RAJASTHAN CYLINDERS AND CONTAINERS LIMITED versus UNION OF INDIA AND ANOTHER

Citation: [2018] 12 S.C.R. 495 · Decided: 01-10-2018 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Disposed off

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Judgment (excerpt)

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RAJASTHAN CYLINDERS AND CONTAINERS LIMITED
v.
UNION OF INDIA  AND ANOTHER
(Civil Appeal No. 3546 of 2014)
OCTOBER 01, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Competition Act, 2002:
ss. 3, 19 and 27 – Cartelisation, bid-rigging and collusive
bidding – Suo-motu proceedings initiated by Competition Commission
of India – Against bidders/manufacturers of LPG Gas Cylinders –
Investigating into complaint about unfair conditions in the tender
floated by Indian Oil Corporation Ltd. (IOCL) for supply of LPG
Gas Cylinders – Competition Commission held that there was collusive
bidding – Competition Appellate Tribunal affirmed the findings of
Competition Commission – On appeal, held: It is duty of the
Commission to ensure that the conditions which have tendency to
kill the competition are to be curbed – There may not be  direct
evidence on the basis of which cartelisation or such agreement
between the parties can be proved – The standard of proof for such
agreement is one of probability – There is a  presumption that four
types of agreements mentioned in s. 3(3) will have an appreciable
effect on competition – However, the presumption is rebuttable as
these agreements are not conclusive proof of the fact that it would
result in appreciable adverse effects on competition – If evidence is
led which rebuts the presumption, the Commission shall take into
consideration the factors mentioned in s. 19 – If the evidence
collected by the Commission leads to one or more or all the factors
mentioned in s. 19(3), it would again be treated as an agreement
which may cause or likely to cause an appreciable adverse effect
on competition – In the present case, inferences drawn by the
Commission, on the basis of the evidence collected by it, have been
duly rebutted by the appellants/manufacturers – They have been
able to discharge the onus that shifted upon them – However, at
that stage, the Commission failed to carry the matter further – Thus,
there is no sufficient evidence to hold that there was any agreement
between the appellants for bid rigging – Appeals by the manufactures
[2018] 12  S.C.R. 495
           495
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SUPREME COURT REPORTS
[2018] 12  S.C.R.
are allowed – Since no penalty is payable, appeals of the Commission
are dismissed as infructuous – Evidence.
Words and Phrases:
“bid rigging” and “collusive rigging” – Meaning of, in the
context of Competition Act, 2002.
Allowing the appeals filed by the manufactures and
dismissing the appeals filed by the Competition Commission, the
Court
HELD: 1. On the one hand the economic policy of the nation
has ushered in the era of liberalisation and globalisation thereby
giving freeplay to the private sector in the manner of conducting
business, at the same time, in public interest and in the interest
of consumers, a regime of regulators has also been brought to
ensure certain checks and balances. Since competition among
the enterprises or businessmen is treated as service for a public
purpose and, therefore, there is a need to curb anti-competitive
practices. The Competition Commission of India (CCI) is given
the task (as a regulator) to ensure that no such anti-competitive
practices are undertaken.  In fact, Section 18 of the Act casts a
specific and positive obligation on CCI to ‘eliminate’ anti-
competitive practices and promote competition, interest of the
consmuer and free trade.  [Para 72] [536-G-H; 537-A-B]
Competition Commission of India vs. Steel Authority of
India Limited and Another (2010) 10 SCC 744 : [2010]
11 SCR 112 – relied on.
2. One of the anti-competitive practices is cartelisation,
the essential postulate whereof is agreement between enterprises
or association of enterprises or persons or associations of persons
in respect of production, supply, distribution, storage, acquisition
or control of goods or provisions of service, which causes or is
likely to cause an appreciable adverse effect on competition within
India. Such an agreement is treated as void.  The types of
agreement which may fall foul of Section 3 are mentioned in sub-
section (3) thereof. These include sharing the market by way of
allocation of geographical areas of market [clause (c)] and the
agreements which result in bid-rigging or collusive bidding
whether directly or indirectly [clause (d)].  There is a presumption
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that four types of agreements mentioned in sub-section (3) will
have an appreciable adverse effect on competition. [Para 73] [537-
F-H]
3. S

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