TaxTMI 
TaxTMI 
2025 (10) TMI 274
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....ct), wherein the Commission held that Appellants along with other bidders, had contravened Sections 3(3)(c) and 3(3)(d) r/w Section 3(1) of the Act. The appeals have been filed under Section 53(b) of the Act challenging the impugned order of the Commission. Brief facts of the case 2. The commission received a general complaint dated 07.08.2018 alleging bid-rigging in the tenders invited by the Department of Agriculture, Government of Uttar Pradesh for soil sample testing. The complaint related to alleged bid rigging in respect of two e-tenders namely, Tender 2018_AGRUP_210583_1 (Moradabad) dated 31.05.2018 ("Tender No. 1") and Tender 2018_AGRUP_212591_1 (Bareilly) dated 18.06.2018 ('Tender No. 2"), invited for the soil sample testing by the Department of Agriculture, Government of Uttar Pradesh. 3. It was stated in the complaint that the following parties participated in the aforesaid two tenders of soil testing in Uttar Pradesh: (i) Yash Solutions (ii) M/s Satish Kumar Agarwal (iii) M/s Siddhi Vinayak and Sons (iv) M/s Saraswati Sales Corporation (v) M/s Lab Traders (vi) Edward Food Research and Analysis Centre Limited....
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....n the matter. The commission also observed that if the DG came across anti-competitive conduct of any other entity in addition to those mentioned in the information, the DG would be at a liberty to investigate the same. The DG was also directed to investigate the role of the persons/officers, who were in charge of and responsible for the conduct of the businesses of the parties at the time the alleged contravention was committed, as well as persons/officers with whose consent or connivance the alleged contravention was committed, in terms of the provisions of section 48 of the Act. The DG, pursuant to the directions of the Commission, investigated the matter, and after seeking due extensions of time, submitted the investigation Report dated 08.04.2021. 7. The relevant findings of the investigation Report submitted by the DG relating to the appellants role are the following: (i) Investigation covered 9 tenders namely, tenders of (a) 2017 and 2018 for Moradabad division, (b) 2017 and 2018 for Bareilly division, (c) 2017 for Jhansi division, (d) 2018 for Saharanpur division, (e) 2017 and 2018 for Meerut division, and (f) 2018 for Aligarh division. (ii) The investi....
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....circumstances clearly established that, through collusion and concerted action, the parties created a façade of competition and rigged bids in the 2017 soil testing tenders of Meerut and Jhansi, with the common objective of ensuring the award of contracts in favour of Austere Systems. (vii) The investigation further revealed that Delicacy Continental, a company primarily engaged in rice exports, was engaged as a sub-contractor by Austere Systems in soil testing work in 2017. It was established that, in collusion with Austere Systems, Delicacy Continental submitted cover bids in the 2018 tenders for Meerut and Saharanpur. (viii) The investigation further revealed that Yash Solutions and Austere Systems, through a prior understanding/arrangement, had geographically allocated divisions for soil testing tenders. Pursuant to this arrangement, they either deliberately avoided bidding or submitted supporting/cover bids in each other's regions. (ix) The investigation found M/s Yash Solutions, M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales, Austere Systems, Delicacy Continental, Fimo Infosolutions, M/s Toyfort and Chaitanya Business Outsourcing t....
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....telization under the Act were absent and the investigation overlooked this fundamental aspect. 11. The Austere Systems averred that the DG's findings were flawed in holding that it colluded with Yash Solutions, Delicacy Continental, M/s Toyfort and Fimo Infosolutions. The mere fact that Austere Systems, Toyfort and Fimo Infosolutions had no prior experience in soil testing work cannot, in itself, be the basis to allege bid rigging. Austere contended that if it did not qualify for the tenders, the DG ought to have confronted it with the officials of the Department of Agriculture, Government of Uttar Pradesh and permitted cross-examination to clarify how the tenders were awarded. 12. Austere further submitted that the DG failed to demonstrate any meeting of minds amongst the alleged entities and instead relied merely on family connections and inter-relationships between them to infer collusion. It was asserted that such reliance, without concrete evidence of concerted action, cannot establish the existence of a cartel. Fimo Infosolutions also made the same submission to the Commission. 13. Fimo Infosolutions further submitted that it participated in the tender of 2017 for Me....
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..... Rahul Teni, Director of Austere Systems, Austere Systems is engaged in software development, onshore development, staffing, augmentation, technology consulting, business consulting, data entry, soil analysis and automation. The shareholding pattern of Austere System is as under: S. No. Name % Shareholding 1. Mr. Rahul Gajanan Teni 40 2. Mr. Shikhir Gupta 30 3. Mr. Piyush Gupta 10 4. Mr. Suresh Kumar Gupta 20 Total 100 ii) Apart from Mr. Rahul Teni, who manages the business as well as the technological aspect of the company, Mr. Piyush Gupta is the other Director who looks after the financial matters of the company. Mr. Piyush Gupta is the son of Mr. Suresh Gupta (sole proprietor of M/s Toyfort) who holds 20 percent shareholding in the company and is also stated to be a strategic investor and had purchased a second- hand soil testing machine in 2017. Mr. Shikhir Gupta, another Director looks after the business development of the company. Mr. Teni stated that his company did not have any prior experience in soil testing before participating in the tenders relating to the same. iii) M/s Fimo Infosolutions....
