9911796707
TMI Blog2015 (9) TMI 1691X X X X Extracts X X X X X X X X Extracts X X X X ..... coal which is obtained from the subsidiaries of Coal India Limited, namely, Western Coalfields Ltd., South-Eastern Coalfields Ltd., Mahanadi Coalfields Limited and Singareni Collieries Company Ltd. 3. With a view to ensure that supply of quality coal and proper supervision of transportation thereof, Respondent No. 2 has been availing the services of private liaisoning agents who are appointed through tender / open bidding. 4. In March, 2005, Respondent No. 2 invited bids for award of contract of liaisoning work.Respondents Nos. 3 to 5 and 1 M/s. B.S.N. Joshi & Sons Ltd. were among the bidders. Though the rates quoted by M/s. B.S.N. Joshi & Sons Ltd. werethe lowest, Respondent No. 2 did not award contract to it.Writ Petition No. 2444 of 2005 filed by M/s. B.S.N. Joshi & Sons Ltd. questioning the decision of Respondent No. 2 was dismissed by Nagpur Bench of the Bombay High Court primarily on the ground that it did not satisfy the conditions of eligibility. 5. The Special Leave Petition filed against the order of the High Court, which was converted into Civil Appeal No. 4613 of 2006 was allowed by the Supreme Court vide judgment dated 31.10.2006. The Supreme Court took cognizance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir business. This order is being passed in the interest of MAHAGENCO as also the private Respondents herein. 6. Since Respondent No. 2 did not comply with the direction contained in the aforesaid order, M/s. B.S.N. Joshi & Sons Ltd. filed a petition under the Contempt of Courts Act 1971, which came to be registered as Contempt Petition No. 245 of 2007. The Supreme Court considered the explanation given by the non- petitioners but did not feel satisfied. However, the apology tendered by them was accepted and the contempt petition was disposed of by a detailed order dated 19.12.2008, the relevant portions of which are extracted below : 8. Supply of coal and that too good quality of coal is essential for running of a thermal power station. It was with that intent in mind that this Court, either at the interim stage or final stage, did not intend to pass any order which would hamper transportation of coal resulting in stoppage of the functioning of the thermal power station. 9. The alleged contemnors, in our opinion, misconstrued the order of this Court for which there was no basis that they were bound by the interim order passed by this Court. For the sake of clarity, we may noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, they should have approached this Court for clarification but could not have arrived at such an absurd conclusion that what was necessary to be considered is handling of coal by the petitioner for the preceding five years from the date of passing of the judgment by this Court. 13. What was necessary for them to consider was implementation of the directions issued by this Court in the backdrop of the events noticed by this Court. This Court in its judgment had not only taken into consideration the contentions raised by MAHAGENCO in regard to non-fulfilment of the essential conditions on the part of the petitioner but also implications thereof at some details. They furthermore sought to take into consideration a purported subsequent event viz. the letter dated 20-2-2007 issued by Sanjay Gandhi Thermal Power Station, which was neither relevant nor decisive. 14. The alleged contemnors, therefore, in our opinion, did not read the directions of the Court in their proper perspective. We say so: (i) because they could not have considered the directions contained in the interim order passed by this Court. The interim order merged into the final order. In any event, even the said int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractor was not satisfactory. 8. Between September, 2009 and 2013, Respondent No. 2 issued four advertisements for award of contract of liaison work, but on each occasion the invitation to bid appears to have been cancelled and Respondents Nos. 3 to 5 were allowed to do liaison work on ad hoc basis by dividing the State into different regions. This is evident from the following Chart: Company Area Cumulative Contract Period M/s. Nair Coal Services Ltd. Nasik andChandrapur Since 25.09.2009 to Till date Karam Chand Thapar & Bros. (C.S.) Ltd. Koradi Parli & Khaperkheda Awarded since 25.09.2009 to till date Nareshkumar & Co. Busawal & Paras Awarded since 25.09.2009 to till date 9. The appellant who is practicing as an advocate in the city of Nagpur (Maharashtra) and is also a consumer of electricity generated by Respondent No. 2 filed an information under section 19(1)(a) with the allegation that by abusing its dominant position, Respondent No. 2 has facilitated formation of a cartel by Respondent Nos. 3 to 5 and awarded contracts to them in clear violation of Section 3(3)(c) and (d) of the Act. In support of this assertion, the appellant relied upon the judgment dated 31.10.2006 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any allegation of corruption or favouritism per se on its part or on the part of its officers is beyond the purview of the jurisdiction of the Commission. 26. For the same reasons, the allegations of the informant based on the same grounds against MAHAGENCO and the three named contractors relating to contravention of the provisions of section 4 of the Act are also misconceived. In the present case, the informant has alleged contravention of the provisions of section 4 of the Act by MAHAGENCO alongwith the three named contractors. As MAHAGENCO and its contractors do not fall within the definition of 'group', the allegations do not stand. Even at a disaggregated level, assuming MAHAGENCO to be dominant in the market of procurement of liaison work relating to coal in the State of Maharashtra, the allegations made by the informant against MAHAGENCO of favouritism and corruption cannot be said to fall within the purview of section 4 of the Act. 11. One of the members,Justice S.N. Dhingra did not agree with the majority and recorded a dissenting order.He referred to the ratio of the Supreme Courts judgement and observed as under : It is to be noted that OPs 2 