Competition Commission of India
In Re: Cartelization In Tender Nos. 21 ... vs Saara Traders Private Limited & Others on 31 May, 2018
COMPETITION COMMISSION OF INDIA
Suo Motu Case No. 03 of 2016
In re: Cartelization in Tender Nos. 21 and 28 of 2013 of Pune Municipal
Corporation for Solid Waste Processing
1. Saara Traders Private Limited
S.No. 27, Plot No. 464
Pradhikaran, Nigadi
Pune-411044. Opposite Party No. 1
2. Ecoman Enviro Solutions Private Limited
Flat No. G-1002, MSR Queens Town
Survey No. 3876, Udyog Nagar, Chinchwad
Pune- 411033. Opposite Party No. 2
3. Fortified Security Solutions
A-10 Shreyas Apartments, Opp. E-Square
Shivaji Nagar
Pune- 411016. Opposite Party No. 3
4. Raghunath Industry Private Limited
3, Pushpanjali Apartment, Plot No. 1162/4A
Shivaji Nagar
Pune-411005 Opposite Party No. 4
Suo Motu Case No. 03 of 2016 Page 1 of 38
CORAM
Mr. Devender Kumar Sikri
Chairperson
Mr. Sudhir Mital
Member
Mr. Augustine Peter
Member
Mr. U. C. Nahta
Member
Appearances:
For Opposite Party No. 1 Ms. Sowmya Saikumar, Advocate
and Shri Deepak Bhaskar Ms. Madhurima Ghosh, Advocate
Phatangare
For Opposite Party No. 2 Mr. Vikas Mishra, Advocate
and Shri Bipin Vijay
Salunke
For Opposite Party No. 3 Mr. Vikas Mishra, Advocate
and Shri Bipin Vijay
Salunke
For Opposite Party No. 4 Mr. Vikas Mishra, Advocate
and Shri Vijay Raghunath
Salunke
Suo Motu Case No. 03 of 2016 Page 2 of 38
ORDER UNDER SECTION 27 OF THE COMPETITION ACT, 2002
Introduction
1. This suo motu case originated from the information received by the Commission
in Case No. 50 of 2015 disclosing co-ordination amongst Saara Traders Private
Limited, Pune (hereinafter, 'OP-1'), Ecoman Enviro Solutions Private Limited,
Pune (hereinafter, 'OP-2'), Fortified Security Solutions, Pune (hereinafter, 'OP-
3') and Raghunath Industry Private Limited (hereinafter, 'OP-4') to rig Tender
nos. 21 and 28 of 2013, which were not being investigated as part of Case no. 50
of 2015, floated by Pune Municipal Corporation (hereinafter, 'PMC') for
Design, Supply, Installation, Commissioning, Operation and Maintenance of
Municipal Organic and Inorganic Solid Waste Processing Plant(s) in
contravention of the provisions of Section 3(3) read with Section 3(1) of the
Competition Act, 2002 (hereinafter, 'Act'). Hereinafter, OP-1, OP-2, OP-3 and
OP-4 are referred to as the 'OPs'.
2. The Commission notes that the DG during investigation of Case no. 50 of 2015
had come across evidence of possible cartelisation in Tender no. 21 and 28 of
2013 of PMC such as common addresses and phone number details of the
bidders in the tender documents and was investigating the same. Vide note dated
21.06.2016, the DG had sought amendment of the order dated passed by the
Commission under Section 26(1) of the Act and inter alia requested that the
tenders mentioned in the order as 'Tender no. 21 and 28 of 2014' be rectified to
be read as 'Tender no. 21 and 28 of 2013'.
3. While the investigation was going on, OP-1, on 01.08.2016 at 12.28 p.m., filed
an application under Section 46 of the Act read with Regulation 5 of the
Suo Motu Case No. 03 of 2016 Page 3 of 38
Competition Commission of India (Lesser Penalty) Regulations, 2009
(hereinafter, 'Lesser Penalty Regulations') furnishing information, documents
and evidence in relation to Tender nos. 21 and 28 of 2013 floated by PMC in
October 2013 to the Commission.
4. A few days thereafter, OP-2 and OP-4 also filed separate applications under
Section 46 of the Act read with Regulation 5 of the Lesser Penalty Regulations
in Case no. 50 of 2015 whereby they also disclosed the existence of cartelisation
in Tender nos. 21 and 28 of 2013. OP-2 filed Lesser Penalty Application on
05.08.2016 at 12:40 p.m. and OP-4 on 05.08.2016 at 02:32 p.m.
5. It was disclosed in the above-stated applications that, with an objective to
increase the probability of OP-2 winning both the tenders of PMC, Shri Bipin
Vijay Salunke, Director of OP-2, made an arrangement whereby cover bids were
to be placed by OP-1 (in which his close friend Shri Deepak Bhaskar
Phantangare was a Director) and OP-3 (in which Shri Bipin Vijay Salunke is the
sole proprietor). Further, since OP-2 was not engaged in the manufacturing of
composting machines at the time when the tenders were issued by PMC, Shri
Bipin Vijay Salunke requested his father Shri Vijay Raghunath Salunke (a
Director of OP-4) to appoint OP-2 as the authorised distributor of OP-4 in order
to make OP-2 eligible to bid in the afore-said tenders.
6. After considering the information revealed during investigation as well as
information disclosed by OP-1, OP-2 and OP-4, the Commission was of the
prima facie opinion that the OPs appeared to have engaged in practices which
directly or indirectly resulted in bid rigging or collusive bidding in contravention
of the provisions of Section 3(3)(d) of the Act. Accordingly, the DG was directed
to carry out investigation in respect of both the tenders i.e. Tender nos. 21 and
28 of 2013 vide order dated 11.08.2016 passed under Section 26 (1) of the Act.
Suo Motu Case No. 03 of 2016 Page 4 of 38
7. Subsequently, on 20.09.2016 at 03:00 P.M., OP-3 filed an application under
Section 46 of the Act read with Regulation 5 of the Lesser Penalty Regulations
accepting that it had submitted cover bids in Tender no 21 and 28 of 2013 and
provided documents in support thereof.
Profile of the parties:
8. 'Saara Traders Private Limited' i.e. OP-1, is a private limited company
registered under the Companies Act, 1956 with three directors, namely; Shri
Deepak Bhaskar Phatangare, Shri Bhaskar Annasaheb Phatangare and Smt.
Sushila Bhaskar Phatangare. It is engaged in trading business of laptops,
computers, LCDs, medical instruments and some electronic spares and
accessories.
9. 'Ecoman Enviro Solutions Private Limited' i.e. OP-2, is a private limited
company registered under the Companies Act, 1956 with two directors, namely,
Shri. Bipin Vijay Salunke and Smt. Sulabha Vijay Salunke. It is stated to be a
leading company in the field of decentralized solid waste management having
an advanced technology in composting. Furthermore, it claims to have
developed a unique solution for decentralised solid waste management by its
composting machine named 'Foodie' which converts organic waste into compost
in 24 hours.
10. 'Fortified Security Systems' i.e. OP-3, is a registered shop and a proprietary
concern of Shri Bipin Kumar Salunke established under the Bombay Shops and
Establishment Act, 1948. It is engaged in the business of sales and services of
electronic security systems, health and medical equipment etc.