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....demand draft submitted on behalf of Austere Systems in the Meerut tender of 2017 was made by Ms. Esha Gupta, Director of Fimo Infosolutions, from her own account, with a bank having its branch at Gurugram, Haryana. v) The Commission also noted that Mr. Rahul Teni, Director of Austere Systems, on being questioned by the DG about why the demand draft was prepared by the rival bidder, stated that he had no information as to how the demand draft submitted by his concern was prepared by Ms. Esha Gupta and had no justification for the same. The relevant extracts from the statement of Mr. Rahul Teni recorded before the DG are as under: "Q.16. As per reply of ICICI Bank (Exhibit-7), the Demand Draft Bearing No. 505282 in respect of your company M/s Austere Systems, which was submitted in the Meerut tenders of 2017 (Exhibit 8), was made by Ms. Esha Gupta, a Director, M/s FIMO INFO Solutions Pvt. Ltd, from her own account. How and why did the Director of another Firm got prepared a Demand Draft for your company from her own account despite the fact that both were rival bidders in the said tenders? A.16. I do not know. I knew Mrs. Esha Gupta who is w/o Shri Shikhir ....
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....mo Info." viii) Based on the above facts and statements, the Commission noted that Austere Systems and Fimo Infosolutions are related entities and, in respect of the aforementioned tenders, were not acting independently but in association with each other in furtherance of their common object. ix) With respect to the relationship between Austere Systems and Fimo Infosolutions, the Commission noted that Mr. Jai Kumar Gupta initially feigned ignorance with respect to the relationship with his son, Mr. Shikhir Gupta. On being confronted with evidence, he admitted that his son had a shareholding of 30% in Austere Systems. Mr. Jai Kumar Gupta, Director of Fimo Infosolutions, in his statement before the DG, also submitted that he looks after the entire affairs of the company, had no experience of soil testing work, did not fulfil the terms and conditions for eligibility in the said tenders and had submitted tenders with the hope of receiving the tender in his favour. Further, Mr. Jai Kumar Gupta submitted evasive replies such as "I do not know" as to why separate bids were submitted by the three closely related entities. x) The Commission further noted that Mr. ....
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....Austere System Private Limited dated 19.02.2018 for sharing of soil testing work. It is mentioned therein that Toy Fort & Austere System Private Limited are sister concerns and share common director Sh. Suresh Kumar Gupta. A. 28. Yes, seen. Q. 29. If both M/s Toy Fort and M/s Austere System Pvt. Ltd. were sister concerns, having common directors, why your firm submitted a separate bid in the soil testing tenders of Jhansi & Meerut divisions in 2017? A. 29. I do not know." Extracts from the statement of Mr. Rahul Teni, Director, Austere Systems "Q 25: I am showing you the schedule forming part of the balance sheet of M/s Toyfor: (Exhibit 14). There is a transaction mentioned as "Advanced Paid to Suppliers" between your company and M/s Toyfort, which shows both the firms were well known to each other and had business relationship A.25. As explained earlier my company formed a consortium M/s Toyfort in which Toyfort has to do printing of soil health cards for my company and the above said payment was made for the card printing work Further, my company prepared domain name and website hosting for. M/s Toyfort for which our company r....
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....As per the said data the Registered address of your firm is E- 09 Kamala Nagar New Delhi, which is also the address of another bidder in the said tenders namely M/s Toyfort as per its GST Registration (Exhibit -15). Please explain how two rival firms in a Government tender firms have common address. A. 30. Yes, because M/s Toyfort had space available with them, hence, we took the space for registration of our company Q 31. What was the purpose for submitting three different bids by related firms in the aforesaid tenders? A. 31.1 do not know" xiii) In view of the foregoing, the Commission took the view that three bidders, namely, Austere Systems, M/s Toyfort and Fimo Infosolutions, which were related concerns through family as well as business relationships, made concerted efforts and rigged the bids in 2017 soil testing tenders for Meerut and Jhansi divisions with a common objective to ensure that Austere Systems wins those tenders. The Commission agreed with the DG's finding that bids submitted by M/s Toyfort and Fimo Infosolutions were not submitted with the intention to compete and win but to create a façade of competition. 18. S....
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....the first place, Mr. Praveen Kumar Agarwal accepted that he had no interest in getting the soil testing tenders of 2018 for Meerut and Saharanpur divisions. At the same time, he could not explain why his company, Yash Solutions, submitted high price bids in those tenders. In this regard, the Commission found no merit in the arguments advanced by the said Opposite Party, and is in agreement with the DG that there could be no explanation for the submission of high price bids by Yash Solutions, except that they were cover bids made in support of bid of Austere Systems in the said divisions and to enable Austere Systems to bag the tenders. (vi) The Commission observed that only three bidders, namely, Austere Systems, Yash Solutions and Delicacy Continental, had submitted bids in the 2018 Meerut and Saharanpur tenders. From the above, the Commission inferred that there was an arrangement/ agreement between the said three entities to manipulate the process of bidding in the soil testing tenders of 2018. (vii) The Commission agreed with the findings of the DG that Austere Systems, under an arrangement/ understanding with rival company Yash Solutions, had geographically a....
