The statutory safe harbour available to a member of a cartel is the leniency programme.

The
leniency policies adopted by Competition Commission of India and its counter parts all over
the world, act as the most effective tools to detect, investigate and break ‘cartels’ and restore
healthy and free competition in the market.

Leniency programmes are designed to give incentives to cartel members to take the initiative
to approach the competition authority, confess their participation in a cartel and aid the law
enforcers. The aim is to drive a wedge at the heart or cartel through its trust and mutual
benefit.

In India, a Party wishing to avail itself of this benefit will have m an application under
Section 46 of the Competition Act and the Competition Commission of India (Lesser
Penalty) Regulations 2009

The first leniency decision (above-discussed) was followed by amendments to the

Competition Commission of India (Lesser Penalty) Regulations, 2009, in August 2017. The
amendments in the Leniency Regulations were in fact overdue considering the growing
number of cartel cases being investigated by CCI. The amendments bring clarity to the
existing leniency regime in India and provide incentives for companies and individuals to
proactively assist in cartel enforcement.
The amended Regulations have ensured more transparency and efficiency within the existing
leniency laws. Under the old regulation, the first applicant would be granted up to 100%
reduction in penalty and the second applicant up to 50% while the third applicant would be
granted up to 30% reduction in penalty. Unlike the erstwhile regulations, where the reduction
of penalty was granted only to the first three applicants, the amended rules do not provide for
this restriction. The amendments provide for lesser penalty not only to the first three
applicants, but also to subsequent applicants (eligible for up to a 30% reduction in the
applicable penalty; similar to third applicant). Now, there is no limitation on the number of
leniency applicants, thus incentivising a larger number of cartel participants to come forward
and disclose a cartel.
'Individuals' were specifically brought under the ambit of the new Regulations with definition
of an ‘applicant’ being amended. Under the new Regulations, the definition of an 'Applicant'
includes individuals also. According to Sec. 2(b) of the Regulations an "applicant” means an
enterprise, as defined in clause (h) of Sec. 2 of the Act, who is or was a member of a cartel
1
and includes an individual who nas been involved in the cartel on behalf of an enterprise, and
submits an application for lesser penalty to the Commission. The Applicant no more needs to
be an enterprise only, even an individual connected with the enterprise can be the Applicant.
However, Rule 3 of the new Regulations provides for various conditions which the applicant
has to satisfy for being eligible for lesser penalties. A condition has been added to the
existing criteria that where the applicant is an enterprise, is shall provide the names of
individuals who have been involved in the cartel and for whom the lesser penalty is sought.
This is troublesome as the extent of the activity is not always known at the time of first
contact with the regulator and will depend on the outcome of the company’s internal
investigation
Apart from the above, the new Regulations bring in some other important changes, such as
the possibility for a reduction in penalty of up to 100 per cent to ‘more than one’ applicant; a
requirement to specify the names of the individuals who have been involved in the cartel in
the leniency application itself; the specification of clear timelines for the leniency applicants;
and powers to the DG to disclose the information received in a leniency application for the
purpose of investigation after taking certain safeguards and obtaining permission from the
CCI in this regard.

Penalties:
Sec. 27: Orders by Commission after Inquiry into Agreements or Abuse of Dominant
Position

Section 27 of the Act lays down reliefs that may be granted for the violation of Section 3 and
4 of the Act. In cases where after enquiry, CCI finds that the agreement is anti-competitive
and have AA E C, it may pass all or any of the following orders [apart from any interim
orders/temporary injunction that it can pass under Sec. 33 of the Act}:

(a) Cease and desist order. Direct the parties to discontinue and not to re-enter such
agreement.
(b) Modification of agreement. Direct the offending parties to modify the agreement to the
extent and in the manner as may be specified in the order.
(c) Payment of costs, etc.-. Direct the enterprises concerned to abide by such orders as the
Commission may pass and comply with the directions, including the payment of costs.

