Grasim Industries held abusing its dominance by charging discriminatory prices from customers: CCI

Case Details: Informant (Confidential) v. Commissioner Nanded Waghala City Municipal Corporation Nanded (NWMCN) - [2021] 131 taxmann.com 324 (CCI)

Judiciary and Counsel Details

• • Ashok Kumar Gupta, Chairperson
  • Sangeeta Verma and Bhagwant Singh Bishnoi, Member

Facts of the Case

In this case, the Informant filed a complaint under section 19(1)(a) of the Competition Act, 2002 (the ‘Act’), claiming confidentiality over its identity, against Commissioner, Nanded Waghala Municipal Corporation Nanded (OP-1) and Shri Satish, Director, Sanman Buildcon Ltd. (OP-2), alleging, that the provisions of sections 3 of the Act were violated.

The Informant had a mobile device repairing store in the ancient Mahatma Phule Market building, which featured a vegetable market, a marriage hall, and 37 road-facing shops and was erected on a total area of 4063.00 sq. meters, according to the Information.

According to the Informant, elected members of the Municipality of Nanded resolved to renovate the aforementioned market through Public Private Partnership mode by removing the previous building, which was built in 1975-77, via a decision dated November 22, 2019. As a result, the Mahatma Phule Market was razed by OP-2. As a result, the Informant was said to have lost his job. The Informant was enraged because OP-2 had refused to rehabilitate him by refusing to assign him a store in the freshly redeveloped market.

The Informant has also alleged that OP-2 has won all of Nanded’s contracts, including the Nanded Airport, Maharaja Ranjit Singh Market, Sanman Prestige Complex, and the Municipal Corporation’s administrative building, all of which are on public property. Furthermore, the Informant said that OP -2 made approximately two billion INR by manipulating bids, bending regulations to its advantage, controlling pricing, and paying less than the minimum salaries set by the Chief Commissioner of Labour, Ministry of Employment, Government of India.

In addition to foregoing, OP-1 was pressurized by OP-2 to hand over the land on which the Mahatma Phule Market was constructed on a 90-year lease, which was illegal according to Municipal Rules, as the same cannot be given beyond a period of 30 years to any private individual or private company. However, the tender amount, which was initially set at Rupees Forty Two Crores (as per notification dated 27-9-2018), was lowered to Rupees Thirty-Five Crores, and finally reduced to Rupees Thirteen Crores Ten Lakhs and Forty Thousand. The Informant also alleged contravention of the provisions of section 3(3)(d) of the Act by OP-2 by rigging tenders that were invited by OP-1.

Based on the foregoing allegations, the Informant claimed that the OPs collaborated and manipulated the tender process in violation of section 3 of the Act, and has asked the Commission to order the Director-General to conduct an inquiry into the matter.

CCI Held

Having examined the Information and the averments made therein, the Commission noted that the Informant was primarily aggrieved of the fact that OP-2, who was carrying out the redevelopment of Mahatma Phule Market site, has refused to rehabilitate the Informant by denying allotment of a newly constructed shop in the redeveloped market. As the Informant was operating a mobile handset repairing center from a shop in the said market, the demolition of the structure was stated to have led to the loss of its livelihood.

To substantiate the allegations, the Informant has submitted copies of documents that seem to be nothing but the summary of the tender opening dates, tender amount, details of Earnest Money Deposit (EMD), Corrigendum-1 (Pre-Bid replies/Amendments) dated 23-9-2019 issued by OP-1, and Form-1 Acceptance Letter dated 6-12-2019 issued by OP-1. Apart from the above-mentioned documents, the Informant has not provided any details regarding the number of participants in the impugned tender. The Informant has also not provided any documents or material or averments wherefrom even prima facie any concert between the bidders can be deciphered in respect of the impugned tender.

On a careful perusal of the Information, the Commission pronounced that the issues raised by the Informant such as breach of municipal by-laws, non-allotment of a shop in the re-developed market were beyond the purview of the Act. As regards, allegations of bid-rigging, the Informant has failed to adduce any material whatsoever which can show even a prima facie case of bid-rigging. The Informant has annexed only certain screenshots of the tender document in support of the allegations. Nothing turns upon such documents.

In view of the above, no case was made out against the Opposite Parties for contravention of the provisions of section 3 of the Act.