TMI Blog2013 (4) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... on order dated 16.04.2012 passed by the Competition Commission of India ( CCI hereinafter). By the impugned common judgment, the CCI has held all the appellant companies guilty of the contravention of Section 3(3)(d) of the Competition Act, 2002 ( Act hereinafter) wherein, all the companies were found to have manipulated the bidding process in the electronic reverse auction held by the informant - Coal India Limited ( CIL hereinafter). 2. In its information the CIL had limited its allegations to the appellants only. It is a common case that CIL is a Public Sector Undertaking (PSU), which is engaged in the business of production of coking and non-coking coal of various grades through mining operations in different parts of India. CIL has the subsidiaries also. In the information, it was alleged that parties Nos.1 to 10 ( appellants hereinafter) named in the information and the other explosive suppliers in India were engaged in the activity of manufacturing and supply of different types of explosives such as bulk explosives, cartridge explosives and related accessories in India. The opposite party No.11 in that information, the Explosive Manufacturers Welfare Association ( EMW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppliers had caused and is continuing to cause harm to the Informant in purchase of explosives and this cartelization had resulted in an appreciable adverse effect of competition in India in the relevant market of explosives including market of bulk explosives, cartridge explosives and fuses and detonators. 6. According to the Informant, this cartelization was invoked since 2005 and had continued even till the date of information. The Informant alleged that there was a clear breach on the part of the appellants of Section 3(3)(a), 3(3)(b) and 3(3)(d) of the Act, in as much as these appellants had boycotted the Electronic Reverse Auction organised by the Informant for finalisation for running contracts on 4th and 5th January 2010. Some of the appellants had also written identical letters to the Informant in this connection and that had resulted in stopping of the supplies. The Informant alleged that the supplies were affected in 2006, 2007, 2009 and 2010. It was also alleged that by boycotting proposed Electronic Reverse Auction, the bidding process was affected and that was also done with the sole idea of avoiding Electronic Reverse Auction. 7. It was clear from the informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s would be determined. The EMWA, as also the appellants basically pleaded that they did not know the ceiling price so fixed by CIL, which was to appear on their electronic screens. They also put forward other factors in their letters written to CIL in support of their plea that the CIL should not take recourse to the Electronic Reverse Auction and should continue with the old system. 9. On 4th and 5th January, 2010 when the Electronic Reverse Auction was held, there was not a single price bid offered by any of the explosive manufacturers. Hence CIL pleaded that the explosive manufacturers had taken a concerted decision to boycott the auction, though they were till then supplying the explosives to CIL and its subsidiaries under the continuing contract. Thus, the whole auction process failed to take off on 4th and 5th January, 2010 due to the fact that nobody and more particularly the major players in the market did not participate. It has come on record that for the bulk explosive purchase, 20 companies had qualified and 18 did not put in any bids, only two of the companies had put in their bid. They are, however, not the parties here, nor were they complained against. In the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tender issued in the year 2008 and that if a new tender was called the companies would be facing substantial finance loss. In this letter, EMWA had also assured CIL that they would be agreeable to amend the price variation clause and also review the prices for the second year with effect from 1st December, 2009 as per their mutual consent. An appeal was also made to call the explosive suppliers for discussion, so that the sanctity of the notice inviting tender issued on 04.07.2008 could be maintained. The DG found that this letter was on account of assurance given in the meeting between the explosive manufacturers and the Chairman of the Informant company only to give assurance that they were prepared for the review of price variation clause. This letter was therefore, found to be innocuous by the DG. The DG also found that there was no evidence suggesting collective fixation of sale price of explosives except for the year 2005-06. The DG, therefore, concluded that the appellants had not contravened the provisions of Section 3(3)(a). The DG took three distinct periods for consideration those three periods being 12.04.2006 to 16.04.2006; 31.01.2009 to 01.02.2009 and 21.03.2010 and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Energies Limited in Appeal No.90 of 2012 submitted its reply and denied that it had ever involved in any anti-competitive activity. Whereas M/s. Gulf Oil Corporation Limited in Appeal No.82 of 2012, M/s. Solar Industries India Limited in Appeal No.84 of 2012, M/s. Blastec India Private Limited, in Appeal No.85 of 2012, M/s. Indian Explosives Limited in Appeal No.86 of 2012, M/s. Emul Tek (P) Limited in Appeal No.87 of 2012, M/s. Black Diamond Explosives Private Limited in Appeal No.89 of 2012 did not tender their replies to the CCI. However, they