11. 'Raghunath Industry Private Limited' i.e. OP-4, is a private limited company
registered under the Companies Act, 1956 with two directors namely, Ms. Sonali
Sahasrabudhe and Shri Vijay Raghunath Salunke. It is engaged in field of solid
Suo Motu Case No. 03 of 2016 Page 5 of 38
waste management and manufacturing of composting machines since June 2013
and started manufacturing from July 2013.
DG's Investigation:
12. The DG examined cartelisation and bid-rigging/collusive bidding by OP-1,
OP-2, OP-3 and OP-4 in Tender nos. 21 and 28 of 2013 pertaining to 'Design,
Supply, Installation, Commissioning, Operation and Maintenance of Municipal
Organic and Inorganic Solid Waste Processing Plant(s)' floated by PMC.
13. To investigate the above, the DG collected evidence from various sources by
issuing probe letters to the parties and third parties including telecom operators,
banks and PMC and also recorded the statements on oath.
Tender nos. 21 and 28 of 2013:
14. With respect to Tender nos. 21 of 2013 the DG noted that three entities i.e.
OP-1, OP-2 and OP-3 participated in the tender and OP-2 emerged as L1 bidder
with the lowest bid of Rs. 9,85,000/-. The second lowest bid was quoted by OP-
1 and highest bid by OP-3. In Tender nos. 28 of 2013, the same three entities i.e.
OP-1, OP-2 and OP-3 placed their bids for the tender, of which OP-2 emerged
as the L1 bidder with the lowest bid of Rs. 10,55,750/- for 125 kg composting
machine and Rs. 7,65,750/- for 75 kg composting machine. The second lowest
bid was quoted by OP-1 and highest bid by OP-3.
Address and Contact Details
15. On examination of the documents of OP-2 and OP-3 submitted with PMC for
the two tenders, it was found that even though OP-2 and OP-3 were separate
legal entities and had bid as competitors, they had a common place of business.
Also, both were being managed by a common person i.e. Shri Bipin Vijay
Salunke. While OP-2 is a private limited company with Shri Bipin Vijay Salunke
and Smt. Sulabha Vijay Salunke as its two directors, OP-3 is a proprietorship
Suo Motu Case No. 03 of 2016 Page 6 of 38
firm with Shri Bipin Vijay Salunke as its proprietor.
16. Further, the online filing of the tenders required the contact details of a person
for the bid. On examination of these details, it was found that the name of the
person designated to file the tenders was mentioned as Shri Deepak Bhaskar
Phatangare for OP-1, Shri Amol Chitamber for OP-2 and Shri Bipin Vijay
Salunke for OP-3. However, phone number specified in the tender document for
OP-1 and OP-3 belonged to Shri Parimal Salunke who was working as Executive
Director in OP-2 and was also related to Shri Bipin Vijay Salunke. The phone
number specified in the tender document for OP-2 belonged to Shri Bipin Vijay
Salunke Director of OP-2. The fact that OP-1 and OP-3 had quoted phone
number of another competitor or a person working in the competitor concern as
its contact person showed that they were likely to have knowledge of each
other's bid and indicated existence of an agreement amongst the bidders.
Demand Drafts for Earnest Money Deposit:
17. Further, the DG found that the Demand Draft (hereinafter, 'DD') of OP-1
required for the Earnest Money Deposit (hereinafter, 'EMD') in Tender no. 21
of 2013, was prepared from Bank of Maharashtra on cash payment by Sh. Bipin
Vijay Salunke, who was neither a director nor an employee of OP-1, but a
director of OP-2 and proprietor of OP-3 i.e. the other two bidders for the tender.
In case of Tender no. 28 of 2013, the DG observed that the DDs submitted by
OP-1 and OP-2, both drawn at Bank of India, were prepared on the same day
and had consecutive numbers. It was found that the DDs of OP-1 and OP-2 as
well as OP-3 (drawn at Bank of Maharashtra) were prepared by debiting the
account of Shri Bipin Vijay Salunke.
Internet Protocol Address used for Uploading Tender Documents:
18. Further, in Tender nos. 21 of 2013, the DG noted that the same Internet Protocol
address (hereinafter, 'IP address') was used by OP-1 and OP-3 for uploading the
Suo Motu Case No. 03 of 2016 Page 7 of 38
documents required for the bid, which was registered in the name of Shri Vijay
Raghunath Salunke, Director of OP-4 and father of Shri Bipin Vijay Salunke.
The documents of OP-1 and OP-3 were uploaded from the IP address within a
gap of two hours. On examination of IP addresses of parties that had bid for
Tender nos. 28 of 2013, it was found that all the three bidders i.e. OP-1, OP-2
and OP-3 had uploaded the documents required for the bid immediately one after
the other from the same IP address, registered in the name of Shri Vijay
Raghunath Salunke, Director of OP-4 and father of Shri Bipin Vijay Salunke.
19. Apart from collecting the above evidences, the DG also confronted the same and
recorded statements of key officer(s)/ person(s) of the OPs while conducting the
investigation. These statements were recorded after the submission of
application under Section 46 of the Act by the OPs. The observations of the DG
from statements of OPs are summarised in succeeding paragraphs.
Statement of Shri Deepak Bhaskar Phantangare, Director of OP-1
i. In his statement on oath, Shri Deepak Bhaskar Phatangare submitted that he had
no expertise in the area of solid waste management. He accepted that he was a
part of the cartel and disclosed the modus operandi of the cartel. He admitted
that OP-1 had bid as a proxy bidder to ensure that there were atleast three
eligible bidders in the first round of bidding itself and tender would be
ultimately awarded to OP-2.
ii. Shri Deepak Bhaskar Phatangare submitted that all this was done at the behest
of Shri Bipin Vijay Salunke, who was his friend. He disclosed that Shri Bipin
Vijay Salunke had filed all the tender documents and price bids on behalf of
OP-1. He only provided relevant documents for filing of tenders, which was
collected by Shri Parimal Salunke. Uploading of documents etc. and other work
was done by Shri Bipin Vijay Salunke.
iii. Further, he stated that he did not personally or monetarily benefit from
participation in the tenders and OP-1's participation was solely to help Shri
Suo Motu Case No. 03 of 2016 Page 8 of 38
Bipin Vijay Salunke.
Statement of Shri Vijay Raghunath Salunke, Director of OP-4
i. In his statement on oath, Shri Vijay Raghunath Salunke, Director of OP-4,
accepted that OP-4 had authorized OP-2 as its authorized distributor of
composting machines to enable it to participate in Tender nos. 21 and 28 of
2013 floated by Pune Municipal Corporation. OP-4 rendered this help at the
behest of his son Shri Bipin Vijay Salunke to ensure that atleast three eligible
bids were placed for the tenders as at that point of time OP-2 was not engaged
in manufacture of composting machines.
ii. However, Shri Vijay Raghunath Salunke denied being aware of the details of
the cartel but accepted that he was aware that Shri Bipin Vijay Salunke would
be taking help of other bidders for the submission of bid in the said tenders.
