Disposed

Xyz And Aegis Logistics Limited, Indus Petro Chem Limited & Sea Lord Containers Limited

CCI3 Mar 202507/2024

Case brief

AI extract

What is this about?

The Competition Commission examined an informant's allegation that several companies belonging to the same group colluded in a port tender. Finding no evidence of actual collusion beyond common ownership, the Commission held that mere commonality does not justify intervention under Section 26(1) and closed the matter.

What did the court decide?

The matter was closed forthwith under Section 26(2) of the Competition Act, 2002, as the Commission found no occasion to intervene due to lack of evidence of collusion.

Xyz And Aegis Logistics Limited, Indus Petro Chem Limited & Sea Lord Containers Limited — CCI (2025) — LawSathi Research

¶1

COMPETITION COMMISSION OF INDIA

¶2

Case No. 07 of 2024

¶3

In Re: XYZ (Confidential) Informant And Aegis Logistics Limited Opposite Party No. 1 1202, Tower B, Peninsula Business Park, G.K.Marg, Lower Parel (W), Mumbai, Maharashtra-400013

¶4

Indus Petro Chem Limited 1501-A, Universal Majestic, P.L, Lokhande Marg, Behind R.B.K International School, Chembur (West), Mumbai- 400043.

¶5

Opposite Party No. 2

¶6

Sea Lord Containers Limited 502, 5^th Floor, Skylon, G.I.D.C, Char Rasta, Vapi, Valsad District, Gujarat – 396195

¶7

Opposite Party No. 3

¶8

CORAM

¶9

Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member

¶10

Ms. Sweta Kakkad Member

¶11

Mr. Deepak Anurag Member

¶12

Page 1 of 6

¶13

Case No. 07 of 2024

¶14

Order under Section 26(2) of the Competition Act, 2002

¶15

The present Information has been filed by the Informant under Section 19(1)(a) of the Competition Act, 2002 ( ‘Act’ ) alleging contravention of the provisions of Section 3(3) of the Act by Aegis Logistics Limited ( ‘OP-1’ ), Indus Petro Chem Limited (‘OP-2’ ) and Sea Lord Containers Limited ( ‘OP-3’ ) collectively referred to as (‘Opposite Parties’/‘OPs’) .

¶16

The Informant sought confidentiality over its identity in the matter in accordance with Section 57 of the Act read with Regulation 35 of the Competition Commission of India (General Regulations), 2009.

¶17

The Informant has stated that the New Mangalore Port Trust (‘ NMPT’ ) had invited a tender through e-tendering mode, for “Allotment of 85,000 sqm of Land Area on Long Term Lease for Installation of Storage Facilities in Tannirbhavi adjacent to MRPL Desalination Plant at New Mangalore Port through Tender cum Auction Process on annual rental basis/upfront basis”. The tender was invited vide Notice Inviting Tender No.CE/EE(C)/EST/TNBSF/23/2020 on 11.01.2021 for allotment of land on long-term basis with lease period being 30 years. The reserve price was fixed at Rs. 52.71/Sqm/Month for an area of 85,000 Sqm.

¶18

The Informant has stated that certain complaints were made to Central Vigilance Officer, Ministry of Shipping against the OPs as they were acting in concert. The said tender was cancelled on 22.04.2021 and NMPT re-issued Notice Inviting Tender No.CE/EE(C)/EST/TNB-SF/23/2020 ( ‘Impugned tender’ ) on the same day. In the re-notified tender, the reserve price was fixed at Rs. 53.76/Sqm/Month.

¶19

Page 2 of 6

¶20

Case No. 07 of 2024

¶21

The Informant has alleged that OP-3 is a wholly owned subsidiary of OP-1. The Chief Operating Officer/Chief Executive Officer of OP-1, Mr. Sudhir Malhotra and his family own 99% of shares in OP-2. It is further stated that the OPs belong to the same group with common directors and essentially controlled by the same set of persons.

¶22

It has been alleged that the OPs have formed a cartel and collusively participated in the tender resulting in bid rigging having Appreciable Adverse Effect on Competition ( ‘AAEC’ ).

¶23

As per the Information, in the impugned tender, the price bids of only technically qualified bidders are opened. From amongst the initial price offers of the technically qualified bidders, the Highest Initial Price offer would be fixed as the Start Price/Floor Bid value/reserve price for the forward e-auction. In the forward e-auction process, the qualified bidders would be required to submit their bids over and above the Start Price/Floor Bid value. The Highest Final Price Offer ( ‘FPO’ ) received in the forward e-auction process would be considered as the basis for selection of the successful bidder. During the entire e-tender process, the bidders would remain completely anonymous to one another.