2
(d) Heavy penalty. Impose such penalty as it may deem fit which shall not be more than 10%
of the average of the turnover for the last three preceding financial years upon each of the
party. In case of a cartel, each producer, seller, distributor, trader or service provider included
in that cartel can be imposed a penalty up to three times of its profit for each year of the
continuance of such agreement or 10% of its turnover for each such year, whichever is
higher.
(e) Pass any such order or issue such directions as it may deem fit

Compensation Section 42 A of the Act also provides for the compensation in case of
contravention of orders of the C CI. Thus, in addition to the civil/criminal sanctions and
payment of fines, the wrongdoer may also be called upon to pay damages to the injured
parties.

Leniency regime: Section 46 provides that the Commission may, if it is satisfied that any
producer, seller, distributer, trader or service provider included in a ny cartel, which is alleged
to have violated Section 3, has made a full and true disclosure in respect of the alleged
violations and such disclosure is a vital, impose upon such producer, seller, distributor, trader
or service provider a lesser penalty as it may deem fit, than leviable under this Act or rules or
the regulations.

The lesser penalty shall not be imposed by the Commission in case where the report of
investigation has been received before making such disclosure.
Further, it shall not be imposed if the person making the disclosure does not continue to co-
operate with the Commission fill the completion of the proceedings before the Commission.
If the Commission is satisfied that such producer, seller, distributor, trader or service provider
included in the cartel had in the course of proceedings-

- not complied with the condition on which the lesser penalty was imposed by the
Commission; or
- had given false evidence; or
- the disclosure made is not vital and thereupon such producer, seller, distributor, trader or
service provider may be tried for the offence with respect to which the lesser penalty was
imposed and shall also be liable to the imposition of penalty to which such person have been
liable, lesser penalty shall not be imposed.
3
To implement the leniency programme, the CCI formulated the Competition Commission of
India {Lesser Penalty) Regulations, 2009. These Regulations provide for a reduction in
penalty based on the sequence in which cartel participants approach the C CI. The first cartel
member to approach the CCI may get a waiver of up to 100 per cent of the penalty amount;
the second member may get its penalty reduced by up to 50 per cent; and the third by up to 30
per cent.

S.45 – Penalty for offences – giving false information/omits to state any material fact/
suppresses or destroys any document
S.48 – Contravention by companies
S.48(1) – Person in charge of running the company/ responsible for conduct
S.48(2) – Person with whose consent/connivance or neglect the conduct has taken place

Cartelization In Respect Of Tenders Floated By Indian Railways For Supply Of Brushless

Dc Fans And Other Electrical Items

(Suo Moto Case 03/2014)

The CCI penalized three companies for allocating tenders floated by the Indian Railways.
The investigation had been initiated based on information received from the CBI. Post the
initiation, one of the opposite parties filed an application under Sec. 46 of the Competition
Act admitting to the contravening conduct and seeking leniency. After noting the stage at
which the application was filed, the nature of evidence and value addition provided, the CCI
granted a 75% reduction in penalty for the leniency applicant and individual concerned. The
other two participants who continued to disavow any wrongdoing did not receive any
reduction in penalties.

[In line with the law, the two underlining parameters for grant of leniency appear to be
complete cooperation during the investigation and value addition to the case due to the
information and evidence submitted by the leniency applicant.]

4
In Re: Cartelisation in respect of zinc carbon dry cell batteries market in India (2018)
Suo Motu Case No. 02 of 2016

Against
1. Eveready Industries India Ltd.
2. Indo National Ltd.
3. Panasonic Energy India Co. Ltd.
4. Association of Indian Dry Cell Manufacturers

The instant case was taken up by the Competition Commission of India (hereinafter,
‘Commission’) suo motu, pursuant to an application dated 25 May, 2016 filed by Panasonic
Energy India Co. Ltd. (OP-3), a subsidiary of Panasonic Corporation Japan under
Regulation 5 of the Competition Commission of India (Lesser Penalty) Regulations, 2009
(hereinafter, ‘Lesser Penalty Regulations’) read with Section 46 of the Competition Act, 2002
(hereinafter, the ‘Act’).

