"Cont’d…/ NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Competition Appeal (AT) No. 39 of 2022 I.A Nos. 3062, 3063 of 2022 IN THE MATTER OF: M/s Satish Kumar Agarwal, Sole Proprietor Having registered office at 67, Station Road Bareilly Cantt Email ID: Satishagarwall96@gmail.com Ph: +91 9837758888 .... Appellant No.1 M/s Siddhi Vinayak & Sons, Sole Proprietor Having registered office at 67, Station Road Bareilly Cantt Email ID: agrl_satish@yahoomail.com Ph: +91 9917125222 .... Appellant No.2 Versus Competition Commission of India 9th Floor, Office Block-1 Kidwai Nagar (East) New Delhi- 110023 Email: secy@cci.gov.in Mob. No. +011 24664100 .... Respondent Present For Appellant : Mr. Rajeev Goyal, Ms. Anshul Misra, Ms. Koninica Bose, Advocates. For Respondent : Mr. Dhruv Malik, Ms. Aditi Sinha, Advocates for CCI. Mr. Dinesh Chandra, Dy. Director, for CCI. Ms. Sunaina Dutta, Jt. Director (Law) for CCI. -2- Competition Appeal (AT) No. 39 of 2022 J U D G M E N T (16th September, 2025) INDEVAR PANDEY, MEMBER (TECHNICAL) This appeal arises from the final order and judgment passed by the Competition Commission of India (hereinafter referred to as “Commission”) on 04.04.2022 under Section 27 of the Competition Act, 2002 (hereinafter called the Act), wherein the Commission held that M/s Satish Kumar Agarwal/ Appellant 1 and M/s Siddhi Vinayak & Sons/ Appellant 2 herein, had contravened Sections 3(3)(c) and 3(3)(d) r/w Section 3 (1) of the Act. The appeal has been filed under Section 53 (b) of the Act challenging the impugned order of the Commission. Brief facts of the case 2. The commission received a general complaint dated 07.08.2018 alleging bid-rigging in the tenders invited by the Department of Agriculture, Government of Uttar Pradesh for soil sample testing. The complaint related to alleged bid rigging in respect of two e-tenders namely, Tender 2018_AGRUP_210583_1 (Moradabad) dated 31.05.2018 (“Tender No. 1”) and Tender 2018_AGRUP_212591_1 (Bareilly) dated 18.06.2018 (‘Tender No. 2”), invited for the soil sample testing by the Department of Agriculture, Government of Uttar Pradesh. 3. It was stated in the complaint that the following parties participated in the aforesaid two tenders of soil testing in Uttar Pradesh: -3- Competition Appeal (AT) No. 39 of 2022 (i) M/s Yash Solutions (ii) M/s Satish Kumar Agarwal (iii) M/s Siddhi Vinayak and Sons (iv) M/s Saraswati Sales Corporation (v) M/s Lab Traders (vi) Edward Food Research and Analysis Centre Limited (vii) Atharva Laboratories Pvt. Ltd. (viii) M/s Newgen Computers (ix) Austere System Pvt. Ltd. 4. It was alleged in the complaint that the following participating bidders acted in a concerted manner in respect of Tender No. 1 and Tender No.2 and resorted to bid-rigging in contravention of provisions of Section 3 (1) read with Section 3 (3) (d) of the Competition Act 2022 (‘Act’): (i) Yash Solutions, Bareilly (Unit of Yash Ornaments Pvt. Ltd.) (“Yash Solutions”/OP-1) (ii) M/s Satish Kumar Agarwal, Bareilly (“M/s Satish Kumar”/OP-2) (iii) M/s Siddhi Vinayak & Sons, Bareilly (“M/s Siddhi Vinayak”/OP-3) (iv) M/s Saraswati Sales Corporation, Bareilly (“M/s Saraswati Sales”/OP-4) (v) Austere System Pvt. Ltd., New Delhi (“Austere Systems”/OP-5) 5. It was further alleged that there were numerous red flags in the documents submitted by the aforesaid entities for Tender No. 1 and Tender No. 2, but the tender inviting authorities preferred to ignore these aspects. M/s Yash Solutions emerged as the successful bidder for the award of work for Tender No. l and Tender No. 2 for the regions Moradabad and Bareilly, respectively, in the year 2018-19. It was also -4- Competition Appeal (AT) No. 39 of 2022 stated in the complaint, that in the previous year, i.e., 2017-18, M/s Yash Solutions was awarded tenders for soil testing for the regions of Bareilly and Moradabad, and Austere Systems was awarded tenders for the regions of Jhansi, Saharanpur and Meerut as a result of such collusive bidding. It was alleged in the complaint that the entities referred above, rigged the tenders of soil testing in the state of Uttar Pradesh by indulging in cover bidding, bid rotation and collusive bidding 6. The Commission considered the complaint and obtained documents like