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....ssion noted that Mr. Rahul Teni submitted evasive replies with regard to the reasons for not submitting a bid in the Moradabad Division soil testing tender in 2017, although it had already won a contract for soil testing for the Meerut division. Mr. Rahul Teni submitted that Austere Systems was not keen to bid for the 2018 Bareilly division tender although he gave no reasons for the same. Further, Mr. Rahul Teni could not provide any explanation for not submitting bids in the Aligarh and Moradabad tenders of 2018, although his company had submitted bids in the Meerut and Saharanpur tenders, which were floated after the tendering process of Aligarh and Moradabad was completed. Accordingly, the Commission concluded that Austere Systems, in collusion with Yash Solutions, had reached an understanding to geographically divide the soil testing tenders issued by the State of Uttar Pradesh during 2017 and 2018 between them. Mr. Rahul Teni played an active role in the anti-competitive conduct unearthed by the DG in relation to Austere Systems. He has not been able to refute the findings against him and is, as such, liable under Section 48 of the Act. 23. The Commission noted that Mr. Jai....
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....efore, the Commission found the identified individuals of the Opposite Parties liable in terms of the provisions of Section 48(1) and 48(2) of the Act. 26. The Commission noted that cartelisation, including bid rigging, is a pernicious form of anti-competitive conduct under the provisions of Section 3 of the Act. None of the Opposite Parties or their individuals have been able to rebut the evidence found against them by the DG of having indulged in anti-competitive conduct and manipulating the bids/bid rigging in respect of tenders floated by the Department of Agriculture, State of Uttar Pradesh. The Commission found that certain Opposite Parties and their individuals had also resorted to the production and submission of fake invoices and grant of false certificates for making some of the Opposite Parties eligible for participating in the bid process so as to effectively act as cover bidders in respect of the winning bidders. Some of the Opposite Parties did not even have prior experience and were later blacklisted. 27. In view of these findings, the Commission held that M/s Austere System Pvt. Ltd. and M/s Fimo Infosolutions Private Limited to have contravened the provisions....
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.... With regard to the submission of the Opposite Parties that they have derived no income from tenders in question and hence zero penalty would arise, the Commission found no merit in the said submission and stated that no narrow interpretation of the relevant turnover can be taken as suggested. The Commission, in this regard, reiterated its decision dated 03.02.2022 in Suo Motu Case No. 2 of 2020 (In Re: Alleged anticompetitive conduct by various bidders in supplying and installation of signages at specified locations of State Bank of India across India): "115. In relation to the contention that turnover derived from the Impugned Tender alone should be considered, it is noted that a bare perusal of the Excel Crop Care judgement makes it clear that nowhere is held or otherwise declared that relevant turnover should he limited to the turnover earned from the specific customer or tender. Such a plea would fratrate the underlying policy objective of deterring the cartelists besides providing them a fertile ground for regulatory arbitrage. For example, if owing to the understanding between the bidders. If some or few bidders have refrained from participating in the particular te....
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....l No. 36 of 2022- Austere Systems has challenged the impugned judgment dated 04.04.2022 passed by the Respondent whereby it has held the Appellant guilty of contravening the provisions of Section 3(3)(c) and Section 3(3)(d) read with Section 3(1) of the Act and imposed a total penalty of Rs. 44,25,569/- (Rupees Forty-Four Lacs Twenty-Five Thousand Five Hundred and Sixty- Nine Only) i.e. five percent of the total average turnover of the Appellant company. 36. The Respondent has held the Appellant to be in collusion with three parties namely M/s Toyfort, M/s Fimo Infosolutions, M/s Delicacy Continental and M/s Yash Solutions. 37. The Appellant assails the findings of the Respondent on the following grounds: a) One crucial aspect which completely gone a miss by the Respondent is the fact that the Appellant was blacklisted by the department of Agriculture, Govt. of Uttar Pradesh which had been struck down by the Hon'ble Allahabad High Court and the ignorance of this crucial aspect seems to have prejudiced the Respondent in painting everyone black. b) It is relevant to state here that as per its own case and admission, the Respondent has held that the Appella....
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.... of the Commission with respect to Fimo Infosolutions and Toyfort having no experience in the soil testing prior to the present tender has been erroneously and illegally without any application of mind being linked to the Appellant without any basis. The same, if a concern could have been addressed by the tender issuing authority i.e. the Department of Agriculture, State of Uttar Pradesh and not the Respondent as done in the present case. Even ignoring the error on the part of the Commission in the said finding, the Commission has completely ignored the certificate by the soil testing officer Gohana certifying M/s Toyfort had successfully completed the soil data entry and soil health cards which has been annexed as Annexure A-4 in the main appeal. h) The Commission also relies upon the experience certificates issued by the Appellant to Delicacy Continental and connects the same to the fact that the Appellant had issued the same with an objective to make Delicacy eligible in the Meerut and Saharanpur tenders of 2018. The said evidence cannot be called to be conclusive in nature as the Respondent has completely ignored and overlooked the statement of the Appellant wherein, h....
