Western Electric & Trading Company & Anr vs Competition Commission Of India & Ors

Western Electric & Trading Company & Anr. ...Appellants

Versus

Competition Commission of India & Ors. ...Respondents

Present: For Appellants :- Mr. M. M. Sharma, Ms. Deepika Rajpal and Mr. Anand, Advocates

For Respondent No. 1 : Mr. Pallav Shishodia, Senior Advocate assisted by Mr. Febin M. Varghese, Advocate

TA (AT) Competition No. 38 of 2017 (Old Appeal No.15 of 2017)

IN THE MATTER OF:

R. Kanwar Electricals & Anr. ...Appellants

Versus

Competition Commission of India & Ors. ...Respondents

Present: For Appellants :- Mr. Jafar Alam and Mr. Gautam Chawla, Advocates

For Respondent No. 1 : Mr. Pallav Shishodia, Senior Advocate assisted by Mr. Febin M. Varghese, Advocate

For Respondent No. 2 : Mr. Kamal Nijhawan, Mr. Sumit Gaur and Mr. Alok Sharma, Advocates 2

JUDGMENT

SUDHANSU JYOTI MUKHOPADHAYA, J.

In both the appeals as common order dated 18TH January, 2017

passed by the 'Competition Commission of India' (is under challenge,

they were heard together and disposed of by this common judgment.

2. These appeals have been preferred by 'Western Electric & Trading

Co. & Anr. in TA (AT) Competition No. 37 of 2017 (Old Appeal No.07 of

2017) and 'R. Kanwar Electricals & Anr.' (Appellants) in TA (AT)

Competition No. 38 of 2017 (Old Appeal No.15 of 2017) against the order

dated 18th January, 2017 passed by the 'Competition Commission of

India' ('Commission', for short) in suo moto Case No. 03/2014, wherein

the Commission observed and passed the following penal order:

"8.13 As the Commission has already held that the

impugned acts/ conduct of OP 1, OP 2 and OP 3

are in contravention of the provisions of Section

3(1) read with Section 3(3)(c) and 3(3)(d) of the Act,

the liability of the persons in-charge of OP 1, OP 2

and OP 3 flows vicariously from the provisions of

Section 48 of the Act. In the present case, while

Shri Sandeep Goyal for OP 1 has accepted that he

played an active role in the cartelisation; Shri

TA (AT) Competition Nos. 37 & 38 of 2017 3

Ashish Jain for OP 2 and Shri Ramesh Parchani

for OP 3 have denied the allegations and have

taken bald pleas such as threat from OP 1,

absence of knowledge of e-mail, attributing calls

to combined procurement of 'die', etc. They have

not been able to show or bring on record, either

before the DG or the Commission, any evidence to

absolve themselves from the liability in terms of

the provisions of the Act.

8.14 Resultantly, considering the totality of facts and

circumstances of the present case, the

Commission decides to impose penalty on Shri

Sandeep Goyal for OP 1, Shri Ashish Jain for OP 2

and Shri Ramesh Parchani of OP 3. The penalty on

these persons-in-charge imposed in terms of

Section 27(b) of the Act calculated at the rate of 10

percent of the average of their income for the last

three preceding financial years is as follows:

S. Individuals Income Income Income Average @ 10 % No. for for for Income of 2011-12 2012-13 2013-14 for 3 average Years Income

1. Shri Sandeep Goyal (of 4,97,729 4,41,358 4,58,726 4,65,938 46,594 OP 1)

2. Shri Ashish Jain 8,50,343 10,20,541 6,74,226 8,48,370 84,837 (of OP 2)

3. Shri Ramesh 19,70,183 23,68,270 20,79,122 21,39,192 2,13,919 Parchani (of OP 3)

TA (AT) Competition Nos. 37 & 38 of 2017 4

8.15 Considering that the Commission has decided to

grant a 75 percent reduction in penalty to OP 1 under

Section 46 of the Act, as recorded hereinabove, the

Commission, also decides to allow the same

reduction in penalty to Shri Sandeep Goyal for OP 1

under Section 46 of the Act. Thus, the total amount

of penalty to be paid by Shri Sandeep Goyal is

Rs.11,648/-.

8.16 The Commission further directs the parties to deposit

the respective penalty amount within 60 days of

receipt of this order.

3. The brief facts of the case are as follows:

4. On 1st April, 2014 Central Bureau of Investigation (CBI) by its letter

informed the Commission that CBI during preliminary enquiry of

misconduct by a public servant found opposite parties to be involved in

cartelisation and bid rigging in respect of tenders floated by Indian Railways

and BEML for Brushless DC ("BLDC") fans.

5. CBI by its letter dated 1st April, 2014 informed the Commission that

during its investigation it came across an email dated 17th March, 2013

from the inbox of Mr. Ramesh Parchani (Partner at 'Western Electric &

Trading Co) along with an attachment which provided details of four

upcoming tenders floated by Indian Railways and BEML for procurement of

BLDC fans. The attachment to said email mentioned the quantity, unit

value and rate to be quoted by the 'Western Electric', 'RK Electricals' and

TA (AT) Competition Nos. 37 & 38 of 2017 5

'Pyramid Electronics' in four tenders floated by Indian Railways and BEML.

On verification from the Railways, CBI found that the rates mentioned in

the email against the opposite parties were the same as the rates quoted by

them in two tenders. The email dated 17th March, 2013 originated from the

email id of Mr. Sandeep Goyal (Partner at Pyramid Electronics) who sent the

same to Mr. Ashish Jain (Partner at RK Electricals). Mr. Ashish Jain further

sent the email to Mr. Gulshan Kapoor (office executive of Mr. Ramesh

Parchani), who forwarded the email to Mr. Ramesh Parchani (Partner of

Western Electric).

6. The Commission taking cognizance of the letter sent by CBI under

Section 19(1) of the Act suo moto initiated inquiry into the conduct of the

opposite parties. The Commission by its Order dated 23rd June, 2014 took

a prima facie view that the opposite parties were engaged in collusive

bidding in contravention of Section 3(1) and 3(3)(d) of the Act and further

directed the Director General (DG) to investigate into the matter under

Section 26(1) of the Act.

7. As per the letter dated 1st April, 2014, the CBI, while enquiring into

the alleged misconduct, found an e-mail dated 17th March, 2013 in the

e-mail inbox of Shri Ramesh Parchani, a partner of OP 3 (hereinafter

'Shri Ramesh Parchani'), along with an attachment providing details of

four tenders of Indian Railways and BEML for procurement of BLDC

fans. It contained the quantity unit value, rates to be quoted by opposite

parties and quantities to be shared amongst them in these four tenders.