submitted their financial details for the financial years 2008-09, 2009-10 and 2010-11. It is pointed out that the representatives of M/s. Indian Explosives Limited and M/s. Blastec India Private Limited took part in the debate before the CCI along with the Informant CIL. 14. The Informant-CIL strongly objected to the DG's report. It pointed out that the analysis of the price bids for the years 2004-05, 2006-07, 2007-08 and 2008-09 clearly established that the explosive suppliers had engaged in cartelization and bid rigging during these years. The Informant relied on some common features in the bid submitted by the explosive suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the CCI came to the conclusion that though the bids for the years 2004-05, 2005-06 and 2006-07 quoted by the explosives suppliers were identical, which went on to prove that they were not taking their decisions in an independent manner and there was meeting of minds amongst all of them to manipulate the process of bidding and fixing of bid rates, yet since all these issues were prior to the date of Notification of Section 3 and 4, the appellants could not be held guilty for violation of Section 3 and 4 on this account. The CCI also took note of the letters dated 13.10.2009 written by the EMWA, which was subsequent to the date 20th May, 2009, on which date the Section 3 and 4 were activated. The CCI came to the conclusion that this could not be treated as an evidence to establish that explosive suppliers through their Association EMWA had collectively tried to fix the prices for supply of explosives to the detriment of the Informant within the meaning of Section 3(3) of the Act. Thus, on the first issue, the explosive suppliers, that is the present appellants were exonerated. 17. As regards the second issue, the CCI came to the conclusion that though in the past the explosive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir bids. In so far as the auction held on 5th January, 2010 all the 26 suppliers had boycotted the price bids, from this, the CCI came to the conclusion that this amounted to concerted action amongst the explosive manufacturers including 10 appellants and this collective boycott of the auction process and manipulation of the process of bidding was in clear violation of the provisions of Section 3(3)(b) of the Act, holding that the boycott resulted in bid rigging. As a result of this, the CCI passed an order under Section 27 of the Act and came to the conclusion that the named explosive suppliers were liable to pay 3% of the average of three years turnover by way of a penalty under Section 27(b). We have to consider the merits of this finding of issue No.3. 19. Some issues were commonly addressed by the learned counsel in all these appeals. The arguments were led by Mr. Ramji Srinivasan, Mr.M.M. Sharma, Mr. Billimoria, Mr. Haksar, Mr. Sudhinder, Mr.Ravinder Narain, Mr. Tarun Rana and Mr. Kumar on behalf of the appellants. The parties have also supplied their written submissions besides their oral arguments. We shall first refer to these commonly argued issues which were generall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days so fixed, particularly that is on 17.11.2011 and 13.12.2011 no opponent parties barring the representatives of two opponents, attended the hearing. It is also a common ground that there was no oral argument offered nor any detailed replies/objections filed by any of the parties before the CCI. It seems that on 08.12.2011 that is five days before the final date of hearing the Informant-CIL filed its objections to the DG's report. However, on 13.12.2011 when the CCI met for hearing the parties, no counsel appeared on behalf of any of the opponents except only two opponents through their representatives who were officers of the opponent companies. 21. The first contention raised on behalf of almost all the opponents is that the copy of the objections of CIL-Informant was not supplied to any of the appellants. It was also strongly pleaded that the documents on which the CIL had relied, were also not supplied to any of the appellants and this caused the denial of natural justice to all these parties. 22. There can be no dispute that all the appellants had adequate notice of the hearings, which were to take place on 17.11.2011 and 13.12.2011. It is also clear from the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence from the hearing and their complacent attitude in relying upon the DG's report, has to be taken into consideration before giving any finding about the denial of natural justice to them. The Hon'ble Supreme Court in a celebrated judgement reported in N.K. Prasada v. Government of India [2004] 6 SCC 299 has in paragraph 24 observed as under :- 24. The principles of natural justice, it is well-settled, cannot be put into a straight-jacket formula. Its application will depend upon the facts and circumstances of each case. It is also well-settled that if a party after having proper notice chose not to appear, he a later stage cannot be permitted to say that he had not been given a fair opportunity of hearing. The question had been considered by a Bench of this Court in Sohan Lal Gupta (Dead) through LRs. and Ors. v. Asha Devi Gupta (Smt.) and Ors., [2003] 7 SCC 492 of which two of us (V.N. Khare, CJI and Sinha, J.) are parties wherein upon noticing a large number of decisions it was held: 29.The principles of natural justice, it is trite, cannot be put in a straightjacket formula. In a given case the party should not only be required to show that he did