Jurisdiction - India
News
India – COMPAT Dismisses Cartel Case Against Manufacturers Of Hydraulic Shock Absorbers.

17 March, 2015

 


On February 2, 2015, COMPAT dismissed a cartel case against three manufacturers of hydraulic shock absorbers, namely, M/s India Auto Industries Pvt. Ltd., M/s Gabriel India Ltd. and M/s Knorr Bremse India Pvt. Ltd (together referred to as the ‘Parties’). The case arose from the complaint of V.K Jain, Chief Materials Manager (I), NW Railway that the Parties had formed a cartel and quoted very high prices in a tender for supply of double acting hydraulic shock absorber. The bids were opened in 2005 post which Jain approached MRTPC.

The MRTPC took cognizance of the complaint and directed the Director General (Investigation & Registration) (‘DG (I&R)’) to conduct a preliminary investigation into the matter. DG(I&R) concluded that in certain years the Parties had quoted identical bids while participating in railway tenders for hydraulic shock absorbers. MRTPC considered the investigation report of DG(I&R) and decided to hold an inquiry and notices were issued to the Parties, who filed detailed replies.

After the establishment of COMPAT under Chapter VIII-A of the Act and enforcement of Section 66 thereof, the case was transferred to COMPAT. COMPAT relied on the judgment of the Supreme Court of India in Union of India vs. Hindustan Development Corporation6 which had held that though the quotation of identical price gave rise to the suspicion that the bidders had formed a cartel, corroborating evidence for the same was required to conclusively prove that such a cartel existed.

Further, COMPAT observed that the DG (I&R) in his preliminary report had observed that there was a strong suspicion that the Parties had formed a cartel but did not record a specific finding in this regard. Further, the Parties gave concrete reasons for quoting similar prices in certain tenders, including (a) the last purchase rate for the product by the Indian Railways; and (b) escalation in cost of manufacturing. COMPAT concluded that given that no material has been produced to controvert the arguments of the Parties, it was not possible to record a finding that the Parties had formed a cartel.

AZB    

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com

Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com

Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

Comments are closed.