TaxTMI 
TaxTMI 
2024 (11) TMI 1005
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....tion Ltd., Bharat Petroleum Corporation Ltd., Jubilant Life Sciences Ltd., Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd., Indian Oil Corporation Ltd., Indian Sugar Mills Association, National Federation of Co-operative Sugar Factories, Ethanol Manufacturers Association, AB Sugars Ltd., Indian Sugar Mills Association, National Federation of Co-operative Sugar Factories, Ethanol Manufacturers Association, Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd., Indian Oil Corporation Ltd., Wave Distilleries and Breweries Ltd., Indian Sugar Mills Association, National Federation of Co-operative Sugar Factories, Ethanol Manufacturers Association, Bharat Petroleum Corporation Ltd., Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd., Lords Distillery Ltd., Indian Sugar Mills Association, National Federation of Co-operative Sugar Factories, Ethanol Manufacturers Association, Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd. MS. RAVNEET KAUR CHAIRPERSON, MR. ANIL AGRAWAL MEMBER, MS. SWETA KAKKAD MEMBER AND MR. DEEPAK ANURAG MEMBER For Informant No. 1 - India Glycols Ltd. : Mr. ....
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.... For Opposite Party No. 16 - Uttam Sugar Mills Ltd. : Mr. A.K. Agarwal, Mr. Sushil Trivedi, Mr. Sanjeev Kumar Singh and Mr. Bhishm Pratap Singh, Advocates For Opposite Party No. 17 - Dalmia Bharat Sugar and Industries Ltd. : Mr. M.M. Sharma and Mr. Ankit Singh Rajput, Advocates with Mr. Abhishek Dua, Manager (Legal), Dalmia Bharat Sugar and Industries Ltd. For Opposite Party No. 18 - The Seskaria Biswan Sugar Factory Ltd. : Mr. Pankaj Bhagat, Advocate For Opposite Party No. 19 - Sir Shadi Lal Enterprises Ltd. : Mr. Anil Kumar Mishra, Advocate with Mr. Vishambhar Dahuja, Deputy General Manager, Sir Shadi Lal Enterprises Ltd. For Opposite Party No. 20 - Sahakari Khand Udyog Mandali Ltd. : Mr. Bhushan V. Mahadik, Mr. Ranjit Raut and Ms. Pallavi Pukale, Advocates For Opposite Party No. 21 - Shree Ganesh Khand Udyog Sahakari Mandli Ltd. : Mr. Bhushan V. Mahadik, Mr. Ranjit Raut and Ms. Pallavi Pukale, Advocates For Opposite Party No. 22 - Shree Kamrej Vibhag Sahakari Khand Udyog Mandali Ltd. : Mr. Bhushan V. Mahadik, Mr. Ranjit Raut and Ms. Pallavi Pukale, Advocates For Opposite Party No. 23 - Shree Mahuva Pradesh Sahakari Khand Udyog Mandali Ltd. : Mr. Bhushan V. ....
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....dingly, the Commission directed the Director General ('DG') to cause an investigation to be made into the matters, and submit a consolidated investigation report. 3. The DG submitted its investigation report dated 17.07.2015 finding that: (i) joint tendering by the three OMCs is not anti-competitive or violative of the provisions of Section 3(3) of the Act; (ii) ISMA has violated the provisions of Section 3(3) read with Section 3(1) of the Act; (iii) the conduct of EMA and its President is in violation of Section 3(3)(a) of the Act; (iv) allegations against NFCSF could not be substantiated; (v) 13 out of 14 sugar mills of the State of Uttar Pradesh named in the Information filed in Case No. 29 of 2013 (except Kisan Sahkari Chini Mills) along with 06 other sugar mills from other States have contravened the provisions of Section 3(3)(d) of the Act; and (vi) 42 individuals of the Opposite Parties ('OPs') are liable in terms of the provisions contained in Section 48 of the Act for the anti-competitive conduct of their respective companies/ associations. 4. Upon consideration of the investigation report, the Commission, vide or....