A copy of the said e-mail along with the attachment was provided to the

TA (AT) Competition Nos. 37 & 38 of 2017 6

Commission. The Information contained in the said attachment is as

below:

Tender Description Nos. Railway Unit Total Value R. Kanwar Crompton Pyra Value (Western mid Electric)

O/B 0 0 0 0

27.02.13 301204020T460 BLDC fan 9368 NER 3,481 3,26,10,008 3481 3495 3510

4215 2810

14672415 9781610 0

20.03.13 45131110 BLDC Fan 1217 SCR 3,481 4,23,81,175 3495 3520 3481 5

2739 1826 4565

9534459 6356306 1589 0765

25.03.13 4102130113 BLDC Fan 4147 NR 3,481 1,44,35,707 3520 3495 3481

3110

0 0 1082 5910

26.03.13 BEML BLDC Fan 5437 BEML 5,437 2,95,60,969 3495 3481 3520

1632 2446

8873184 13298902 0

C/F 11,89,87,85 3,30,80,0 2, 2,67, 9 58 9436818 16,6 75

8. It was further stated that CBI had sought information from North

Eastern Railway (NER) and Northern Railway (NR) regarding the two

tenders mentioned in the said attachments i.e., tender No.

TA (AT) Competition Nos. 37 & 38 of 2017 7

30120402OT460 dated 27.2.2013 and tender No. 4102130113 dated

25.3.2013, in order to verify whether the rates mentioned in the e-mail

attachment were the same as quoted by the OPs in the said railway

tenders. It was found from the information received that the rates

mentioned in the e-mail against each OP were same as the rates quoted

by them against the said two tenders.

9. After examining all the material on record, the Commission was of

the prima facie view that the case involved contravention of provisions of

Section 3(1) read with Section 3(3)(d) of the Competition Act, 2002

(hereinafter 'Act'). Therefore, the Commission vide its order dated

23.06.2014 directed the Director General (hereinafter the 'DG') to

conduct an investigation into the matter under Section 26 (1) of the Act

and submit an investigation report. The Commission also noted that

apart from the three opposite parties identified by the CBI, the

probability of other bidders also indulging in the bid rigging could not be

ruled out and required investigation. The DG, accordingly, conducted an

investigation and submitted its investigation report dated 27.03.2015 to

the Commission.

10. During the investigation, the DG found that the vendors approved

by Research Designs and Standards Organisation, Lucknow (RDSO) are

divided into two categories namely 'Part I source/supplier' and 'Part II

source/supplier'. Part I suppliers are older approved vendors who have

earlier supplied as Part II suppliers and whose supplies have received

favourable report from the Railways. In the Railways tendering system,

TA (AT) Competition Nos. 37 & 38 of 2017 8

Part I supplier is eligible for 100% of tender quantity if it emerges as L1

and 75% of tendering quantity if a Part II supplier becomes L1. Also, the

Part I supplier is eligible to supply at the higher rate quoted by it against

the L1 rate of Part II supplier.

11. In the Tenders under investigation the Opposite Parties were

Part I suppliers whereas M/s Light Engineering Corporation,

Parwanoo; M/s Kapson Industries Ltd., Jalandhar and M/s. General

Auto Electric Corporation, Mumbai were part II suppliers. M/s BBC

Corporation was an unapproved supplier.

Role of Pyramid Electronics

12. The DG after analysing the email, call data records and statement

of Mr. Sandeep Goyal concluded that 'Pyramid Electronics' colluded

with 'RK Electricals' and 'Western Electric' to rig the bids.

13. The DG relied on the statements dated 17th February,2015

and 18th March, 2015 of Mr. Sandeep Goyal wherein he admitted

that the email dated 17th March, 2013 was sent by him to Mr. Ashish

Jain. Mr. Sandeep Goyal further admitted that he along with RK

Electricals and Western Electric formed a cartel in February, 2013

and rigged the bids for Tender No. 30120402OT460 (due date 27 th

February,2013) and Tender No. 4102130113 (due date 25th March,

2013). The limited purpose of the cartel was to ensure a market

share to each Opposite party and not for earning or sharing profits .

The cartel for the Tender dated 27th February, 2013 was arrived over

telephone and its rate was mentioned in the mail dated 17th March,

TA (AT) Competition Nos. 37 & 38 of 2017 9

2013 to keep records

14. On perusal of call data records of Mr. Sandeep Goyal and Mr.

Ashish Jam (call data record of Mr. Sandeep Goyal), the DG found that

Mr. Ashish Jain made/received more than 50 calls to/from Mr.

Sandeep Goyal from 25th February,2013 to 31st March, 2013. Mr.

Sandeep Goyal also received several calls from Mr. Ramesh Parchani

during this period.

Role of RK Electricals

15. The DG found that the rates quoted by RK Electricals for Tender

Nos. 30120420T460 (due dated 27 th February, 2013) and Tender No.

4102130113 (due dated 25 th March, 2013) were identical to the rates

mentioned in the email dated 17 th March, 2013.

16. In his statement dated 16th February, 2015, Mr. Ashish Jain

admitted that he received the email dated 17th March, 2013 from

Sandeep Goyal and forwarded the same to Mr. Gulshan Kapoor.

17. The DG found that Mr. Ashish Jain made/received nearly 26

calls from Mr. Ramesh Parchani between 25 th February, 2013 to 31st

March, 2013. Mr. Jain also made calls to partners of other firms

participating in the Tenders. These calls were more frequent around

the date of Tender.

18. The DG found the defence taken by Mr. Ashish Jain that the

conversation between Mr. Ashish Jam, Mr. Sandeep Goyal and Mr.

Ramesh Parchani during the time of the Tenders was with respect to

development of a die (of FRD connector, one of the components of BLDC

TA (AT) Competition Nos. 37 & 38 of 2017 10

fans) as unbelievable as the same was unsubstantiated. There was no

written document to show that Rs. 16,000/- was given for development

of a die. The DG concluded that Mr. Ashish Jain colluded to rig the bids

of Tenders issued by Indian Railways.

Role of Western Electric

19. After analysing the email dated 17 th March, 2013 and the rates

submitted by Western Electric, the DG in its report observed that the

rates quoted by Western Electric for Tender Nos. 30120420T460 (due

dated 27th February, 2013) and Tender No. 4102130113 (due dated

25th March, 2013) were identical to the rates mentioned in the email.

20. In his statement dated 18th February, 2015 Mr. Ramesh Parchani

admitted that he received the email dated 17.03.2013 from Mr. Gulshan

Kapoor. Mr. Gulshan Kapoor in his statement dated 18.02.2015

admitted that on 17th March, 2013 he received an email from Mr. Ashish

Jain and he forwarded the same to Mr. Ramesh Parchani.

21. Analysis of call data records of Mr. Ramesh Parchani revealed that

he spoke with Mr. Ashish Jain nearly 30 times between 25th February,

2013 to 31st March, 2013.

22. The DG did not accept the defence raised by Western Electric

that being the authorised dealer of Crompton Greaves Ltd., the rates

were dictated by Crompton Greaves. The DG relied on the statement

dated 3 rd March, 2015 by Mr. Asif Ali, Manager of Crompton Greaves

stating that the rates suggested by Crompton Greaves are not

binding on Western Electric. Mr. Ramesh Parchani failed to explain

TA (AT) Competition Nos. 37 & 38 of 2017 11

how Mr. Sandeep Goyal had privy to the rates suggested by

Crompton Greaves as the rates were mentioned in the email dated

17th March, 2013.

23. Based on call data records, emails and the statements by

parties the DC concluded that 'Pyramid Electronics', 'RK Electricals'

and 'Western Electric' colluded with each other to rig the bids

pertaining to the four Tenders in contravention of section 3 (3)(d) of

the Act.

