CCI slaps Rs 2.7-crore penalty on three companies for rigging bid

The Competition Commission of India (CCI) has imposed a total penalty of Rs 2.7 crore on three firms for indulging in anti-competitive practices by colluding to rig bid of a tender floated by Pune Municipal Corporation.

Pentacle Consultants Pvt Ltd was fined Rs 1.33 crore, SAAR IT Resources Pvt Ltd Rs 1.26 crore and CADD Systems and Services Pvt Ltd Rs 0.11 crore, as per CCI orders.

Besides, SAAR IT's two directors, a managing director of CADD Systems and a director of Pentacle Consultants were fined a total of Rs 5.45 lakh by the competition watchdog.

The ruling came on a complaint filed by Nagrik Chetna Manch, a Pune-based organisation working for public causes after it alleged that a tender floated by PMC in year 2015 for carrying out geo-enabled tree census was rigged by the three firms.

CADD and Pentacle acted as proxy bidders to pre-determine the outcome of the tender process, it alleged.

After prima facie finding violations of the Competition Act, the CCI in the year 2017 had asked its investigation arm director general to initiate probe against the firms.

Based on the director general's report and submissions of the firms, the regulator found that there was cogent evidence of bid rigging/collusive bidding by the companies in the tender process in contravention of Section 3 of Competition Act.

Section 3 pertains to anti-competitive agreements.

Besides, the Commission also found meeting of mind and co-ordination between various individuals which included the directors of companies to rig the tender, by way of submitting proxy bids, the regulator added.

"...the Commission finds that OP-1, OP-2, and OP-3 (three firms) entered into an arrangement to rig the bids pertaining to Tender... floated by OP-4 (Pune Municipal Corporation)... and are hence responsible for infringement of the provisions of Section 3 of the Act and are liable to be penalised," CCI said in an order dated August 2.

Subsequently, a monetary penalty was imposed on the firms and the officials.