TMI Blog2022 (12) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... leniency application have also got reduction in the penalty which is reflected from the relevant portion of the impugned order which we have quoted in the present order. We are of the opinion that disclosure made in leniency application admitting involvement amounts to confession. If confessional statement is also corroborated even by some sort of evidence one is precluded to assail an order imposing penalty/punishment on such confession. Moreover, in the present case at the time of admission itself it was admitted by the appellants that the appeal may be heard on the point of penalty only. Now coming to the discretionary jurisdiction of the CCI in considering the turnover on the higher level i.e. 10% which is maximum percentage prescribed under Section 27(b) of the Act is concerned we are of the opinion that though CCI is empowered to take turnover upto 10% but while taking up such percentage i.e. maximum as prescribed in the Act it was required for the CCI to elaborately assign reason for coming to the conclusion for maximum penalty. It may not be held that CCI in no case can impose higher penalty upto 10% but in such situation it would be required for the CCI to afford full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition Appeal (AT) No. 44 of 2018 Competition Appeal (AT) No. 45 of 2018 Competition Appeal (AT) No. 46 of 2018 Competition Appeal (AT) No. 47 of 2018 Competition Appeal (AT) No. 49 of 2018 Competition Appeal (AT) No. 56 of 2018 Competition Appeal (AT) No. 57 of 2018 Competition Appeal (AT) No. 58 of 2018 Competition Appeal (AT) No. 59 of 2018 Competition Appeal (AT) No. 60 of 2018 Competition Appeal (AT) No. 61 of 2018 Competition Appeal (AT) No. 67 of 2018 Competition Appeal (AT) No. 68 of 2018 ( Justice Rakesh Kumar ) Member ( Judicial ) And ( Dr. Ashok Kumar Mishra ) Member ( Technical ) For the Appellant : Mr. Gaurav Mitra with Mr. Kartik Nagarkatti, Mr. Adit Singh, Advocates For the Respondent : Mr. Manish Vashist, Sr. Advocate with Ms. Avinash Sharma, Ms. Akanksha Kapoor, Mr. Siddhant Chaudhary, Advocates for CCI/R1. Mr. Davander Prasad, Dy. Director for CCI. JUDGEMENT JUSTICE RAKESH KUMAR, MEMBER (JUDICIAL) The aforesaid appeals were taken up for final hearing on 08.08.2022, 15.11.2022 and finally on 28.11.2022 after conclusion of hearing, Judgement was reserved. Despite the fact that on 08.08.2022 appellants counsel were appearing in Compet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty. 3. The proprietorship firm of appellant in Competition Appeal (AT) No.43/2018 in view of his leniency application was granted 50% reduction in the penalty whereas the appellant in Competition Appeal (AT) No.47/2018 was granted 40% reduction and appellant in Competition Appeal (AT) No.49/2018 was granted reduction in penalty to the extent of 50% penalty. 4. Aggrieved with order dated 01.05.2018 the appellants have preferred the aforesaid appeals. The operative portion of the impugned order dated 01.05.2018 is reproduced hereinbelow:- 97. Thus, considering the totality of facts and circumstances of the present case, the Commission decides to impose penalty on OP-1, OP-2, OP-4, OP-5, OP-6 and OP-7 under Section 27 of the Act by taking into consideration the financial statements filed by them at the rate of 10 (Ten) percent of the average turnover of three financial years 2012-13, 2013-14 and 2014-15. The total amount of penalties imposed on the Ops are set out below: Amount- in rupees S. No Opposite Parties Turnover for 2012-13 Turnover for 2013-14 Turnover for 2014-15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT) No.68/2018 subsequently. 7. One Retired Major General namely Mr S.C. N. Jatar in the capacity of authorised signatory of Nagrik Chetna Manch, a public charitable trust constituted under the provisions of Bombay Public Trust Act 1960 and Society registered under the Societies Registration Act, 1860 after gathering relevant information regarding omission and commission of misconduct by official of Pune Municipal Corporation in connivance with appellants filed a detailed information application before the CCI. In the complaint following facts were incorporated in details: 2.During April, 2015, Nagrik Chetna Manch had obtained information about tenders floated by Pune Municipal Corporation (PMC for short) pertaining to the Design, Supply, Installation Commissioning. Operation and Maintenance of Municipal Organic and Inorganic Solid Waste Processing Plant(s) for tender numbers 34, 35, 44, 62 and 63 of 2014 for the period December 2014 to March 2015 from PMC's web site at https://pmctenders.abcprocure.com/ 3. During the scrutiny of the tenders and award of the above-noted tenders, it was found by the Complainant that the Accused had colluded with each other and com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oking