Statement of Shri Bipin Vijay Salunke, Director of OP-2 & Proprietor of OP-3
i. Shri Bipin Vijay Salunke in his statement categorically accepted the existence
of cartel. He accepted that the phone numbers belonging to Shri Parimal
Salunke were given in the contact person details for OP-1 and OP-3 in the
concerned tenders and that Shri Parimal Salunke had submitted all relevant
documents on behalf of OP-1 and OP-3 for procuring digital key and, thereafter,
registered his mobile number for telephonic verification by PMC.
ii. Further, he admitted that Shri Parimal Salunke prepared DDs for EMD for the
bidders / competitors in Tender nos. 21 and 28 of 2013 on his instructions either
by depositing cash or debiting his bank account.
iii. He stated that the IP addresses were same for various bidders because the
technical and price bid were scanned and uploaded by Shri Parimal Salunke
from the office of OP-2 and that rates of other bidders were also determined by
him.
iv. He admitted that the role of OP-1 and OP-3 was limited to providing the relevant
documents for the tender and act as proxy bidders. He stated that no
Suo Motu Case No. 03 of 2016 Page 9 of 38
consideration of any kind - monetary or otherwise was given by OP-2 to any
of the entities acting as proxy bidders.
v. He claimed that the role of his father was limited to issuing various
authorization certificates and facilitating preparation of DDs.
Affidavit of Shri Parimal Salunke, Executive Director of OP-2
The DG also took into consideration the affidavit of Shri Parimal Salunke, an
Executive Director of OP-2, dated 20.12.2016 in which Shri Parimal Salunke
fully accepted the relevant portions of the statement of Shri Bipin and his own
role in the cartel.
20. Thus, from the evidences gathered during the investigation and the statements of
person(s)/ officer(s) of the OPs, the DG concluded that there was bid rigging/
collusive bidding in the Tender nos. 21 and 28 of 2013. There was also meeting
of minds and co-ordination between various individuals which included the
proprietor/ director of OP-1, OP-2, OP-3 and OP-4.
21. The Commission considered the investigation report of the DG on 30.08.2017
and decided to forward the same to the OPs and also to the person(s)/ officer(s)
found to be liable under Section 48 of the Act by the DG i.e. (i) Shri Deepak
Bhaskar Phatangare (for OP-1); (ii) Shri Bipin Vijay Salunke (for OP-2); and
(iii) Shri Vijay Raghunath Salunke (for OP-4), for filing their objections/
suggestions thereof and to appear for hearing before the Commission. On
16.11.2017, the Commission heard the matter. The submissions of the OPs are
summarised below.
Submissions of the OPs
OP-1 and Shri Deepak Bhaskar Phatangare (Director of OP-1)
22. OP-1 and Shri Deepak Bhaskar Phatangare in their combined written
Suo Motu Case No. 03 of 2016 Page 10 of 38
submission, while accepting the findings of the DG and their respective role in
the same, have stated that they should be granted the benefit of 100% reduction
in penalty as they were the first to make a vital disclosure by submitting
sufficient and material evidence of a cartel. At the time the disclosure was made
by them, the DG did not possess material evidence to establish the contravention
in relation to Tender nos. 21 and 28 of 2013. The relevant information provided
by them enabled the DG to establish the same.
23. Further, OP-1 and Shri Deepak Bhaskar Phatangare cooperated fully and
expeditiously on a continuous basis throughout the investigation/ inquiry into
the matter by the office of the DG as well as before the Commission and provided
all information and evidence in their possession or available to them. Further, at
the time when the evidence was submitted to the Commission, OP-1 had already
ceased to have any participation in the cartel, which was only in relation to
Tender nos. 21 and 28 of 2013 as OP-1.
24. During the course of the investigation by the DG, OP-1 made full disclosures
regarding the alleged anti-competitive conduct of Shri Bipin Vijay Salunke,
Director of OP-2, regarding manipulation of the tender process of PMC. Also,
the role of Shri Parimal Salunke of OP-2 was revealed by OP-1.
25. Further, OP-1 did not monetarily or otherwise benefit in any manner through any
anti-competitive practice perpetrated by Shri Bipin Vijay Salunke. No tender
was awarded to it by PMC for Solid Waste Management. In fact, OP-1 did not
participate in any such tender pre or post October 2013. Even in Tender nos. 21
and 28 of 2013, OP-1 got inadvertently involved through Shri Deepak Bhaskar
Phatangare in order to help his friend Shri Bipin Vijay Salunke. Further, OP-1
and Shri Deepak Bhaskar Phatangare regret the actions taken by them and
undertake not to do so in future. In any case, OP-1 is not in business anymore
and is not operational as on date.
Suo Motu Case No. 03 of 2016 Page 11 of 38
OP-2 and Shri Bipin Vijay Salunke (Director of OP-2)
26. OP-2 and Shri Bipin Vijay Salunke in their combined written submission
submitted that they have already admitted to their role in the acts investigated by
the DG and have no objection to the conclusion arrived at in the DG report.
Further, they co-operated fully with the DG in the investigation and disclosed
their own role and that of its officers in the alleged bid rigging of Tender nos. 21
and 28 of 2013, which was a new information not within the knowledge of the
Commission.
27. In their reply, OP-2 and Shri Bipin Vijay Salunke have submitted that their
present reply relates to two broad aspects (i) entitlement to lesser penalty and (ii)
procedural and substantive errors in the investigation report of the DG.
28. With respect to the first aspect it is submitted that perusal of the investigation
report shows that virtually no investigation was required as all the facts and
evidence were provided in the Lesser Penalty Application. OP-2's application
made detailed disclosure of precise modus operandi adopted by it to coordinate
between various OPs bidding for the tender. Further, details of alleged
cartelisation including the objective of alleged cartelization i.e. to ensure that
PMC does not extend tender period, names of persons who participated, nature
of their relationship with OP-2 and its officers and dates when concerted actions
were done, were provided by OP-2. With respect to the documentary evidences,
bank statement of Shri Bipin Vijay Salunke indicating preparation of DDs for
Tender nos. 21 and 28 of 2013, copies of documents of including Affidavits,
DDs and authorization letters, box containing actual digital keys/pendrives
obtained by Shri Parimal Salunke from PMC for all bidders were submitted by
it which were vital piece of physical evidence establishing cartelisation.
29. OP-2 has stated that it was unaware of provisions of Competition Act, and thus,
Suo Motu Case No. 03 of 2016 Page 12 of 38
inadvertently contravened the same by setting up other OPs as bidders to ensure
that clause 2.4.5 regarding extension of time was not triggered. It is averred that
this was done bonafide as it is a matter of record that apart from OP-2 no other
eligible bidder participated in PMC tender between 2013 to 2015, despite
extension of period of bidding. Therefore, as such, no actual loss was caused to
PMC, nor did OP-2 foreclose the market to other competitors.
30. With respect to the other aspect of procedural and substantive errors in the
investigation report, OP-2 has alleged that certain lapses occurred in course of
investigation and preparation of investigation report by the DG, which adversely
affected the reputation of OP-2 and its officers as well as their rights under the
Act. It is averred that inclusion of entire, non-redacted statement of Shri Bipin
Vijay Salunke in the investigation report of the DG amounted to gross violation
of confidentiality of OP-2 and Shri Bipin Vijay Salunke in terms of Regulation
6 of the Lesser Penalty Regulations. It is alleged that this resulted in actual harm
as the report and the statement were quoted in local newspapers of Pune, which
caused embarrassment to Shri Bipin Vijay Salunke and his family members. OP-
2 has requested that the harm already caused to Ecoman and Shri Bipin Vijay
Salunke be also considered as a factor while evaluating any reduction in penalty.