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....ash Solutions. 40. The Commission blindly follows the statement given by the director of Yash Solutions and binds the Appellant and holds it liable which is not permissible in law. 41. The appellant states that the most crucial point which has gone amiss is that even if assumed, but not admitted, that there was an agreement between the parties, there was in fact no Appreciable adverse effect on competition within the meaning of Section 3 of the Act and none of the negative factors present under Section 19 (3) of the Act got fulfilled in the present case and hence the entire case built up against the Appellant from the DG to the Commission was flawed and suffered from grave illegalities and hence is liable to be set side. 42. The Appellant further submitted that the Commission has also erroneously overstepped the concept of relevant turnover as spelled out by the Hon'ble Supreme Court in the case of Excel Crop Care Vs. Competition Commission of India (2017) 8 SCC 47, wherein the Supreme Court had specifically held that the penalty if any shall be calculated from the relevant turnover only. It is stated that the turnover of the Appellant from its business of soil testing....
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....ons were flawed, unjust, and legally unsustainable. 47. The appellant contends that the Director General (DG) failed to properly apply and consider the relevant statutory provisions, especially Section 19(3) of the Competition Act, 2002, which is crucial to determine if Section 3 of the Act was contravened. The DG conducted an incomplete and biased investigation, ignoring essential facts such as the absence of defined relevant product and geographic markets, failure to examine key evidence like call records and emails, and neglecting to consult important witnesses from the Department of Agriculture, Uttar Pradesh. The appellant also points out that the DG accepted forged documents without verifying contrary affidavits and ignored the fact that the tenders involved fixed government-set prices, precluding any price rigging. 48. Further, the appellant highlights that the entities involved-Austere Systems, Fimo Infosolutions, and Toyfort-are closely related family concerns, constituting a single economic entity exempt from anti- competitive agreement allegations under established legal precedents. The DG ignored key facts such as lack of collusion indicators (no common IP address....
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....in bid-rigging in connection with soil testing tenders floated by the Department of Agriculture, Government of Uttar Pradesh. The Commission has found that Appellant No.1 has colluded with entities such as Austere Systems and Toyfort, based partly on familial and business connections, and has imposed penalties under Sections 3(3)(c), 3(3)(d), and 3(1) of the Competition Act. A separate penalty has also been imposed on Appellant No.2 under Section 48. 53. The counsel for the Appellants submitted that the Commission's conclusions were based on associations between Fimo and other entities- Austere Systems, Toyfort, and Delicacy Continental-grouped in "Set 2" of the case. The Appellants argue that these firms are related or family concerns, forming a single economic entity, and therefore cannot be said to have colluded under Section 3 of the Act. This principle, they assert, has been well established in Indian case law (e.g., Shamsher Kataria v. Honda Siel, Exclusive Motors v. Lamborghini) and international jurisprudence. The Appellants point out that the Commission's own findings acknowledge the relatedness of these firms but inconsistently apply this understanding to still infer c....
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....ivity (soil testing tenders), not the total turnover of the company-especially when they had no turnover from these tenders due to technical disqualification. The Commission, however, calculated the penalty based on total turnover by referencing its own case law, allegedly sidestepping the binding Supreme Court precedent, making the penalty arbitrary, excessive, and unlawful. 58. Finally, the Appellants underscore that in similar cases, such as FCI v. Shivvalik Agro and Eastern Railway v. Chandra Brothers, the Commission chose not to impose penalties on MSMEs in view of mitigating circumstances and to avoid harming competition. The decision to impose a severe penalty on Fimo Infosolutions, an MSME, stands in contrast to this trend and undermines the Act's intent to promote fair competition. They seek the impugned order to be set aside as being based on incomplete analysis, lack of evidence, and misapplication of law. 59. The Appellants challenge the penalty imposed by the Commission on multiple grounds, primarily arguing that it is arbitrary, excessive, and contrary to established legal principles. They contend that the Commission erroneously calculated the penalty based on t....
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....ents demonstrate business and family relationship between Toyfort, Fimo and the Appellant which was the beneficiary of Meerut and Jhansi tender process. Further, there was collusion between Toyfort, the Appellant and Fimo in the 2017 tender process. It was furthermore held that cover bids were given by Toyfort in support of the Appellant so that the tender process is not cancelled due to insufficient number of participants. (b) In the Delicacy judgment, this Hon'ble Tribunal had observed and held that due to good relationship with the Appellant, the work was sub-contracted to Delicacy and payments were made by the Appellant to Delicasy for conducting the soil testing work. Further, Delicacy was only a namesake partner while the actual work was managed and executed by the Appellant. Furthermore, the MoU signed between the Appellant and Delicasy were created for submission to the investigation before the CCI and that the Appellant had complete control over Delicacy. The bid prices were also decided by the employees of Delicacy in discussion with the Appellant and that there was pre-emptive action to hide facts regarding their collusive relationship and bid-rigging of ten....