violations of the provisions of the Competition Act so that the chosen bidders qualify technically. The Complainant submits that such bids were merely designed to give the appearance of genuine competitive bidding On scrutiny of the bids, it is clear that Accused no. 2. Ecoman, becoming L1 was a foregone conclusion because it acted like a lead company 9.The net worth certificate of Accused no.1, Fortified, for tender nos 34, 35 44-2014 shows Bipin Vijay Salunke as the owner of both Accused no 1, Fortified and Accused no.2, Ecoman, with the same office address as shown in paragraphs 4 and 5 above. It is apparent that this person is the brain behind the violation of the Act in cohort with the other bidders and the Accused no. 3, the PMC. The Accused no.3 has allowed Accused no 1 and 2 lo take part in the tender process with the full knowledge that there was a common owner The Complainant draws kind attention of the Hon'ble Commission to the report in the Times of India, Pune dated 13 May 2015 wherein the head of the MSW Department of PMC. Accused no. 3 herein, has unabashedly accepted that it is not surprising for one person to own two different firms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere driven by sharing of a certain percentage of profits of the successful bidder not only with the unsuccessful bidders but also with officials and office-bearers acting for Accused no 3 while being in a position to influence the outcome of the bids. These persons belonged to the parent MSW department who carried out the technical screening, to the Vigilance Department who velled the proposal, the recommending authorities (the Additional Municipal Commissioner and Commissioner of PMC) and ultimately the Standing Committee comprising councillors who finally approved the proposal. These persons have overreached their authority and aided and abetted the bidders in violating the Competition Act by consciously taking calculated risks of awarding tenders to unqualified bidders The Complainant reiterates that the estimated value of the five tenders was Rs.11.45 crores while the competent authority entertained the L1 bid of Accused no.2 at Rs. 14,82,94,580/ 13.The Complainant submits that paragraphs 14, 15, 16 and 17 hereinbelow describe in detail the evidences, both direct and circumstantial, in support of the allegations. With each and every piece of evidence in the following parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion, operate maintain MSW processing plants without any past experience. 16 The Complainant submits that, as evident in these bids, the bidders seem to be intimately connected with each other. The bidders are apparently from one family as there is linkage amongst directors, suppliers and institutions in these five bids The distributors, model numbers, notanos banks, etc are inter- connected. Furthermore, there are similarly styled mistakes in the quotations apart from common addresses All of the above are extra-ordinary and unbelievable coincidences at best and illegal acts done in pursuance of well-orchestrated design to dupe fair competition, at worst. Furthermore, they also point to the fact that the designated bid winner had prepared all the bids of the losers and establish collusive bidding violating the provisions of the Competition Act, 2002, entalling cancellation of the tenders and penal actions in terms of the Act. Documents in support of the above are as below a) Lahs and Accused no, 2 have both quoted the same Model no. F-125 b) in tender nos: 34 and 44-2014, the Accused no. 2 and Lahs have the same notary, same bank for demand draft and in 44-2014, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Money Deposit (EMD) of both Accused no.2 and Mahalaxmi are from Bank of Maharashtra, Pune Main Branch and numbers are serially close (025818 025819 for Accused No 2 and 02582 and 025822 for Mahalaxmi) strongly indicating collusive bidding m) Tender numbers 62 and 63 of 2014 have the same Notary for the affidavits of all the three bidders (Accused no.2. Mahalaxmi and Sanjay) who have together produced affidavits of the same date again strongly indicating collusive bidding n)Raghunath Industry Pvt Ltd, so-called manufacturer of all composting machines for Accused No 2 which PMC has purchased, authorized different companies in different tenders. In Initial tender nos, 21, 28 of 2014, it authorised Accused No. 2 in tender nos. 34 and 35 of 2014, it authorised Accused No. 1and in tender nos: 62 and 63 of 2014, it authorised Mahalaxmi Steel. o)As per the Ministry of Corporate Affairs, the owner/director of Raghunath Industry is the father of Mr. Bipin Vijay Salunke He is also the owner/director of Fortified Security Solutions. Accused no.1 herein and Ecoman, Accused no.2 herein Sonall Sahasrabudhe, nee Sonali Vijay Salunke is the sister of Mr. Bipin Vijay Salunke, Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marked