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2016 (12) TMI 1734 - AT - Indian LawsAnti-Competitive act - Quantum of penalty - The Commission has calculated the penalty at the rate of 2% against the maximum of 10% on the average turnover of the Appellants for the years 2010-2011, 2011-2012 and 2012-2013 - Held that:- The term 'turnover' is interpreted for the purposes of Section 27(b) of the Act to mean value of goods and services which are made subject matter of investigation under Section 26 of the Act and hence liable for punishment under Section 27 of the Act - Penalty has to be calculated with reference to the gross premium received by UIICL as insurance provider under RSBY/CHIS scheme and penalty for each of the Appellants will be a proportion of their share in such premium. In determining the rate of penalty at 2%, the Commission has considered the peculiarities of the insurance sector and the importance of insurer solvency for the consumer, as a mitigating circumstance. Bid rigging in public procurement for a social welfare scheme was treated to be an aggravating circumstance. The aggravating circumstance identified by the Commission does not apply to the facts of this case. It cannot be denied, and the Commission had taken cognizance of the internal note of OICL(reproduced in paragraph 6.6 of this Order) indicating that the Appellants were aware of the likelihood of incurring losses and OICL actually refused to share business, but despite that, UIICL proceeded to bid for the tender. From such conduct, it is evident that the Appellants who were Public Sector Companies, in their zeal to participate in a Government sponsored Health Insurance Scheme benefiting the poor, ignored prudence and the restraints of the competition law. Such conduct cannot constitute an aggravating circumstance. However, the burden of penalty will ultimately be transferred to public, as the Appellants are owned by the Government - the penalty be restricted to 1% of the relevant turnover. Appeal allowed in part.
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