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....ellant in 2018, and for this purpose a Memorandum of Understanding dated. 19.02.2016 was entered into which reflects both entities as sister concerns. 65. Ld. Counsel stated that Austere did not have prior soil testing experience and failed to abide by the terms and conditions of the tender upon submission of bids. The Austere is a software development company providing IT services and solutions to startups and enterprises and has no prior experience of soil testing. Further, Mr. Rahul Teni, the Director of the Austere, had submitted that they had participated in the tender process as there were relatively few players in the soil testing business and had no prior soil testing experience. The Directors of the Austere and Toyfort could not provide any justification as to why bids were submitted by related/sister concerns which had no experience of soil testing work and did not even qualify the terms and conditions of the 2017 Meerut and Jhansi tenders. 66. He further stated that Mr. Ankur Kumar (Director of Delicacy) had admitted that the bids prices for the 2018 tender process for Meerut and Saharanpur were decided by his employees in discussion with the Austere. 67. The Di....
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....ad also not taken permission of the Department of Agriculture, before sub-contracting the work to Delicacy. 70. Ld. Counsel submitted that Mr. Ankur Kumar Director of Delicacy had taken a contrary stand vis-à-vis Austere with respect to the MoU executed between them. Mr. Ankur Kumar submitted that he was unaware of the terms and conditions of the tenders and was also not aware as to whether any Memorandum of Understanding existed for the same. However, he had submitted two versions of the MoUs related to the sub- contract of soil testing work by the Appellant. Both copies were fabricated to prove that the parties had a contract amongst them, thereby indicating a prior business relationship. Moreover, one of the copies of the MOU was sent by Mr. Mandar Teni of the Appellant to Mr. Ankur Kumar just before recording of the statement of Mr. Ankur Kumar before the DG. 71. Ld. Counsel stated that on the other hand, Mr. Rahul Teni Director- Austere Systems submitted that an MoU was executed with Delicacy for undertaking the soil testing work. In response to the statement given by Mr. Ankur Kumar that there was no MoU between the Appellant and Delicacy, Mr. Teni had no comment....
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....over. Similarly, in the present case and as already held in the Yash Solutions judgment, the Appellant was acting as the leader of the cartel under an understanding arrangement with Yash Solutions to geographically allocate the soil testing tenders and organised the big rigging. Therefore, the penalty as imposed on the Appellant by CCI at 5% of the relevant turnover should be upheld as directed in Yash Solutions. Mr. Rahul Gajanan Teni 74. Ld. Counsel for Commission stated that the DG Report and investigation brought out the collusive and controlling nature of the Appellant Sh. Rahul Gajanan Teni and other related firms in submitting their bids. Pertinently, none of the directors could submit any explanation for their conduct and gave evasive replies on being questioned, which reaffirmed that through collusion and concerted action, these entities created a façade of competition and rigged the bids in the 2017 Meerut and Jhansi and in 2018 for Saharanpur and Meerut divisions with the objective to ensure that Austere wins the said tenders. 75. Ld. Counsel submitted that the Appellant Sh. Rahul Gajanan Teni is responsible for managing the affairs of Austere Systems. He....
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....hough his company Austere had submitted bids in the Meerut and Saharanpur tenders, which were floated after the tender process of Aligarh and Moradabad were completed. Accordingly, Austere in collusion with Yash Solutions, had reached an understanding to geographically divide the soil testing tenders during 2017 and 2018 between them. The Appellant played an active role in the anti-competitive conduct and was unable to refute the findings against him. Further, Mr. Praveen Kumar Agarwal-MD, Yash Solutions, in his statement submitted that his entity had submitted high bid prices in the 2018 Meerut and Saharanpur tenders, as he was not interested in wining those tenders. 80. Ld. Counsel highlighted the contrary stand taken by the Directors of Delicacy and Austere with respect to the MoU executed between them: (a) Mr. Ankur Kumar on behalf of Delicacy submitted that he was unaware of the terms and conditions of the tenders and was also not aware as to whether any Memorandum of Understanding existed for the same. However, he had submitted two versions of the Mols related to the sub-contract of soil testing work by Austere. Both copies were fabricated to prove that the partie....
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.... submission of the Commission that Appellant No. 1 had no experience in soil testing and did not have technical eligibility to bid in the tender process. This would be clear from the following: (a) Appellant No. 1 is stated to be a company engaged in the business of provision of support services, legal consultancy services, management consultancy etc. and has no experience in soil testing. Appellant No. I had never purchased any soil testing machine or established any soil testing lab or any other infrastructure required for soil testing. Despite this, it participated in the tender process. (b) In his deposition before the DG, Appellant No. 2 had admitted that Appellant No. 1 had no experience of soil testing work and did not fulfil the terms and conditions for eligibility in the said tenders and the bid was submitted with hope of receiving the tender in his favour. He further gave evasive replies as to why three separate bids were given by three closely related entities i.c., Austere, Appellant No. 1 and Toyfort. 84. The Respondent further submitted that there were overlapping relations and shareholding between the Appellants and Austere: (a) Appellan....