a copy of the email dated 01/05/2015 to prominent local MLAs and MPs Though the allegations, in themselves, were serious enough warranting an immediate probe to begin with, the Complainant's representations made strictly to safeguard public interest, were conveniently swept under the carpet and Accused No 2 was rewarded for it's corrupt practices with award of contracts. The Complainant submits that the involvement of accused no.3 in the conspiracy to award tender to unqualified bidders is only corroborated from this tact of playing deat, dumb and blind by design despite being communicated by the Complainant of the attempt of accused nos. 1 and 2 of thwarting the provisions of the Competition Act 17. The Complainant submits its email ID for receipt of reply from the Hon'ble Commission with respect to this Complaint and the same is furnished as: scniat@gmail.com 18In view of the submissions made hereinabove, the Complainant most humbly prays this Hon'ble Commission for the following reliefs a Order an inquiry by the Director General into the tender process of the tender numbers 34, 35, 44, 62 and 63 of 2014 of MSW Department of Pune Municipal Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enterprise and M/s Mahalaxmi Steels to pre-determine the winner of the bids, which may be a case of corruption. 20. In view of the foregoing the Commission is of the prima facie opinion that OP1, OP2, M/s Sanjay Enterprise and M/s Mahalaxmi Steels, by seeking to stifle competition in the market through the above said collusive practices, have indulged in anti-competitive practices which is in violation of the provisions of Section 3(3) read with Section 3(11) of the Act. 21. Accordingly, the Commission, under section 26(1) of the Act, directs the DG to cause an investigation into the matter and to complete the investigation within a period of 60 days from the date of receipt of this order. During the course of investigation, if involvement of any other party is found, the DG shall investigate the conduct of such other parties also. The DG is also directed to investigate the role (if any) of the persons who were in charge of and were responsible for the alleged conduct of such companies. 9. After the order passed under Section 26(1) of the Act by the CCI, the DG conducted thorough investigation. During investigation petition under Section 46 of the Act read with Regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sured that they cause/make technically qualify two chosen bidders in addition to a pre-determined winner to comply with the tender process guidelines that specify a minimum of three technically qualified bidders for each bid. The OPs had further ensured that the financial quotes of the two chosen bidders are more than that of the pre-determined winner i.e., OP-2. 9.3 Existence of cartel and modus operandi During the investigation, several evidences were gathered and statements on oath were recorded which indicated the existence of cartel to rig the bid in tender nos. 34, 35, 44, 62 and 63 of 2014 pertaining to solid waste management. The main person in this cartel was Shri Bipin Vijay Salunke, who is the director in M/s Eenman Enviro Solutions Pvt. Ltd. (OP-2), the LI bidder and the sole proprietor of M/s Fortified Security Solutions (OP-1), a co-bidder in the said tenders. The motive of this cartelization and bid-rigging in the said tenders was to make M/s Ecoman Enviro Solutions Pvt. Ltd. (OP-2) emerge the L1 bidder by arranging proxy/cover bidders and thereby bag the said tenders. In order to do so. Shri Bipin Vijay Salunke ensured that there were three eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted by Shri Manoj Kumar Gupta (proprietce of Mis Mahalaxmi Steels); Shri Sanjay S. Gugle (partner of Ms Sanjay Agencies) and Shri Saiprasad S. Prabhukhanolkar (Managing director of M/s Labs Green India Pvt. Ltd.) confirmed that they colluded with Shri Bipin Vijay Salunke for rigging the hid in the above tenders The corroborative statement on affidavit was received from Shri Parimal Salunke He accepted that he assisted Shri Bipin Vijay Salunke in the bid-rigging cartel whereby he coordinated with other bidders for arranging the relevant documents and or procuring the digital keys and also prepared the bank drafs for earnest money deposit on their behalf. 