cross-examine the witnesses whose statements were relied upon by the DG. In this regard, the Commission notes that vide order dated 06.10.2015, liberty was granted to the parties who were desirous of cross-examining the witnesses to file appropriate applications containing the details of the (i) witness sought to be cross-examined; (ii) relevance of the statements made by such person in the findings/recommendatio....
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....s non-confidential versions of their replies / objections/responses/submissions. The confidential versions were kept separately during the pendency of the proceedings. It is ordered that confidentiality claim, as prayed for, shall hold for a further period of 3 years from the date of passing of this order in respect of confidential versions which have been filed before the Commission from time to time and on which confidentiality was claimed. It is, however, made clear that no such confidentiality claim shall be available in so far as the data that might have been referred to in this order. 307. The Secretary is directed to communicate to the parties, accordingly. ============= Document 1 S. No. Depot Company Basic Price NDC (In Rs. Per KL) Final Price 1. ALLAHABAD Bajaj 35600 42250.16 41882.18 Oudh 35400 42275.44 41882.18 KM Sugar 35050 41882.18(L1) 41882.18 2. KARARI/AMBABAI Simbhaoli (JHANSI) Oudh 35200 42730.72 42625.44 35400 42625.44 (LI) 42625.44 3. BAITALPUR DEPOT Bajaj 35600 42250.16 (LI) 42250.16 Balrampur 35999 43048.48 42250.16 GONDA DEPOT Ba....
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.... 35200 42000.72(LI) 42000 (Brijnathpur) Document 2 S. No. Depot Company Quantity Required Quantity Offered (In KL) Final Quantity 1 ALLAHABAD Bajaj 8618 5000 5000 Oudh 1500 1118 K.M. Sugar 2500 2500 Total 9000 Total-8618 2 KARARI/AMBABAI | Simbhaoli 6376 1000 1000 (JHANSI) Oudh 3500 3500 Total = 4500 Total = 4500 3 BAITALPUR Bajaj 9000 9000 DEPOT 15620 Balrampur 6500 6500 Total 15500 Total = 15500 GONDA Вајај 3000 3000 10092 Simbhaoli 2000 2000 Balrampur 5500 5092 Total =10500 Total =10092 5 KANPUR DEPOT Вајај 28196 8500 0 Simbhaoli 1500 0 Oudh 5000 5000 Balrampur 1500 1196 Manakpur 7000 7000 KSCM 500 500 Dalmia 1500 1500 Seksaria 3000 3000 Total =28500 Total =18196 LUCKNOW DEPOT Bajaj 16196 6000 6000 Simbhaoli 1500 0 Oudh 3000 3000 KSCM 500 500 Dalmia 1500 1500 Seksaria 3000 3000 Total =15500 Total = 14000 7 MUGHALSAR....
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.... Bidder Najibabad Dhampur* and Upper Ganges Partaput (Meerut) Dhampur, Mawana amd Shamli Note: Dhampur was L1 at Najibababad Document 5 38000 37500 37000 36500 36000 35500 35000 34500 34000 33500 Scatterplot of Basic Price (in Rs.) for all Bidders and all Depots in Uttar Pradesh 00 Document 6 45000 44000 43000 42000 41000 40000 39000 Scatterplot of Net Delivered Cost (in Rs.) for all Bidders and all Depots in Uttar Pradesh Document 7 Comparison Chart of Cost of Production Company COP (2012-13) Minimum BP quoted Margin BAJAJ** 26390.00 35600.00 9210.00 UPPER GANGES 17790,00 35600.00 17810,00 OUDH 20056.00 35400.00 15344.00 TRIVENI SIMBHAOLI BALRAMPUR MAWANA KM SUGAR ** 28310,00 35400.00 7090.00 29200.00 35000.00 5800.00 21980,00 35999.00 14019.00 29160.00 35250.00 6090.00 25490.00 35050.00 9560.00 KSCM** 21210,00 34000.00 12790.00 UTTAM SUGAR 26540,00 35077.00 8537.00 DALMIA 19180.00 35300.00 16120.00 SEKSARIA 28280.00 35500.00 7220.00 ** For 2....
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.... Finalized Matched Price Matched Price (in KL) (Net Delivered (Net Delivered Cost Per UOM Cost Per UOM before Le after VAT VAT setoff) setoff) (in Rs.) (in Rs.) 42000 48453.70 2500 45000.00 42917.41 2500 Depot- Khapri Total Quantity required-29378 KL Nameof the bidder Basic Net Cost Delivered Quantity Offered Final Negotiated/ Final Negotiated/ Quantity Finalized (in Rs.) Cost (in Rs.) (after VAT set off) (in KL) Matched Price Matched Price (in KL) Le. (Net Delivered (Net Delivered Cost Per UOM Cost Per UOM before ie. after VAT VAT setoff) setoff) (in Rs.) (in Rs.) Purti Power & Sugar 41700 Ltd. 47354.12 3000 47000 44785.72 3000 Depot- Loni Total Quantity required-64404 KL Nameof the bidder Basic Cost (in Rs.) Net Delivered Cost (in Rs.) (after VAT set off) Quantity Offered (in KL) Final Negotiated/ Final Negotiated/ Quantity Finalized Matched Price Matched Price (in KL) (Net Delivered (Net Delivered Cost Per UOM Cost Per UOM i.e. before i.e. after VAT VA....
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....ered (Net Delivered Cost Per UOM Cost Per UOM before e. after VAT Cost (in Rs.) Net Delivered Cost Quantity Offered Final (in KL) (in Rs.) (after VAT set off) i.e. VAT setoff) setoff) (in Rs.) (in Rs.) Shree Renuka Sugars 48011 55416.84 3000 47004.00 44841.92 3000 Ltd. Vitthalrao Shahkari Shinde 43000 Sakhar 49404.80 1500 47004.00 44481.92 1500 Karkhana Ltd. The Saswad Mali 40360 46948.50 1500 47004.00 44841.92 1500 Sugar Factory Ltd. Majalgaon Shahkari 41000 47495.60 1000 47004.00 44841.92 1000 Sakhar Karkhana Ltd. Manjara Shetkari 40700 47596.77 700 47004.00 44841.92 700 Shahkari Sakhar Karkhana Ltd. Depot-Shirud Total Quantity required -1850 KL Nameof the bidder Basic Net Cost Delivered (in Rs.) Cost Quantity Final Offered (in KL) (in Rs.) (after VAT set off) Shree Renuka Sugars 48012 Ltd. 55622.09 1000 Final Quantity Negotiated/ Negotiated/ Finalized Matched Price Matched Price (in KL) (Net Delivered (Net Delivered Cost Per UOM Cost Per UOM ....