¶24

The Informant has alleged that in the impugned tender, the OPs who were known to each other have competed individually. They have however, been alleged to have acted identically in the tender process. It is further stated that the OPs could have participated as a Consortium/Joint venture but had participated individually only to indulge in anti-competitive practices by acting identically.

¶25

The Informant alleged that even in the renotified tender, the OPs followed a similar collusive tactic that is a clear case of bid rigging and falls within the definition of anti- competitive agreements.

¶26

The Informant has prayed for the following reliefs:

¶27

Page 3 of 6

¶28

Case No. 07 of 2024

¶29

a. to penalize OPs in terms of Section 48 of the Act;

¶30

b. to impose ban on the OPs and its group in participating in any of the tenders issued by any Major Port Authority or Public Sector Undertakings, Government of India or any State Government in India; and

¶31

c. to cancel the allotment made to OP-3 and direct tendering authorities to go for fresh tender.

¶32

On 25.09.2024, the Commission considered the matter and decided to seek the response of NMPT to its queries in respect of Tender No. CE/EE(C)/EST/TNBSF/23/2020 dated 11.01.2021 and impugned tender No. CE/EE(C)/EST/TNBSF/23/2020 dated 22.04.2021. NMPT/ New Mangalore Port Authority ( ‘NMPA’ ) filed its response vide letter dated 27.12.2024.

¶33

The Commission considered the matter in its ordinary meeting held on 29.01.2025 and decided to pass an appropriate order in due course.

¶34

The Commission has examined the material available with the Information, submissions of NMPA/NMPT and information in the public domain. It is observed that the primary grievance of the Informant is that the OPs belong to the same group under the same management and control and have collusively participated in the impugned tender as a cartel resulting in bid rigging having AAEC .

¶35

With regard to the tender issued on 11.01.2021, the Commission perused the response of NMPA and noted that the said tender was cancelled to explore the possibility of enhanced competition with wider publicity by giving a second call inviting tender. It was also stated that the cancellation was not on account of a vigilance complaint with respect to tender bidders/parties acting in concert and being related to each other.

¶36

With respect to Impugned Tender dated 22.04.2021, the Commission notes that while all the four participants of technical bid were qualified for e-auction, only

¶37

Page 4 of 6

¶38

Case No. 07 of 2024

¶39

OP-3 and one other party (other than the OPs) participated in the forward e- auction process. It is further noted that the Informant alleged that the OPs acted identically in the tendering process. However, the Commission observes that the allegation of having acted identically in respect of impugned tender is not supported by any evidence by the Informant.

¶40

The Commission further notes the allegations of the Informant that OPs are related to each other and have colluded in the Impugned tender. In this regard, the Commission notes that, as per the information available on record as well as in the public domain, OPs are related to each other. However, the Commission is of the view that merely being related to each other, without any evidence of likely collusion, cannot be a ground for investigation under Section 26(1) of the Act, as has been held by the Commission in prior cases. In Re: Ved Prakash Tripathi v. Director General Armed Forces Medical Services & Ors. (Case No. 10 of 2020), the Commission held that “ mere commonality of directors or ownership of participating firms, in itself, is not sufficient to record any prima facie conclusion about bid rigging in the absence of any material indicating collusion amongst such bidders while participating in the impugned tender ”. Further, In Re: Reprographics India v. Hitachi Systems Micro Clinic Pvt. Ltd. & Ors. (Case No. 41 of 2018) , the Commission held that “ merely having common business linkages between the OPs as projected by the Informant, cannot be the basis to suggest collusion in the bidding process. Resultantly, mere commonality of ownership does not imply contravention of the provisions of section 3(3)(d) of the Act, unless there is material on record to substantiate the allegations of bid rigging by way of collusion ”. Furthermore, the Commission perused the response submitted by the NMPT/NMPA, wherein it stated that the OPs are independent legal entities and legally there is no impediment for the OPs to participate and submit their competitive offers.

¶41

In view of the facts of the case and analysis carried out in the preceding paragraphs, the Commission does not find evidence which would suggest the

¶42

Page 5 of 6

¶43

Case No. 07 of 2024

¶44

presence of bid rigging in the impugned tendering process. In view of the same, the Commission does not find any occasion to intervene in the matter under the provisions of the Act, and accordingly, the Commission directs that the matter be closed forthwith under Section 26(2) of the Act.

¶45