9.5 Role and complicity of individuals Shri Bipin Vijay Salunke is the kingpin in the cartel and he was assisted by other persons Shri Parimal Salunke and Shri Vijay Raghunath Sahnke, for anging the relevant documents and preparation of bank drafts. Further Shri Saiprasad S. Prabhukhanolkar (Managing director of M/s Labs Green India Pvt. Ltd.), Shri Sanjay S. Gugle (partner of M/s Sanjay Agencies) and Shri Manoj Kumar Gupta (proprietor of M/s Mahalaxmi Steels) acquiesced to his request and provided the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 of 2014. Opposite party No.4 and 5 on 4.8.2016 filed their lesser penalty application in which OP 5 accepted its involvement in cartel in respect of participation in Tender No.62 and 63 of 2014. OP 4 in its lesser penalty application disclosed that he had agreed to bid as a proxy bidder to assist OP2 to win the tender No.34, 35, 44 of 2014. Thereafter on 5.8.2016 OP No.2 and 7 also filed lesser penalty application. OP No.2 accepted that it had arranged proxy bidder to ensure that Tender period in tender No.34, 25, 44, 63, 64 of 2014 were not extended and the tenders were awarded to OP No.2. It also provided documents and evidence in support of its submission. OP No.7 in its lesser penalty application accepted that it has provided authorisation letters to OP no.1 and OP 6 to fulfil eligibility criteria enabling them to participate in the PMT Tender. However, at much belated stage i.e. on 20.09.2016 OP No.1 filed application under lesser penalty application accepting therein that it had submitted cover bids in Tender No.34, 35 and 44 of 2014. It also provided documents in support thereof. 13. The Learned CCI also discussed the profile of the opposite parties/appellants. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antum of penalty imposed by the Commission in view of the stand taken by the appellants. Mr. Navdeep Singh, Deputy Director of the Commission who is present in the Court accepts notice on behalf of the Commission and submits that Commission will engage a lawyer to assist the Court. Therefore, no further notice need be issued on it. Commission may file reply within two weeks and rejoinder if any maybe filed by the appellant within seven days thereof. Let notice be issued on rest of the respondents by Speed Post. Requisite alongwith process fee, if not filed, be filed by 18th July, 2018. If the appellant provides e-mail address of the respondents, let notice be also issued through e-mail. Post the appeals for admission on 6th August, 2018. In the meantime, M/s. Mahalaxmi Steels, Ecoman Enviro Solutions Pvt. Ltd., Fortified Security Solutions and Raghunath Industry Private Limited will pay 10% of the respective penal amount within four weeks. The individual appellants will pay full penalty imposed on them within the aforesaid period of four weeks, subject to the decision of the appeal . 15. In view of aforesaid order there was very limited scope for advancing argument by learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention . Thus there is a legislative link between the damage caused and the profits which accrue from the cartel activity. The inquiry, in terms of Section 59(20), appears to envisage that consideration be given to the benefits which accrue from the contravention: that is to amount to affected turnover. By using the baseline of affected turnover the implications of the doctrine of proportionality that is between the nature of the offence and benefit derived therefrom, the interests of the consumer community and the legitimate interests of the offender can be taken more carefully into account and appropriately calibrated. [Emphasis supplied] 72) Judgement in the case of Southern Pipeline Contractors Conrite Walls (Pty) Ltd.19 reveals that the Court therein was concerned with the provisions of Section 59(20) of the Competition Act, 1998 of South Africa which also provides for maximum penalty of 10% of the annual turnover. The Court held that the appropriate amount of penalty had to be determined keeping into consideration the damage caused and the profits which accrue from the cartel activity. The Appeal Court used the words affected turnover . It determined the amount of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pacific Ltd.21 wherein the expression use occurring in Environment Protection Act was given restricted meaning. The principle that absurdity should be avoided was explained in the following manner: The expression for any use that can be made of the natural environment has an identifiable literal or plain meaning when viewed in the context of the EPA as a whole, particularly the other paragraphs of s. 13(1). When the terms of the other paragraphs are taken into account, it can be concluded that the literal meaning of the expression for any use that can be made of the natural environment is any use that can conceivably be made of the natural environment by any person or other living creature . In ordinary circumstances, once the plain meaning of the words in a statue have been identified there is no need for further interpretation. Different considerations can apply, however, in cases where a statute would be unconstitutional if interpreted literally. This is one of those exception cases, in that a literal interpretation of s. 13(1)(a) would fail to meet the test for overbreadth established in Heywood. The state objective underlying s. 13(1)(a) EPA is, as s. 2 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o construed, if possible, that absurdity and mischief may be avoided. 