On November 28, 2017, CCI dismissed the reference filed under Section 19(1)(b) of the Act by Shri D. K. Shrivastava, chief material manager, Rail Coach Factory, Kapurthala against M/s Daulat Ram Engg & Services P. Ltd., Madhya Pradesh (‘Daulat Ram Engg’), M/s Daulat Ram Industries (‘Daulat Ram Industries’), M/s Amit Engineers (‘Amit’), M/s Fedders Lloyd Corpo- ration (‘Fedders’), M/s Intec Corporation (‘Intec’), M/s Lloyd Electric and Engg. Ltd. (‘Lloyd’), M/s Sidwal Refrigeration Industries Ltd. (‘Sidwal’), M/s Stesalit Ltd. (‘Stesalit’) and M/s Ess Ess Kay Engg. Co. P. Ltd. (‘Ess’) (Daulat Ram Engg, Daulat Ram Industries, Amit, Fedders, Intec, Lloyd, Sidwal, Stesalit, and Ess collectively referred to as the ‘RMPU Manufacturers’) alleging inter alia contravention of the provisions of Section 3 of the Act.Shri D. K. Shrivastava alleged that the RMPU Manufacturers have formed cartel and rigged the tenders floated by the Rail Coach Factory, Kapurthala, other Zonal Railways and the Indian Railways (on pan-India basis) for Roof Mounted AC Package Units (‘RMPUs’), which was evident from the collective increase and decrease in the rates quoted by the RMPU Manufacturers during the period of 2011 to 2014, the increase in rates observed in tenders opened in or after June 2013, and instances of identical or similar pricing between several subsets of the RMPU Manufacturers, which contravened the provisions of Sections 3(3)(a) and 3(3)(d) read with Section 3(1) of the Act.CCI, having found a prima facie case, directed the Director General (‘DG’) to investigate the matter. The DG, upon the completion of its investigation, concluded that Amit, Fedders, Intec, Lloyd, and Sidwal had contravened Sections 3(3)(a) and 3(3)(d) of the Act. The matter was then considered by CCI. CCI noted that there was collective increase and decrease in the rates quoted by the RMPU Manufacturers, but mere price parallelism, without some conclusive evidence of agreement or arrangement among the RMPU Manufacturers, is not sufficient to conclude that the price parallelism was an outcome of collusion. In sum, CCI acknowledged that parallel behaviour of competitors can be a result of intelligent market adaptation in an oligopolistic market and to arrive at a finding of contravention merely on the basis of suspicion resulting from identical or similar pricing with evidence of possibility of exchange of information is fraught with its own pitfalls. In light of no direct evidence nor even persuasive circumstantial evidence to establish that the RMPU Manufacturers tacitly colluded, CCI held that no case of contravention of Sections 3(3)(a) and 3(3)(d) read with Section 3(1) of the Act was established.

*Reference Case No. 04 of 2014.