31. Further, OP-2 has contended that the investigation report appears to ignore the
fact that Lesser Penalty Application was filed by OP-2 and instead gives an
impression that the entire investigation was carried out solely by the efforts of
the DG. OP-2 has submitted that it was incumbent upon the DG to prepare two
versions of the investigation report i.e. confidential and public version. In the
confidential version of the report he should have indicated precisely how much
assistance was obtained from its disclosures.
32. Thus, OP-2 has prayed that on account of substantial value addition done by it
by way of disclosing new facts and documents in Lesser Penalty Application and
Suo Motu Case No. 03 of 2016 Page 13 of 38
oral statements, as well as considering the prejudice caused to it on account of
the flaws in the DG report, maximum reduction of penalty permissible in law
should be granted to it in accordance with its priority status.
OP-3 and Shri Bipin Vijay Salunke (Proprietor of OP-3)
33. OP-3 and Shri Bipin Vijay Salunke have submitted that they have already
admitted to their role in the acts investigated by the DG. and have no objection
to the conclusion arrived at in the investigation report of the DG. Accordingly,
their present reply relates only to two aspects i.e. entitlement to lesser penalty
and procedural and substantive errors in the investigation report of DG.
34. OP-3 has contended that even though summons issued to it by the DG pertained
only to Case no. 50 of 2015, Shri Bipin Vijay Salunke co-operated with the DG
and answered all questions relating to the present suo motu case without demur.
Moreover, bare reading of the investigation report shows that practically no de
novo investigation was required to be done into the particular facts and
circumstances of the tender covered by the instant case, possibly because the
disclosures in the Lesser Penalty Application of OP-3 were so comprehensive
that they sufficed to establish violations of provisions of the Act.
35. OP-3 has stated that in its Lesser Penalty Application as well as oral statements
it gave a detailed description of how the alleged cartelisation was carried out
along with other OPs, including names of persons who participated, nature of
their relationship with OP-2 and its officers and dates of when various concerted
actions were done. It is averred that these precise facts were not within the
knowledge of the DG at that stage. In addition to disclosing the modus operandi
of the cartel, OP-3 also provided documentary evidence such as bank statements,
emails, Affidavits, authorization letters and physical digital keys/ pen drives
obtained from Pune Municipal Corporation. In view of foregoing, it is contended
the disclosures made by OP-3 in the Lesser Penalty Application and oral
Suo Motu Case No. 03 of 2016 Page 14 of 38
statements added significant value to the investigation.
36. Further, OP-3 has alleged that some procedural/ substantive errors were
committed in the investigation by the DG, which adversely affected its rights
and reputation at large. It has contended that the DG while preparing the
investigation report has breached the confidentiality under Regulation 6 of the
Lesser Penalty Regulations by appending entire statement of Shri Bipin Vijay
Salunke, in the public version of the investigation report and incorrectly stating
that no confidentiality was claimed. Regulation 6 of the Lesser Penalty
Regulation accords confidentiality to both the identity of the informant as well
as to the 'information' provided by it. OP-3 has contended that the term
'information' must be taken to cover both the written application as well as any
subsequent oral statement made to the DG as any other interpretation would
mean that a fact assured confidentiality in the written application would not be
entitled to confidentiality if stated during oral examination by the DG.
37. In view of above, OP-3 has prayed for grant of maximum reduction of penalty
permissible in law for OP-3 on account of providing a substantial value addition
by disclosing the new facts and documents in lesser penalty application and oral
statements, as well as on account of the flaws in the DG report.
OP-4 and Shri Vijay Raghunath Salunke (Director of OP-4)
38. OP-4 and Shri Vijay Raghunath Salunke in their combined written submission
submitted that they have no objection to the conclusion arrived at in the
investigation report of the DG and has already admitted to its role in the acts
investigated by the DG. Further, OP-4 has cooperated genuinely, fully and
continuously with the investigation and disclosed its entire role and that of its
officers in the alleged bid rigging of tenders by way of written submissions and
oral statements and ceased the anti-competitive activities.
Suo Motu Case No. 03 of 2016 Page 15 of 38
39. OP-4 has contented that on account of the disclosures made by it practically no
de novo investigation was required to be done by the DG into the instant Suo
Motu Case. It disclosed not only the objectives of the alleged cartelization but
also made comprehensive disclosure about the modus operandi of the cartel, the
manner in which OP-4 assisted the cartel and provided evidences such as bank
statements, Affidavits, authorization letters etc., which are vital pieces of
evidences establishing cartelization /bid rigging that could not have been
obtained without cooperation of OP-4.
40. OP-4 has submitted that only a manufacturer of the composting machines or an
authorized distributor of the said manufacturer was eligible to participate in PMC
tenders, and as OP-2 did not qualify this condition, Shri Vijay Raghunath
Salunke, Director of OP-4, a manufacturer of composting machines, on the
insistence of his son, Shri Bipin Salunke agreed to provide authorization to it as
authorized distributor of the Applicant to help it to qualify for PMC tenders.
OP-4 has contended that this was done with bona fide intent, as apart from
OP-2 no other eligible competitor or bidder participated in PMC tenders between
2013-2015 despite extension of period of bidding. It is averred that neither any
consideration was offered nor received by OP-4 for this purpose. The assistance
was provided merely due to personal relationship with OP-2 and Shri Bipin Vijay
Salunke, who is the son of Shri Vijay Raghunath Salunke. Moreover, no actual
loss was caused to PMC due to inadvertent acts of OP-4, nor did such acts
foreclose the market to other competitors.
41. Additionally, OP-4 has pointed out some procedural and substantive errors in
the investigation report of the DG. It has stated that the DG by submitting only
one public version of the report, which appended the entire non-redacted
statement of Shri Vijay Raghunath Salunke, acted in complete breach of
confidentiality of OP-4. Further, the DG report did not provide sufficient
Suo Motu Case No. 03 of 2016 Page 16 of 38
guidance to Commission to decide lesser penalty application as it completely
ignores the fact that application for lesser penalty was filed by OP-4.
42. In view of the foregoing, OP-4 has prayed that on holistic evaluation of the value
addition due to facts and documents disclosed by OP-4 in the Lesser Penalty
Application and oral statements, as well as the prejudice cause to it on account
of the flaws in the DG Report, maximum reduction of penalty permissible in law
be granted to it.
Analysis:
43. Before proceeding to decide the case on merits, the Commission notes that OPs
have raised certain procedural issues such as breach of confidentiality by the DG/
Commission and incompleteness of the investigation report of the DG as it does
not reveal the fact that Lesser Penalty Applications had been filed by various
OPs in the matter or the value addition provided by such applications. In this
regard, it is observed that these issues have already been dealt with by the
Commission in Case no. 50 of 2015 (Nagrik Chetna Manch v Fortified Security
Solutions and Ors.). The observations of the Commission are reproduced here
for completeness of this order.
Legal Issue:
Whether Section 3(3) of the Act is applicable in the instant case when not all
OPs are engaged in 'identical or similar trade of goods or provision of services'.
