CCI dismisses allegations of bid-rigging in UP electricity tender*

On January 24, 2018, CCI dismissed an information filed by Mr. Arun Mishra, against 17 individuals and companies (‘OPs’), for participation in an alleged bid rigging in contravention of Section 3(3)(d) of the Competition Act. The alleged bid rigging related to a tender floated by UP Power Corporation Limited (‘UP Power Corp’) in 2013 for procurement of 6000 MW of electricity. OPs No. 1 to 4 were the erstwhile government officials of various government departments or companies in the State of Uttar Pradesh, whereas OPs No. 5 – 17 were the companies that participated in the tender and engaged in the business of power generation.

It was contended that OPs No. 1 to 4 colluded with OPs No. 5-17 in accepting a new higher tariff of ₹ 5.90/- per unit, against the previously decided tariff of ₹ 5.09/- per unit. It was further alleged that such increase in the tariff was achieved on account of collusion between the bidders.

As also in the case involving GETCO discussed above, the OPs raised the objection that CCI had no jurisdiction in the instant matter as the issues fell within the purview of Electricity Act, where the Uttar Pradesh Electricity Regulatory Commission was the concerned authority. CCI took the view that it had the jurisdiction to proceed with issues that pertained to anti-competitive conduct and proceeded on this basis.

As regards the collusion alleged between OPs No. 1-4 and OPs No. 5-17, CCI held that OPs No. 1-4 were only government officials and were not engaged in the same business as that of OPs No. 5-17. As such, Section 3(3)(d) of the Competition Act covers an anti-competitive agreement between parties that are engaged in the same trade or area of practice. Further, as regards the alleged collusion between OPs No. 5 – 17, CCI held that the only evidence provided by the informant related to a meeting in Hotel Leela, Gurgaon, but the said meeting was only attended by officials of one enterprise i.e. OP No. 6 and therefore, could not be viewed as an evidence of meeting with competitors for fixing bid prices. Therefore, CCI held that no substantiating evidence was brought on record to prove even a prima facie indication of an agreement and passed a closure order under Section 26(2) of the Competition Act.

*Case No. 43 of 2017.

Published In:Inter Alia - Special Edition Competition Law - March 2018 [ English
Date: March 7, 2018