CCI Penalizes M/s Klassy Computers, M/s Nayan Agencies and M/s Jawahar Brothers for Engaging in Bid-Rigging

On March 17, 2021, CCI issued its decision on allegations of bid-rigging and cartel conduct against Usha International Ltd. (‘OP-1’), M/s Klassy Computers (‘OP-2’), M/s Nayan Agencies (‘OP-3’), M/s Jawahar Brothers (‘OP-4’), in relation to bids invited by Pune Zilla Parishad (‘OP-5’) ( ‘OPs’).[1]

The informant had alleged that the tender invited by OP-5 for procurement of picofall-cum-sewing machine, as part of a social welfare scheme of the Government of Maharashtra, was manipulated in favour of OP-1, and that the bids submitted by OP-2 to OP-4 were identical.

The CCI found that M/s Klassy Computers, M/s Nayan Agencies, and M/s Jawahar Brothers had quoted similar bid prices based on the evidence collected by the Director General (‘DG’). It arrived at this finding with additional evidence such as IP addresses, call data records, and close coordination in other tenders, to conclude that the bidding process was rigged. CCI exonerated Usha International for the lack of sufficient evidence and stated that lack of proper due diligence and verification by a manufacturer before issuing authorization letters in relation to their bids, cannot, in itself, be a ground to hold a party in contravention.

CCI imposed a penalty on the three entities M/s Klassy Computers, M/s Nayan Agencies, and M/s Jawahar Brothers of INR 10,00,000 respectively and issued cease and desist directions. It noted that collusion in public procurements not only defeats the tendering process but also has an adverse impact on the exchequer.  It also imposed a penalty on the individuals of M/s Jawahar Brothers identified by the DG as being responsible for the conduct in terms of the provisions of Section 48 of the Act.

Erratum

The special edition of our Inter Alia issue on April 29, 2021 carried a version of a case summary titled ‘CCI Penalizes Usha International Ltd. and Others for Engaging in Bid-Rigging and Cartel Conduct’. The case summary inadvertently suggested that CCI penalized Usha International Ltd., which it did not. The error is regretted, and the update has been duly revised.

 

[1] Case No. 90 of 2016, Order dated March 17, 2021

Published In:Inter Alia Special Edition - Competition Law - May 2021 [ English
Date: May 31, 2021