not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 07.01.2010 has not been supplied by the CIL. In fact there was no question of the appellants missing this letter as it was the part of the information filed by the CIL. Two decisions of the Hon'ble Supreme Court were relied upon by the appellants in support of their plea that on account of non-supply of documents there was prejudice caused and that it was not necessary to further show that the party has suffered because of that. These two cases are State of UP v. Saroj Kumar Sinha AIR 2010 SC 3131 and Payyavula Vengamma v. Payyavula Kesanna reported in AIR 1953 SC 21. We do not think that these cases are in any way apposite to the controversy. In the first mentioned case, the party had specifically requested for the documents in question and yet they were denied the access and in that light, it was held that the prejudice was caused to the parties. In the second mentioned case, the case was based on the misconduct of the Arbitrator, in which he had examined the parties in the absence of the other party. Both the cases are therefore, different on facts and cannot be made applicable here. There was a full opportunity to the appellants to appear on 13th of December, 2011 and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those against whom the enquiry is ordered, the only option left to the CCI is to initiate enquiry under Section 26(7). The appellants argued that a further investigation should be caused where CCI disagree with the finding of DG to the effect that no contravention of the Act has been committed. According to the appellants, there is no other option, but to initiate the inquiry under Section 26(7), which will be in the nature of 'further inquiry'. We do not think that this is the correct legal position. In our opinion, the report of the DG is only recommendatory in nature and it is not binding on the CCI in any manner. Once the report comes under Section 26(3) and has exonerated the parties of the violation of the Act, the Section 26(5) gets activated and the CCI has a full discretion to pass an order under Section 26(6). It is only if the CCI formulates an opinion on the basis of the report that the DG has either not done full investigation or that the further investigation is necessary, then it proceeds under Section 26(7) and not otherwise. Therefore, it is not that in every case where the CCI disagrees with the report of the DG, it has to proceed under Section 26(7) to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was therefore, filed before us seeking permission to raise additional ground on this count as initially this ground was not taken in the appeals. This point was more particularly pursued by Keltech Energies, as also M/s. Solar Industries. Of course, M/s. Solar Industries has raised this in their main appeal also. What is submitted before us were two letters one dated 17.05.2007 from one Shri Partha Bhattacharya, the then Chairman of CIL addressed to Shri H.C. Gupta, who was then the Secretary, Govt. of India, Ministry of Coal. The second letter is dated 06.01.2010, again from Shri Partha Bhattacharya to the Secretary, Ministry of Coal with the copy marked to Shri H.C. Gupta, who at that time was the sitting Member of the CCI. It is pointed out by the parties during the debate that Shri Gupta served in the capacity of Coal Secretary between the periods January, 2006 to September, 2008. It is true that in these letters there is a complaint about the explosive manufacturers. It is also not known as to what reply did Shri Gupta gave in response to firstly a letter in 2007 and secondly in response to the letter marked to him, which was the second letter dated 06.01.2010. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was refused by the CCI. If the appellants had taken troubles to appear before the CCI, they would have certainly known of these letters. In our view, it was undoubtedly inappropriate on the part of the CIL to send a second letter dated 06.01.2010 to Shri Gupta who was already a Member of the CCI at that time. But by that, it cannot be presumed that Shri Gupta would get prejudiced against the explosive manufacturers. There is absolutely no scope for holding the same. After all that was a letter between the Coal Ministry and the CIL and only a copy of which was only marked to Shri Gupta. He was not requested to take any action, nor was he requested to use his good offices as erstwhile Secretary of the Ministry. In our view, the complaint, if any, about the bias could have been made before the CCI, as both these letters were admittedly available to the appellants, more particularly to Keltech and Solar. That was not done. In our view, therefore, the plea of bias as being raised at this stage for the first time only is clearly an after thought, which is not permissible in law. In our opinion the observations made in Narinder Singh Arora case cited (supra) would not be applicable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for bulk explosives, which is an admitted position. Mrs. Shroff, however, pointed out that Regenesis was qualified to participate in reverse auction to supply both bulk and cartridge explosives to Western Coalfields Limited and had in fact participated in the scheduled reverse auction where its bid fell over 30% below the ceiling price. She also relies on two letters written to Regenesis, on 24th December, 2009 confirming its eligibility to supply bulk and cartridge explosive and to participate in reverse auction. These letters were filed along with the documents relied upon in the appeal. At least from the letters, filed by Mrs. Shroff as Annexure-F to her legal submission, it cannot be said that Regenesis was in any manner disqualified either in the bulk supply or in the supply of cartridges. The letter dated 24th December, 2009 is not denied by Shri Sharma either in his oral submissions or in the written submissions. We, therefore, reject the contention raised by Shri Sharma in this behalf. This takes us to the consideration of the matters on merits. 