OP-3 in its Lesser Penalty Application submitted that there existed a cartel amongst OP-1,
OP-2, and OP-3, which were all engaged in the business of, inter alia, manufacture and
supply of zinc-carbon dry cell batteries, to control the distribution and price of zinc-carbon
dry cell batteries in India, in contravention of the provisions of Section 3(3) read with
Section 3(1) of the Act.

It was also disclosed that the Manufacturers were members of a trade association, namely,
Association of Indian Dry Cell Manufacturers (hereinafter, ‘AIDCM’/ ‘OP-4’) which
facilitated transparency between the Manufacturers by collating and disseminating data
pertaining to sales and production by each of the Manufacturers.

Based on the disclosure under Lesser Penalty Application of OP-3, the Commission noted
that the alleged conduct of cartelisation essentially took place through, (a) coordinated price
increase by the Manufacturers; (b) active measures by the Manufacturers to implement price
control and reduce possibilities of price competition amongst them; and (c) reduction of
price competition at the stockist/ retailer/ wholesaler level by controlling and agreeing on
the level of incentives to be provided. DG also carried out search and seizure operations.

Lesser Penalty Application of OP-1 and OP-2

5
 Subsequently, on 26 August 2016, OP-1 filed an application under Regulation 5 of the
Lesser Penalty Regulations read with Section 46 of the Act.
 On 13 September 2016, OP-2 also filed an application under Regulation 5 of the Lesser
Penalty Regulations read with Section 46 of the Act.

Industry overview:

 Zinc-carbon dry cell battery segment contributes about 97% of the total dry cell market,
while high priced alkaline batteries are just 3% of the market.
 OP 1- 47-49%
 OP 2- 27.5-31%
 OP 3 -18.2-20.9%

DG:
 top management of the Manufacturers maintained regular contacts by way of personal
visits, meetings of association, exchange of fax messages, emails, etc., and shared pricing
and other vital, confidential commercial information.
 In order to give effect to the decided price increase in the market, the market leader i.e.
OP-1 used to make announcement of increase in MRP through press releases
 MRP was increased by OPs at least on six occasions by Rs 0.50 (fifty paisa) each,
resulting in about sixty percent increase in price of the concerned product since January,
2010.
 also exchange of information about the components of pricing structure of their products
including trade discount, wholesale price, dealers/ stockist landing cost, open market
rates, retailers margin, sales promotion schemes etc. to monitor effective implementation
of price increase and determine price for distributors/whole sellers/retailers and end
consumers, for allocation of market amongst themselves on the basis of types/sizes of
batteries and/or geographical areas, and to control output to establish higher prices and
control supply
 With respect to AIDCM (OP-4), the DG found that it facilitated cartel activities amongst
its members by providing a convenient platform for sharing /discussing prices and other
commercially sensitive issues on the pretext of discussing the market conditions.
 thereby contravened the provisions of Section 3(3)(a), 3(3)(b) and 3(3)(c) read with
Section 3(1) of the Act.
6
 the DG identified certain persons in terms of Section 48 of the Act who played active role
in the contravention of the provisions of Section 3 of the Act and also those who were
incharge of and responsible to the respective companies for the conduct of their
businesses. In this regard, the DG found active involvement of the top management of
OPs including their Managing Director, Joint Managing Director and Whole-time
Director, Head of Marketing & Sales etc. as well as other officers/ office bearers.