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....s with respect to bidding by the sugar mills of the State of Maharashtra. 11. Upon consideration of the supplementary investigation report, the Commission vide order dated 07.06.2018, forwarded electronic copies of the same to the Parties, giving them an opportunity to file their suggestions/ objections, if any, thereto. 12. In its Ordinary Meeting held on 26.07.2018, the Commission considered the supplementary investigation report and the suggestions/ objections received thereto from the Parties, and decided to pass an appropriate order in due course. 13. On 18.09.2018, the Commission passed a Final Order under Section 27 of the Act disposing of all the 06 matters, finding 20 OPs (ISMA, EMA, 12 sugar mills of Uttar Pradesh, 4 sugar mills of Gujarat and 2 sugar mills of Andhra Pradesh) guilty of contravention of the provisions of the Act and imposing penalty upon them in terms of the provisions contained in Section 27(b) of the Act. 14. Against the aforesaid Final Order passed by the Commission, several OPs filed appeals before the Hon'ble National Company Law Appellate Tribunal ('NCLAT'). Vide judgment and order dated 10.10.2023, the Hon'ble NCLAT set aside the Final O....
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....inistry of Petroleum and Natural Gas ('MoPNG') made 5% Ethanol blending in petrol mandatory across 9 States and 5 Union Territories ('UTs'). However, the same could only be partially implemented because of unavailability of Ethanol. 18. In September 2006, resurgence of sugarcane production in 2005-06 and 2006-07 led Government of India to again mandate 5% blending across 20 States and 8 UTs subject to commercial viability. The OMCs hence, contracted 1.4 billion litres of Ethanol for EBP at Rs.21.5/lt from November 2006 to November 2009. However, only 540 million litres could be procured. Subsequently, implementation of EBP was deferred. 19. In September 2008, the Union Cabinet approved the National Bio-fuel policy and 5% Ethanol blending was made mandatory across all States in the country. For 2010-11 and 2011-12, the OMCs floated tenders on Expression of Interest ('EoI') basis for supply of Ethanol. Under this arrangement, the base price at which Ethanol was to be procured was determined by the Cabinet Committee on Economic Affairs ('CCEA') on 23.08.2010 at Rs.27/lt as an ad hoc interim price. In the meanwhile, Soumitra Chowdhary Committee was constituted to examine the issu....
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....eved. iv. In no case, the location-wise quantity requirements will be exceeded and hence, the bidder should ensure that their offered quantity is less than or equal to the location- wise quantity requirements. f. If the quantity offered by the L1 bidder is not sufficient to meet the entire demand of a location, then the shortfall quantity shall be offered to the L2 vendor and the L2 vendor has to match the L1 rate. If the rates are not matched, it will then be offered to L3, L4 and so on for matching with L1 rate. g. If in case there are multiple L1s for any location, the allocation shall be made based on the ratio of their offered quantity. h. ..." 22. Therefore, as per the terms and conditions of the Impugned Tender, the award of tender was to be made on depot-wise basis as per the lowest NDC quoted. The one who had quoted the lowest NDC amongst all bidders for a particular location was to be declared L1 and was to be called for negotiations by the OMCs. At the negotiated rate, the quantity offered by the L1 bidder was to be awarded to it. If the quantity offered by L1 was less than the total quantity required at that particular depot, the n....
