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2020 Supreme(Guj) 595
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Biren Vaishnav, J.
M/s. Vardayani Offset Through its Sole Proprietor Mr. Madhvesh Bhikhabhai Patel - Petitioner
Versus
Competition Commission of India & 2 Others - Respondents
R/Special Civil Application No. 8101 of 2020
Decided On : 18-08-2020
For the Petitioner: Mr. Mihir Thakore, Ld. Senior Counsel with Ms. Amrita M. Thakore.
For the Respondent:Mr. Devang Vyas, Ld. Additional Solicitor General with Mr. K.M. Antani, Ms. Garima Malhotra Advocates.
Point of Laws:
Regulation 46A envisages that if permission is sought to engage an Advocate the same is granted.
Headnote:
Constitution of India – Article 226 – Competition Act, 2002 – Sections 3, 26 – Tender – Cartelization – Petition is filed by petitioner for prayers for holding and declaring that action of respondents of initiating proceedings against petitioner by way of Case before respondent no.1 and order passed therein and of carrying out investigation and issuing Investigation Report therein is ex facie arbitrary, unreasonable, unconstitutional, violative of principles of natural justice without jurisdiction, highhanded, perverse, unjust, harsh, illegal and void.
Facts of the case:
Petitioner is carrying on business of printing and has a web offset printing machine – Gujarat State Board of School Text Book issued a tender for job-work of offset printing of textbooks – Case of petitioner is that after issuance of tender Gujarat State School Text Book Printers' Association called a meeting to give information about tender – It appears that during meeting office bearers of association suggested quoting 25% above rate offered in rate card – Pre-bid meeting was held where according to petitioner, representatives of about 72 printing presses including those from outside were present – Case of the petitioner is that outside State printing presses were over heard discussing quoting -25% to -40% of GSBSTB offered rates – Petitioner’s case is that since it was public knowledge that outside state bidders were likely to quote upto-31% of offered rates, it is possible that other bidders also acted in similar manner while quoting rates in their bids resulting in multiple bids with quotes -31%. – It appears that out of 42 bidders, 28 bidders gave confirmation to work at L1 price – Petitioner was not allotted work by GSBSTB – Respondent no.3, who participated and was unsuccessful, approached Competition Commission of India by filing Information Petition against successful bidders – According to petitioner there were allegations of cartelization and violation of Section 3(1) read with Section 3(3)(d) of Competition Act, 2002 – Petitioner states that on Information Petition so filed, CCI passed an order under Section 26(1) of Act directing Director General to conduct an investigation and submit a report – Petitioner was issued a summons from respondent no.2 directing personal appearance of petitioner which was subsequently changed – It is case of petitioner that petitioner received a letter from CCI with a copy of order forwarding a copy of investigation report – Respondent no.2 called upon petitioner to file its objections / suggestions to same latest – Letter further directed petitioner to file copies of audited balance sheets and profit and loss accounts – Aggrieved by Order passed by CCI under Section 26(1) of Act, the Investigation Report and the Order. together with communication by which Petitioner was asked to appear and file his suggestions and objections, petitioner has approached this Court.
Findings of Court:
Court deems it fit to quash and set aside Order of Competition Commission Of India passed under Section 26(1) of Act, only on ground that order does not record reasons for forming a prima-facie opinion while directing Director General to cause investigation – Order is therefore quashed and set aside.
Result: Petition Partly Allowed
JUDGMENT :
1. RULE. Mr. Devang Vyas, learned Additional Solicitor General with waives service of notice of rule on behalf of respondent nos.1 to 3. With the consent of the learned advocates appearing for the parties, matter is taken up for final hearing today.
1.1 This petition is filed by the petitioner for the following prayers:
“(i) Holding and declaring that the action of the respondents of initiating proceedings against the petitioner by way of Case No.32 of 2018 before the respondent no.1 and order dated 9.11.2018 passed therein and of carrying out investigation and issuing Investigation Report dated 20.3.2020 therein is ex facie arbitrary, unreasonable, unconstitutional, violative of principles of natural justice without jurisdiction, highhanded, perverse, unjust, harsh, illegal and void.”
2. The brief facts of the petitioner's case are as under:
2.1 The petitioner is carrying on the business of printing and has a web offset printing machine. In April, 2018, the Gujarat State Board of School Text Book (for short 'GSBSTB') issued a tender for job-work of offset printing of textbooks. The tender was for two categories. (1) Sheet – Fed offset printing and (2) Web offset printing. Both were for 5000 copies and more than 5000 copies. A rate card was provided along with the tender by the GSBSTB and the bidders were required to quote percentage increase / decrease against GSBSTB offered rates. According to the petitioner therefore, the tender contemplated allotment of work to more than one technically qualified bidder.
2.2 The case of the petitioner is that after the issuance of the tender the Gujarat State School Text Book Printers' Association called a meeting on 27.04.2018 to give information about the tender. According to the Petitioner it appears that during the meeting the office bearers of the association suggested quoting 25% above the rate offered in the rate card. One Mr. Nitin Vyas addressed an E-mail providing calculations in regard to 35% increase in offered rates.
2.3 A pre-bid meeting was held on 15.05.2018 where according to the petitioner, representatives of about 72 printing presses including those from outside were present. The case of the petitioner is that the outside State printing presses were over heard discussing quoting -25% to -40% of the GSBSTB offered rates.
2.4 A total of 115 printing presses including several outside State printing presses participated in the tender and about 100 or so bidders including several outside State bidders were declared technically qualified. The petitioner had submitted a bid in respect of categories B1 and B2 i.e. for Web Offset Printing along with binding upto 5000 copies and 5001 copies and more. The petitioner was one of the 21 bidders who was declared in L1 in category B2 Web offset printing. The petitioner's bid was -31% of the offered rate. The Petitioner’s case is that since it was public knowledge that the outside state bidders were likely to quote upto-31% of the offered rates, it is possible that the other bidders also acted in the similar manner while quoting rates in their bids resulting in multiple bids with quotes -31%. It appears that out of the 42 bidders, 28 bidders gave confirmation to work at L1 price. However, the petitioner was not allotted work by GSBSTB.
2.5 According to the petitioner the respondent no.3, sole proprietor of M/s. Gujarat Book Stores who participated and was unsuccessful, approached the Competition Commission of India (hereinafter to be referred to as 'CCI’) by filing Information Petition being Case No.32 of 2018 against successful bidders. According to the petitioner there were allegations of cartelization and violation of Section 3(1) read with Section 3(3)(d) of the Competition Act, 2002 (hereinafter to be referred to as 'the Act' for short).
The Petitioner states that on the Information Petition so filed, the CCI passed an order da