Submissions for lesser penalty:

 OP-1 and individuals submitted that it has made ‘significant value addition’ in the case by
providing a full, true and vital disclosure about the said cartelisation in the zinc- carbon
dry cell battery
 Furthermore, it has named AIDCM (OP-4) as one of the participants of the said cartel,
which strengthened the investigation conducted by the DG, though both OP- 2 and
OP-3 had denied the role of AIDCM in fixing the price
 Provided evidence
 Fully cooperated
 Mitigating factors – rise in cost of raw material
 OP-2 and individuals – “significant value addition”
 genuine, full, continuous and expeditious cooperation
 various mitigating factors while imposition of penalty, if any, such as stagnant
demand of zinc-carbon dry cell batteries and increase in the cost of raw materials for
zinc-carbon dry cell
 it understands the seriousness of the violation and therefore, is in a process of putting
in place an effective Competition Law Compliance Program
 OP-3 – was first to disclose the details of the cartel
 because of the Competition Compliance Program in its organisation, it became aware
of the existing cartel of Manufacturers and accordingly approached the Commission
under the Lesser Penalty Regulations.
 Cooperated
 OP-4 – no role to play
 Secretary is only an administrative employee

7
Analysis
 From the information and evidence furnished by OPs and the investigation by the DG, it
is observed that the Manufacturers indulged in anticompetitive conduct of price
coordination, limiting production/ supply as well as market allocation. The price
coordination amongst the Manufacturers encompassed not only increase in the MRP of
the zinc carbon dry call batteries but also exclusion of ‘price competition’ at all levels in
the distribution chain of zinc-carbon dry cell batteries to ensure implementation of the
agreement to increase price.
 They not only decided the schedule of start of production of units with new MRP but also
the start of billing as well as availability of products, with revised rates in the market.
 The evidence on record shows that price increases made by OP-2 and OP-3 immediately
following announcement of price increase by OP-1 were with prior information of
imminent price increase by OP-1. Due to this, OP-2 and OP-3 were able to increase prices
of their respective products on most of the occasions with little or no time lag though
ordinarily such actions of changing the price label of the product, packaging with new
price tag etc. would take considerable time.
 Since the ‘price competition’ in the distribution chain, as stated above, could have
rendered the agreement/ understanding reached among the Manufacturers ineffective,
they entered into agreement/ understanding/ coordination amongst themselves to cover all
other elements of the price structure besides MRP, comprising trade discount, wholesale
price, dealer/ stockist landing cost, open market rates, retailers’ margin, sales promotion
schemes etc.
 The Commission observes that while it may be legitimate for enterprises engaged in the
same line of business to share common concerns, the Manufacturers in the instant case
used the platform of AIDCM to coordinate their actions, inter alia, on pricing.
 Top management played an active role with frequent direct email communications b/w
them
 There is further evidence to show that by collating and disseminating crucial business
data of the competitors, AIDCM facilitated better coordination amongst the
Manufacturers.
 The evidence on record also shows that OP-4 through Shri S. Kumaraswami, former
Secretary AIDCM, had been privy to the intended price increase by the members of
AIDCM.

8
  the Commission finds that OP-4 through its practices, decisions and conduct of the
office bearers i.e. individuals of OP-4, facilitated anti-competitive agreement/
understanding and concerted action amongst its members in contravention of the
provisions of Section 3(3)(a) read with Section 3(1) of the Act.
 the Commission finds that contention of Shri Ravindra Grover, Secretary of OP-4,
that Section 48 of the Act does not apply to an unregistered association of
companies and no proceedings against him can be initiated under Section 48(2) of
the Act as he was not the Secretary of a ‘company’ but an association, is
misconceived. In this regard, it is pointed out that Explanation (a) to Section 48 of
the Act clearly provides that the term ‘company’ means a body corporate and
includes a firm or other association of individuals.
 OP-1, OP-2 and OP-3 have been involved in cartelisation of zinc-carbon dry cell batteries
in India which has been facilitated by OP-4, in contravention of the provisions of Section
3(3)(a), 3(3)(b) and 3(3)(c) read with Section 3(1) of the Act.

