Competition Commission rejects complaint against HAFED

Fair trade regulator CCI has dismissed allegations of anti-competitive practices made against Haryana State Co-operative Supply and Marketing Federation Ltd (HAFED).
The complaint pertained to procurement of operation and maintenance (O&M) services by HAFED for its sugar factory in Haryana.
It was alleged that the federation abused its dominant position by rigging the tendering process by way of introducing conditions that favoured one entity - Integrated Casetech.
Rejecting the complaint, CCI said no case of contravention of competition norms has been made out.
For the case, Competition Commission of India (CCI) considered 'procurement of services relating to operation and maintenance of sugar mills with exportable power co-generation capacities in the state of Haryana' as relevant market.

Citing the HAFED sugar mill's crushing as well as exportable energy capacities, the Commission said it was of the considered opinion that HAFED does not appear to be in a dominant position in the relevant market.

As HAFED is not dominant in the relevant market, it is not necessary to examine the alleged instance of abuse of dominant position, the regulator said in an order dated November 17.
"The allegations of bid rigging by the Informant against Opposite party 1 (HAFED) and Integrated Casetech are misconceived... As the same are not operating at horizontal level in the market," it added.

Further, the regulator said that to ensure healthy
competition, all enterprises, irrespective of their public or private ownership, must be able to operate on a level playing field consistent with the principles of competitive neutrality.
"It is widely recognised that in markets where public and private entities compete, competitive neutrality warrants reform in governance arrangements and removal of conflict of interest to reduce the scope of ownership-linked advantages ex ante," the order said.
Naval Chopra, Partner at law firm Shardul Amarchand Mangaldas & Co, said that CCI refused to accept plain statements of competitors without any supporting evidence and gave due consideration to statements of customers who did not have any complaints.

(REOPENS DCM97)
When contacted, J K Lakshmi Cement said that it has always abided by the rules, regulations and law of the land.
"Although we are still studying the order. We are confident that we would definitely have a strong case in our favour," the company's spokesperson said.
Ultratech spokesperson too said that "our company is always in compliance with the law, rules and regulations. We will examine the CCI order and take appropriate action".