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....al bidder. 87. Appellant No. 2 in his deposition could not justify how Appellant No.1 was registered at Toyfort's address. 88. In regard to the imposition of penalty Ld. Counsel has made the following submissions: (a) The Appellants have placed reliance on the decision of the Hon'ble Supreme Court in Excel Corp Limited v. Competition Commission of India and Others [(2017) 8 SCC 47]. On the same lines as the other appellants herein. (b) The Counsel submitted that the Appellants are equally guilty of contravening the provisions of the Act, as they had a crucial role in executing the scheme of bid-rigging orchestrated by Austere. Without the active role of the Appellants, Austere would not have won the tenders and been successful in the bid-rigging process. He further submitted that this Hon'ble Tribunal in the judgment passed in Toyfort has already held that the Appellants had colluded with Austere and Toyfort to rig the bids in the 2017 tender process of Meerut and Jhansi. It is further submitted that the Act itself does not provide for any distinction in the consequences based on the extent of role played in case of such serious contravention of ....
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....ness. Q.3 Has your company M/s Austere Systems Pvt Ltd, submitted bids in the tenders for Soil Testing floated by Govt. of UP? If yes, please provide details? A.3. Yes, our company M/s Austere bid for Meerut and Jhansi Divisions in 2017 and in Meerut, Saharanpur and Bareilly Divisions in year 2018 tender. Shri Suresh Gupta was strategic investor in our company. In mid of 2017 my company had purchased a second hand soil testing machine from Mumbai based vendor in which Shri Suresh Gupta had invested majority of the capital. Q.6. Did you or your firm have any relation with any other firm or their Directors/Proprietors which had submitted bids in the 2017 & 2018 soil testing tenders of UP Government? A.6. I was aware about M/s Fimo Info and M/s Toyfort. I had some prior business relation related to data entry work with Fimo while Toyfort was a strategic investor in our company. Q.10. Did you or your company had any experience in soil testing work when you had bid in the soil testing tenders of UP Government during 2017? If Yes give details. A.10. No, my company was not having any soil testing work experience at the time of submitti....
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....epartment? A 15 There was no permission from any authority to use the address of the Assistant Director (Soil testing) for using their address in the GST registration. However, I do not remember whether the soil testing authorities has given me any No objection certificate (NOC) for using their address in the GST registration. Q. 16. As per reply of ICICI Bank (Exhibit-7), the Demand Draft Bearing No. 505282 in respect of your company M/s Austere Systems, which was submitted in the Meerut tenders of 2017 (Exhibit 8), was made by Ms Esha Gupta, a Director, M/s FIMO INFO Solutions Pvt. Ltd, from her own account. How and why did the Director of another Firm got prepared a Demand Draft for your company from her own account despite the fact that both were rival bidders in the said tenders? A. 16. I do not know. I knew Mrs. Esha Gupta who is wife of Shri Shikhir Gupta a Director in my company and she is my Professional friend and also a Director of M/s Fimo Info. I have no information how the demand draft submitted by my firm was got prepared by Mrs. Esha Gupta from her own bank account and I do not have any justification for the same Q. 25 I am showin....
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....s A 65. Yes, I have seen. Q. 66. Why was your bid rejected in the Bareilly division 2018? A. 66. I do not know. Q. 67. As per technical bid chart of Bareilly division tenders of 2018, Austere's technical bid in the soil testing tender was rejected on the grounds that, 3 years' balance sheet not submitted, Annual turnover is not Rs 3 cr, last 3 years IT Returns with Profits not submitted, Lab Incharge with 3 years' experience not available and Proof of availability of ICP machine/Undertaking for establishment of Lab not submitted. Whether the said grounds for rejection were correct for your bid? A. 67. It could have been a mistake & I was also not keen for Bareilly tender. Q. 68. Why were you not keen for Bareilly but for other divisions? A. 68. I do not know. Q. 69. Why your company did not submit bids in the soil testing tenders of Moradabad and Aligarh Divisions in the year 2018? A. 69. As we were having limited resources. Q 70 Why your company submitted bids in Meerut & Saharanpur divisions soil testing tenders of 2018? A. 70. As we were having limited resources ....