46. Where the plain literal interpretation of a statutory provision produces a manifestly unjust result which could never have been intended by the Legislature, the Court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce a rational construction. The task of interpretation of a statutory provision is an attempt to discover the intention of the Legislature from the language used. It is necessary to remember that language is at best an imperfect instrument for the expression of human intention. It is well to remember the warning administered by Judge Learned Hand that one should not make a fortress out of dictionary but remember that statutes always have some purpose or object to accomplish and sympathetic and imaginative discovery is the surest guide to their meaning. 47. We have noted the object of Section 16(3) of the Act which has to be read in conjunction with Section 24(2) in this case for the present purpose. If the purpose of a particular provision is easily discernible from the whole scheme of the Act which in this case is, to counterac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larity. As Judge learned Hand said, we must not make a fortress out of dictionary but remember that statutes must have some purpose or object, whose imaginative discovery is judicial craftsmanship. We need not always cling to literalness and should seek to endeavour to avoid an unjust or absurd result. We should not make a mockery of legislation. To make sense out of an unhappily worded provision, where the purpose is apparent to the judicial eye 'some' violence to language is permissible. 26. Sabharwal, J. (as His Lordship then was) has observed thus: ...It is well-recognised Rule of construction that a statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. It was held that construction suggested on behalf of the Revenue would lead to a wholly unreasonable result which could never have been intended by the legislature. It was said that the literalness in the interpretation of Section 52(2) must be eschewed and the court should try to arrive at an interpretation which avoids the absurdity and the mischief and makes the provision rational, sensible, unless of course, the hands of the court are tied and it cannot find any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the subject from penalty rather than the one which imposes penalty. It is not competent to the Court to stretch the meaning of an expression used by the Legislature in order to carry out the intention of the Legislature. As pointed out by Lord Macmillan in London and North Eastern Railway Co. v. Berriman, where penalties for infringement are imposed it is not legitimate to stretch the language of a rule, however beneficent its intention, beyond the fair and ordinary meaning of its language. This principle has been consistently applied by this Court while construing the ambit of the expression 'corrupt practices'. The Rule of strict interpretation has been adopted in Amolakchand Chhazed v. Bhagwandas; MANU/SC.0086/1976 : (1977) 3 SCC 566. A Bench of three Judges of this Court held thus: 12....Election petitions alleging corrupt practices are proceedings of a quasi-criminal nature and the onus is on the person who challenges the election to prove the allegations beyond reasonable doubt. (iv) In such a situation even if two interpretations are possible, one that leans in favour of infringer has to be adopted, on the principle of strict interpretation that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the violators and lead to the death of the entity itself. If we adopt the criteria of total turnover of a company by including within its sweep the other products manufactured by the company, which were in no way connected with anti-competitive activity, it would bring about shocking results not comprehended in a country governed by Rule of Law. Cases at hand itself amply demonstrate that the CCI s contention, if accepted, would bring about anomalous results. In the case of M/s. Excel Crop Care Limited, average of three years turnover in respect of APT, in respect whereof anti-competitive agreement was entered into by the appellants, was only 32.41 crores. However, as against this, the CCI imposed penalty of Rs. 63.90 crores by adopting the criteria of total turnover of the said company with the inclusion of turnover of the other products as well. Likewise, UPL was imposed penalty of 252.44 crores by the CCI as against average of the three years turnover of APT of Rs. 77.14 crores. Thus, even when the matter is looked into from this angle, we arrive at a conclusion that it is the relevant turnover, i.e., turnover of the particular product which is to be taken into considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are enforced. On the contrary, the learned counsel for the appellants