SUPPLEMENTARY REPORT SUBMITTED BY DG

24. Pursuant to requests by RK Electricals and Western Electric, the

Commission by its order dated 14th August, 2015 allowed the Appellants

to cross-examine Mr. Sandeep Goyal.

25. The DG also submitted a supplementary report dated 19 th

October, 2015 with cross examination of Mr. Sandeep Goyal

conducted on 9th September, 2015. The DG concluded that there is

nothing on record which could refute the facts or evidence gathered

during the course of investigation and impeach the credibility of the

witness.

26. It is only thereafter the Commission noticed and heard the

parties and comparing the rates and other evidence came to the

conclusion and passed the order as referred above.

STAND OF THE APPELLANTS - 'Western Electric & Trading

Co.'

TA (AT) Competition Nos. 37 & 38 of 2017 12

27. Learned counsel for the Appellants highlighted the following

background :

a) Brushless Direct Current (BLDC) Fans 400 mm - sweep

- 110 Volts fixed type conforming to RDSO specifications;

designed specifically for Indian Railways by Crompton

Greaves / OEM No. 2002. BLDC fans saved energy up to

10 times compared with old conventional fans. Though

the demand increased gradually from 2010-11 but the

price has remained in the range of Rs.3445 (in 2007) to

Rs.3500( in 2013;

b) Connector- The CG/OEM does not manufacture the

Connectors and was supplying BLDC fans to ICF with

"Wago" connectors imported from UK and from 2006.

When the demand of BLDC fans increased, the

specifications for BLDC fans were changed with FRP(

Fibre Glass Reinforced Plastic) Connector, which were

locally _ produced and were cheaper ; 'Western Electric

& Trading Co.' (OP 3) was informed that 'Pyramid

Electronics' and 'Kanwar Electricals' (OP -1 & OP-2),

were supplying BLDC fans with FRP connectors. OP2

agreed to supply FRP connectors to 'Western Electric &

Trading Co.' @ Rs. 35/ piece. Evidence of supplies made

by 'Pyramid Electronics' and 'Kanwar Electricals' were

also submitted.

28. It was submitted that the Appellants 'Western Electric &

TA (AT) Competition Nos. 37 & 38 of 2017 13

Trading Co.' - a reputed dealer/trader only since 1971: Became a

dealer of OEM/CG for supply of BLDC fans to Railways in 2006.

'Pyramid Electronics (OP1- Sandeep Goyal) caught red handed with

cash of Rs. 90 Lakhs and arrested on 2 nd May 2013 by CBI while

investigating Mr. Kul Bhushan, the then Member Electrical, Rly

Board in the "Railway Bribery/ Cash for posting scam", spent 2

months in Tihar Jail, an under trial on bail in criminal case no.

03/2013 before the Special Judge PC Act/ASJ in New Delhi Courts

at Patiala House. Pyramid Electronics (OP-1) was delisted as RDSO

part supplier in May, 2013 after arrest of SG. 'Kanwar Electricals'

(OP -2- Ashish Jain), was the supplier of FRP connectors to OP-3

during 20.1.2013. Both 'Pyramid Electronics' and 'Kanwar

Electricals' ( OP-1 &OP-2) are RDSO approved Part-1 suppliers of

BLDC fans since 2010 along with OEM/CG, RDSO Part 1 supplier

since 2005.

29. It was submitted that the following facts was ignored by the

Commission :

Unique to WETC/Appellants-(Ignored by CCI)

1. Unlike 'Pyramid Electronics' and 'Kanwar Electricals' ( OP-

1 &OP-2), WETC is only an agent and not a manufacture of

BLDC fans, not direct competitor to 'Pyramid Electronics'

and 'Kanwar Electricals'( OP-1 &OP-2), and the actual

competitor is OEM/CG, had no authority to quote rates

indecently. (Horizontal agreement not legally possible under

section 3(3) of the Act.

TA (AT) Competition Nos. 37 & 38 of 2017 14

2. Unlike 'Pyramid Electronics' and 'Kanwar Electricals' ( OP-

1 &OP-2), WETC was always instructed the exact rates to be

quoted specifically before each tender by CG-OEM and not

only for the three tenders in question. Evidence supplied

but ignored by CCI (Annexure 8-page 221-222 -page 760-

761 Vol.3; Annexure 10- Page 232- Page 771 Vo. 3) &

Annexure 11- Page 346-348 Page 881 to 883 Vol.3) of WETC

objections dated 21.1.2016 to DG Report dated 21 st

January,2016).

Learned counsel for the Appellants referred to evidence as relied

in the impugned order against the Appellants are :

i) E-mail dated 17.3.2013 with attachment with respect to

the 4 tenders;

ii) Call Detail Records - calls exchanged between 'Western

Electric & Trading Co.' and 'Kanwar Electricals' and

'Western Electric & Trading Co.' and 'Pyramid

Electronics';

iii) Confessional Statement dated 18 th March, 2015 of

Sandeep Goyal to DG (after filing leniency application on

10th March, 2015 as compared with his earlier statement

as stated on 17th February, 2015.

With regards to the impugned e-mail dated 17th March, 2013, it

is submitted that the four tenders in which bid rigging is alleged are

:

(i) Tender No. 30120402 OT 460 dated 27 th February, 2013

TA (AT) Competition Nos. 37 & 38 of 2017 15

- by NE Railways;

(ii) Tender No. 45131110 dated 20 th March, 2013 - by SC

Railways;

(iii) Tender No. 4102130113 dated 25 th March, 2013 - by

Northn Railways; and

(iv) Tender No. DR01/RM2/1200120506, BEML dated 26 th

March, 2013 - by BEML.

30. Learned counsel also highlighted the facts about the 'Western

Electric & Trading Company' with regard to the above tenders, which

alleged to have been ignored by the Commission :

1. Tender dated 27 th February, 2013 by North Eastern

Railway (NER) - WETC did not quote Rs. 3495 as

suggested in the impugned e-mail but quoted Rs. 3491.98

(Rs. 3325.70 plus 5 % CST), the exact price directed by

CG vide letter dated 26 th February, 2013.

2. Tender dated 20 th March, 2013 by South Central Railway

(SCR) - The rate suggested for WETC/CG was Rs. 3520.

However, WETC quoted Rs. 3530 (Rs.3361.90 plus 5%

CST), the exact price directed by Crompton Greaves vide

letter dated 15th March, 2013. Moreover, the rates of

neither 'Pyramid Electronics' and 'Kanwar Electricals'

were matching with the impugned e mail. Being the

lowest (L-1), WETC received the order at the negotiated

rate of Rs. 3333.75 all inclusive.

3. Tender No. 4102130113 dated 25 th March, 2013 by

TA (AT) Competition Nos. 37 & 38 of 2017 16

Northern Railway (NR) - although the rates as suggested

in the attachment are the same, but as far WETC is

concerned, the exact price directed by CG vide their

letter dated 15 th March, 2013 were quoted by it, that is

Rs. 3495 (Rs.3328.57 plust 5 percent CST).