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....DRs of Shri GK Thakur, Director of ISMA, of December 2012 and January 2013, showing that representatives of the sugar mills of Uttar Pradesh who were bidders in the Impugned Tender (including of OP-13 who is a non-member of ISMA but largest player in the market), communicated with him on a regular basis during the relevant period. (iii) Mobile conversations between competitors viz. Shri Arvind Jain of OP-11 and Shri Dilip Seksaria of OP-12 on 04.01.2013 and 16.01.2013 i.e. during the tender period. (iv) Shri GK Thakur attending pre-bid meeting organised by OMCs for the Impugned Tender without there being any reason for him to do so. (v) Certain e-mails recovered from the e-mail account of Shri GK Thakur which showed that ISMA used to exchange data relating to production and sale of Ethanol from various manufacturers during its meetings, that too during the tender period. (vi) Quoting of NDC by all private players in the State of Uttar Pradesh within a narrow range of Rs.41.8/lt to Rs.44.7/lt (barring one exception), and quoting of identical NDC to the last decimal point by some bidders at some depots. (vii) Quoting of identical freight c....
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....s also found to be without any basis. C. Against sugar mills of Andhra Pradesh (i) Quoting of identical BP and NDC to the last decimal point by 02 bidders at 01 depot and representatives of the bidders being unable to provide the basis for quoting the identical prices by their mills. Freight charges quoted by such bidders was also found to be without any basis. Further, required quantity for such depot was 5,366 kl while the quantity offered by the 03 participating bidders therefor was 5,300 kl. D. Against EMA (i) Statement of Shri VM Patil, President of EMA, published on 07.12.2012 in the Mumbai edition of the 'Business Standard' in respect of price of Ethanol, and no publication of any rebuttal in this regard. (ii) Press Release dated 20.01.2013 issued by Pune online edition of the 'Times of India' where a report in the name of Shri VM Patil mentioning that Ethanol manufacturers will quote prices in the range of Rs.38/lt was published. (iii) All members of EMA in Maharashtra and Gujarat quoting BP of Rs.40/lt and above (which was much above prevailing market price) and supplies being eventually made at prices of Rs.3000- Rs.4000/kl below ....
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....fide. Its own subsidiary Shakumbari Sugar Mills and Allied Industries Ltd. was a member of ISMA and had quoted the BP of Rs.41/lt in the Impugned Tender and lost in the bid process. 26.6 There are sparse incidents of quotation of identical NDCs by the bidders of the State of Uttar Pradesh in the Impugned Tender. Hence, not all bidders can be painted with the same brush. 26.7 The tender required the bidders to quote BP as well as NDC (BP + taxes and fee + freight) of Ethanol. L1 was to be determined on the basis of NDC. Hence, comparison of BP by the DG was of no consequence. 26.8 The DG has stated that the prices quoted by the bidders were based on the prevailing price of similar products i.e. RS/ SDS/ ENA. However, RS/ SDS/ ENA and Ethanol are entirely different products having different alcoholic strength and altogether different usage. None of them are substitutes to each other qua their usage and/ or applicability. 26.9 Benchmark prices did not exist prior to the bidding process and were in fact, fixed only after bidding was completed. Therefore, the idea that the bidders sat together and decided to bid in a certain manner to maintain their p....
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....ad also admittedly attended two EMA meetings on 09.01.2013 and 21.01.2013. However, no correlation has been found by the DG between the statement made by the President of OP-3 and the prices actually quoted by the Maharashtra mills, which varied between Rs.35/lt and Rs.48.01/lt. Only the association has been found violating the provisions of Section 3(3)(a) of the Act. This also clearly establishes that discriminative approach has been adopted by the DG. 26.18 The facts of the present matters are squarely covered on both facts and law by the judgment of the Hon'ble Supreme Court in the case of Rajasthan Cylinders and Containers Ltd. v. Union of India and Another, passed by Hon'ble Supreme Court of India, (2020) 16 SCC 615. 27. In contrast, IP-1 filed an application seeking deletion of its name from the array of parties submitting that it is no longer interested in pursuing its case before the Commission as the resultant economic harm to it because of alleged cartelisation has eased considerably. Since 2013, the business scenario and market conditions of availability of Ethanol have changed drastically and the company also has, over the years, changed its business priori....
