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Ravi Pal Vs. All India Sugar Trade Association (AISTA) and Ors. - (Competition Commission of India) (22 Mar 2019)

Presumptive inference and analysis provided by Informant cannot be basis for forming a prima facie opinion as to order investigation


MRTP/ Competition Laws

Present information has been filed by Informant under Section 19(1)(a) of the Competition Act, 2002 alleging contravention of the provisions of Section 3(3) of the Act by All India Sugar Trade Association (OP-1) and its Chairman, (OP-2), with other unknown persons, collectively referred to as Opposite Parties/OPs'.

The Informant has alleged that, the OPs are Collecting and disseminating pre-determined purchase price of sugar amongst the cartel members through WhatsApp and SMS and restricting the market for other competitors whose bids are based on market forces. Further, it vitiates the tender process so that an enterprise floating the tender has no option but to accept the prices determined by the Ops. Further, it is affecting players of the market in other states (Uttar Pradesh/Karnataka) who are selling/supplying sugar in the same market as the OPs because the former are compelled to lower the prices of sugar due to elimination of market forces.

Unless it is indicated by the Informant, based on cogent evidence, that there was any meeting of minds amongst the OPs for placement of bids for tenders or with respect to prices to be quoted in such bids, it is not possible to form a prima facie view in the matter under Section 26(1) of the Act, warranting an investigation.

The Commission notes that, the members of the WhatsApp group also comprise millers (two). There does not seem to be any rationale as to how millers (as sellers) who have an interest in getting higher prices of sugar, as against that of traders, who want to procure at lower prices, would be agreeable to sell the sugar at lower prices. No material has been placed on record related to tenders floated by the millers during the relevant period and the bid details etc. The information is lacking in material particulars as to how there had been bid rigging or collusive bidding in any specific tender, rather the averments made are general in nature. Therefore, on account of lack of credible material and information, the Commission does not find any merit in the allegations posited by the Informant.

The Commission further notes that, certain documents which were filed by the Informant indicating the rate at which sugar was purchased after the tender. Documents were not explained by the Informant during the preliminary conference. However, it is apparent that, the documents were not for the relevant period (the same are in respect of certain months of 2014 and 2015) and are, thus, inconclusive in the light of allegations raised by the Informant in respect of the relevant period.

Furthermore, the sugar commodity is subject to the provisions under the Essential Commodities Act, 1955 and orders issued thereunder and, thus, the final market price of sugar is dependent upon numerous factors. Therefore, the allegation of the Informant that the alleged practices affected the market price in the absence of any evidence is without merit and does not warrant any investigation.

The Commission is of the view that, no evidence has been provided by the Informant to show that, there was any meeting of minds between the OPs to establish correlation between bids submitted in any specific tender with the alleged sugar prices circulated over the WhatsApp group. Presumptive inference and analysis provided by the Informant cannot be the basis for forming a prima facie opinion as to order investigation in the matter. A prima facie case under Section 26(1) of the Act is not made out against the OPs.


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