pointed out the provision contained in similar statutes of some countries where the concept of relevant turnover had been adopted. South Africa is one such example and, in fact, COMPAT has referred to the judgment of Southern African Competition Appeal Court in this behalf, i.e., Southern Pipeline Contractors Conrite Walls (Pty) Ltd. 19 case. In such a scenario, it may not be necessary to deal with the statutory provisions contained in different countries. In view of interpretation that is given by us to the provision at hand, we would, however, like to comment that in some of the jurisdictions cited by Mr. Kaul, learned Additional Solicitor General, the guidelines are also framed which ensure that the penalty does not become disproportionate, for example, in the UK, the Office of Fair Trade (OFT) has guidelines as to the appropriate amount of penalty . In contrast, there are no similar guidelines issued as far as India is concerned and in the absence thereof imposition of penalty, taking into consideration total turnover, may bring about disastrous results which happened in the instant case itself with the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed penalties on the Appellants to the tune of Rs. 21.18.471/-. It is submitted that the Appellant No. I has deposited the sum of Rs. 10,00,000/- as directed by this Hon'ble Tribunal vide its Order dated 18.7.2018 as a condition for stay of the penalty imposed 2. Appeal No. 67/2018 before this Hon'ble Tribunal has been preferred by the Appellants herein aggrieved by the impugned order dated 31.5.2018 of the Ld. Commission in Case No. 4 of 2016 whereby the Ld. Commission again erred in its finding that the Appellants to have violated Section 3(3)(d) of the Act in respect of Tender No. 59 issued by the Pune Municipal Corporation for design, supply, installation, commissioning, operation and maintenance of organic and inorganic Solid Waste Processing Plants. The Ld. Commission has relied upon its Order dated 1.5.2018 to arrive at a conclusion of violation of Section 3(3)(d) of the Act on the part of the Appellants. The Ld. Commission has not imposed any penalty on the Appellants vide this order, in view of the fact that penalty had been already imposed in Case No. 50/2015 which pertained to the same period. The Appellants herein are aggrieved by the finding of violation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving occurred. Section 3(3) states a presumption of law that certain categories of agreements shall be presumed to have AAE on competition in India. Section 19(3), which refers to the entirety of Section 3. provides for the factors to be considered while carrying out an inquiry into the question of AAE. Section W3 equally applies to Section 3(3). Therefore, while inquiring agreements of the categories referred to in Section 3(3), the factors set out in Section 19(3) are relevant, and must be considered. 5. The Ld. Commission, in paragraph 84 at pg. 171 has relied upon Section 3(3)(d) to conclude that in case of the said section, there is a presumption as to AAE. In the subsequent paragraphs thereafter, the Ld. Commission then proceeded to (erroneously, as demonstrated in para 3 above) conclude that the Appellants have failed to discharge the onus to rebut the presumption. It is submitted that the Ld. Commission has not even discussed the factors relevant under Section 19(3). The interpretation therefore placed by the Ld. Commission would amount to rendering Section 19(3) otiose. 6. The decision (pg. 180) to award maximum penalty to Appellant No. 1 is devoid of any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence to show that there was any agreement between the Appellants and others and any consideration has been accepted by the Appellants 11. A proxy bid for Appellant No. I was submitted by Mr. Bipin Vijay Salunke only for Tender Nos. 34, 35 and 44 ( Subject Tenders ), 12. The LPR Application of the Appellant No. 1 was the first LPR Application in respect of the Subject Tenders. The finding at para 100 @ pg. 184 regarding the participants in the respective tenders and the order of LPR Applications is perverse. 13. The ingredients of Regulation 4 of the LP Regulations, which governs grant of lesser penalty are: i)The Applicant is the 1 to make a vital disclosure; ii. By submitting evidence of a cartel: iii which enables the Commission to form a prima facie opinion regarding existence of a cartel: iv. and the Commission was not possessed of sufficient evidence to form such an opinion. The parameters for exercise of discretion of the Commission are set out in Regulation 3(4) and are as follows: a. the stage at which applicant comes forward; b. b. the evidence already in possession of Commission; c. the quality of information prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments were transferred to Shri Bipin Vijay Salunkhe and disclosed dhon, However, evidence of IP addresses and preparation of DD for EMD for Tender No. 34. 