NCLAT dismisses Sundaram Brake's plea against CCI cease and desist order on railways tendering

The CCI has passed an order without any application of mind, contrary to fundamental principles of competition law and the law of evidence, it said.Moreover, it had only given a bid for three tenders and the admissions of one of its employees would not bind the appellant company as he gave a statement before the authority without any authorisation.Mere receipt of information cannot be conclusive proof of the membership of the cartel when the appellants tenders were not a part of Microsoft Excel sheets, Sundaram Brake Linings said.

The National Company Law Appellate Tribunal on Tuesday dismissed a plea by Sundaram Brake Linings, challenging a cease and desist order passed against the company by the fair trade regulator CCI.

NCLAT upheld orders passed by the Competition Commission of India (CCI), and said there was a ''meeting of mind'' with other parties, which were participating in the bidding process of certain tenders of the Indian Railways.

The CCI had on July 10, 2022 passed an order directing 10 companies, including the appellant Sundaram Brake Linings, and some of their officials, to cease and desist from indulging in anti-competitive practices.

The Chennai-based company challenged the order in NCLAT.

In its petition, Sundaram Brake Linings had raised several points and said it was wrongly clubbed into the CCI order. The CCI has passed an order without any application of mind, contrary to fundamental principles of competition law and the law of evidence, it said.

Moreover, it had only given a bid for three tenders and the admissions of one of its employees would not bind the appellant company as he gave a statement before the authority without any authorisation.

Mere receipt of information cannot be conclusive proof of the membership of the cartel when the appellant's tenders were not a part of Microsoft Excel sheets, Sundaram Brake Linings said. However, the plea was rejected by the appellate tribunal, which said, ''We do not agree to this argument in view of strong evidence of cartelisation in the form of statements made by cartel members, which belies the argument that the appellant was merely a recipient of information.'' It further said as per the definition of cartelisation in the Competition Act, even an attempt to rig a bid is sufficient to attract the provision.

''The appellant argued it had never sent any such email and only 'received' such emails and mere 'receipt' of the emails does not amount to 'exchange' of emails, is not acceptable,'' said NCLAT.

Sundaram Brake Linings had continuously ''received'' emails for over five years without any protest and never requested the cartel to stop sending such emails to it.

''This itself indicates a meeting of mind,'' said NCLAT, adding, ''it cannot be concluded that the appellant was never a part of the cartel''. ''In view of above, the appeal and all pending applications are dismissed,'' the order said.

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