On March 22, 2019, CCI dismissed allegations against the All India Sugar Trade Association (‘AISTA’) and its Chairman, Mr. Praful Jagjivandas Vithalani, along with other unknown persons, (‘AISTA Respondents’), for contravening Section 3(3) read with Section 3(1) of the Act, in an information filed by Mr. Ravi Pal (‘Informant’).[1]

The allegation pertained to the Chairman of AISTA actively running various discussion forums and WhatsApp chat groups with leading sugar traders/ millers/ refiners and other unknown persons. It was alleged that price sensitive information like sugar prices and forthcoming policy changes by the Government of India, in relation to the sugar industry, was circulated via these groups. The sugar prices were then collated and uploaded on the website of AISTA. The Informant also alleged that information of sugar prices, shared on the Chairman of AISTA’s WhatsApp group, reflected the last successful bid prices to sugar tenders in Maharashtra, issued prior to the date of sharing of prices on the WhatsApp group. The Informant further alleged that this enabled all the members of this WhatsApp group to engage in bid rigging by collectively fixing the lowest price for their bids in the sugar procurement tenders from the millers. This process, according to the Informant, indirectly restricted the market for those traders who submitted price bids on the basis of market forces as opposed to the lowest price speculated and collusively fixed by the AISTA Respondents. To demonstrate this, the Informant submitted the average ex-factory price of sugar from the Agricultural Produce Market Committee, purportedly published by Maharashtra Rajya Sahakari Karkhana Sangh Limited, Mumbai. It was the Informant’s case that these prices were lower than the ‘price sensitive information’ circulated on the WhatsApp group.

CCI considered the evidence provided by the Informant and did not find any link between the sugar prices circulated on the WhatsApp group and the average ex-factory net prices of sugar. Considering that the sugar prices circulated on the WhatsApp group were already publicly available, CCI held that circulation of this information, per se, does not make it price sensitive information. CCI further held that the Informant had failed to show how the information exchanged on the WhatsApp group affected free play of the market forces with respect to prices of sugar and also failed to show any meeting of minds amongst the AISTA Respondents to achieve this. Other aspects considered by CCI were: (i) members of the WhatsApp group included two millers who would have no interest in colluding on sugar prices; (ii) sugar, as a commodity, is subject to the provisions under the Essential Commodities Act, 1955 and orders issued under it; therefore, the final market price of sugar is dependent upon numerous factors; and (iii) the information filed had general averments, lacking in material particulars to show bid-rigging, i.e., related to the tenders floated by the millers during the relevant period and the bid details etc. On the basis of the factors discussed above, the information was dismissed by CCI, stating that the presumptive inference and analysis provided by the Informant could not be the basis for passing of a prima facie order to investigate the matter.

[1] Case No. 25 of 2018