On October 16, The National Company Law Appellate Tribunal has declined to pass an order in the favour of the opposite parties on the ground of Competition Commission of India taking a lenient view while levying monetary penalties.
The appellate authority highlighted that under section 27 of the Competition Act, 2002 penalty upto 10% of the average of the turnover or income, as the case may be, for the last three proceedings financial years can be imposed. However, the CCI has undertaken a lenient view by imposing a penalty of 1% of the average and average of their relevant turnover for the three financial years i.e. 2015-16 to 2017-18.
The appeal was filed under Section 53 (b) of the Competition Act, 2002 challenging the final order and judgment passed by the Competition Commission of India under Section 27 of the Act.
The case was related to a tender issued by SBIIMS, a wholly owned subsidiary of the State Bank of India (SBI).
Complaint alleging that the vendors had engaged in bid-rigging and cartelization was received by the competition regulator on June 28, 2018.
Following which an investigation under Section 19(1) of the Competition Act, 2002, was undertaken by CCI. Further, directing the Director General to conduct an investigation into the allegations of anticompetitive behavior.
In the report, The Director General concluded vendors had contravened Sections 3(3)(c) and 3(3)(d) of the Competition Act. Accordingly, the CCI under Section 27 of the Act imposed penalties on the parties involved.
The penalties were calculated as 1% of the total turnover for the last three financial years. The CCI found that the vendors had engaged in bid-rigging and cartelization, resulting in inflated prices and reduced competition.
The matter was before the bench of Justice Rakesh Kumar Jain, Naresh Salecha (Judicial Member), and Indevar Pandey (Technical Member).