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....bers. 28.1.8 In this regard, it is noted by the Commission that the e-mail dated 17.12.2012 postponing the meeting dated 19.12.2012 to 27.12.2012 clearly mentions that the meeting dated 06.12.2012 took place. The contents of the said e-mail read as "As decided in the last meeting held on 06th December 2012, the next meeting..." 28.1.9 Further, admittedly, the meetings dated 06.12.2012 and/ or 27.12.2012 were attended by at least the following representatives of the sugar mills of Uttar Pradesh, including of OP-7, which was not even a member of ISMA: (i) Shri Amit Agarwal, General Manager (Sales and Marketing) of OP-7, (ii) Shri Mahesh Agarwal, Financial Controller of erstwhile Oudh Sugar Mills Ltd. and erstwhile Upper Ganges Sugar and Industries Ltd. (now OP-8), (iii) Shri Shishir Agarwal, Deputy Manager (Sales) of Upper Ganges Sugar and Industries Ltd., (iv) Shri Rakesh Kumar Singh, Chief General Manager of OP-10, (v) Shri Arvind Jain, Vice-President (Marketing) of OP-11, (vi) Shri Rajesh Dhingra, former Business Head (Alcohol) of OP-13, (vii) Shri Balmukund Srivastava, Assistant General Manager (Fina....
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....der or that any decisions could have taken place therein or consensus amongst all sugar mills could have been reached therein in light of limited attendance. The OPs have also argued that there is no record to show as to what actually transpired in the said meetings and that there is also no evidence to hint that prices or quantities were discussed in the said meetings. 28.1.16 In the matter of Rajasthan Cylinders (supra), the Hon'ble Supreme Court of India also did not attach much weightage to scarcely attended meetings of competitors as evidence of cartelisation, though in that case the meetings had in fact been held during the relevant period of tender. 28.1.17 As far as inviting of and attendance of OP-7 (a non-member of ISMA) in such meetings is concerned, it has been explained by Shri Amit Agarwal, General Manager (Sales and Marketing) of OP-7 and Shri Abinash Verma, Director General of ISMA, in their statements recorded on oath before the DG, that OP-7 was a member of ISMA till 2004 and has been occasionally interacting with ISMA on policy issues. 28.1.18 As argued by OP-7, since OP-7 was the largest sugar manufacturer in the State of Uttar Pradesh....
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....lls having telephonic conversations with the Director of the industry association. 28.2.3 As per the OPs, in order to say that such frequent telephonic calls between the representatives of the OPs and Shri GK Thakur, Director of ISMA, were in furtherance of a cartel, the DG ought to have obtained the CDRs of Shri GK Thakur for preceding or at least subsequent few months to show a sudden surge, if any, in the telephonic calls made during the months of December 2012 and January 2013. However, no such exercise has been done by the DG. 28.2.4 In this regard, however, it is noted by the Commission that Shri GK Thakur, when asked by the DG if the representatives of Ethanol manufacturers communicated with him on telephone and mobile on a regular basis, during his statement on oath, answered "No". Hence, in light of the categorical negative answer given by Shri GK Thakur to the DG, the argument put forth by the OPs in this regard, cannot be accepted. 28.2.5 The Commission notes that the calls exchanged with Shri GK Thakur by the representatives of the OPs, as collected by the DG, can be divided into 3 categories, as follows: (a) Calls exchanged prior to ....
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.... with Shri B.P. Agarwal, General Manager (Commercial) of OP-18 Date Time Duration (In seconds) 23.01.2013 13:56 168 (x) Calls exchanged with Shri Manoj Goel, Deputy General Manager of OP- 19 Date Time Duration (In seconds) 09.01.2013 14:06 2 22.01.2013 11:42 61 23.01.2013 15:56 85 23.01.2013 20:15 6 23.01.2013 20:17 163 27.01.2013 15:15 118 27.01.2013 15:00 424 (c) Calls exchanged after submission of bids by each OP: Again, such calls may not be of much relevance as there is no finding in the investigation report that price negotiations with the OMCs was also pursuant to a cartel. 28.2.6 From the above, it is evident that the representatives of OP-7, Upper Ganges Sugar & Industries Ltd., OP-10, OP-11, OP-12, OP-13, OP-17, OP-18 and OP-19 exchanged several calls of substantial duration with Shri GK Thakur, Director of ISMA, during the relevant period of the Impugned Tender. As stated by Shri GK Thakur, such calls were not routinely exchanged. 28.2.7 Though it has not come on record as to what was discussed in such calls, none of the OPs have been effectively ....
