CCI: Mere collusion or coordination is not enough to hold the Parties in contravention of the provisions of the Competition Act |

Competition Commission of India, by way of its order dated June 28, 2016 held that M/s Ruchi Soya Industries Ltd. ,M/s Betul Oils Ltdand M/s Ganganagar Commodity Ltd. were not in contravention of the provisions of sections 3 and 4 of the Act as alleged by Shri Nirmal Kumar Manshani (Informant). The Informant stated that the conduct of the Opposite Parties appeared to be that of a cartel with regard to trading of Guar Seeds and Guar Gum in various commodity exchanges in India. The Informant alleged that the OPs have inflated the prices of Guar Seeds and Guar Gum by artificially increasing the demand through self-trading, circular trading etc. which caused huge loss to traders, hedgers and farmers.

Investigation report by Director General (‘DG’), concluded that OPs contravened the provisions of section 3(3)(a) and 3(3)(b) read with section 3(1) of the Act on the basis of various evidence collected like calculation sheet depicting distribution of profits, e-mail exchanged between M/s Ruchi Soya Industries Ltd. and M/s Betul Oils Ltd and, evidence of a common employee being entrusted to manage the guar related business activities of both the groups establishing meeting of minds between the two groups. Allegations against M/s Ganganagar Commodity Ltd could not be substantiated by facts and evidence gathered during investigation.

The CCI observed that though there appeared to be an agreement indicating collusion or coordination between OPs that was not decisive of contravention of the provisions of the Competition Act unless such agreement or arrangement determines the prices of the commodity in question or otherwise controls/ limits the supplies thereof etc. The appreciable adverse effect arising or likely to arise out of such conduct needs to be shown in the markets in India particularly when the parties strenuously rebut the statutory presumption. The Commission noted that it was not the quantity but the quality of evidence that matters. It was a time- honored principle that evidence must be weighed and not counted. The test is whether the evidence is cogent, credible and trustworthy or otherwise. The CCI thus noted that mere collusion or coordination per se will not be sufficient to reach a finding of contravention of the provisions of Section 3(1) read with Section 3(3) of the Competition Act. (Source: Order dated June 28, 2016. For full text see CCI website- www.cci.gov.in )

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About the author

M M SHARMA

 Comdt. (Retd.) M. M. Sharma heads the Competition Law & Policy team in VA since 2009 and has over 30 years’ experience as an Advocate of Delhi High Court and holds a Post Graduate Diploma in Economics of Competition Law from Kings College, London. He has worked in the Competition Commission of India (CCI) as Additional Registrar during 2006-2008 and was responsible for drafting the Implementing Regulations under the Competition Act, 2002. He has experience of working as Head-Legal /In-house Counsel for a large Corporate Group in the Steel and Power sector before joining VA in 2009. He has represented clients as an independent arguing Counsel in landmark cases decided by CCI, the Competition Appellate Tribunal (COMPAT) , High Courts and the Supreme Court. As a prolific writer, he contributes articles and is regularly quoted on competition issues in National Newspapers and interviewed by TV Channels. He also teaches as a visiting faculty in various Universities and Institutions and is widely regarded as a subject expert in various Committees of Apex Business Chambers, such as FICCI, CII, ASSOCHAM and PHD CCI.  Mr. Sharma has been mentioned as a “Notable Practitioner” in the “Competition/Antitrust” category of Chambers & Partners (Asia Pacific) Ranking of Leading Lawyers for Business in India for the year 2012 and 2013. VA’s competition law and policy team has also been awarded the Law Firm of the Year Award for “Competition/Antitrust Law” for 2013 by the Indian Business Law Journal. Included as a ‘Recognised Practitioner’ in Individual Lawyers’ranking by Chamber’s Asia Pacific Guide 2020 for Antitrust/Competition Law.