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....roprietor of M/s Toyfort, a rival bidder in the Meerut and Jhansi tenders of 2017, was a "Strategic Investor" in M/s Austere Systems Pvt. Ltd. and had invested funds for procuring a soil testing machine even prior to the issuance of the 2017 tenders. This clearly indicates that a prior understanding existed between the two parties to undertake soil testing work jointly. This is corroborated by the fact that a Memorandum of Understanding (MoU) was subsequently signed between M/s Austere Systems Pvt. Ltd. and M/s Toyfort to jointly undertake soil testing work. It has also been established that Sh. Suresh Kumar Gupta's son, Sh. Piyush Gupta, was appointed as a Director in M/s Austere Systems Pvt. Ltd. v) Sh. Rahul Teni also failed to explain how his company qualified in the technical bid and was awarded the contract despite not fulfilling the prescribed eligibility criteria in the Meerut and Jhansi tenders of 2017. 93. From the submission of Sh. Teni it can be concluded that all three bidder firms in the Meerut and Jhansi division tenders of 2017, namely M/s Austere Systems Pvt. Ltd., M/s Toyfort, and M/s Fimo Infosolutions, were related concerns, connected both through fa....
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....Government/ Semi _ Government .or . standard - Institutions, Further, the company/firm's Proprietor/Director should also have experience of soil testing work of 15 years, for which experience certificate is to be enclosed with bid". Did your firm fulfil the said condition, before submission of bids in the aforesaid tenders? A. 11 . No. Q. 12. As per condition no 18 for the Meerut Division tender (Exhibit -2) and condition 14 of the Jhansi Division tender (Exhibit -3) of the terms and conditions for soil testing tenders of 2017, it was required that the bidder should have experience of working on high tech equipment ICP (lndictivity Cupeled Plasma Spectrometer). Did your firm had any experience of soil testing on ICP machine/ high tech soil testing machine? A 12. No, my firm had no experience of working on high tech equipment ICP (lnductivity Cupeled Plasma Spectrometer). Q. 13. Why your firm submitted bids in the aforesaid tenders even though your firm had no experience of soil testing, and did not fulfil the terms & conditions as per tender requirement? A. 13. Although my firm had no experience of soil testing or of working on ICP m....
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....ed for M/s Austere regarding data entry work. Q. 23. I am showing you the copy of Statement of transactions in your firm's current account number: 039905005145 for the period 01.01.2017 to 31.03.2017 (Exhibit -8) in which your firm has received Rs . 1,39,409 on 02.01.2017, Rs 44.685 on 13.01.2017 Rs. 52,240 on 10.02.2017 Rs. 34,000 on 06.03.2017 & Rs. 4500 on 25.03.2017 from M/s Austere System Private Limited. A. 23. Yes, I have seen. Q . 24. Why M/s Austere transferred such amounts at different intervals to your firm's account? A. 24. The payment received in our firm's account is related to data entry work and/or some software development work which our company had undertaking for M/s Austere Systems Pvt. Ltd. Q.25 How is Sh. Shikhir Gupta associated/related with M/s Austere Systems Pvt Ltd? A. 25. I do not know. Q. 26. I am showing you list of shareholders as on 31.03.2018 in M/s Austere Systems Private Limited (Exhibit -9), wherein Sh Shikhir Gupta's shareholding in the said firm is 30%. A. 26. Yes, I have seen. Q. 27. I am showing you a copy of the Demand Drafts Nos 505284,505282 an....
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....idder in the said tenders of 2017 belong to her sister Mrs Nirmal Gupta wife of Sh Suresh Kumar Gupta. iii) Sh Gupta admitted that his son Sh Shikhir Gupta assists him in his business and therefore his mobile and email id is mentioned in the bid document of Meerut tender as well as other statutory registrations. iv) Sh Gupta submitted "I do not know when enquired as to how the Principal place of Business of M/s Austere Systems Pvt Ltd (OP-5) another bidder in the 2017 tenders, in its GST registration is having the address of his firm. However, Sh Gupta admitted that his firm had undertaken data entry and software related work for M/s Austere Systems Pvt Ltd v) Sh Jai Kumar Gupta initially feigned ignorance to the relationship of his son Shikhir Gupta with M/s Austere Systems Pvt. Ltd however, on being confronted with evidence admitted that' his *son is having a shareholding of 30% in the said firm. vi) Regarding preparation of Demand draft of Rs. 'I lakh towards EMD for M/s Austere Systems Pvt. Ltd in the 2017 soil testing tender, from the bank account of Smt Esha Gupta, who is also a Director of M/s Fimo Infosolutions Pvt Ltd, Sh Jai Kum....
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....ul Teni also in his statement on 19.02.2021 submitted that he has no information as to how the DD submitted by M/s Austere in the Meerut tenders in the year 2017 was prepared from the bank account of a Director of a rival bidder M/s Fimo Infosolutions Pvt Ltd and that he has no justifications for the same. 102. Sh Jai Kumar Gupta did not submit any cogent reply as to why his firm had submitted bids in 2017 Meerut and Jhansi division soil testing tenders although his firm had no experience of soil testing and was not even fulfilling the eligibility terms and conditions mentioned in the said tenders. Further, Sh Gupta submitted an evasive reply "I do not know" as to why separate bids were submitted. by three closely related firms. 103. It is the submissions of the appellants that at the particular time of tendering for the Meerut and Jhansi Division Sh. Shikhir Gupta was neither a shareholder nor a Director of M/s Austere Systems. He only became a shareholder in February, 2018. Similarly, it has also been argued that Smt. Esha Gupta was not a Director of Fimo Infosolutions and only an authorised signatory. 104. In case of Smt. Esha Gupta her links to Fimo Infosolutions are v....