to 4 are bidding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son services relating to coal for thermal powerstationsthat the relevant geographical market is the area of State of Maharashtra and the relevant market would be liaison services relating to coal for thermal power stations in the State of Maharashtra. He also noted that the installed capacity of the thermal power stations being operated by Respondent No. 2 is 68000 M.W. it procures 45.57 million tonnes of coal per annum and held that Respondent No. 2 is a dominant player in the relevant market. He went on to observe that the decision of Respondent No. 2 to cancel tenders time and again and to allocate work of liaisoning to Respondent Nos. 3 to 5 on ad-hoc basis and renewal thereof prima facie resulted in driving out competition amongst bidders. On that premise, he concluded that a prima facie case has been made out for ordering investigation by the Director General under Section 26(1) of the Act. 13. The appellanthas questioned the majority order on several grounds including the one that in the face of the opinion expressed by senior officers of Respondent No. 2 and the finding recorded by the Supreme Court that Respondent Nos. 3 to 5 had formed a cartel for procuring contract of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors of the cartel formation by Respondent Nos. 3 to 5 and the Commission committed serious error by ordering closure of the case under Section 26(2). Learned counsel then argued that Respondent Nos. 3 have successfully highjacketthe market of liaison work and, thereby, caused loss to Respondent No. 2 for last six years and a serious matter like this should not have been scuttled by the Commission at the threshold. He also pointed out that Respondent No. 2 was very much aware that Respondent Nos. 3 to 5 had formed a cartel and yet it continued to award contracts to them in complete disregard of the public interest as well as national interest 17. Learned counsel for Respondent No. 2 argued that his client cannot be accused of being a party to the cartel because its own officers had discovered cartel formation by Respondent Nos. 3 to 5. He submitted that Respondent No. 2 had taken decision to allocate liaison work to Respondent Nos. 3 to 5 keeping in view the larger public interest of continued availability of good quality coal and therefore,even if the Tribunal comes to the conclusion that the impugned order is legally unsustainable, it should not order an investigation against Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, in such manner and], accompanied by such fee as may be determined by regulations, from any person, consumer or their association or trade association; or (b) a reference made to it by the Central Government or a State Government or a statutory authority. (2) Without prejudice to the provisions contained in sub-section (1), the powers and functions of the Commission shall include the powers and functions specified in sub-sections (3) to (7). (3) The Commission shall, while determining whether an agreement has an appreciable adverse effect on competition under section 3, have due regard to all or any of the following factors, namely:-- (a) creation of barriers to new entrants in the market; (b) driving existing competitors out of the market; (c) foreclosure of competition by hindering entry into the market; (d) accrual of benefits to consumers; (e) improvements in production or distribution of goods or provision of services; (f) promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services. (4) to (7) xxx xxx xxx Section 26(1)---Procedure for inquiry under section 19(1) On receipt of a reference from the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moto take cognizance of any alleged contravention of Section 3(1) or Section 3(4) of the Act and hold an inquiry. This necessarily implies that the Commission is not required to wait for receipt of a reference from the Central or the State Government or a statutory authority or a formal information by someone for exercising power under Section 19(1) read with Section 26(1) of the Act. In a given case, the Commission may not act upon an information filed under section 19(1)(a) but may suo moto take cognizance of the facts constituting violation of Section 3(1) or Section 3(4) of the Act and direct an investigation. The Commission may also take cognizance of the reports appearing in print or electronic media or even anonymous complaint/representation suggesting violation of Sections 3 and 4 of the Act and issue direction for investigation under Section 26(1). The only limitation on the exercise of that power is that the Commission should feel prima facie satisfied that thereexist a prima facie case for ordering into the allegation of violation of Sections 3(1) or 4(1) of the Act. 23. So far as this case is concerned, I am satisfied that the appellant cannot be non-suited by acceptin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Joshi & Sons Ltd. Vs. Nair Coal Services Ltd. and others (2006) 11 SCC 548 and also the fact that the contempt petition was disposed of vide order dated 19.12.2008 but it did not rely upon the findings recorded by the Supreme Court and proceeded to observe: On perusal thereof, it appears that the quotes made by these parties were in a narrow band, yet the same cannot be described as identical or similar. Absent any other evidence or circumstance, it is difficult to infer any anti-competitive agreement solely on the basis of the chart noted above. Hence, it may be observed that the informant has not been able to substantiate its allegations of bid rigging by and between the opposite party Nos. 2 to 4. Resultantly, no case of contravention of the provisions of section 3 of the Act is made out against the opposite party Nos. 2 to 4. 26. A conjoint reading of the main judgment in Civil Appeal No. 4613/2006 and order dated 19.12.2008 passed in Contempt Petition No. 245/2007 makes it clear that the Supreme Court had, after taking cognizance of the notings recorded by senior functionaries of Respondent No. 2 recorded an unequivocal finding that Respondent Nos. 3 to 5 had formed a cartel. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