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....after consulting my Director General just to understand the procedure of e-tender process. There was no request from any member or any directions from the President of the Association to attend the same." 28.3.3 In view of the Commission, Shri GK Thakur, being the Director of ISMA, the largest association of Ethanol Manufacturers in India, had reasonable ground to attend the pre-bid meeting organised by the OMCs in respect of the Impugned Tender, which admittedly was a novelty, being a first time e-tender and being a joint tender issued by 3 OMCs for 110 locations across India. 28.4 E-mails recovered from the account of Shri GK Thakur 28.4.1 The Commission notes that in the investigation report, 06 e-mails recovered from the e-mail account of Shri GK Thakur, Director of ISMA, have been flagged as evidence of ISMA being involved in anti-competitive activities w.r.t. the Impugned Tender. 28.4.2 The views of the Commission upon each such e-mail, are as follows: (i) E-mail dated 22.01.2013 sent by Shri Raj Kumar Rawal of OP-12 to Shri GK Thakur inviting attention of Shri Dilip Seksaria of OP-12 and containing distance between distilleries of OP-12....
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....id for 2009-10. The above e-mail is of post bid submission date of the Impugned Tender, contains historical bid data, and has been sent by a sugar mill which has not been found guilty of cartelisation by the DG. No adverse inference w.r.t. ISMA being involved in cartelisation in the Impugned Tender, can be drawn from such e-mail. (v) Letter dated 13.03.2013 from South Indian Sugar Mills Association seeking some information on difference in quantity offered as against required quantity by OMCs for depots located in the State of Andhra Pradesh. The above letter is of post bid submission date of the Impugned Tender, contains aggregated data of the industry and not of individual companies, requests quoted quantity and price information post tender, and has been sent by South Indian Sugar Mills Association to ISMA, sugar mills of which in general have not been found guilty of cartelisation by the DG. No adverse inference w.r.t. ISMA being involved in cartelisation in the Impugned Tender, can be drawn from such e-mail. (vi) Circular dated 23.11.2012 of ISMA to its members enclosing Press Release of CCEA. Evidently, the above circular simply in....
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....f the State of Uttar Pradesh. (iv) OP-13 * OP-13 had quoted bids for 03 depots out of 13 depots in the State of Uttar Pradesh, for 2 depots in the State of Rajasthan and for 1 depot in Delhi. * Of its 6 bids, there is a single instance of quotation of an identical bid, with 2 competitors, at one depot. (v) OP-19 * OP-19 had quoted bids for 02 depots out of 13 depots in the State of Uttar Pradesh. * Both its bids matched with 3 competitors. 28.5.4 From the above, it can be seen that out of the 5 OPs who the investigation report states have quoted identical NDCs, 3 have only one single instance of identical prices out of multiple bid quotations made by them which might as well be a coincidence, while 2 have multiple such identical prices. 28.5.5 Further, of the 3 who have a single instance of quotation of identical bid, it is noted from the investigation report that neither of them ended up being L1 bidder at the depots where they had placed the identical bids. Also, they had eventually reduced their prices during negotiations with the OMCs and ended up being suppliers of Ethanol at these respective depots. ....
