Sangeeta Verma ORDER
Order under Section 26(2) of the Competition Act, 2002
1. Present information has been filed by Mr. Ravi Pal (hereinafter, the 'Informant') under Section 19(1)(a) of the Competition Act, 2002 (hereinafter, the 'Act') alleging contravention of the provisions of Section 3(3) of the Act by All India Sugar Trade Association (hereinafter, 'OP-1') and its Chairman, Mr. Praful Jagjivandas Vithalani (hereinafter, 'OP-2'), with other unknown persons, collectively referred to as Opposite Parties/OPs'
2. According to the Informant, OP-1 is an association comprising mostly of sugar traders, couple of millers, refiners and bulk consumers as its members. It is stated that OP-1 has been formed, inter alia, with the following objectives:
(i) Policy advocacy for orderly development of the sugar sector;
(ii) Providing timely update on subjects of common interest and related regulations to the members;
(iii) Collection, analysis and dissemination of data and market reports; and
(iv) Holding periodical events for knowledge sharing and networking between members
3. The Informant has alleged that OP-2 is actively running various discussion forums and chat groups with the leading sugar traders/millers/refiners and other unknown persons on a software application platform popularly known as WhatsApp, which is being used by the OPs for circulating price sensitive information like sugar prices, and forthcoming policy changes by Government in relation to sugar industry, which, as per the Informant, would have direct impact on the domestic sugar market. The Informant has stated that OP-1 has been collecting, analysing and disseminating ex-mill prices of sugar and other sensitive information from various sugar traders/millers (also members of OP-1). According to the Informant, the details in relation to the sugar prices are collated and uploaded on the website of OP-1. This information provides the members with speculative as well as determinative sugar prices in the market prevailing during a particular period of time.
4. It has been alleged that OP-2, in addition to holding a fiduciary capacity in OP-1, is also running few trading firms in Mumbai, one of which is under the name and style "Jagjivan Keshavji & Co.". It has been alleged that the OPs entered into an arrangement, forming a cartel whereby they have indulged in bid rigging by way of pre-determining prices for bids through information exchange.
5. It has, further, been alleged that for the past several months, the WhatsApp group, run and operated by OP-2, was very active and was informing and sharing the lowest prices of sugar on a daily basis, which were traded in limited quantities through a daily tender process in the state of Maharashtra. It has also been alleged that information of sugar prices, shared on the said WhatsApp group, were from the last successful bid to the tender, issued prior to the date of sharing of prices on the WhatsApp group. The Informant has further alleged that access to lowest sugar prices enables all the members of this WhatsApp group to collectively fix the lowest price for their bids for the next sugar procurement tender and that, thereby, all these members controlled and fixed price at which sugar was to be bought from the millers. This process, indirectly, restricted the market for a trader who submitted its bid on the basis of a price determined by market forces and not on the basis of the lowest price that was speculated and collusively fixed by the OPs.
6. It has also been alleged that most of the members of OP-1 are leading traders from Maharashtra and are acting in collusion by illegally exchanging information about lowest sugar prices amongst themselves. Through these acts, they allegedly indulged in bid rigging, primarily, to influence the bidding process in order to procure sugar at lower prices on a daily basis and eliminate free play of market forces in th........