4. Tender BEML dated 26 th march, 2013 by Bharat Earth

Movers Ltd. (BEML) - although WETC could not quote

because only the OEM/RDSO approved suppliers

eligible. However, WETC were informed the rate to be

quoted by the OEM/CG vide their letter dated 16 th

March, 2013 and again vide their letter dated 26 th

March, 2013 for arranging supplies. The rate as per the

impugned email dated 17 th march, 2013 were Rs.3481

but the rate actually quoted by CG was Rs. 3498.6 (Rs.

3412.70 plus 2 percent CST) which again different from

the suggested e-mail rate. The rate quoted by 'Pyramid

Electronics' for 26th March, 2013 was Rs. 3570.75

which was also different from the suggested e-mail rate

of Rs. 3520.

31. With regard to 'Call Detail Records' detailed explanation and the

background for the telephonic calls has been given by the Appellants,

as under:

Call Detail Records :

Telephone calls exchanged between 'Ramesh Parchani' and

'Ashish Jain' and 'Sandeep Goyal' only 2 calls + 2 SMS mostly with

TA (AT) Competition Nos. 37 & 38 of 2017 17

'Ashish Jain'. 'Ramesh Parchani' never called 'Sandeep Goyal' but

received a single call on 17 th March, 2013 at 6.55 PM which was after

sending of the impugned email dated 17 th March, 2013 by 'Sandeep

Goyal' to 'Ashish Jain' i.e. at 2.19 PM. 'Ramesh Parchani' only

returned the call on 23rd March, 2013 for 39 second. Admitted that

the call on 23 rd March, 2013 may be in connection with procurement

of "dye" for FRP connectors.

Background for the telephonic calls between the Opposite Parties

32. In connection with the procurement of the "dye" for locally

manufacturing FRP connectors together, admitted directly by AJ12

and indirectly by SG13 in their statements before the DG.

33. In spite of the admission by 'Ashish Jain', which corroborated

'Ramesh Parchani' statement dated 18th March, 2015 DG/CCI has not

even bothered to verify the statements of all the 'Opposite Parties',

particularly, whether or not WETC was procuring them separately on

behalf of the OEM as stated in by RP in his statement dated 18th

March, 2015.

34. Commission has completely relied upon the denial of the above

in the statement of 'Sandeep Goyal' on the ground that "Western

Electric & Trading Co., who is not even a manufacturer but only a

dealer of Crompton Greaves, would still require a dye for

manufacturing a component of that item and wholly ignored the

objective justification provided by Western Electric & Trading Co..

35. Whereas DG/Commission ignored 7 calls exchanged between

'Ashish Jain' and 'Mr. Prashant Sehgal of 'M/s. Kapsons Industries -

TA (AT) Competition Nos. 37 & 38 of 2017 18

OP-5' and 29 calls between 'Ashish Jain' and Maninder Singh - OP-4

and 10 calls between 'Ashish Jain' and Mr. Hetal R. Gandhi - OP-6

though made regarding "supply of spare parts/quotation for spare

parts" on the ground that "details of conversation are not known".

The details of conversation i.e. transcript of the audio tapes of

telephonic conversation between 'Ashish Jain' and 'Ramesh Parchani'

or between 'Ramesh Parchani' and 'Sandeep Goyal'.

36. Confessional statement of 'Sandeep Goyal' dated 18 th March,

2015 (Leniency Applicant) has been contradicted.

37. Learned counsel for the Appellants raised legal objections as

under :

1. The elements of an agreement under Section 3 of the

Competition Act have not been established for WETC. Mere

exchange or gathering of information between parties for spare

parts (FRP Connector) in an inter-dependent or concentrated

marked does not constitute a cartel.

2. WETC is being a mere trader/dealer of OEM/CG is not

direct competitor of 'Pyramid Electronics' (OP-1) and 'R. Kanwar

Electricals' (OP-2), and, therefore cannot be charged under

Section 3(3)(d). The real beneficiary of the cartel if presumed to

be true was the OEM/CG - why has DG/CCI completely

exonerates the OEM/CG?

3. There is no appreciable adverse effect on competition

(AAEC) visible on the facts of this case. There has not been any

reduction in the number of suppliers of BLDC fans to Railway.

TA (AT) Competition Nos. 37 & 38 of 2017 19

4. Since the prices quoted by OEM/CG/WETC of BLDC fans

for Indian Railways has remained in the same range since 2011,

the finding of cartelization is against economic theory of

cartelization.

5. Instances of violations of principles of natural justice

committed during investigation ignored by the Commission.

6. Penalty imposed on the Appellants is grossly excessive

and disproportionate and arbitrary. Not based on the relevant

turn over principles as decided by 'Hon'ble Supreme Court in

'Excel Crop care Limited vs. Competition Commission of

India and Anr.' on 8th May, 2017 in C.A. No. 2480/2014.

38. Other points were also highlighted relating to quoting higher

rates for tender dated 20th March, 2013. Additional cost of PCB

charger, bid rotation etc. which according to Appellants not proved

since 'Pyramid Electronics' (OP-1) and 'Western Electric & Trading Co.

(OP-3)got the order in tender dated 27 th February, 2013 and 20 th

March, 2013 respectively. The tender dated 25 th March, 2013 was

cancelled.

Submissions of Appellants - 'Mr. R. Kanwar Electricals' & Mr. Ashish Jain

39. The facts as noticed above has also been highlighted by the

counsel for these Appellants.

40. It was submitted that the DG and the Respondent Commission

have failed to note that R. Kanwar Electricals did not derive any benefit

TA (AT) Competition Nos. 37 & 38 of 2017 20

from the alleged cartel, as R. Kanwar Electricals did not receive a

purchase order in any of the four tenders. There is therefore no material

or ground to suspect their involvement in the alleged cartel.

41. The Commission has failed to appreciate that 'Pyramid

Electronics" (Opposite Party No.1) had been delisted from the RDSO

owing to their illicit activities. Accordingly, Mr. Sandeep Goyal of (OP-1)

suspected Mr. Ashish Jain (OP-2) and 'Ramesh Parchani' (OP-3), who

were his competitors, of having given evidence against him during the

bribery related investigation conducted by the CBI. As such, it is clear

that Mr. Sandeep Goyal was a motivated individual who wanted to take

revenge against Opposite Party Nos.2 and 3, and yet the Respondent

Commission relied on his alleged "confessional" and contradictory

statement(s) without any corroborating evidence.