35 and 44 of 2014 were not disclosed by OP-4. These may not have been available with OP-4 as his role was limited to Providing the documents. It is submitted that as a matter of fhet, the evidence of IP addresses was obtained much later, as can be seen from the DG Report (pg. 415 @pg. 442. 448. Vol.II). It is submitted that prior to the receipt of the said information, the Appellant No. had provided sufficient material for the Commission to arrive at a prima facie view of cartelization. The findings of the Commission in paragraph 118 of the impugned order are also relevant in this regard. 18. Notwithstanding all of the above findings, the Commission has granted only 50% reduction in penalty to the Appellant No. 1. It is submitted that the Appellant had provided the most vital piece of disclosure (ie. the modus operandi) for arriving at a prima facie view of cartelization. In this view of the fact. 100% reduction in penalty ought to have been granted to Appellant No, I by the Ld. Commission. 19. It is submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y jurisdiction and exercising the same if any decision is taken, such discretion is not open for any criticism. According to him such discretion which has been authorised by a Statute may not be questioned subsequently. In support of his submission he has placed reliance on a Judgement of Hon ble Supreme Court reported in (1997) 2 SCC 567, Harbans Kaur (Smt) Vs CWT Jullundur, and he has referred to para 5 to 8, 10 and 11 which are quoted hereinbelow : 5.If the conditions stipulated in the section are satisfied Commissioner has a discretion in the matter. In exercise of that discretion, Commissioner can either reduce the amount of the penalty or he may even waive the entire penalty. It is for the Commissioner to decide on the facts of a particular case whether a waiver in entirety or a reduction alone is warranted. 6.The words the Commissioner may in his discretion......reduce or waive the amount of penalty in Section 18-8 of the Act are clear enough to show that the power conferred on the Commissioner is to be exercised by his in such manner as he deems just and proper. When a discretion is conferred on an authority the same must be exercised fairly and not arbitrarily, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals are dismissed. 20. Further it was submitted by Mr. Vashist, learned senior counsel for the CCI that the order impugned is based on evidences and also admission of the appellants. Accordingly they may not be permitted to resile from their own admission. To substantiate his submission on the point of admissibility he has placed reliance on a judgement of Hon ble Supreme Court reported in AIR 1960 SC 100, Narayan Bhagwantrao Gosavi Balajiwale Vs Gopal Vinayak Gosavi Others and referred to para 12 which is quoted hereinbelow: 12. In the present case, the burden of proof need not detain us for another reason. It has been proved that the appellant and his predecessors in the title which he claims, had admitted on numerous occasions that the public had a right to worship the deity, and that the properties were held as Devasthan inams. To the same effect are the records of the revenue authorities, where these grants have been described as Devasthan, except in a few cases, to which reference will be made subsequently. In view of all these admissions and the revenue records, it was necessary for the appellant to prove that the admissions were erroneous, and did not bind h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s already annexed as Annexure A-4 [Page 263 to 273] of the Appeal No. 43/2018 [Volume 2] Subsequently, on the request received from the DG, four entities i.e. Lahs Green India Pvt Ltd [Respondent No. 6 herein] Sanjay Agencies [Respondent No. 7 herein]. Mahalaxmi Steels (Appellant herein] and Raghunath Industry Pvt Ltd [Respondent No. 8 herein] were also included as Opposite Parties in the matter vide order dated 28th June 2016. 5. The DG, after completing the investigation submitted the Investigation Report to the CCI on 23rd November 2016. Copy of the DG Report is already annexed as Annexure A 13 [Page 336 to 476] of the Appeal No. 43/2018 [Volume 3] During investigation, in August September 2016, Lesser Penalty Applications were filed by the Parties under Section 46 of the Competition Act, 2002. For details of the Lesser Penalty Applications filed by the Parties, kindly see, Para 5 to 8 of the Impugned Order, for summary of DG's Investigation, kindly see, Para 17 to 37 of the Impugned Oder, annexed as Annexure A-1 of the Appeal No. 43/2018 [Volume 11. 6. In the present case, the CCI has considered the submissions of the parties [Kindly see, Para 38 to 66 of the Impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to be excessive, perverse, illegal or disproportionate. .Accordingly, the Appeals filed by the Appellants are liable to be dismissed with heavy costs. 