No unfair trade practice by HPCL as it wasn’t a dominant player in the relevant market of LPG in India: CCI

Case details:Ms. Sanyogita Singh v. Hindustan Petroleum Corporation Ltd. - [2022] 134 taxmann.com 29 (CCI)

Judiciary and Counsel Details

• • Ms. Sanyogita Singh
  • Ashok Kumar Gupta, Chairperson Ms. Sanjeeta Verma and Bhagwant Singh Bishnoi, Member.

Facts of the Case

In the instant case, Ms. Sanyogita Singh, (Informant) filed a complaint under section 19(1)(a) of the Competition Act, 2002 against Hindustan Petroleum Corporation Limited (‘OP’ hereafter) alleging contravention of the provisions of section 3 and 4 of the Act against the OP.

Informant stated that a tender was floated (Tender no: 20000806-HD-10157 dated 30-12-2020) by OP for transportation of packed LPG gas cylinders by road from its bottling plant in Loni for a period of five years.

The Informant further stated that distributors of HPCL gas transporters also participated in the said tender along with the other bidders. However, OP intentionally disqualified/rejected the bidding of HP gas distributors/dealers during the evaluation process, stating that they have quoted a higher rate and awarded the tender to the Indian Oil Corporation Limited (IOCL).

She contended that the conduct of OP in selecting IOCL transporters as its bidder without considering HP distributors gas transporters was in contravention of the provisions of sections 3 and 4 of the Act.

The informant further alleged that rejection of the bids of HP gas distributors caused irreparable financial loss to them. She also alleged that the OP had adopted anti-competitive activities in the said tender proceedings by favouring the particular group of bidder(s) and was also involved in the fixation of cartel rate for the aforesaid tender.

The informant requested the commission to direct OL to issue a fresh tender by incorporating a clause containing preferential terms in favour of the distributors/dealers of HPCL LPG gas and pass any other appropriate orders in favour of the LPG gas distributors of OP.

CCI Held

The commission observed that the Informant had not provided any information with regard to the dominance of the OP in the relevant market. The Commission further noted that the Informant had neither provided any data or material to show the dominance of OP nor defined the relevant market.

The commission first defined the relevant product market in the present case as ‘procurement of service of transportation of packed LPG cylinders by road’, as that was the whole purpose of the floated tender.

The commission further observed that as per information available in the public domain, in the year 2017-18, 48 LPG bottling plants had been operated by OP, whereas its competitors IOCL and BPCL operated 91 and 52 LPG bottling plants, respectively. Thus, from this it was concluded that OP was not dominant in the relevant market.

The commission concludes that OP was not a dominant firm, therefore it was unnecessary to examine if the alleged conducts constitute an abuse of dominant position under the provisions of the Act, as there is no dominance therefore the question of its abuse doesn’t arise.

Further as far as the allegation of cartelisation is concerned the Commission notes that the Informant had not only failed to elaborate even the details of the parties which have allegedly cartelized but had also failed to provide any details in support thereof.

Since issues raised by Informant in the present context did not involve any competition concerns, no case was made out against OPs for contravention of provisions of sections 3 and 4 and information was to be ordered to be closed forthwith.