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....lt to Rs.51.60/lt (3 depots); and in the State of Gujarat, it was Rs.47.90/lt to Rs.50.55/lt (6 depots). 28.5.12 Therefore, not much emphasis can be placed on the narrow price range of the bids quoted by the bidders of the State of Uttar Pradesh. 28.6 Freight charges of bidders of Uttar Pradesh 28.6.1 It has also come on record that there are instances of the OPs i.e. the sugar mills of Uttar Pradesh, quoting identical freight rates for certain depots in the State of Uttar Pradesh, in the Impugned Tender. These instances are as follows: (a) Aonla depot - OP-11 and Shamli Distillery (OP-19) quoted identical freight charges of Rs.950. (b) Najibabad depot - Upper Ganges Sugar & Industries Ltd. and OP-11 quoted identical freight charges of Rs.750. (c) Allahabad depot - Oudh Sugar Mills Ltd. and OP-14 quoted identical freight rates of Rs.1,400. 28.6.2 From the above, the Commission notes that: (i) The quotation of identical freight rates at Aonla depot is despite difference in distance of distillery (150 km of OP-11 and 270 km of Shamli Distillery (OP- 19)) from the depot. (ii) The quotation of identical freight ....
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....pur depot - OP-7, OP-11, OP-13 and Shamli Distillery (OP-19). (v) Mughalsarai depot - OP-7 and OP-11. 28.7.2 As stated above, since the quotations received for the 13 depots of Uttar Pradesh were solely from the sugar mills located within the State, and since the cost of ingredients (i.e. raw material (sugarcane), conversion cost, labour cost, fuel/ energy cost etc.) in a State are likely to be similar, the likelihood of the BP of the bidders located within the same State being similar, would be very high. 28.7.3 In fact, the DG in the investigation report itself, while analysing the bid quotations for the States of Gujarat and Andhra Pradesh, has stated that where identical BPs have been quoted but the NDCs are different, the same has been accepted as a co-incidence and not construed as evidence of a cartel, thereby downplaying the importance of the BP. 28.7.4 Further, the difference between Rs.35/lt-Rs.36/lt quoted as BP in the Impugned Tender by the OPs and Rs.27/lt which was the ad hoc BP fixed for procurement in 2010 after 2.5 years is not a big difference, especially in light of the OPs bringing on record that the sugarcane prices from 2008....
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....private players. Further, there is hardly a difference of Rs.1/lt to Rs.1.5/lt in the BP of OP-15 and of the private bidders. It has been submitted on record that Government organisations like OP-15 run entirely in a different environment with regard to costs, public policy, various subsidies, incentives, etc. Therefore, expecting the private bidders to make quotation similar as OP-15 may not be the correct approach. 28.7.10 The OPs have also argued that the investigation report incorrectly states that the BP quoted by bidders is not related to their CoP. Further, a few OPs have argued that their CoP taken by the DG in the investigation report for comparison, is in fact incorrect. 28.7.11 In this regard, the Commission notes from the statements on oath given by representatives of certain OPs before the DG that the calculation of BP quoted by such OPs have been explained. Further, it is noted that similar reasoning given by representatives of the bidders of the State of Maharashtra for arriving at their BP has been accepted by the DG in the supplementary investigation report. 28.7.12 Therefore, the Commission is also not inclined to agree with the finding ....
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....iations. Gonda Lowest bidder (OP-10) was selected as L1, implying that its bid amount was lower than benchmark price fixed by OMCs. Both the other bidders also agreed to supply at L1's rate. Therefore, it is seen that the private players did reduce their prices during negotiations. Kanpur Lowest bidder (OP-15) selected as L1 lowered its NDC by Rs.224.72/ kl. 05 out of 07 other bidders who were private players also agreed to supply at OP-15's negotiated rate. Therefore, it is seen that the private players did reduce their prices during negotiations. Lucknow Lowest bidder (OP-15) selected as L1 lowered its NDC by Rs.224.72/ kl. 04 out of 05 other bidders who were private players also agreed to supply at OP-15's negotiated rate. Therefore, it is seen that the private players did reduce their prices during negotiations. Mughalsarai Lowest bidder (OP-7) was selected as L1, implying that its bid amount was lower than benchmark price fixed by OMCs. 01 out of 03 other bidders also agreed to supply at L1's rate. Therefore, it is seen that the private players did reduce their prices during negotiations. Aonla Lowest bidder (OP-15) selecte....