9. Even otherwise, alternatively, if the penalty is found to be excessive, this Hon'ble Tribunal, have all the powers of the trial court to reverse, modify, enhance, reduce the penalty, while exercising its appellate jurisdiction under Section 53-A and 53-B of the Competition Act, 2002. 10. It will not be out of place to mention here that in the aforesaid 5 tenders in question, public money worth several crores were involved [See Para 19 of the Impugned Order] and as the DG investigations reveals the Opposite Parties were successful in sabotaging/ defrauding the state exchequer fraudulently by having/ putting proxy bidders in all the aforesaid tenders. Hence, apart from the contravention under the provisions of the Competition Act, 2002, it also attracts various provisions of the Indian Penal Code and Prevention of Corruption Act for which the requisite cognizance may be taken. 23. Besides hearing learned counsel for the parties we have minutely perused the entire materials available on record which include i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Hon ble Supreme Court in Excel Crop Care (supra) where turnover appearing in Section 27 of the Act has been interpreted to mean relevant turnover , no penalty should be imposed on them as they do not have any relevant turnover or relevant profit . 95. In this regard, the Commission observes that facts before the Hon ble Supreme Court in that case were altogether different from the facts of this case. The Hon ble Supreme Court invoked the principle of proportionality and doctrine of purposive interpretation in Excel Corp Care case to interpret the term turnover in Section 27 of the Act as relevant turnover to ensure that infringer does not suffer punishment which may be disproportionate to the seriousness of the infringement. This cannot be interpreted to mean that the infringer should not be punished at all. In fact, Hon ble Supreme Court has stated that the perpetrators of anti-competitive practices need to be indicted and suitably punished and the aim of penal provision is to ensure that it acts as deterrent for others. The relevant portion of the judgement of Hon ble Supreme Court is reproduced below: 74) (vi) . No doubt the objective c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maximum percentage prescribed under Section 27(b) of the Act is concerned we are of the opinion that though CCI is empowered to take turnover upto 10% but while taking up such percentage i.e. maximum as prescribed in the Act it was required for the CCI to elaborately assign reason for coming to the conclusion for maximum penalty. It may not be held that CCI in no case can impose higher penalty upto 10% but in such situation it would be required for the CCI to afford full opportunity to the concerned party to address the CCI as to why such higher penalty may not be imposed. On going through the impugned order we find no indication as to whether the appellants were asked to explain regarding exemplary penalty i.e. maximum 10% or detailed reasons has been assigned for the same. It is true that in respect of imposing penalty discretion has been given to the CCI, but at the same time it is settled that discretion may not be exercised indiscreet manner. We are of the opinion that though discretionary jurisdiction may not be interfered with but in view of facts and circumstances particularly the fact that discretion by the CCI in the present case has not been exercised in a reasonable ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation perused the documents submitted by third parties, the statements on oath of key persons in the bidding entities and the statement of Shri Bipin Vijay Salunke and no direct evidence of involvement of officials of OP-3 was noted. Certain issues of systemic failures have also been pointed out earlier in the report. Taking appropriate measures regarding these issues could have prohibited such cartel activity. The call details records of Shri Sanjay Atmaram Gawade (Assistant Municipal Commission), Shri Ravindra Krishnanath Mulay (Brnach Engineer) and Shri Suresh Jagtap (Jointer Municipal Commissioner) were examined and it wasnoted that there were a number of calls which have been exchanged on mobile No.7720999222 and 7720999333 registered in the name of M/s Ecoman Enviro Solutions Pvt Ltd (OP2) and are being used by Shri Parimal Salunke (770999222) and Shri Bipin Vijay Salunke (7720999333). However, Shri Sanjay Atmaram Gawade (Assistant Municipal Commissioner) and Shri Ravindra Krishnanath Mulay (Branch Engineer) in their statement on oath have stated that these calls were for the purpose of compliance to be given in court/NGT/questions related to Assembly of Maharash ..... X X X X Extracts X X X X X X X X Extracts X X X X
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