audit report, experience certificates and term deposit receipts submitted by relevant parties. Based on the analysis of records, the commission was of the prima facie view, that despite being competitors, these entities appear to have manipulated the process of bidding in the soil testing tenders in state of UP by indulging in bid-rigging, in contravention of provisions of Section 3 (1) r/w Section 3 (3) (d) of the Act. Accordingly, the commission passed an order dated 30.01.2020 under Section 26 (1) of the Act directing the Director General (DG) to cause an investigation and submit the investigation report in the matter. The commission also observed that if the DG came across anti-competitive conduct of any other entity in addition to those mentioned in the information, the DG would be at a liberty to investigate the same. The DG was also directed to investigate the role of the persons/officers, who were in charge of and responsible for the conduct of the businesses of the parties at the time the alleged contravention was committed, as well as persons/officers with whose consent or connivance the alleged -5- Competition Appeal (AT) No. 39 of 2022 contravention was committed, in terms of the provisions of section 48 of the Act. The DG, pursuant to the directions of the Commission, investigated the matter, and after seeking due extensions of time, submitted the investigation Report dated 08.04.2021. 7. The relevant findings of the investigation Report relating to the appellant’s role are the following: (i) Investigation covered 9 tenders namely, tenders of (a) 2017 and 2018 for Moradabad division, (b) 2017 and 2018 for Bareilly division, (c) 2017 for Jhansi division, (d) 2018 for Saharanpur division, (e) 2017 and 2018 for Meerut division, and (f) 2018 for Aligarh division. (ii) As per the records submitted by the Department of Agriculture, Government of Uttar Pradesh, during the year 2017-18, the contract for soil testing work was awarded to Yash solutions on L-1 basis for Moradabad and Bareilly divisions. For the year 2018-19, the contract for soil testing work was awarded again to M/s Yash Solutions for Moradabad, Bareilly and Aligarh divisions. (iii) The investigation revealed that Yash Solutions, M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales and Austere Systems (the Opposite Parties as identified by the Commission at prima facie stage) as well as other parties/bidders, namely, Delicacy Continental Private Limited (\"Delicacy Continental\"), Fimo Info Solutions Pvt. Ltd. (\"Fimo Info Solutions\"), M/s Toyfort and -6- Competition Appeal (AT) No. 39 of 2022 Chaitanya Business Outsourcing Pvt. Ltd. (\"Chaitanya Business Outsourcing\") indulged in cartelisation and bid-rigging in the 2017 and 2018 tenders pertaining to soil testing work issued by various divisions of the Department of Agriculture, Government of Uttar Pradesh. (iv) The investigation also brought out that M/s Yash Solutions, in collusion with M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales and M/s Chaitanya Business Outsourcing, had rigged the bids and emerged as L-1 in soil testing tenders floated by the Department of Agriculture, Government of Uttar Pradesh, in Bareilly and Moradabad divisions in 2017 and Bareilly, Moradabad and Aligarh division in 2018. (v) With respect to M/s Satish Kumar and M/s Siddhi Vinayak, the investigation brought out that the said entities are sister concerns. Both entities are proprietorship concerns owned by Mr. Satish Kumar Agarwal and are engaged in the business of supplying vegetables and fruits. Both entities had bid for 2017 and 2018 soil testing tenders despite having no prior experience of soil testing. Further, the said entities did not have any soil testing machine. M/s Satish Kumar and M/s Siddhi Vinayak, in collusion with M/s Yash Solutions, used fake documents provided by M/s Yash Solutions to become eligible and submit cover bids to support the bid of M/s Yash Solutions. Both the entities were blacklisted by the Department of Agriculture, Government of Uttar Pradesh for two -7- Competition Appeal (AT) No. 39 of 2022 years in relation to the lack of authenticity of the documents submitted along with bids for soil testing tenders. The said decision was not appealed