Evaluation of lesser penalties

 Keeping in view the sequence in which they approached the Commission under
Regulation 5 of Lesser Penalty Regulations read with Section 46 of the Act, it granted
First Priority Status to OP- 3, Second Priority Status to OP-1 and Third Priority Status to
OP-2.
 OP-3
 The Commission observes that the information and evidence provided by OP- 3, first
applicant to file Lesser Penalty Application, was crucial in assessing the domestic
market structure of the zinc-carbon dry cell batteries, nature and extent of information
exchanges amongst OPs with regard to the cartel and identifying the names, locations
and email accounts of key persons of OPs actively involved in the cartel activities.
 The information and cooperation received from OP-3 enabled the DG to conduct
search and seizure operations at the premises of the Manufacturers and seize quality
evidence in the form of emails, handwritten notes and various other documents.
 Thus, full and true disclosure of information and evidence and continuous cooperation
provided by OP-3, not only enabled the Commission to order investigation into the
matter, but it also helped in establishing the contravention of Section 3 of the Act by.

9
 the Lesser Penalty Applications of OP-1 and OP-2, the Commission notes that
incriminating documents (both hard and soft copies) recovered and seized from the
premises of the Manufacturers during the search and seizure operations on 23 August
2016 were independently sufficient to establish the contravention of Section 3 of the Act
by OPs.
 Therefore, information/ evidence on cartel including the period of cartel, submitted by
OP-1 and OP-2 did not result in ‘significant value addition’
 But, the Commission also notes that both OP-1 and OP-2 have provided genuine, full,
continuous and expeditious cooperation during the course of investigation in the
present case.

(a) The Commission grants reduction of 100 (hundred) percent of the penalty leviable under
the Act, to OP-3.

(b) The Commission observes that OP-1, who is second in making a disclosure in this case,
approached the Commission not at the beginning but at a later stage of the investigation, i.e.
three days after the search and seizure operations had been carried out by the DG

the Commission finds that almost all disclosures made by OP-1 were available with the
Commission/ DG either as disclosures by OP-3 or material obtained by DG during search and
seizure operation

However, OP-1 through several oral statements supported by contemporaneous documents,

corroborated information already in possession of the DG and helped connect the evidence
gathered during the search and seizure operations

Commission decides to grant 30 (Thirty) percent reduction in the penalty to OP-1

(c) The Commission notes that OP-2, who is third in making a disclosure in this case, has
also through several oral statements supported by contemporaneous documents, corroborated
certain information already in possession of the DG and explained the evidence gathered
during the search and seizure operations. However, the Applicant approached the
Commission not at the beginning but after nearly three weeks of the search and seizure
operations of the DG.

10
Taking into account these factors, the priority status granted and continuous and expeditious
co-operation extended by OP-2 including admission of cartelisation, the Commission decides
to grant 20 (Twenty) percent reduction in the penalty to OP-2

ORDER: 1.25 times of the profits of the Manufacturers for each year (8 years) for the
duration of the cartel under S.27

Individuals of OPs found to be guilty of contravention of the Act and liable for penalty under
Section 48 of the Act:

 The liability of the individuals of OP-1, OP-2, OP-3 and OP-4 under the provisions of
Section 48 of the Act flows vicariously.
 No individual of OPs has shown that contravention of the Act was committed without his
knowledge or that he had exercised due diligence to prevent the commission of
contravention.
 But for two individuals of OP-2, namely, Shri P. Dwaraknath Reddy and Shri Hemant
Gupta, who have questioned the finding of the DG, none of the other individuals of the
Manufacturers mentioned by the DG, have disputed the finding in respect of those held
liable under Section 48 of the Act.
 Therefore, each one of them is deemed to be guilty of the contravention of the Act and is
liable for penalty under Section 48 of the Act.
 Reduced in the same proportion with no penalty for OP-3 individuals

Nagrik Chetna v. Fortified Security Solutions (2018)

The Pune Municipal Corporation [“PMC”] floated certain tenders through their website for
“Design, Supply, Installation, Commissioning, Operation and Maintenance of Municipal
Organic and Inorganic Sold Waste Processing Plants”.
The informant alleged that the bids received for these tenders were made through anti-
competitive practices, in violation of Section 3 of the Act. Specifically, it was alleged that the
bidders were involved in bid rigging/collusive bidding, thereby violating Section 3(3) red
with Section 3(1) of the Act.
The Commission found a prima facie case and ordered the DG to conduct investigation.