44. In this regard, it is observed that a plain reading of Section 3(3) of the Act shows
that any agreement, practice, or decision, including cartels, by enterprises,
persons or association thereof is amenable to the jurisdiction of the Commission
if the parties that are engaged in identical or similar trade of goods of provision
of service are directly or indirectly engaged in bid rigging/ collusive bidding,
which means that they are competitors in the market. Some OPs herein, however,
Suo Motu Case No. 03 of 2016 Page 17 of 38
contend that they are not competitors as they are engaged in different trades and
are, therefore, not covered by the provision of Section 3(3) of the Act.
45. The issue before the Commission here is that in a scenario where there is clear
evidence and even acknowledgement of bid rigging in a tender process, can the
bidders still contend that they are not covered by the provisions of the Act as
they were not in that business activity at the time of bidding. In other words, the
issue is whether in the context of Section 3(3)(d) of the Act the phrase 'engaged
in' ought to be accorded the literal meaning or a meaning that advances the
objective of the Act. Literal meaning would imply that the phrase would cover
only those business(s), which the parties 'were' or 'are' actually engaged in; the
other interpretation would include even those business(s) which the parties
propose to undertake and for which they submit bid. In this regard, the
Commission notes that it is a well settled principle of law that when two
interpretations are feasible, the one that advances the remedy and suppresses the
evil has to be preferred as envisioned by the legislature.
46. In the instant case, the Commission is of the view that it is the business activity
of the parties that they are actually bidding for and the one regarding which the
violation of law has been alleged which is relevant for the purpose of the
applicability of Section 3(3)(d) Act rather than any other business activity(s)
parties 'were' or 'are' actually engaged in. If the parties are allowed to escape
the grasp of the Act by considering them as not competitors on the pretext that
they are actually engaged in varied businesses, it will defeat the very purpose of
the provisions of Section 3(3) (d) of the Act. Any construction other than this
would mean that new entrants are totally exempt from the provisions of bid
rigging for the reason that they are or were not involved in that business at the
time of bidding. This would not only render the provision of Section 3(3)(d)
nugatory but would make it totally redundant, thus taking out a large segment of
the agreements related to bidding out of the purview of the Act.
Suo Motu Case No. 03 of 2016 Page 18 of 38
Procedural Issues:
A. Breach of confidentiality by the DG/ Commission
47. It is noted that one objection that almost all OPs have taken is the issue of breach
of confidentiality by the DG/ Commission. The OPs have claimed that DG, by
disclosing the contents of their statements made before it in the investigation
report as non-confidential information, has in effect disclosed the contents of
their respective Lesser Penalty Application in breach of confidentiality accorded
in terms of the Lesser Penalty Regulations. Further, the Commission by
forwarding such report to the OPs has aided the breach of confidentiality.
48. The Commission, on careful consideration, finds this contention of the OPs to
be misconceived. It is noted that application by an Applicant under Lesser
Penalty Regulations and statements of the OPs before the DG, are separate set
of evidences. The application under Section 46 of Act is filed before the
Commission in terms of the Lesser Penalty Regulations. The confidentiality on
such an application is governed in terms of the said Regulations. The confidential
treatment granted under Lesser Penalty Regulations does not extend to evidence
obtained or collected by the DG, even if such an evidence is obtained from a
Lesser Penalty Applicant. Therefore, statements of the OPs recorded by DG are
an independent evidence. These may or may not contain the information
submitted in the Lesser Penalty Regulations. The confidentiality on such an
evidence can only be in terms of Regulation 35 of the General Regulations, for
which the tests laid down in Regulation 35(3) and 35(9) of the General
Regulations have to be satisfied. There is nothing on record to show that the OPs
sought confidential treatment on their statements or the same was granted by the
DG under those Regulations. It goes without saying that if confidential treatment
is neither sought nor granted on any evidence, it shall be treated as non-
confidential for the purposes of the case. In such a scenario, including this
material evidence in the investigation report is essential to enable the parties to
Suo Motu Case No. 03 of 2016 Page 19 of 38
the case to exercise their right of defence.
49. At the same time, it is pertinent to note that even in the case of information
submitted under the Lesser Penalty Regulations, where confidentiality granted
to information is over and above that granted under Regulation 35 of the General
Regulations, the confidentiality will remain subject to the provisions of Section
57 of the Act under which the Commission can disclose such information for the
purposes of the Act.
50. Be that as it may, in the instant case, it is noted that OPs are claiming reputational
harm not because of disclosure of confidential information in the investigation
report of the DG but because of disclosure of such information to the public at
large. In this regard, the Commission observes that it is well recognized fact that
the investigation report is not a public document and is not to be shared with
public. This aspect is enshrined in Regulation 47 of the Competition
Commission of India (General) Regulations, 2009 (hereinafter, 'General
Regulations'), which clearly provides that the proceedings before the
Commission are not open to public, except where the Commission so directs. In
the instant case, there being no direction to make proceedings open to public,
there was no question of sharing of the investigation report of the DG with
anyone other than the OPs.
51. It seems that the contention of the OPs regarding sharing of investigation report
in the instant case emanates from an incident in Case no. 50 of 2015 whereby
the Informant had shared the investigation report with the media. The OPs have
merely made similar contention of breach of confidentiality in this case also
without placing on record evidence to show that the contents of investigation
report in this case were also disclosed in public domain. The instant case being
taken up suo motu, the investigation report was not shared with anyone other
than the OPs. Since the OPs were themselves involved in the conduct, they were
Suo Motu Case No. 03 of 2016 Page 20 of 38
well aware of each other's conduct and disclosure of their statements to each
other cannot be considered to cause reputational harm.
52. In view of the foregoing, contention of the OPs that reputational harm has been
caused due to action/ omission of the DG/ Commission appears to be misplaced.
Such harm, if any, has been caused due to OPs own acts of collusion in
contravention of the provisions of the Act. The allegation against the DG/
Commission is nothing more than a ruse to get reduction or discharge from
imposition of penalty under the Act.
B. The Investigation report of the DG does not reveal the fact that Lesser Penalty
Applications had been filed by various OPs in the matter or the value addition
provided by such Applications:
53. Some OPs have contended that the investigation report did not adequately deal
with and distinguish between the evidences/ information that had been gathered
by the DG on its own vis-à-vis those that had been furnished by the Lesser
Penalty Applicants. Further, it is averred that by excluding the fact that OPs had
filed Lesser Penalty Applications and the value addition that was provided by
their information, investigation report has remained incomplete.
54. In this regard, the Commission observes that what OPs have referred to as
incompleteness, in fact protects the identity of the Lesser Penalty Applicants. If
the investigation report was to identify the evidences furnished by the Lesser
Penalty Applicant(s), it would not only disclose the identity of such Applicant(s)
but also the contents of Lesser Penalty Application, on which OPs have
themselves vehemently claimed confidentiality. Further, the decision on
significant value addition by the Lesser Penalty Applicant and consequent
reduction in penalty to the Applicant is something which only the Commission
can decide and not the DG. Such a decision would be made looking into the
contents of the Lesser Penalty Application, documents/ additional evidence
Suo Motu Case No. 03 of 2016 Page 21 of 38
obtained during investigation by the DG, investigation report of the DG and
submissions of the OPs thereon. The observation in this regard would form part
of the order of the Commission and not the investigation report of the DG.
Hence, the Commission finds no inconsistency or incompleteness in the
investigation report of the DG.