by the proprietor of the said entities. (vi) The investigation also brought out that a common IP address was used for the submission of e-bids in respect of M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales and M/s Yash Solutions in the Moradabad tenders for the year 2018. Further, in the Bareilly tenders for the year 2018, the bids submitted by M/s Siddhi Vinayak, M/s Satish Kumar and Yash Solutions were submitted through a common IP address. The login ID used by M/s Siddhi Vinayak to submit the bids in the Bareilly and Moradabad tenders for the year 2018 also belonged to M/s Yash Solutions. (vii) M/s Yash Solutions, having no prior experience of soil testing work, had submitted its bids, for various divisions and was awarded tenders in the Bareilly and Moradabad divisions in the year 2017 and Moradabad and Aligarh Divisions in the year 2018. The investigation concluded that M/s Yash Solutions, in collusion with M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales and Chaitanya Business Outsourcing, had rigged the bids in the years 2017 and 2018 issued by various divisions of the Department of Agriculture, Government of Uttar Pradesh. (viii) The investigation found M/s Yash Solutions, M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales, Austere Systems, Delicacy Continental, Fimo Info Solutions, M/s Toyfort and -8- Competition Appeal (AT) No. 39 of 2022 Chaitanya Business Outsourcing to be in contravention of provisions of Section 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act. (ix) The investigation also identified Mr. Satish Kumar Agarwal, Sole Proprietor, M/s Satish Kumar and de facto owner of M/s Siddhi Vinayak as individual official of the Appellants to be responsible under Section 48 of the Act. 8. The commission considered the investigation report of the DG in its meeting on 08.06.2021 and noted the findings that Yash Solutions, M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales and Austere System along with other entities namely, M/s Delicacy Continental, Fimo Infosolutions, M/s Toyfort and M/s Chaitanya Business Outsourcing indulge in cartelisation and bid rigging in the soil testing tenders floated by Government of U.P. 9. Thereafter, commission decided to add M/s Delicacy Continental, Fimo Info solutions, M/s Toyfort and M/s Chaitanya Business Outsourcing as parties to the proceedings and they were arrayed as Opposite Party (OP) Nos. 6, 7, 8 & 9 respectively. The commission, thereafter forwarded a copy of investigation report in electronic form to all the 9 OPs mentioned above and the persons/ individuals of the opposite parties identified by the DG as being responsible under Section 48 of the Act for filing their respective objections/ suggestions thereto latest by 16.07.2021. The Commission also directed the Opposite Parties to furnish -9- Competition Appeal (AT) No. 39 of 2022 copies of their audited balance sheets and profit & loss accounts/turnover for the last three financial years, i.e., 2018-19, 2019-20 and 2020-21 latest by 16.07.2021. The persons/individuals named above were also directed to file their income details including copies of the income tax returns for the last 3 financial years, i.e., 2018-19, 2019-20 and 2020-21. The Commission further decided to hear the parties on the Investigation Report on 05.08.2021. In view of submission of parties seeking further time, the Commission finally heard the parties and their individuals at length on 16.12.2021. The Appellants further submitted their written submissions on 27.12.2021 by email. 10. In their objections, appellants stated that they became aware of the business of soil testing for the first time in 2017, when Yash Solutions had applied for and was awarded the Bareilly tender for soil testing and for the purpose of expansion into new projects, they decided to apply for the Moradabad tender in 2017. 11. The Appellants averred that, Mr. Rachit Agarwal, an employee of Yash Solutions, who was well-versed in the process of applying for the tenders as well as related work involving soil testing, assured them that they would emerge as winners and will provide them the necessary assistance in carrying out the work of soil testing. 