42. According to the Appellants, there are serious infirmities and

contradictions in relation to the evidence for each of the four tenders

alleged to have been rigged by the Opposite Parties, as explained below:

a. In relation to tender dated 27.02.2013,

i. The said tender had already been opened before

circulation of the alleged distribution list vide e-mail

dated 17 th March, 2013, and hence the bid prices were

known to all bidders.

ii. Mr. Sandeep Goyal/Opposite Party No.1 has made

contradictory statements in relation to this tender - at one

TA (AT) Competition Nos. 37 & 38 of 2017 21

place he admits that cartel was only in relation to the tenders

in March 2013, whereas at another place he states that

Opposite Parties cartelized tender dated 27th February, 2013

over telephone.

iii. It is an admitted position that the tender dated 27 th

February, 2013 was cancelled and no purchase orders

were issued.

b. In relation to tender dated 20 th March, 2013,

i. None of the bids match the prices in the e-mail dated 17th

March, 2013. RKE's actual price bid of Rs. 3757 was 7.5%

higher than the price bid stated in the e-mail dated 17th

March, 2013 (of Rs. 3495) and hence it is evident that RKE

did not follow the e-mail dated 17th March, 2013.

ii. As per the e-mail, 'Pyramid Electronics' (O.P -1) ought to

have won the tender. However, as per the actual tender,

'Western Electric & Trading Co. (OP- 3) won the tender.

iii. Mr. Sandeep Goyal's statement that each of the Opposite

Parties changed their price bids for this tender on the

date of the tender itself (i.e. 20 th March, 2013) is

completely contrary to the documents on record, namely

(a) the call detail records in the DG Report, and (b) data

regarding the tender submission time. No explanation was

TA (AT) Competition Nos. 37 & 38 of 2017 22

given by Mr. Sandeep Goyal in relation to this inconsistency

at the cross-examination.

iv. Mr. Sandeep Goyal contended that 'Western Electric &

Trading Co.' (Opposite Party No.3) wanted to be L-1 in this

tender for which purpose Mr. Ashish Jain called Mr.

Sandeep Goyal 6 times on 20th March, 2013. This is

completely contrary to the record as 'Western Electric &

Trading Co. (Opposite Party No.3) had already submitted its

bid at 17:22 hours on 19th March, 2013.

v. Mr. Ashish Jain made 6 calls to Mr. Sandeep Goyal after

'Pyramid Electronics' (Opposite Party No.1) had already

placed its bid (at 6:39am), 5 of which were after Opposite

Party No.2 had also placed its bid (at 08:47am). There was

no reason whatsoever for either of them to be talking to

one another about the tender after they had placed their

price bids. Clearly their conversations were not about the

tender.

c. In relation to tender dated 25 th March,2013,

i. R. Kanwar Electricals' price bid was identical to the price

stated in the e-mail dated 17th March, 2013 merely as a co-

incidence, given that it always bid in the same price range

(Rs. 3450 - Rs. 3750) and had submitted the price bid as per

its own calculation.

TA (AT) Competition Nos. 37 & 38 of 2017 23

ii. Without prejudice, this tender was ultimately cancelled

by the tendering authority (due to technical reasons, to

the best of Appellant's knowledge), and resultantly there

was no appreciable adverse effect on competition

("AAEC") caused by the alleged conduct of the Opposite

Parties.

d. In relation to tender dated 26.03.2013,

i. R. Kanwar Electricals did not submit a price bid in this

tender owing to independent business considerations, as

explained to the DG.

ii. Assuming without conceding that R. Kanwar Electricals' was

part of the cartel, it is inexplicable as to why R. Kanwar

Electricals' having fixed the prices for the upcoming tenders

does not even offer a price bid in one tender.

43. It was contended that there are serious infirmities in the evidence

in relation to each tender and the Respondent Commission has simply

assumed that quotation of identical prices for one tender dated 25 th

March, 2013 tantamount to violation of Competition Act. While doing

so, the Respondent Commission has failed to consider that (i) the said

tender dated 25 th March, 2013 was ultimately cancelled by the

tendering authority and resultantly there was AAEC caused by the

alleged conduct of the Opposite Parties, and (ii) no purchase orders

were issued to Appellants in any of the four tenders. This

TA (AT) Competition Nos. 37 & 38 of 2017 24

demonstrates that there was no AAEC caused by the conduct of the

Opposite Parties, and contrary to its own precedent in the Sugar Mills

case (Suo moto Case No. 1 of 2010), both the DG and the Commission

failed to carry out an examination of whether the conduct of the parties

caused any impact on competition in terms of the factors under section

19(3) of the Competition Act.

Submissions with regard to e-mail dated 17 th March, 2013

44. According to the learned counsel for the Appellants only of the

four tenders specified in the e-mail dated 17 th March, 2013, (i) the

first tender (dated 27 th February, 2013) had already been opened and

hence the bid prices were known to all bidders, (ii) R. Kanwar

Electricals' price bid did not match in the second tender (dated 20 th

March, 2013), (iii) the third tender (dated 25 th March, 2013) was

cancelled by the tendering authority (owing to technical reasons, to

the best of Appellants knowledge), and (iv) R. Kanwar Electricals' did

not submit a price bid in the fourth tender (dated 26 th March, 2013)

owing to independent business considerations. It is therefore evident

that R. Kanwar Electricals did not follow the prices stipulated in the

e-mail dated 17.03.2013.

45. It is also pointed out that Mr. Sandeep Goyal who made the

distribution chart in e-mail dated 17 th March, 2013, intended to

ensure that his firm, 'Pyramid Electronics' (Opposite Party No.1) is

the L-1 in two of the upcoming three tenders (and L-2 in the third

TA (AT) Competition Nos. 37 & 38 of 2017 25

tender) to ensure maximum gain to 'Pyramid Electronics' (Opposite

Party No.1). Further, Mr. Sandeep Goyal threated and directed Mr.

Ashish Jain to forward the e-mail to 'Western Electric & Trading Co.'

(Opposite Party No.3)

Submissions regarding call detail records

46. It is further contended that the Commission has relied on the

fact that 'Pyramid Electronics' (OP-1) and 'R. Kanwar Electricals

(OP-2) spoke 50 times and 'Pyramid Electronics' and 'Western

Electric & Trading Co. (OP-3) spoke 30 times between 25 th February,

2013 and 31st March, 2013 (para 6.16 of impugned order). However,

the Commission failed to consider that all the bidders spoke to each

other throughout the period between 25 th February, 2013 and 31 st

March, 2013. The frequency of the calls does not show any particular

pattern.

47. Further case of the Appellants is that during the same period,

'Pyramid Electronics' (OP-1) also spoke 29 times with Opposite Party

No. 4, and 'R. Kanwar Electricals (OP-2) also spoke several times with

Opposite Party No. 5 and Opposite Party No. 6, none of whom are

found guilty of cartelization. All the people who bid for railway

contracts know one another and talk to one another on spare parts,

bid technical specifications and such like as was stated by all the

Opposite Parties to the DG. The nature of discussions in the calls

between Mr. Sandeep Goyal and Mr. Ashish Jam, as admitted by Mr.

TA (AT) Competition Nos. 37 & 38 of 2017 26

Sandeep Goyal were limited to technical issues and exchange of ROSO

drawings.

48. It is an admitted position amongst the Opposite Parties that

they exchanged calls to discuss the procurement of a die (@ Q17 -18

of Mr. Sandeep Goyal's statement dated at internal page 170 of DG

Report r/w Q4 of Mr. Ramesh Parchani's statement dated 24.03.2015

at internal page 200 of DG Report r/w Q3 of Mr. Ashish Jam's

statement dated 17.03.2015 at internal page '183 of DG Report).

49. In relation to tender dated 26 th March, 2013, although the

Opposite Parties allegedly cartelized for this tender, only one call was

made between them after 23 rd March, 2013. The call was made by

'R. Kanwar Electricals (OP-2) on 'Pyramid Electronics' (OP-1), and

'R. Kanwar Electricals (OP-2) did not even participate in the tender

dated 26th March, 2013 so there was no reason for 'R. Kanwar

Electricals (OP-2)' to speak with 'Pyramid Electronics' (OP-1).