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....he concept of a "single economic entity," wherein the subsidiaries and their controlled dealers were considered part of the same group under direct management and ownership. However, in the present case, M/s Toyfort and M/s Fimo Infosolutions are independent business entities with separate legal personality, separate commercial interests, and no common controlling ownership. The mere fact of being categorized as "related parties" for certain transactions does not merge their economic identity into one. In fact, it negates the basic foundation of bidding which entails all participants to bid independently of each other. Independence and secrecy are the key elements of any tendering. The participation in a tender by related parties directly contravenes the fundamental principles and objectives of tendering as there is neither independence nor secrecy in such bids. Rather, it confirms the collusion in bids and bid rigging. The ratio of the case does not apply to the present case. 109. In Exclusive Motors Pvt. Ltd. v. Automobili Lamborghini S.p.A., the CCI held that where a principal and its exclusive distributor operate as a single economic entity, they cannot be treated as separat....
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.... machine and other equipment's so that I can take up this project. Q.9. Did you or your Firm have any experience in soil testing work when you had bid in the Soil testing tenders of UP Government during 2017? A.9. No, my company did not have any soil testing work experience before the bids of 2017. Q 57. Your company had quoted a price of Rs 122/ 81.50 in the Aligarh tenders of 2018 respectively however, in the tenders of Meerut & Saharanpur you had bid Rs 147.25/Rs.98.25 and Rs 148.6/Rs98.5 for the 12/6 parameters respectively. A copy of the comparative bids of the respective divisions is being shown as. A. 57 Yes, I have seen Q. 58. Why an increase of Rs 26.6/17 (21.8%7/20.8%) between Aligarh and Saharanpur bids of 2018? A. 58. As I was not interested in getting the contract for Saharanpur that is why my firm had quoted high price in the above said two tenders. Q. 59. Why an increase of Rs 25.25/16.75 (20.7/20.5%) between Aligarh and Meerut bids of 2018? A. 59. As I was not interested in getting the contract for Meerut that is why my firm had quoted high price in the above said two tenders. Q. 60. Yo....
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.... and submission of Sh. Rahul Teni that M/s Austere Systems Pvt. Ltd. itself had submitted a bid in the 2018 Bareilly tenders, which was rejected at the technical stage due to non- submission of the last three years' balance sheets, income tax returns, absence of a lab in-charge with requisite experience, and non-availability of an ICP machine. 114. In response to a question regarding the rejection of its 2018 Bareilly bid, Sh. Rahul Teni stated that it might have been a mistake and further added that he was not keen on participating in the Bareilly division tender, though he failed to provide any reasons for the same. Similarly, he could not offer any rational explanation for not submitting bids in the Aligarh and Moradabad tenders of 2018, even though his company had participated in the Meerut and Saharanpur tenders, which were floated after the tender processes of Aligarh and Moradabad had already been completed. He also gave evasive replies when questioned about not submitting a bid in the Moradabad soil testing tender of 2017, despite already holding a soil testing contract from the Meerut division. 115. It has also been noted that although M/s Yash Solutions had already ....
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.... and Containers Ltd. Vs. Union of India and Others, (2020) 16 SCC 615. The Hon'ble Supreme Court in further paras 81 & 84 of Judgment supra has made the following observations: "81. There may not be direct evidence on the basis of which cartelisation or such agreement between the parties can be proved as these agreements are normally entered into in closed doors. The standard of proof which is required is one of probability. 84. Even in the absence of proof of concluded formal agreement, when there are indicators that there was practical cooperation between the parties which knowingly substitute the risk of competition, that would amount to anti- competitive practices." 120. In the present case the evidence is very direct and is proven from documents on record and conduct of the individuals involved making it a clear case of anti-competitive practices. 121. Based on the material on record; evidence of OPs; and judicial precedent Rajasthan Cylinders (Supra), we are of the considered opinion that Commission has correctly and legally held the appellants responsible for violation of Section 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act and there is no er....
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....f responsible officers for evaluation of technical and price bids. As per the practice, the lowest bidder is invited by the Committee for negotiations and after negotiations, the Committee submits the report giving its recommendations and the contracts are awarded and after that the payment for the purchased tablets is released by the regional offices concerned. 3.4. It was found that right from the year 2002, up to the year 2009, all the four parties used to quote identical rates, excepting for the year 2007. In 2002, Rs 245 was the rate quoted by these four parties and in the year 2005 it was Rs 310 (though the tender was scrapped in this year and the material was purchased from Central Warehousing Corporation @ Rs 290). In November 2005, though the tenders were invited, all the parties had abstained from quoting. In 2007, M/s UPL had quoted the price which was much below the price of other competitors. In 2008, all the parties abstained from quoting. while in 2009 only the three appellants, barring Agrosynth Chemicals Ltd., participated and quoted uniform rate of Rs 388, which was ultimately brought down to Rs 386 after negotiations. It was also found that the tender do....