COMPAT by its order dated March 1, 2016 has directed CCI to re- consider penalties imposed on the 47 LPG manufactures for big- rigging in procurement of 14.2 KG LPG cylinders in IOCL.
As a background to the case, the CCI by its order dated February 24, 2012 had imposed penalty of 7% of the preceding three years turnover on 47 LPG manufacturers for bid-rigging in procurement of 14.2 KG LPG cylinder by IOCL.
Through COMPAT’s judgment dated December 20, 2013, the order of CCI was upheld on merits. However, COMPAT directed re-consideration by the CCI on the question of penalties imposed on the LPG cylinder manufacturers.
Upon re-consideration, the CCI upheld the original penalty imposed at the rate of 7% of the turnover on all the parties except in case of M/s Confidence Petroleum Ltd, the penalty on was reduced on account of error of calculation in the original order.
This order of CCI dated August 6 , 2014 was appealed by the LPG manufacturers.
COMPAT, through its latest judgment dated March 01, 2016 has again set-aside the order of CCI dated August 6, 2014. The COMPAT has set-aside the order on essentially two considerations. Firstly, the COMPAT held that the CCI had not considered the relevant turnover of the LPG manufacturers while imposing penalties, and instead had imposed the penalty on average of total turnover of LPG manufacturers. Secondly, the COMPAT opined that CCI had not given due weightage to the mitigating factors pleaded by many of the LPG manufacturers for reduction of penalties, such as nature of anti- competitive agreement, appreciable adverse effect on competition, financial health of the enterprise and market condition.
(Source: Order dated March 1, 2016. For full text see COMPAT website-www.compat.nic.in)