50. As such, it is submitted that the frequency of telephone calls does

not imply cartelization. Also, it is submitted that the call detail records

only show the factum of the calls exchanged and do not and cannot

provide the nature or content of the conversion amongst the Opposite

Parties.

Submissions regarding "confessional" statement

51. The Commission has relied upon the confessional statement

of Mr. Sandeep Goyal which decoy to Appellants is vague and

TA (AT) Competition Nos. 37 & 38 of 2017 27

inherently contradictory to the documents placed on record. The

Commission has failed to appreciate that Mr. Sandeep Goyal was a

motivated individual who was desperate for leniency as his firm had

been de-listed by the RDSO in effect shutting down his business.

Notably, Mr. Sandeep Goyal did not confess or complain of a cartel

until after the CBI investigation began, although he was purportedly

cartelizing under pressure from the other Opposite Parties.

52. The Respondent Commission relied on Mr. Sandeep Goyal's

statement that there was a meeting of the Opposite Parties in

February 2013 (Q5 of DG Report) where the bid rotation arrangement

was arrived at and it was agreed that Mr. Sandeep Goyal would

prepare and circulate the distribution chart keeping rates of tender

dated 27.02.2013 as reference distribution (Qs 22 and 24).

53. However, Mr. Sandeep Goyal is totally vague about the

specifics of the date, time and place of the meeting. Mr. Sandeep

Goyal is based out of Panchkula and would have had to travel

specifically for this meeting. It is therefore most strange that he did

not remember or have any other material particulars about this

meeting, nor has he produced any other proof of the meeting in the

form of hotel or travel receipts despite being asked about it (Q54 nw

Q62).

54. It was submitted that the month of February has 28 days, the

tender dated 27.02.2013 was opened on 27.02.2013 itself, and Mr.

TA (AT) Competition Nos. 37 & 38 of 2017 28

Sandeep Goyal claims that they met in February i.e. therefore they

could have only met on 28.02.2013 but in statement dated

18.03.2013 Shri Sandeep Goyal stated that he does not remember

the exact date of the meeting (Q5 and 16, internal page 169-170 of

DG Report). This is because there was no such meeting, as has been

denied by the Appellants as well as Opposite Party No.3.

55. In relation to tender dated 20.03.2013, in his first statement

dated 17.02.2015 Mr. Sandeep Goyal stated that Mr. Ashish Jain

called him on 20.03.2013 from 7am till 12:30pm but he did not

receive his call (Q13 at internal page 165 of DG Report), in his next

statement on 18.03.2015 he stated that the bid for tender dated

20.03.2013 was changed by the Opposite Parties on the insistence

of Mr. Ashish Jain on the date of the tender itself for which Mr.

Ashish Jain called him 6 times (Q10 of DG Report).

56. Considering the contradiction about the change/revision of bids for

tender dated 20.03.2013 and receipt of phone calls on 20.03.2013,

which was also contrary to the documents on record w.r.t. call detail

records in the DG Report and data regarding the tender submission

time as Opposite Party No.3 had already submitted their bid on

19.03.2013, an explanation was sought Mr. Shri Sandeep Goyal at

the cross-examination. Mr. Sandeep Goyal replied that he does not

remember the time of the bid submission, the same is a matter of

record, and he does not remember whether there were any revisions

TA (AT) Competition Nos. 37 & 38 of 2017 29

to the bid submission (Q lO-13 ), all of which are completely contrary

to the earlier statements. Such swinging stance of the Shri Sandeep

Goyal from his earlier statements, which is also inconsistent with the

documents on record, makes it amply clear his statement is

unreliable and motivated.

. Submissions on penalty

57. Based on the above submissions, it was submitted that the

Impugned Order including the penalty imposed on the Appellants

deserves to be set aside.

58. The Hon'ble Supreme Court of India in Excel Crop Care Limited

v. CCI & Anr, (2017) 8 SCC 47 held that the penalty imposed must

be based on the doctrine of proportionality, and the penalty should

not be so disproportionate so as to lead to shocking results. In the

present case, the following grounds shown to suggest between the

conduct of the Appellants and the quantum of penalty imposed,

a. 'R. Kanwar Electricals' (OP-2)'is a small family firm

comprising Appellants No.2 and his mother.

b. It is in fact registered as a small scale industrial firm (S.S.I)

with the Government of India's National Small Industries

Corporation Limited.

c. Another ground is that its net profit for the entire year of

2012-13 was Rs. 17.31 lakhs. The penalty amount of Rs.

TA (AT) Competition Nos. 37 & 38 of 2017 30

20.01 lakhs will grievously affect the day-to-day working of

RKE.

d. The Commission also found that the alleged cartel

existed for 3 tenders over a span of one month (February

- March 2013).

e. 'R. Kanwar Electricals (OP-2)'got no purchase orders on

any of the tenders that allegedly formed part of the bid

rigging.

f. 'R. Kanwar Electricals (OP-2)'has never been accused of

any anti-competitive acts except the present case, which

has been previously considered as a mitigation factor by

the erstwhile Competition Appellate Tribunal.

However, in absence of such facts brought before Commission,

facts beyond record cannot be taken to allege that the penal order is

disproportionate.

ANALYSIS OF FACTS & FINDING:

59. There are primarily three types of evidence in the present case

i.e. (a) e-mail, (b) call data records and (c) statement of OPs.

60. The e-mail dated 17th March, 2013 was initiated by Shri Sandeep

Goyal to Mr. Ashish Jain with the following comments :

""Dear Ashish, I have made the distribution for your reference. Please see and then we can discuss.

Thanking you,

TA (AT) Competition Nos. 37 & 38 of 2017 31

With warmest regards"

Thereafter, Shri Ashish Jain forwarded the e-mail to Shri Gulshan Kapoor, an office executive of OP 3 with the following remarks:

"Sir, please put the said mail with attachment on the table of Sir Ji"

61. On receipt of this e-mail, Mr. Gulshan Kapoor forwarded the e-

mail to Mr. Ramesh Parchani on the same day. It is from the inbox of

Shri Parchani that the CBI retrieved this e-mail.

62. Opposite party No. 1 accepted that the e-mail was sent in

pursuance of the agreement between the Opposite parties. However,

opposite party No. 2 (R. Kanwar Electricals) and Opposite Party No. 3

(Western Electric & Trading Co.) denied any such agreement.

63. Mr. Ashish Jain, Opposite Party No. 2 (R. Kanwar Electricals)

contended that though he forwarded the e-mail but he has done so

because Shri Sandeep Goyal had threatened him with dire

consequences. In the case of OP 3 (Western Electric & Trading Co.) both

Shri Gulshan Kapoor as well as Shri Ramesh Parchani denied

knowledge of the contents of the e-mail. Shri Gulshan Kapoor even went

to the extent of stating as to how Shri Ashish Jain got hold of their

e-mail and thereby accepted that it was his e-mail.