Establishment of Violation:
55. The Commission has perused the facts of the case, the investigation report of
DG, submissions made in Lesser Penalty Applications and submissions of the
OPs thereon. On consideration of the same, it is observed that the evidence
adduced by the DG during investigation and the admissions of OPs under Section
46 of the Act categorically establish cartelisation and bid rigging in Tender nos.
21 and 28 of 2013.
56. The investigation into the case reveals that the main role in the cartel was played
by Shri Bipin Vijay Salunke, who is a director in OP-2, the L1 bidder, and also
the sole proprietor of OP-3. The objective of cartelisation was to assist OP-2
emerge as L1 bidder by placing proxy bids and, thereby, win the tenders. In order
to do so, Shri Bipin Vijay Salunke ensured that there were minimum three
eligible bidders in each of the two tenders in order to comply with the tender
process guidelines that specified a minimum of three technically qualified
bidders for each bid. For doing so, Shri Bipin Vijay Salunke approached the
director of OP-1 i.e. Shri Deepak Bhaskar Phatangare, to provide relevant
documents for filing the online tender as a proxy bidder in Tender nos. 21 and
28 of 2013. Also, Shri Bipin Vijay Salunke submitted another bid on behalf of
OP-3, in which he himself was a proprietor.
57. To enable the participation of OP-2, which did not have any experience or
background in solid waste management, Shri Bipin Vijay Salunke arranged the
Suo Motu Case No. 03 of 2016 Page 22 of 38
authorization certificates for OP-2 from OP-4 in which his father Shri Vijay
Raghunath Salunke was a Director. Further, Shri Bipin Vijay Salunke prepared
the DDs for EMD for the proxy bidders. Also, for participation in Tender nos.
21 and 28 of 2013, Shri Parimal Salunke obtained the relevant documents from
the proxy bidder and uploaded the same on their behalf for the online tender.
58. Shri Bipin Vijay Salunke was assisted by Shri Parimal Salunke and Shri Vijay
Raghunath Salunke, for arranging the relevant documents, preparation of DDs
and authorization certificates and uploading of tender documents. Also, Shri
Deepak Bhaskar Phatangare, Director of OP-1 acquiesced to request of Shri
Bipin Vijay Salunke and provided the relevant documents to place proxy/ cover
bid in Tender nos. 21 and 28 of 2013 and aided the cartel.
59. Thus, it is evident from the above that that there was meeting of mind and
collusion amongst OP-1, OP-2 and OP-3 to rig the bid in Tender nos. 21 and 28
of 2013 floated by PMC.
60. As regards the role of OP-4, it is observed that OP-4 certified OP-2 as authorized
distributor of composting machines to enable it to participate in the two tenders.
In his statement on oath, Shri Vijay Raghunath Salunke, director of OP-4
accepted that he was aware that Shri Bipin Vijay Salunke would be taking help
of other bidders for submission of tenders. This shows that OP-4 not only aided
OP-2 to bid for tender but also played a pivotal role in the operation of the cartel.
Strangely, despite having the requisite experience, OP-4 did not participate in
the tender itself, which also assisted OP-2 to win the tenders. Thus, the
Commission finds that contravention of provisions of Section 3(3)(d) of the Act
is made out in instant case not only against OP-1, OP-2 and OP-3 but also against
OP-4.
Suo Motu Case No. 03 of 2016 Page 23 of 38
61. Additionally, the Commission notes that some of the OPs have averred that no
appreciable adverse effect on competition in India has been caused by way of
any alleged meeting of minds in this case, as the tenders that are under
investigation were e-auction tenders open for all bidders. Therefore, the entry
was not restricted in any manner due to the alleged agreement/ cartel and no
actual loss was caused to PMC. Moreover, no consideration was derived from
OP-2 by other bidders for submitting their bids, therefore, the latter did not even
benefit from bid rigging.
62. In this regard, the Commission observes that under the provisions of Section
3(3)(d) of the Act, bid rigging shall be presumed to have adverse effect on
competition independent of duration or purpose and, also, whether benefit was
actually derived or not from the cartel. In terms of the provisions contained in
Section 3(1) of the Act, no enterprise or association of enterprises or person or
association of persons can enter into any agreement in respect of production,
supply, distribution, storage, acquisition or control of goods or provision of
services, which causes or is likely to cause an appreciable adverse effect on
competition within India. Section 3(2) of the Act declares that any agreement
entered into in contravention of the provisions contained in sub-section (1) shall
be void. Further, by virtue of the presumption contained in subsection (3), any
agreement entered into between enterprises or associations of enterprises or
persons or associations of persons or between any person and enterprise or
practice carried on, or decision taken by, any association of enterprises or
association of persons, including cartels, engaged in identical or similar trade of
goods or provision of services, which - (a) directly or indirectly determines
purchase or sale prices; (b) limits or controls production, supply, markets,
technical development, investment or provision of services; (c) shares the market
or source of production or provision of services by way of allocation of
geographical area of market, or type of goods or services, or number of
customers in the market or any other similar way; (d) directly or indirectly results
Suo Motu Case No. 03 of 2016 Page 24 of 38
in bid rigging or collusive bidding, shall be presumed to have an appreciable
adverse effect on competition.
63. Thus, in case of agreements listed under Section 3(3) of the Act, once it is
established that such an agreement exists, it will be presumed that the agreement
has an appreciable adverse effect on competition and the onus to rebut the
presumption would lie upon the OPs.
64. In the present case, OPs have neither been able to rebut the said presumption nor
been able to show how the impugned conduct resulted into accrual of benefits to
consumers or made improvements in production or distribution of goods in
question.
65. Further, with respect to the averment of OPs that as bid rigging has not restricted
entry there is no appreciable adverse effect on competition and, hence, no
contravention of the provisions of Section 3(3) of the Act, the Commission
observes that mere possibility that other bidders could have bid for the tender
cannot absolve the colluding OPs from their conduct of bid rigging. Explanation
to Section 3(3) of the Act makes it clear that bid rigging even includes an
agreement that has the effect of reducing competition for bids or adversely
affecting or manipulating the process of bidding. Therefore, even if a subset of
bidders collude amongst themselves to rig or manipulate bidding process, it
would be a violation of Section 3(3)(d) of the Act.
66. In view of the forgoing, the Commission finds that OP-1, OP-2, OP-3 and OP-4
have indulged in bid rigging/ collusive bidding in the aforesaid tenders of OP-3
in contravention of the provisions of Section 3(3)(d) read with Section 3(1) of
the Act.
Suo Motu Case No. 03 of 2016 Page 25 of 38
67. So far as the individual liability of person(s)/ officer(s) under Section 48 of the
Act is concerned, the Commission notes that the DG has identified Shri Deepak
Bhaskar Phatangare (OP-1), Shri Bipin Vijay Salunke (OP-2 and OP-3), Shri
Parimal Salunke (OP-2) and Shri Vijay Raghunath Salunke (OP-4) as the
person(s)/ officer(s) involved in the cartel under Section 48(2) of the Act.
68. The Commission is in agreement with the findings of the DG on the role and
liability of the person(s)/ officer(s) of the OPs under Section 48(2) of the Act.
However, the Commission notes that under Section 48 separate liability arises
against the officer(s)/ person(s) of the contravening company including
partnership firms but not proprietorship firms. In the Explanation to Section 48
of the Act, the word 'Company' is defined to include body corporate or firms or
association of firms but not proprietorship firms. Thus, the Commission is of the
view that provisions of this section would not apply to proprietorship firms.