12. It has been submitted that the entire work such as providing the relevant documents; identity proofs; audit reports; etc., relating to tenders of soil testing was undertaken by a team comprising Mr. Suraj Singh, Mr. -10- Competition Appeal (AT) No. 39 of 2022 Vivek Saxena and Mr. Anuj Sharma, who were employees of Yash Solutions, and that M/s Satish Kumar and M/s Siddhi Vinayak, had absolutely no role in the process of applying for the said tenders and the Appellants were misled to believe that they would win those tenders. It has also been stated that the said tender was not awarded to either of them. As for the evidence in the form of CDR that showed the telephonic conversations of Yash Solutions with M/s Satish Kumar and M/s Siddhi Vinayak, it was submitted that, as M/s Satish Kumar and M/s Siddhi Vinayak share business and family relations with Yash Solutions, they entered into telephonic conversations with Yash Solutions occasionally, and not for the purpose of engaging in any kind of manipulation or bid- rigging. 13. On the issue of penalty, referring to the decision of the Hon’ble Apex Court in the case of Excel Corp Limited vs. Competition Commission of India and others (2017) 8 SCC 47, the Appellants averred that as the turnover, to be calculated under Section 27 of the Act has to be the relevant turnover which relates to the product in question in respect whereof the provisions of the Act are found to be contravened, and as that they could not derive any income from soil testing as they were never involved in the business of soil testing they have nil income and nil turnover. 14. The commission after careful perusal of the investigation report, the objections/suggestions thereto received from OPs and the submissions -11- Competition Appeal (AT) No. 39 of 2022 made by the OPs during the hearing on 16.12.2021 framed two issues, which are as follows: “Issue 1: Whether the Opposite Parties have directly or indirectly rigged/ manipulated the tenders of soil testing issued by the Department of Agriculture, Government of Uttar Pradesh, in various regions for the year 2017 and 2018, by indulging in bid rigging, collusive bidding and sharing of market, resulting in contravention of provisions of Section 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act. Issue 2: If the Opposite Parties are found to have contravened the provisions of Sections 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act.” 15. For the analysis of the first issue the commission grouped the opposite parties in 3 sets are as under: “For the sake of brevity, the analysis of the first issue in the present case is being carried out by grouping the Opposite Parties in sets, as under: a) Set 1: Yash Solutions, M/s Saraswati Sales, M/s Satish Kumar, M/s Siddhi Vinayak and Chaitanya Business Outsourcing, b) Set 2: Austere Systems, M/s Toyfort, Fimo Info Solutions and Delicacy Continental, and c) Set 3: Austere Systems and Yash Solutions.” -12- Competition Appeal (AT) No. 39 of 2022 16. In order to analyse the allegations of bid rigging and collusion against the parties the commission first discussed the activities of the relevant parties and their key personnel: (i) M/s Yash Solutions: It is a unit of Yash Ornaments Private Ltd, and is engaged in Jewellery- related work, Manpower Recruitment Agency and Business Auxiliary Service and is based in Bareilly. Mr Praveen Kumar Agarwal is its MD and his wife Ms. Komal Agarwal is a director. Mr. Nitish Agarwal, who is director of Chaitanya Business Outsourcing, is the CEO of M/s Yash Solutions. The firm did not have any experience of soil testing before submitting its response to the tender of 2017. (ii) M/s Satish Kumar: It is a sole proprietorship concern based in Bareilly and stated to be engaged in the retail and wholesale business of food articles such as cereals, milk products, vegetables, etc. Mr. Satish Kumar Agarwal is the proprietor of the firm. It may be noted that M/s Satish Kumar had no experience in soil testing work and it has neither any soil testing lab nor any soil testing machine. (iii) M/s Siddhi Vinayak: It is a sole proprietorship concern based in Bareilly and is engaged in the retail and wholesale business of food articles such as prepared food items, cereals, vegetables, etc. Ms. Sangeeta Agarwal, w/o