64. Shri Ramesh Parchani submitted that he first come to know of the

e-mail dated 17th March, 2013 when the CBI found it in his inbox but

such stand cannot be accepted.

TA (AT) Competition Nos. 37 & 38 of 2017 32

65. It is interesting to note that when Shri Gulshan Kapoor, who

claims that he did not know Shri Ashish Jain, received an e-mail from

Shri Ashish Jain with instructions to put it on table of "Sir Ji", he did

not ignore the e-mail and rather immediately forwarded the same to his

superior, Shri Ramesh Parchani. It is inconceivable that any prudent

person would forward an e-mail from an unknown source with unknown

contents without opening or reading the same, unless he knew the

sender and/ or the contents of the e-mail. Further, the call data records

of Shri Ashish Jain show that there were nine calls made between Shri

Ashish Jain and Shri Gulshan Kapoor from 27.02.2013 to 31.03.2013

with three calls being exchanged on the date of the e-mail itself i.e.,

17.03.2013. Thus, considering the above conduct of Shri Gulshan

Kapoor, his statement that he did not know Shri Ashish Jain is without

credence.

66. The evidence as adduced from the call data records forwarding the

e-mail an incidental event and this has rightly be held by the

Commission. Opposite Party No. 2 'R. Kanwar Electricals' and

Opposite Party No. 3 (Western Electric & Trading Co.) tried to project that

it was an incidental but the conduct makes it clear that there was an

understanding/arrangement arrived at amongst the Opposite parties to

rig the tenders floated by the Indian Railways and BEML.

67. Shri Asif Ali, Marketing Manager of CGL were recorded. In his

statement, recorded by the DG on 18th February, 2015 stated as :

"Generally, the notified tenders of railways

are communicated to us by M/s Western Electric &

TA (AT) Competition Nos. 37 & 38 of 2017 33

Trading Company and then we issue authorization

letter for specific tender before the opening of tender.

Thereafter, we issue a separate letter wherein the

suggested rates are mentioned (based on certain

factors including tender trends, tenderquantity etc.)

to be quoted by M/s Western Electric & Trading

Company in the railway tenders. The rates

mentioned in the said letters are just an advice and

are competitive price. We mention one figure as a

rate for quoting in the tenders. After issuance of

authorization letter, Crompton Greaves Ltd. hand

over the products i.e., BLDC fans to M/s Western

Electric & Trading Company and charge the total

price for the supply... M/s Western Electric &

Trading Company issues us periodic order for bulk

quantity on fix price independently of railways

orders. Crompton Greaves invoices to Western

Electric & Trading Company upon supply of BLDC

fans and receives payment from the later

independent of railway payment to Western Electric

& Trading Company....Thereafter, M/s Western

Electric & Trading Company bid in the railway

tenders and after getting orders from railways,

supply the same to the railways and charge the

price from the railways. Railways have to pay to

TA (AT) Competition Nos. 37 & 38 of 2017 34

M/s Western Electric & Trading Company and M/s

Western Electric & Trading Company has to pay to

us. We do not claim any money from railway directly

regarding supply of BLDC fans as billing is raised

by M/s Western Electric & Trading Company ..."

68. The statement of Asif Ali shows the clear relationship between OP-

3 (Western Electric & Trading Company) and OP-2 ('R. Kanwar

Electricals) Ashish Jain was not one of principal-agent as claimed by

OP-3 (Western Electric & Trading Company.) Shri Parchani has also

contended that he had quoted the same rates as given to him by CGL.

To support his contention he supplied a letter dated 18.02.2013, wherein

the rates were advised by CGL for the four tenders that are subject

matter of this case. He also provided another letter dated 15.03.2013 of

CGL wherein rates for tender dated 20.03.2013 were revised by CGL.

However, when the DG examined the rates suggested by CGL, it was

found that the rates proposed in the e-mail dated 17.03.2013 and the

rates advised by CGL in letter dated 18.02.2013 (final price after adding

5% CST) were same. This raises the issue how Shri Sandeep Goyal of OP

1 became privy to the rates suggested by CGL to OP 3.

69. The Commission has noticed the sequence of events which

conclusively shows that the rates were shared by Shri Ramesh Parchani

with Shri Ashish Jain and Shri Sandeep Goyal, directly or indirectly,

through e-mail or telephone. Thereafter, the Opposite Parties bid for

tender dated 27th February, 2013 as per mutually agreement rates and

then met at New Delhi to make their arrangement.

TA (AT) Competition Nos. 37 & 38 of 2017 35

70. For proper understanding, it is relevant to quote some of the

evidence, given by the Ashish Jain and others.

71. Mr. Ashish Jain (R. Kanwar Electricals) during his deposition, at

Question No. 16 makes the following statement :

"Question No. 16 : Have you received any mail on 17.03.2013 on your

mail ID rdso.fans@gmail.com from Sandeep Goyal

from his mail ID goyal.pk1@gmail.com? If yes, please

provide the details.

Answer: Yes, I have received a mail from Sandeep Goyal from

his mail ID goyal.pk1@gmail.com on 17.03.2013 with

an attachment relating to details of upcoming three

tenders and one tender which was already passed on

27.02.2013. After receiving the mail, I have not called

Mr. Sandeep Goyal. In fact, he has called me on same

day i.e. 17.03.2013 and threatened me that I will have

to forward it to Western Electric and Trading Company

and if I will not forward it then he will get me black

listed from RDSO because of his strong links. Also,

he has threatened that 'main tumhare pankhen

railways me fail karwa dunga, mere ML (member

electrical), Mr. Kulbhushan se personal relation hain,

RDSO mein bhi mere ache relation hain, wahan se

main tumhe black list kara dunga."

TA (AT) Competition Nos. 37 & 38 of 2017 36

Question No. 21 : When Mr. Sandeep Goyal of Pyramid has threatened

you on 17.03.2013 telephonically then why you have

not called the police?

Answer: I have not called the police because I was afraid that

Sandeep Goyal will shut down my business by using

his contacts in RDSO and Railway Board mainly

Member Electrical.

Question No. 22: The rates decided by you i.e. R. Kanwar Electricals

and Pyramid Electronics & Western Electric and

Trading Company and rates quoted in the tenders are

same (after showing the mail and tender documents).

Considering the same please specify that why the said

conduct of R. Kanwar Electricals and Pyramid

Electronics & Western Electric and Trading Company

should not be term to be cartelization and rigged the

bid?

Answer" Tender No. 301204020T460 due date 27.2.2013 was

already open and rates were known to all. In second

tender i.e. Tender No. 45131110 due date 20.3.2013,

I have not quoted the rates as given by Sandeep Goyal

and I have quoted as per my own calculations. As far

as third tender is concerned i.e. Tender No.

4102130113 due date 25.03.2013, I want to say that

it was the same rate as given by Sandeep Goyal in the

mail dated 17.03.2013 but the same was only due to

TA (AT) Competition Nos. 37 & 38 of 2017 37

co-incidence. And as far as fourth tender i.e. BEML is

concerned I have not participated in the bid.

Ramesh Parchani (Western Electric and Trading Company) in his

statement made the following statement :

Question Nos. 6: Do you have any agreement with Crompton Greaves

Ltd. regarding the supply/price to be quoted in

tenders?