11
On advice of the DG, CCI ordered that all six bidders to the tenders also be made Opposite
Parties (“OPs”).
During the course of the DG’s investigation, which lasted a little over a year, all OPs filed
leniency applications within a gap of few days under Regulation 5 of the Regulations read
with section 46 of the Act.
The DG observed that OP-2 (Ecoman Enviro Solutions) participated in all five tenders and
emerged as L-1 bidder in all of them. The DG assessed the relevant evidence such as
addresses & contact details, the demand drafts submitted towards earnest money deposit and
the internet protocol address used by them to upload tender documents and concluded that all
evidences indicated that the parties were conjoint with each other and engaged in bid
rigging/cartelisation to submit the relevant tenders

OP 2- Ecoman Enviro Solution Pvt Ltd

OP-6 Mahalaxmi Steels

Issue: Whether Section 3(3) of the Act is applicable in the instant case when not all Ops
are engaged in ‘identical or similar trade of goods or provision of services’.

 The issue that arises before the Commission is that when bid rigging is alleged in the
tender process after the same has taken place, should it be open for any of the bidders to
contend that they would not be covered by the provisions of the Act as they had not
started that business activity at all at the time of bidding whereas the other bidders were
well established players.
 In other words, whether in the context of Section 3(3)(d) of the Act the phrase
‘engaged in’ ought to be accorded the literal meaning or a meaning that advances the
objectives of the Act.
 In this regard, the Commission notes that it is a well settled principle of law that when
two interpretations are feasible, that which advances the remedy and suppresses the
evil has to be preferred as envisioned by the legislature.
 The Commission is of the view that it is the business activity of the parties that they are
actually bidding for and the one regarding which the violation of law has been alleged

12
 which is relevant for the purpose of the applicability of Section 3(3)(d) Act rather than
any other business activity(s) parties ‘were’ or ‘are’ engaged in.
 If the parties were allowed to escape the grasp of the Act by considering them as not
competitors on the pretext that they are actually engaged in varied businesses, it may
defeat the very purpose of the provisions of Section 3 (3)(d) of the Act.
 Any construction other than this would mean that new entrants are totally exempt
from the provisions of bid rigging for the reason that they are or were not involved in
that business at the time of bidding.
 This would not only render the provision of Section 3(3)(d) nugatory but would make
it totally redundant.

Issue: Breach of confidentiality

 The Commission observes that it is well recognized fact that the investigation report is
not a public document and is not to be shared with public.
 This aspect is enshrined in Regulation 47 of the Competition Commission of India
(General) Regulations, 2009 (hereinafter, ‘General Regulations’), which clearly provides
that the proceedings before the Commission are not open to public, except where the
Commission so directs.
 In the instant case, there being no direction to make proceedings open to public, there was
no question of sharing the investigation report of the DG with public.
 However, despite this regulatory provision, the Informant shared the investigation report
with the media
 In view of the foregoing, contention of the OPs that reputational harm has been caused
due to action/omission of the DG/Commission appears to be misplaced.
 Such harm, if any, has been caused either due to disclosure of the contents of the
investigation report of the DG by the Informant or due to OPs own acts of collusion in
contravention of the provisions of the Act.
 The allegation against the DG/ Commission is nothing more than a ruse to get reduction
or discharge from imposition of penalty under the Act.