Accordingly, since OP-3 is a proprietorship firm in the present case, the
Commission decides not to hold its person(s)/ officer(s) separately liable under
Section 48 of the Act. However, person(s)/ officer(s) who are the director/
executive director/ partners of OP-1, OP-2 and OP-4, would be liable. The role
and liability of these individuals is discussed below:
a. Role of key persons in OP-1:
For OP-1, Shri Deepak Bhaskar Phatangare was the key person involved in
the cartel. OP-1, a private limited company, has three directors namely; Shri
Deepak Bhaskar Phatangare, Shri Bhaskar Annasaheb Phatangare and
Sushila Bhaskar Phatangare. In his statement on oath, Shri Deepak Bhaskar
Phatangare stated that he was responsible for overall management of the
company being the managing director of OP-1. Shri Deepak Bhaskar
Phatangare also stated in his confession that he cartelised at the behest of
Shri Bipin Vijay Salunke who requested him to provide relevant documents
for the bid for acting as a dummy bidder.
Suo Motu Case No. 03 of 2016 Page 26 of 38
b. Role of key persons in OP-2:
Shri Bipin Vijay Salunke, Director of OP-2
i. OP-2, being a private limited company registered under the Companies
Act, 1956, has two directors, namely; Shri Bipin Vijay Salunke and
Sulabha Vijay Salunke. For OP-2, Shri Bipin Vijay Salunke managed
the overall operations and business activity while the role of Smt.
Sulabha Vijay Salunke was limited to as being the signing authority for
compliance of any legal documents.
ii. Furthermore, Shri Bipin Vijay Salunke confessed to having formed a
cartel to rig the bid. In his statement on oath, he confessed that he knew
all the competitors bidding in Tender nos. 21 and 28 of 2013. He stated
that Shri Deepak Bhaskar Phatangare (Managing Director of OP-1) was
his good friend and gave the documents for submitting cover bid on
behalf of OP-1 based on their friendship and relationship for Tender
nos. 21 and 28 of 2013.
iii. Shri Bipin Vijay Salunke also admitted that DDs for EMD for various
bidders were prepared by Shri Parimal Salunke on his instructions by
depositing cash. He submitted that the technical and price bid for the
bidders in two tenders were scanned and uploaded by Shri Parimal
Salunke from same IP address. Further, Shri Bipin Vijay Salunke
accepted that he sent Shri Parimal Salunke to PMC for purchasing
/procuring the digital key for OP-1 and OP-3 by submitting all relevant
documents and registered his mobile number for telephonic verification
by the PMC.
Shri Parimal Salunke, Executive Director of OP-2
i For OP-2, apart from the Shri Bipin Vijay Salunke, Shri Parimal
Suo Motu Case No. 03 of 2016 Page 27 of 38
Salunke who was Executive Director of OP-2 and cousin of Shri Bipin
Vijay Salunke also played an important role in the cartel. The name and
contact details of Shri Parimal Salunke were mentioned in tender
documents of various bidders for any telephonic verification by PMC.
ii Further, Shri Parimal Salunke procured the digital keys for various
bidders by submitting all the relevant documents in PMC office. Also,
DDs for EMD for the various bidders were prepared by Shri Parimal
Salunke on the instructions of Shri Bipin Vijay Salunke. Furthermore,
relevant documents and the technical and price bids for various bidders
in the impugned tenders were scanned and uploaded by Shri Parimal
Salunke from the same IP address.
iii Shri Parimal Salunke when confronted with the statement of Shri Bipin
Vijay Salunke describing his role in the cartel, accepted that he assisted
Shri Bipin Vijay Salunke in the bid-rigging/cartel with other bidders in
the manner as described above.
Role of key persons in OP-3:
For OP-3, Shri Bipin Vijay Salunke was the key person involved in the
cartel, who was a proprietor of OP-3. Shri Bipin Vijay Salunke in his
statement on oath accepted that he was involved in collusive bidding which
was also corroborated by various evidences gathered during the
investigation. He also acknowledged that he knew the competitors for
these tenders as he himself roped them in and requested them to place
proxy bids.
Role of key persons in OP-4:
For OP-4, Shri Vijay Raghunath Salunke, also the father of Shri Bipin
Vijay Salunke, was the key person involved in the cartel. He had clear
Suo Motu Case No. 03 of 2016 Page 28 of 38
knowledge about different entities being given authorization by OP-4 as
its distributor for participating in the tender, despite these not having any
background of solid waste management. In his statement on oath, Shri
Vijay Raghunath Salunke accepted that authorization letters/certificates
were given to OP-2 but were signed by a former director - Smt. Smita
Avinash Shirolkar. Further, the investigation also revealed that IP
addresses which were used for uploading the tender documents of various
OPs was registered in the name of Shri Vijay Raghunath Salunke.
Therefore, Shri Vijay Raghunath Salunke clearly had knowledge of cartel
orchestrated by his son Shri Bipin Vijay Salunke and aided the same.
ORDER
Computation of Penalty:
69. As regards the penalty to be imposed under Section 27 of the Act, the Commission finds that OP-1, OP-2, OP-3 and OP-4 have entered into an arrangement to rig the bids pertaining to Tender nos. 21 and 28 of 2013 floated by PMC for 'Design, Supply, Installation, Commissioning, Operation and Maintenance of Municipal Organic and Inorganic Solid Waste Processing Plant(s)', as brought out hereinabove, and are, hence, responsible for infringement of the provisions of Section 3(3)(d) read with Section 3(1) of the Act and are liable for penalty.
70. Considering the totality of facts and circumstances of the present case, the Commission decides to impose penalty on OP-1, OP-2, OP-3 and OP-4 under Section 27 of the Act by taking into consideration the financial statements filed by them at the rate of 10 (Ten) percent of the average turnover of three financial years 2011-12, 2012-13 and 2013-14. The total amount of penalties imposed on the OPs are set out below:Suo Motu Case No. 03 of 2016 Page 29 of 38
information in support thereof. At the time OP-1 approached the Commission and admitted to being a part of the cartel, the DG had already gathered evidence which indicated bid rigging/ collusion amongst OPs. This included mention of telephone number of Shri Parimal Salunke of OP-2 in the contact person detail given by OP-1 in the PMC tenders, preparation of DDs furnished as earnest monay for Tender no. 21 and 28 of 2013 by Shri Bipin Vijay Salunke by depositing cash and common IP address for uploading of tender documents by all three bidders i.e. OP-1, OP-2 and OP-3.
76. However, OP-1 made a critical disclosure regarding modus operandi of the cartel revealing that he was approached by Shri Bipin Vijay Salunke , who was his close friend, requesting to provide documents of OP-1 to place proxy bid in Tender nos. 21 and 28 of 2013. OP-1 also disclosed that the documents were collected by Shri Parimal Salunke from his office. Thus, OP-1 revealed the role of other person involved in the cartel i.e. Shri. Parimal Salunke. However, it is observed that the evidences pertaining to the preparation of DD and use of same IP address for uploading the bid documents online were already in the possession of the DG and were not provided by OP-1. Since preparation of bank drafts and uploading of the documents of OP-1 was done by Shri Bipin Vijay Salunke /Parimal Salunke, it is possible that this information was not available with it.
