NCLAT Upholds CCI Order Against Manufacturers of Composite Brake Blocks in Relation to Bid Rigging

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Aug 30, 2023

NCLAT Upholds CCI Order Against Manufacturers of Composite Brake Blocks in Relation to Bid Rigging

On May 16, 2023, the National Company Law Appellate Tribunal (‘NCLAT’) dismissed an appeal filed by the Chief Materials Manager, Eastern Railway (‘CMM’) against the order passed by the CCI on 10 July, 2020 finding brake block manufacturers (‘OPs’) and their office bearers guilty of indulging in a bid-rigging cartel in relation to tenders floated during 2009-2017, for supplying composite brake blocks (‘CBB’) to the Indian Railways (‘Tenders’).

NCLAT’s Order

The CCI had decided not to impose any penalty on the OPs considering, (i) their cooperation during the investigation; (ii) OPs were micro small and medium enterprises; (iii) the OPs turnover from CBB were miniscule; and (iv) the economic situation during COVID-19. Aggrieved by the decision of the CCI to not impose a penalty, CMM filed an appeal before the NCLAT.

The NCLAT upheld the order of the CCI holding that the CCI has rightly considered the mitigating factors while determining whether a penalty should be imposed and there was no reason for NCLAT to interfere with CCI’s order.

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