Issue: Investigation report and value of evidence in application

13
 The Commission with regard to this issue stated that the decision on significant value
addition by the Lesser Penalty Applicant and consequent reduction in penalty to the
Applicant is something which the Commission would decide and not the DG.
 Such a decision would be made looking into the contents of the Lesser Penalty
Application, documents/ evidence obtained during investigation by the DG, investigation
report of the DG and submissions of the OPs thereon.
 The observation in this regard would form part of the order of the Commission and not
the investigation report of the DG.

Establishing Violation
 the Commission observes that under the provisions of Section 3(3)(d) of the Act, bid
rigging shall be presumed to have adverse effect on competition independent of duration
or purpose and, also, whether benefit was actually derived or not from the cartel.
 Thus, in case of agreements listed under Section 3(3) of the Act, once it is established that
such an agreement exists, it will be presumed that the agreement has an appreciable
adverse effect on competition; the onus to rebut the presumption would lie upon the OPs.
 Explanation to Section 3(3) of the Act makes it clear that bid rigging even includes an
agreement that has the effect of reducing competition for bids or adversely affecting or
manipulating the process of bidding.
 Therefore, even if a subset of bidders collude amongst themselves to rig or manipulate
bidding process, it would be a violation of Section 3(3)(d) of the Act.
 The OPs were not able to rebut the presumption nor were able to show any accrued
benefits.
 All this was orchestrated by Shri Bipin Vijay Salunke though duly assisted by OP-4, OP-5
and OP-6 in the process. Thus, there is no doubt whatsoever on the meeting of minds and
collusion amongst OP-1, OP-2, OP-4, OP-5 and OP-6 to rig the bid in Tender nos.
34,35, 44, 62 and 63 of 2014 floated by PMC.
 These evidences show that OP-7 not only aided OP-1 and OP-6 to bid for tender but also
played a pivotal role in the operation of the cartel.
 Thus, the Commission finds that contravention of provisions of Section 3(3)(d) of the Act
is made out in instant case not only against OP-1, OP-2, OP-4, OP-5 and OP-6 but also
against OP-7

14
 Thus, there are glaring acts of omission and commission on part of OP-3, which
intentionally or otherwise aided the bidders in cartelisation. However, this conduct
cannot be said to be in contravention of the provision of Section 3(3)(d) of the Act and,
thus, OP-3 cannot be held liable under the provisions of Section 3 of the Act

Issue: Imposition of penalty/evaluation

 Argument that since OP5 and OP6 were not engaged in any manufacture, trade or
service pertaining to solid waste management (subject of tender),no penalty should be
imposed as per Excel Crop Care as “turnover” in S.27 would mean “relevant turnover”
which they didn’t have.
 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.
 The Commission is of the view that in the peculiar facts of this case where OPs have
admittedly submitted cover bids but are not engaged in the solid waste management
i.e. the activity relating to which bid-rigging has taken place, interpretation of
‘turnover’ in Excel Crop Care case would not be applicable.
 10% of average turnover for three financial years
 The Commission notes that under Section 48 separate liability arises against the
officer(s)/ person(s) of the contravening company including partnership firms but not
proprietorship firms.
 Thus, the Commission is of the view that provisions of this section would not apply to
proprietorship firms.
 Accordingly, since OP-1 and OP-6 are proprietorship firms in the present case, the
Commission decides not to hold their person(s)/ officer(s) separately liable under
S.48.

15
Evaluation
 OP6 was first to accept the cartel
 Even though DG had already gathered some evidence, it made critical disclosure
regarding modus operandi, and roles, and copies of documents
 Good value addition
 But application was at a later stage and hence only 50%
 OP5
 Disclosure regarding modus operandi, roles, emails
 Good value addition
 40%
 OP4
 First to approach the Commission under S.46
 Substantiated the evidence in possession of the commission and good value addition
 3rd in priority list
 Not involved in 2 tenders
 Granted 1st priority and hence 50%
 OP2
 Lat stage when evidence was already gathered of the cartel
 Almost all information was already available
 Co-operated throughout
 25%
 OP7 and OP1
 No value addition
 0% reduction

16