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TMI Blog2019 (2) TMI 2122X X X X Extracts X X X X X X X X Extracts X X X X ..... dents as the case of Appellant Informant lacked reasonable allegations based on any concrete evidence. 2. The issue arising for determination is whether the CCI erred in undertaking an exercise itself to determine whether or not the allegation of inter-alia collusive bid rigging leveled against Respondent No. 2 & 3 has been established without ordering an investigation in terms of Section 26(1) of the Competition Act, 2002. 3. Before referring to the allegations leveled in the information lodged by the Appellant with CCI, it would be appropriate to notice the relevant provisions of the Competition Act, 2002. Relevant portion of Section 3 reads as under:- "3. (1) No enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India. (2) Any agreement entered into in contravention of the provisions contained in subsection (1) shall be void. (3) Any agreement entered into between enterprises or associations of enterprises or perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to increase efficiency in production, supply, distribution, storage, acquisition or control of goods or provisions of services have been kept out of purview of Sub-section (3) which means that the presumption relating to such agreement shall not be available qua joint venture agreements. The explanation appended to Sub-section (3) provides that an agreement between such enterprises or persons engaged in identical or similar production or trading of goods or provisions of services shall fall within the definition of 'bid rigging', if it has the effect of eliminating or reducing competition or bids or adversely affecting or manipulating the process for bidding. A bare look at the provision engrafted in Section 3 brings it to fore that anti-competitive agreements in respect of certain activities involving production, supply, distribution, etc. which adversely affects competition, at a given time or where there is likelihood of its affecting competition in future are presumed to have an appreciable adverse effect on competition if such agreements or decisions taken in pursuance thereof determine prices, control or limit production, supply, markets or results in sharing market or sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prise Equipment. L-1 was to be determined in each group respectively based on the total value of items in that group while the bidder had the liberty to bid for one or both categories. The Appellant restricted his allegations only in respect of Group-A items. Only OEMs and SIs were eligible to bid. All items in the each group were required to be of the same OEM. According to the Appellant bids were submitted by R-2 and R-3 only. Rate Contract LOI for IT equipment of contract value of about Rs. 110 Crores + Taxes was awarded to Respondent No. 2 by BHEL on 23rd December, 2017. The total value of Rate Contract comprised of the elements of outright purchase price, maintenance cost and interest component. The Appellant alleged that in the entire bidding process Respondents 2 and 3 acted in collusion and thereby rigged the process resulting in huge loss to the State Exchequer. 6. The CCI after hearing the Appellant - Informant and the officials of BHEL found that the tender floated by BHEL was an open tender and there was no embargo on any SI or OEM to participate. It noted that various SIs, OEMs and other representatives from the industry had participated in the pre-bid discussions. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f an investigation by DG. 7. Heard the Appellant in person and considered his submissions. 8. CCI is empowered to inquire into any alleged contravention of provisions contained in Section 3(1) or Section 4(1) of the Competition Act, 2002 on its own motion or on receipt of an information from any person, consumers or their associations or trade associations or upon a reference made to it by the Central Government, State Government or Statutory Authority. Section 26 of the Act provides that upon receipt of a reference or upon its own knowledge or upon information received from any person, the Commission, if of opinion that there exists a prima facie case, shall direct the Director General (DG) to cause an investigation to be made into the matter. On a bare reading of this provision, it is abundantly clear that causing of investigation to be conducted by Director General is entirely dependent on existence of a prima facie case warranting such investigation. Unless the Commission is satisfied that a prima facie case exists, the Informant (where information has been received from any person) has no vested right to seek investigation into alleged contravention of provisions Section 3(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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