31. We have already given a brief history of the controversy raging between the CIL on one hand and the appellants, who were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall of supply due to non-availability of vendors . Lastly the letter pleads for not short closing the tender of 2008, which was to last upto 2011 and requests for a discussion on the two issues for maintaining the sanctity of NIT issued on 04.07.2008. 33. As has been stated earlier, no fault was found with this letter by the CCI. It only showed that EMWA was interested in seeing that the tender dated 04.07.2008 should not be disturbed. In paragraph-8, however, the EMWA had given this commitment sir we on our part would be agreeable to amend the price with variation clause and also review the prices for the second year i.e effective 1st December, 2009, to our mutual comfort . This letter shows the thinking on the part of the EMWA in a representative capacity as also the thinking on the part of the explosive manufacturers. In short, all the explosive manufacturers through their representative body had conveyed that they would be prepared for the price variation on the basis of the terms and conditions of NIT dated 04.07.2008. In this backdrop, the DG as well as the CCI have not viewed this letter as a decision by concerted mind, which would fell foul of Section 3. 34. Real c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 price for that subsidiary ruling on the day of reverse auction. It was also clarified that no bidder can quote a price equal to or higher than the ceiling price for the particular subsidiary during the reverse auction. The essential condition of this NIT, the price formula was further explained. The issuance of the notice inviting tender dated 09.10.2009 which proposed the electronic reverse auction vide its condition No.10 as also the ceiling price explained in Clause No.12 sent shock waves through explosive manufacturers, which resulted in the letter of EMWA dated 13th October, 2009. 36. There was then a last bid effort by letter dated 30th of December, 2009 to extend the date of reverse auction. This letter is on behalf of the Gulf Oil Corporation Limited (GOCL) one of the appellants herein and almost identical letters were written by Indian Explosives and Keltech. There is also a separate letter by Black Diamond on the same date, which is on the similar lines with the earlier mentioned letters. As has been pointed out that, this request was also not heeded to by CIL. There does not seem to be any reply sent of these letters dated 30th of December, 2009 and ultimately, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two of the appellants namely Gulf Oil Corporation and Blastec India Pvt. Ltd. wrote two letter dated 7th of January, 2010, perhaps which are almost identical to each other. By these letters, these two appellants almost apologetically explained their non-participation. Be that as it may, the auction was ultimately held on 15th and 16th January, 2010 in which inspite of all their opposition, all the appellants took part including the other remaining 16 explosive manufacturers and ultimately it is also on record that the prices then fell almost by 30% on an average. 40. We have already pointed out that on the other counts namely for the contravention of Section 3(3)(b), the DG as also the CCI has not found any contravention. However, on this aspect of non-participation amounting to boycotting the bidding process, the CCI has come to the conclusion that this was with the concerted mind and therefore, the appellants have been found guilty of contravention of Section 3(3)(d). 41. Vociferous arguments were led before us by the learned counsel and the basic common factor argued was the inability on the part of the appellants and others to take part in the auction pricing bid on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical letters on 30th December, 2009 where, if not anything but postponement of the auction was pleaded for, probably in the fond hope that once the auction on 4th and 5th January, 2010 is postponed, there may be some ground available for the negotiations with CIL. Unfortunately that also did not happen. On this factual background then remains the parallel behaviour on the part of the appellants. 44. It was urged that the ceiling price for Bulk Explosive was not the actual or true ruling price at the time of the tender because it did not include the component of All India Consumer Price Index in the provisional price declared for 1st December, 2009. This plea has to be rejected on the specific letter dated 08.12.2009. There was a specific promise to adjust the price in consideration of All India Consumer Price Index in that letter. Thus, this plea is clearly incorrect. 45. Then again in letter dated 07.01.2010 it was urged that the GOCL had logged on to e-auction website, but it did not place its bid as the given ceiling price was not truly applicable price as on the date of reverse auction, since reverse price as per the PVC Formula applicable from 01.01.2009 had not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of no consequence. 