Mr. Satish Kumar Agarwal, is the proprietor of the said entity. It may be noted that M/s Siddhi Vinayak had no -13- Competition Appeal (AT) No. 39 of 2022 experience of soil testing work and neither it has any soil testing lab nor did it purchase any soil testing machine. (iv) M/s Yash Solutions had submitted its bids in the soil testing tenders of the Department of Agriculture, Government of Uttar Pradesh for the Moradabad and Bareilly divisions in the year 2017 and Bareilly, Moradabad, Jhansi, Saharanpur, Meerut and Aligarh divisions in the year 2018. M/s Yash Solutions had won contracts in the tenders of 2017 for Bareilly and Moradabad divisions and tenders of 2018 for Bareilly, Moradabad and Aligarh divisions. (v) The Commission further noted that even though the 2017 soil testing tenders for Bareilly and Moradabad divisions did not prescribe any prior soil testing experience, the 2018 soil testing tenders for Bareilly, Moradabad and Aligarh divisions had prescribed prior experience of analysing 50,000 soil samples. The eligibility conditions in the said tenders also required the bidders to conduct tests on an ICP-OES soil testing machine. (vi) The Commission noted that M/s Satish Kumar had submitted its bids in the soil testing tenders of 2017 for Moradabad division. It had also submitted bids in the 2018 tenders for the Bareilly, Moradabad and Aligarh divisions. M/s Satish Kumar had also submitted bids in the soil testing tenders of 2017 and 2018 for M/s Siddhi Vinayak. Ms. Sangeeta Agarwal, in her deposition before the DG, stated that her husband, Mr. Satish Kumar Agarwal, manages the affairs of her concern, M/s Siddhi Vinayak, including tender- -14- Competition Appeal (AT) No. 39 of 2022 related work and her role was only to sign the documents on behalf of the concern, as she was the sole proprietor of the said concern. She stated that she was an ostensible owner of M/s Siddhi Vinayak, and all the decisions were taken by her husband, Mr. Satish Kumar Agarwal, he being the de facto proprietor of the both the concerns. (vii) The Commission noted that the investigation revealed that M/s Satish Kumar and M/s Siddhi Vinayak submitted experience certificates of soil testing work issued by rival entity in the tender, the same being M/s Yash Solutions, despite admitting before the DG that both his concerns had no experience of soil testing work nor did they have any soil testing lab or any soil testing machine. The Commission noted that Mr. Satish Kumar Agarwal could not come forth with any justification as to why such false certificates were issued by M/s Yash Solutions to the above concerns. The Commission also noted that the experience certificates issued by M/s Yash Solutions to M/s Satish Kumar and M/s Siddhi Vinayak bore the same date and were issued despite the fact that those entities never had any soil testing experience or experience of working on ICP-OES machine, and these were fake. (viii) The Commission also noted that Mr. Praveen Kumar Agarwal in his statement before the DG admitted that fake work orders and experience certificates were issued by M/s Yash Solutions to rival bidders’ M/s Satish Kumar and M/s Siddhi Vinayak in the 2018 soil testing tenders for Aligarh, Bareilly and Moradabad divisions. -15- Competition Appeal (AT) No. 39 of 2022 However, Mr. Praveen Kumar Agarwal submitted in his deposition that he did not know why such fake experience certificates and work orders were issued by his company to rival bidders. Mr. Praveen Kumar Agarwal, in his statement, could not come up with any cogent explanation for issuing such fake certificates and work orders. (ix) The Commission further noted that Mr. Satish Kumar Agarwal had submitted invoices for the purchase of soil testing machine, i.e, ICPOES machine, with identical account number and serial number of the invoices submitted by other bidders such as M/s Yash Solutions, M/s Siddhi Vinayak and M/s Saraswati Sales in the soil testing tenders. However, Mr. Satish Kumar Agarwal was persistently evasive with replies of \"I do not know\" and came up with no explanation as to how the invoices bore identical accounts and serial numbers and who arranged the said invoices, which the Commission finds highly improbable. The