CCI imposes penalty on bidders for a bid-rigging tender floated by SBI

Case Details: Alleged anti-competitive conduct by various bidders in supply and installation of signages at specified locations of State Bank of India across India, In re - [2022] 137 taxmann.com 64 (CCI)

Judiciary and Counsel Details

• • Ashok Kumar Gupta, Chairperson
  • Ms. Sangeeta Verma and Bhagwant Singh Bishnoi, Member
  • Rajshekhar Rao, Sr. Adv., Ms. Ameyavikrama Thanvi, Siddharth H. Raval, Advs., R.G. Venkatesh, Ms. Shivanghi Sukumar, Adv., Arjun Reddy, Ritanshu Mohan, Anandh Venkatramani, Adv., Ramesh Bharadwaj, Rudresh Singh, Anjaneya Mishra, Nithin Chowdary Pavuluri, Advs. Naresh Kumar Dasari and Ms. Rohini M. Amin, Adv. for the Appearing Parties.

Facts of the Case

In the instant case, SBI had issued a tender for pre-qualification of signage solution providers for replacing external signages. After scrapping the tender, SBI directed SBI Infra Management Solutions Pvt. Ltd. (SBIIMS) (a wholly-owned subsidiary of SBI for taking care of premises and estate-related matters), to take necessary action regarding the roll-out of SBI’s refreshed brand identity and standardization of the bank’s signage boards at branches/ATMs.

Consequently, SBIIMS issued another tender according to which 9 vendors were recommended to be pre-qualified for the signage project work which included OP-1 to OP-5.

A complaint was received in the Commission, alleging bid-rigging and cartelisation in the tender floated by SBIIMS for the supply and installation of a new replacement of existing signages for branches/offices/ATMs of SBI located at specified metro centers of various circles of SBI across India (‘Impugned Tender’).

Pursuant to receipt of a complaint, the CCI took suo motu investigation of the complaint. The Investigation revealed e-mails exchanged between OP-bidders which formed the basis for manipulation of the bidding process.

It was found that OP-bidders had indulged in anti-competitive agreement/conduct and concerted practices by way of exchange of commercial information to rig impugned tender, as well as geographically allocated amongst themselves circles for which tender was issued.

Further, the none of OPs had been able to demonstrate as to how their conduct had resulted in the accrual of any benefit to consumers, improvement in production or distribution of goods or provision of services or any kind of promotion of technical, scientific or economic development.

CCI Held

Therefore, the Commission held that all OPs were guilty of contravention of provisions of section 3(3)(c) and section 3(3)(d) read with section 3(1), and accordingly, penalty was to be imposed upon them, and their respective officials who had been held liable in terms of section 48.

CCI further ruled that considering fact that parties had cooperated during the investigation as well as inquiry process and that most of the parties were MSMEs, some of which even acknowledged their conduct during the inquiry, a penalty at rate of 1 per cent of their respective average turnover was to be imposed upon parties and their respective officials were also to be directed to cease and desist from indulging in anti-competitive conduct. Further, one party having filed lesser penalty application and having shown co-operation during investigation and enquiry before DG as well as commission, benefit of reduction in penalty by 90 per cent was to be ordered.

List of Cases Referred to

• • Excel Crop Care Ltd. v. CCI [2017] 81 taxmann.com 173/141 SCL 480 (SC) (para 12.5)
  • Pran Mehra v. CCI [Writ Petitions No. 6258, 6259 & 6669 of 2014 dated 26-2-2015] (para 104)
  • Aneeta Hada v. Godfather Travels and Tours (P.) Ltd. [2012] 21 taxmann.com 43/113 SCL 564 (SC) (para 104)
  • Cadila Healthcare Ltd. v. CCI [2018] 97 taxmann.com 237/149 SCL 610 (Delhi) (para 105).