47. There can be no dispute that for the auctions which took place on 4th and 5th January, 2010, all the 26 explosive manufacturers had taken part in the mock bid, which was held between 31st December, 2009 and 2nd January 2010. This was inspite of their letter dated 30th of December, 2009. All of them did know the ceiling price from the specific language of letter dated 8th of December, 2009. It is also a fact that all these explosive manufacturers including the appellants were found to be qualified in the technical bids. When this was the situation, it cannot be imagined that all of them took an independent decision not to put in price bids, once the ceiling price appeared on their board. There can be no dispute that all of them had logged in and yet after knowing the ceiling price, did not put in the bid. In our opinion, the plea that all of them had taken an independent decision for each one not to put in the bid, considering that the ceiling price was too low, cannot be accepted. On the other hand, their parallel behaviour does go on to show that this was result of a concerted action amongst all of them. It simply cannot be imagined that all the 26 man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Both these concerns are not appellants before us. The fact, however, remains that barring these two, all the remaining manufacturers including the present appellants had boycotted the auctions. The counsel for the GOCL also made much of the fact that they had quoted lower in the subsequent auction held on 15th January, 2010, as they were asked to quote lower than the prices quoted by PEL and KEAC. In our opinion, that circumstance is irrelevant. 51. It was pointed out by Mrs. Shroff that thereafter when the auction took place on 15th January, 2010, all the bidders put in their prices inspite of their earlier opposition and the prices fell by almost 30% of the running contract prices. According to her, this suggests that all the manufacturers had clearly deduced that the prices are going to fall in the reverse auction and therefore, they as a last bid effort did not put in any price bid and this was nothing but an example of an action taken with concerted mind. The plea is quite substantial. In reply to this argument, the appellants argued that there was a letter dated 5th of January, 2010 fired on all the appellants, which was of a draconian nature. We have already made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be rejected summarily as it has come on record that nobody made any price bids and thus the auction had to be scuttled down. Some counsel also argued that the prices given in the letter dated 08.12.2009 was only an ad-hoc/provisional prices, as per the price variation clause of running contract 2008-09 and was not a ruling price for the purpose of determining ceiling price and that the said price would be suitably modified. We do not see any merit in this plea, in view of the clear language of the letter dated 08.12.2009. 54. It was tried to be argued that the CCI had not given any finding about the competition having been eliminated or reduced. This argument is raised on the basis of the explanation to Section 3. In our opinion, the argument is wholly incorrect. It is true that the explanation provides that the bid rigging means any agreement which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the 'process for bidding'. We have already shown that the boycott which was by concerted action had adversely affected and manipulated the process of bidding. There is a clear cut finding given by the CCI and we find no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation of the factory led the company not to put in the bid. He pointed out that the factory was ordered to be relocated by the District Magistrate on October 20, 2009. The learned counsel also pointed out that the land, which was suggested for relocation was much more and was also encroached upon. He also pointed out that there was no production for the period from 1st April, 2010 till the time of obtaining relief from the Madhya Pradesh High Court. From the contentions itself, it is clear that M/s. Solar Industries had obtained the relief from Madhya Pradesh High Court on 25th October, 2010 itself. It was also an admitted position that the factory is still continuing on the old place itself. This takes out all the basis of the arguments of the learned counsel. This is apart from the fact that no evidence was brought on record that these were the reasons or that a specific decision was taken by the company to not put in the bid. It is not understood, why the company logged in and then decided not to put in the bid and then also decided to take part in the subsequent bidding process on 15th January, 2010. All this show the utter lack of bona-fide on the part of the appellant Solar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, it would not have led to an increase in its market share so dramatically, so as to become the largest manufacturer of explosives and biggest supplier to CIL. It is then argued that the fact that the market share has increased suggests that there could be no cartelisation as it is a classic characteristic of a cartel that the market remains stable. We do not think that these are distinguishing factors. The fact remains that even after logging in, this appellant chose not to put in the bid. Even the uncertainty of product in the factory at Singrauli does not impress at all, as the fact remains that later on the appellant took part in the auction on 15th of January, 2010 and that the Singrauli difficulty was in fact a non-difficulty, as the relief was granted by the High Court as early as on 25.10.2010. It has to be remembered that the argument of cartelisation is also not correct, as it was not a general agreement on cartelisation going on for years together. The cartelisation could be found on 4th and 5th January, 2010 in their boycotting the bids altogether. The learned counsel also argued on the justification of the penalty, which we will consider separately later. 58. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was to be rescheduled suitably, then there would be forfeiture of earnest money/participation fees. We are not here to assess the impact of this threat, but we refuse to believe that it is only on account of such a threat of forfeiture that the appellants took part in the subsequent auction. In fact that threat is too insignificant in our opinion, even if the argument of the learned senior counsel were to be accepted. 59. In Appeal No.90/2010 by Keltech Energy, Mr. Kumar came with a novel argument. He firstly argued that the ceiling price was incorrectly calculated as it had not taken into account the consumer price index in industrial worker on 1st December, 2009. We have already rejected that argument earlier on account of the specific language contained in letter dated 8th December, 2009, wherein it was clarified that the appellants would get the benefit for revised CPI whenever it is published. The learned counsel also tried to argue that on account of monopsony enjoyed by the CIL in the market of explosives, the CIL went on to set the price. According to the learned counsel, this led to a predatory price and the argument further goes on to show that such exercise of sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. On the other hand, the fact is that the price fell even below the aforementioned ceiling price set-up by the CIL. The argument is, therefore, rejected. All the other contentions raised by way of general submissions, have already been considered by us earlier. 60. Mr. R. Sudhinder in Appeal No.89 of 2012, firstly contended that the appellant had only 4% of total market share and therefore, appellant either of its own or in association with any other player could not be in a position to impact competition, as the appellant is solely depended upon respondent No.1 for its existence. We see no reason to accept this argument, for the simple reason that the market share is irrelevant in the matter of Section 3, particularly where the contention is that there is an illegal agreement of boycotting and thereby affecting the bidding process. The learned counsel tried to argue that the CIL was unfair and was adopting practices to affect competition which were per se anti-competitive. We are not examining the issue about the conduct of the CIL in these appeals. This argument is, therefore, rejected. The learned counsel then argued that there was an error in finding of fact in paragraph 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Corporation that we should consider not the turnover, but only the 'relevant turnover' for the purpose of inflicting the penalties. Same arguments were reiterated by some others like Solar Industries, whose claim was that their main turnover was because of the export market. Unfortunately, it was not clarified before us, as to what would be the extent of the relevant market in case at least in Gulf Oil Corporation and Solar Industries. The others did not pursue that point very seriously. There are some mid-class manufacturers like Ideal Industrial Explosives Ltd., Blastec India Pvt. Ltd., Regenesis Industries Pvt. Ltd., Black Diamond Explosives and Techno Blasts India Ltd. in whose case the penalty is less than ₹ 1 crore, while Emul Tek Pvt. Ltd. appears to be the smallest of the appellant companies where the penalty is merely ₹ 28,576/-. The so called mid-class industries are also having substantial turnover running into thousands of crores of rupees. 66. In our opinion, the mitigating factors would have to be taken into consideration, which were addressed by various counsel before us. The first mitigating factor is that this was very first breach on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereby all the manufacturers including the appellants took part, would also be a relevant circumstance. 68. In that view, we would choose to dilute the punishments. We note that the behaviour of the appellants in boycotting was reprehensible behaviour, which is looked down upon in the competition jurisprudence. Therefore, there has to be some deterrent punishment, but not so much as to affect their ability to deliver the goods in an efficient manner. We would, therefore, keep this factor into consideration while ordering the penalty. 69. While passing interim orders we had directed the parties to pay 5% of the penalties as a condition for grant of stay. It is reported that all the appellants have complied with that condition. We would choose to order reduction of the penalty to the extent of total of 10% penalty imposed by the CCI. Thereby the appellants would be required to deposit again 5% of the penalties. For this purpose, we would grant one month time to the appellants. Thus, the total penalty will be 10% of the penalty already imposed by CCI. With this observation and the modifications in the penalties, we would choose to dismiss the appeal on merits, however, the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X
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