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....r, if they have already qualified as L1. 28.8.6 In this regard, it is also noted that the OPs have argued that their only customer for fuel grade Ethanol i.e. Anhydrous Ethanol were the OMCs and they had no other buyer for the product. Further, the OPs have also argued that such Ethanol has limited shelf life and the OPs have limited storage capacities. As such, keeping in mind such arguments made by the OPs, the Commission observes that the OPs had no reason to not reduce their prices during negotiations if they had surplus quantity to supply, even at break-even rates, in order to avoid incurring losses. 28.8.7 Therefore, for the above reasons, the Commission is not inclined to draw adverse inference against the OPs simply because they may have not reduced their prices at all bid locations during negotiations with the OMCs. 28.9 Previous conduct of ISMA and bidders 28.9.1 The investigation report has also highlighted certain previous conduct of ISMA and the bidders of the State of Uttar Pradesh, i.e.: (a) Bidders quoting identical prices of Rs.21,500/kl for depots of Rajasthan and Rs.22,000/kl for depots of Punjab in 2006-07 tenders of OMCs; ....
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....ated 23.11.2011 of ISMA seems to only propose a strike. There is no evidence of a co-ordinated strike actually taking place in furtherance of such circular. Further, even if such a strike did take place, it may, depending upon facts and circumstances, fall within trade union activities and may not necessarily, be an anti-competitive conduct. 28.9.3 As such, any of the above evidences regarding alleged previous anti-competitive conduct of ISMA and the Uttar Pradesh bidders, do not strengthen the allegations of cartelisation and bid-rigging in the Impugned Tender. 28.10 Allocation of quantities 28.10.1 The investigation report also states that against the total quantity required in the State of Uttar Pradesh through the Impugned Tender i.e. 2.01 kl, the total quantity quoted by the bidders was 2.08 kl, i.e. almost equal to the total required quantity. This was despite the fact that the bidders' actual capacity was almost 3 times the required quantity (includes 25% for RS/ SDS and ENA). 28.10.2 Further, the report also observes that depot wise also, in the State of Uttar Pradesh, the difference between the quantity required by the OMCs and the quantity of....
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....price parallelism cannot be the sole criteria to establish a cartel. Evidence of parallel pricing must be supplemented with "plus factors" showing that alleged conduct is conscious and not the result of independent business decisions. In the present matters, the plus factors on record to supplement price parallelism by 2 OPs, is exchange of a few calls between the OPs with the representative of the industry association ISMA, which may have been to understand the nuances of the Impugned Tender as it ushered a novel way of tendering process. 28.13 When the aforesaid evidence is viewed holistically, and keeping in mind the practicalities of the industry, it may not be possible for 2 isolated bidders of the State of Uttar Pradesh, out of 14 bidders of the State of Uttar Pradesh and 66 bidders pan India, to indulge into a cartel with respect to the pan India Impugned Tender, specifically in the light of the fact that there was no bar on the bidders to give their quotations pan India. 28.14 Moreover, it is a part of the record that the final prices were to be determined on the basis of negotiations with the buyer (OMCs) and the OPs have also argued that the OMCs have not themselves....