77. The Commission finds that the information provided by OP-1 made reasonable value addition to the ongoing investigation as it provided a better picture of the operation of cartel. The evidence provided in the Lesser Penalty Application and statement of Shri Deepak Bhaskar Phatangare before the DG accepting the existence of cartel substantiated the evidence in the possession of the DG/ Commission and completed the chain of events. The investigation report of the DG shows that the information and evidence furnished by OP-1 were relied upon to establish the existence of the cartel in Tender nos. 21 and 28 of 2013.Suo Motu Case No. 03 of 2016 Page 32 of 38
78. Further, OP-1 supported the investigation and co-operated fully and expeditiously on a continuous basis throughout the investigation/ inquiry into the matter with the DG as well as the Commission. The Commission is satisfied with the cooperation offered by OP-1 and acknowledges that the evidence and cooperation provided by it helped the Commission's investigation in establishing the existence of a cartel in Tender nos. 21 and 28 of 2013. No doubt, OP-1 was first to file an application under Section 46 of the Act, but he came when some evidence was already in possession of the DG.
79. Thus, considering the above, Commission decides to grant a reduction in penalty of Fifty percent to OP-1 than would otherwise have been leviable on it.
OP-2 and Shri Bipin Vijay Salunke (Director of OP-2)
80. OP-2 filed an application in the present matter under Section 46 of the Act, read with Regulation 5 of the Lesser Penalty Regulations on 05.08.2016 at 12:40 P.M.
81. In the Lesser Penalty Application, Shri Bipin Vijay Salunke of OP-2 admitted to having orchestrated the cartel in Tender nos. 21 and 28 of 2013 floated by PMC. He disclosed the modus operandi of the cartel. He accepted that he roped in other cover/ proxy bidders so that it was assured that there were atleast three eligible bidders in first round of bidding itself and tender would ultimately be awarded to OP-2. He explained the role of Shri Parimal Salunke in the cartel. He also acknowledged that relevant documents for the tenders were provided by OP-1and that the DDs for EMD for the tenders were prepared by Shri Parimal Salunke on behalf of OP-1.
82. The Commission observes that when OP-2 approached the Commission, several evidence indicative of collusion amongst OPs had already been gathered by the DG including contact persons named by OPs in tenders, preparation of DDs for Suo Motu Case No. 03 of 2016 Page 33 of 38 EMDs and uploading of documents from same IP addresses. Further, OP-1 had already approached the Commission under Section 46 of the Act read with Regulation 5 of the Lesser Penalty Regulations prior to OP-2. Therefore, almost all the information provided by OP-2, including the details of modus operandi of the cartel were already available with the Commission at the date and time of its approaching the Commission.
83. Though the statement of Shri Bipin Vijay Salunke of OP-2 admitting cartelisation and disclosing the role of persons involved in Tender nos. 21 and 28 of 2013 is important, statements of Shri Deepak Bhaskar Phatangare of OP-1 had independently disclosed modus operandi of the cartel. Only value addition which was made by disclosure of OP-2, was with respect to purchase/ procurement of digital keys by Shri Parimal Salunke for uploading the documents on website of PMC on behalf of other bidders from the computer of OP-2.
84. The Commission finds that although OP-2 disclosed details of the cartelisation, the value addition made by it was minimal. At the time it approached as Lesser Penalty Applicant, most of the information was already in possession of the Commission. Moreover, it is important to note that Director of OP-2, Shri Bipin Vijay Salunke, orchestrated the entire cartel, as a result of which OP-2 emerged as L1 bidder in both the tenders. However, the Commission is also cognizant of the fact that OP-2 co-operated on a continuous basis throughout the investigation/ inquiry and accepted information indicating the modus operandi of the cartel and provided all evidence in its possession or available to it.
85. Therefore, considering the stage at which OP-2 approached the Commission, the co-operation extended during investigation, value addition made in establishing the cartel, role played in the cartel and the priority status granted to OP-2, the Commission decides to grant no reduction in penalty to OP-2 in this matter. It Suo Motu Case No. 03 of 2016 Page 34 of 38 is pointed out that despite being the orchestrator of the cartel, OP-2 has already been granted reduction in penalty in Case no. 50 of 2015 and no penalty is levied in Suo Motu Case no. 04 of 2016.
OP -4 and Shri Vijay Raghunath Salunke (Director of OP-4)
86. OP-4 filed an application under Section 46 of the Act, read with Regulation 5 of the Lesser Penalty Regulations on 05.08.2016 at 02:32 P.M.
87. In the said application OP-4 stated that in October 2013 Shri Bipin Salunke informed Shri Vijay Raghunath Salunke about the tenders issued by PMC and the condition that only a manufacturer of composting machines or an authorized distributor of the said manufacturer was eligible to participate. Therefore, to help OP-2 participate in the said tenders, authorization certificates as an authorized distributor of OP-4 were issued to OP-2, as the latter itself was not engaged in manufacturing of composting machines. Further, it was also stated that Shri Bipin Vijay Salunke informed Shri Vijay Raghunath Salunke about his intentions of placing cover bid on behalf of OP-3. He accepted the existence of cartel but denied that he was a part of or aware of the cartel even though he accepted that he had knowledge of the fact that his son Shri Bipin Vijay Salunke would be taking help of other bidders for the tenders.
88. The Commission notes that prior to the Lesser Penalty Application of OP-4, there were other applicants who had made disclosure about the cartel in the tenders floated by PMC. At the time OP-4 approached under Section 46 of the Act, evidence gathered by the DG including that of preparation of DDs for EMD and authorization letters by OP-4 to OP-2 in the tender process which were disclosed by OP-4 in its Lesser Penalty Application, was already available with the Commission. Moreover, the information that Shri Vijay Raghunath Salunke was the father of Shri Bipin Vijay Salunke and that the IP addresses which were used for uploading the tender documents of various OPs was registered in the Suo Motu Case No. 03 of 2016 Page 35 of 38 name of Shri Vijay Raghunath Salunke was also discovered through investigation. Thus, the documents furnished by OP-4 did not provide significant value addition to the evidence already in possession of the DG.
89. In view of the facts and evidences gathered in the present matter, the Commission is of the view that OP-4 did not provide any value addition in establishing the existence of cartel. Accordingly, the Commission decides not to grant any reduction in penalty to OP-4.
OP-3
90. OP-3 filed an application under Section 46 of the Act, read with Regulation 5 of the Lesser Penalty Regulations on 20.09.2016 at 03:00 P.M. The Commission notes that OP-3 participated in Tender nos. 21 and 28 of 2013. Shri Bipin Vijay Salunke, Proprietor of OP-3 admitted to orchestrating the cartel and propping up OP-1 and OP-3 as proxy bidders so that tender would ultimately be awarded to OP-2.
91. It is observed that at the time OP-3 furnished evidence and documents under Section 46 of the Act, the Commission was already in possession of evidence gathered by the DG and the evidence provided by OP-1 with respect to Tender nos. 21 and 28 of 2013. Therefore, Lesser Penalty Application of OP-3 did not make any significant value addition to the evidence gathered during the investigation.
92. The Commission is of the view that OP-3, no doubt, has supported the investigation and co-operated fully with the investigation/ inquiry throughout and accepted the information indicating the modus operandi of the cartel and evidence in its possession or available to it. But all this made no value addition to the evidence gathered.
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