Answer: We do not have any agreement with Crompton

Greaves Ltd. regarding dealership/supply/price to be

quoted in writing from inception but we are exclusive

agent of Crompton Greaves Ltd. for BLDC fans in India

since inception till date.

Question No. 7: Did you decide bidding rates independently or after

consultation with some other bidder?

Answer: I never consult any other person or firm or other

bidders for quoting my rates in railway tenders for

BLDC fans but Crompton Greaves Ltd. direct us what

price we should be quoted in tenders. Here by I am

submitting letters dated 18.02.2013 and 15.03.2013

(Annexure I) of Crompton Greaves Ltd. wherein they

have directed us to quote the rates in railway tenders.

I will also submit some more letters of Crompton

Greaves Ltd. wherein they have directed us to quote

the rates in railway tenders latest by 23.02.2015. We

TA (AT) Competition Nos. 37 & 38 of 2017 38

are advised by the OEM the indicative prices much

before the date of opening of the tenders however price

to be quoted is communicated to us one or two day

earlier before submission of the quotation.

72. Mr. Gulshan Kapoor (office Executive, Western Electrical &

Trading Company) in his deposition stated that :

Question No. 6 : Did you decide bidding rates independently or after

concern with some other bidder?

Answer: Yes, we decide bidding rates as per the price list given

by CGL and we never consult any other person and

firm for quoting our rates in railways tenders for BLDC

fans.

Question No. 7: What price you have quoted in Tender No.

30120402OT460 due date 27.02.2013, Tender No.

45131110 due date 20.03.2013, Tender No.

4102130113 due date 25.03.2013 and Tender No.

DR01/RM2/1200120506 due date 26.03.2013?

Answer:

Sl. Tender No. with due date Price in No. Rs. 1. 30120402OT460 (27.02.2013) 3491.98 2. 45131110 ( 20.03.2013) 3530/- 3. 4102130113 (25.03.2013) 3495/- 4. DR01/RM2/1200120506 3481 (26.03.2013) BEML (Quoted by CGL)

Question No. 8 : Are you were L-1 in any of these tenders? If yes, in

TA (AT) Competition Nos. 37 & 38 of 2017 39

which tender?

Answer: Yes, we were L-1 in tender No. 4513110 due date

20.3.2013. And in BEML tender due dated

26.03.2013 purchase order have been received by us.

Question No. 9 : Can you please explain what are the reasons for

quoting different prices for different tenders with in a

span of one month?

Answer: We have quoted the price given by the Crompton

Greaves Ltd. therefore I do not know what was the

reasons for quoting different prices for different

tenders.

xxx xxx xxx

Question No.13 : Have you received any mail on 17.03.2013 on your

mail ID kapoor.gulshanwestern@rediffmail.com from

Ashish Jain from his mail ID rke26@rerdiffmail.com ?

If yes, please provide the details.

Answer: Yes, I have received a mail from mail ID

rke26@rediffmail.com but I have not opened its

attachment and forward the same to mail IDs

rameshparchani@yahoo.com; Wetco3@gmail.com and

westernelectric@airtelmail.in. I came to know about

the attachment to this email only when CBI

approached Ramesh Parchani during June, 2013.

TA (AT) Competition Nos. 37 & 38 of 2017 40

73. The arrangement proposed in the e-mail was implemented by the

parties, it is evident if compared with the rates actually quoted by the

opposite parties in the four tenders as :

Tender No. and 30120402OT460, 45131110, 4102130113, DR01/RM2/1200120506, Due Date (27.02.2013) (20.03.2013) (25.03.2013) (26.03.2013) (1) (2) (3) (4) Procurer N.E Railway S.C Railway North Railway BEML OP 1 (Rate in e- 3510 3481 3481 3520 mail)

OP 1(Rate 3510 3610.80 3480.75 3570.75 quoted) OP 2 (Rate in e- 3481 3495 3520 3495 mail)

OP 2(Rate 3481.07 3757 3520 No bid quoted) OP 3 (Rate in e- 3495 3520 3495 3481 mail)

OP 3 (Rate 3491.98 3530 3495 3498.36 (Quoted by Crompton quoted) Greaves Ltd.) L1 based on OP 2 OP 1 OP 1 OP 3 rates in e-mail

L1 based on OP 2 OP 3 OP 1 Crompton Greaves rates quoted

From the above table, it is evident that:

a. as per arrangement, the rates agreed to be quoted by OPs were

Rs.3481 (by L1), Rs.3495 (by L2) and Rs.3520/3510 (by L3);

b. the arrangement was followed for tender dated 27th February,

2013. OP 2 quoted the same rate as was mentioned in e-mail

attachment i.e., Rs.3481 and was L1. OP 3 and OP 1 had also

quoted identical/similar rates as in e-mail attachment and were

L-2 and L-3, respectively;

c. the arrangement was not followed for tender dated 20.03.2013.

The rates quoted in this tender were different from what was

mentioned in the e-mail. Interestingly, all the three OPs, did not

TA (AT) Competition Nos. 37 & 38 of 2017 41

quote rates lower or equivalent to the previous L-1 i.e., Rs. 3481;

rather all quoted a higher rate. OP 3 was L-1 in this tender.

d. after deviating in tender dated 20.03.2013, the arrangement was

again followed by OP 1, OP 2 and OP 3 in tender dated 25.03.2013,

where OP 1 quoted Rs. 3480.75 and was L1, OP 3 and OP 2 quoted

identical rates as in e-mail and were L 2 and L 3, respectively.

e. the arrangement was not effectuated in tender dated 26.03.2013,

as instead of OP 3, CGL quoted directly in this tender. Further, OP

2 did not submit bid and the rates quoted by OP 1 did not match

with the rates in the e-mail.

74. There are other evidence on record which we have not discussed

but detailed by the Commission. Some of important evidence suggests

that OP-1 (Pyramid Electronics), OP-2 (R. Kanwar Electricals) and OP-3

(Western Electric & Trading Co.) not only rig the tender dated 25th

March, 2013 but also the tender dated 27th February, 2013.

75. In fact, the Opposite Party No. 1 had admitted to entering into the

arrangement with OP-2 (R. Kanwar Electricals) and OP-3 (Western

Electric & Trading Co.) to rig the four tenders for BLDC Fans and quoted

rates in three out of four tenders in collusion with OP-2 (R. Kanwar

Electricals)and OP-3 (Western Electric & Trading Co.) though latter have

denied that it was part of the cartel.

76. In view of the evidence on record and discussion as made and the

Commission having dealt with the matter in detail based on the

evidence, no case is made out to interfere with the findings of the

TA (AT) Competition Nos. 37 & 38 of 2017 42

Commission.

77. The grounds that 'R. Kanwar Electricals' is a small family firm or

is a small scale industries and on net profit for the entire year is less is

not a ground to interfere with the penalty as imposed by the Commission

on the Appellants. It deserves to be rejected.

Both the appeal are accordingly dismissed. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice A.I.S. Cheema ] Member (Judicial)

[ Balvinder Singh ] Member (Technical)

New Delhi

17th February, 2020

/ns/

TA (AT) Competition Nos. 37 & 38 of 2017