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....gundam, Tada, Vijaywada, Vizag and Suryapeth/ Warangal) in the State of Andhra Pradesh. 28.21 For those 10 depots, 06 bidders (OP-24, OP-25, Shree Renuka Sugars Ltd., Satish Sugars Ltd., Rajlaxmi Petrochem Pvt. Ltd. and Parry Sugar Industries Ltd.) submitted bids. OP-24 bid for Rajamundry and Vijaywada depots while OP-25 bid for only Rajamundry depot. 28.22 Of the above quotations, the investigation report finds that the bids given by OP-24 and OP-25 matched for Rajamundry depot i.e. identical BP of Rs.38,600 and identical NDC of Rs.44,945.96 (including identical freight rates) was quoted. Further, the investigation report finds that the total quantity of Ethanol required at Rajamundry depot was 5,366 kl and the quantity offered by the three bidders who gave quotations at Rajamundry depot i.e. OP-24, OP-25 and Shree Renuka Sugars Ltd. was 5,300 kl. 28.23 On the basis of the above evidence, the investigation report has found OP-24 and OP-25 to have indulged in cartelisation in contravention of the provisions of Section 3 of the Act. 28.24 In this regard, the concerned OPs have, inter alia, argued that their mills are situated within the same State at a distance of around....
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....at during 2011-12, ethanol producers had incurred a per litre loss of Rs. 5 as the production cost had increased to Rs. 32 per litre against the procurement price of Rs. 27 per litre. Mohite Patil said there has been a still rise in the prices of alcohol and molasses in Maharashtra in particular especially due to the fall in sugarcane production following drought conditions. "It won't be possible for ethanol producers not only in Maharashtra but other states in such circumstances to supply ethanol at Rs. 27 per litre especially when the ethanol production cost has surged to Rs. 36.50 to Rs. 37 per litre. Therefore, there is a need for OMCs to pay Rs 40 per litre.'' he added. Mohite Patil recalled about 35 ethanol producers had shown their intention to supply 4.82 crore litre during 2012-13 at Rs. 37 per litre. OMCs had forwarded its letter recommending ethanol producers' demand to the Cabinet Committee on Economic Affairs. An OMC official, who did not want to be named, admitted that all OMCs would joint review the Centre's 5% ethanol blending programme and decide future course of action. "The government decision is in the right direction. There were hiccu....
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....on of the 'Times of India' where a report in the name of Shri VM Patil mentioning that Ethanol manufacturers will quote prices in the range of Rs.38/lt was published. The relevant portion of the same read as "January 28 is the last date of filing tender released by oil companies. We have decided to quote our price which would be close to Rs. 38 per litre. Some factories may quote a little lower rates. Five years back, the price was fixed at Rs. 27 per litre which is now not practical. The production cost of ethanol has already crossed Rs. 30 per litre and we cannot sell ethanol at Rs. 27 per litre." 28.29.2 As per EMA, no separate statement was given by Shri VM Patil, President of EMA, to the 'Times of India' and the above article is also based on the same statement of Shri Patil given to Shri Sanjay Jog, reporter of 'Business Standard' only. Further, as per EMA, the only thing that the 'Times of India' confirmed to the DG was that the said item was indeed published in their online edition. 28.29.3 Again, in light of the fact that the supplementary investigation report concludes that the members of EMA i.e. bidders of the State of Maharashtra who quoted a price of....
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....Ministry whereby the resources of all the three OMCs are pooled together and distributed throughout the country. The three OMCs have to work in close co-ordination and provide inter se facilities/ services. This includes sharing of pipelines, railway sidings, refineries, jetties etc. Keeping in mind efficiencies and commercial benefits, joint tendering for Ethanol was resorted to. Since EBP policy was intended to be a continuous process, issuance of independent tenders would have led to inefficiencies. There has been no attempt by the OMCs to determine, directly or indirectly, the price of Ethanol, or to limit or restrict, the supply of Ethanol. Further, total quantity of Ethanol that is required by the OMCs is well known, since it arises from gazette notification and will not change whether a single tender or separate tenders are issued. Conversely, from an administrative and public benefit perspective as well as in light of the mandate of Government of India, there are a lot of factors necessitating joint tendering which outweigh the option of separate tendering. Such joint tendering has also not been found to have resulted in any appreciable adverse effect on competition in the ....