Commission also notes that M/s Satish Kumar Agarwal had submitted invoices for the purchase of lab consumables related to soil testing, issued by M/s Today Tech Scientific Solutions, Ambala Cantt, with exactly the same number of items, amount and time mentioned therein, as other invoices furnished by other bidders namely, M/s Yash Solutions and M/s Siddhi Vinayak, which again the Commission found highly improbable and inconceivable. Mr. Satish Kumar Agarwal, in his statement before the DG, admitted that the said -16- Competition Appeal (AT) No. 39 of 2022 invoices were fake/ altered, however, he evasively replied \"I do not know\" when questioned as to who provided the said invoices and for what purpose. (x) The Commission also noted that Mr. Praveen Kumar Agarwal of M/s Yash Solutions submitted evasive replies to the questions regarding the similarity in the invoices for the purchase of lab consumables from M/s Today Tech Scientific Solutions and soil testing machine from M/s Thermo Fisher Scientific Pvt. Ltd. (Singapore), which were submitted by M/s Yash Solutions, M/s Satish Kumar, M/s Siddhi Vinayak and M/s Saraswati Sales in the 2018 soil testing tenders. (xi) The Commission also observed that as per the reply of M/s Thermo Fisher, dated 14.04.2020, M/s Yash Solutions had purchased soil testing machines from it, however, no sale was ever made to M/s Satish Kumar, M/s Siddhi Vinayak and M/s Saraswati Sales, which implies that the invoices submitted by them in the soil testing tenders of 2018 were fake and fabricated. (xii) The Commission also noted that, as per reply dated 30.06.2020 of the Excise Department, Haryana, filed before the DG, no sale was ever made by M/s Today Tech Scientific to M/s Satish Kumar and M/s Siddhi Vinayak. Accordingly, the Commission took a view that the invoices so submitted by them were fake. -17- Competition Appeal (AT) No. 39 of 2022 (xiii) The Commission further noted that Mr. Satish Kumar Agarwal, in his statement, had admitted that he had submitted fake documents and bid separately for both his concern, M/s Satish Kumar and M/s Siddhi Vinayak, in the 2017 soil testing tenders for Moradabad and 2018 soil testing tenders for Aligarh, Moradabad and Bareilly divisions, just to show that there was enough competition and to avoid cancellation of tenders due to lack of participation. The Commission further noted that the name of M/s Yash Solutions appeared in the affidavits submitted by M/s Satish Kumar and M/s Siddhi Vinayak. Further, the phone number of the authorised signatory of M/s Yash Solutions, i.e. Mr. Rachit Agarwal, appeared in the character certificate issued to Ms. Sangeeta Agarwal of M/s Siddhi Vinayak. The Commission also noted that Mr. Satish Kumar Agarwal persistently submitted evasive replies \"I do not know\" or \"I do not remember\" and submitted no explanation for the alleged linkages. It is also noted that Mr. Satish Kumar Agarwal initially denied knowing Mr. Praveen Kumar Agarwal of M/s Yash Solutions, however, when confronted with the CDR of his mobile number, he admitted having regular interactions with Mr. Praveen Kumar Agarwal. He also admitted to be in regular communication with Mr. Nitish Agarwal, CEO of Yash Solutions, as well as Mr. Rachit Agarwal, General Manager of M/s Yash Solutions. Mr. Satish Kumar Agarwal admitted that he used to take Mr. Rachit Agarwal's assistance in completing and submitting tender formalities of both -18- Competition Appeal (AT) No. 39 of 2022 his concerns. The Commission noted that Mr. Satish Kumar Agarwal also admitted that the Department of Agriculture, Government of Uttar Pradesh, had blacklisted both his concerns namely M/s Satish Kumar Agarwal and M/s Siddhi Vinayak, questioning the authenticity of the documents submitted by his concerns in the soil testing tenders and he had not appealed against that order as he did not want to escalate the matter further and appeal in the court, as he was aware of the fact that both his concerns have submitted manipulated documents in the said tenders. (xiv) The Commission noted that the investigation revealed that Mr. Suraj Singh, an employee of M/s Yash Solutions, had submitted bids as an authorised signatory in the 2017 soil testing tenders for Bareilly and Moradabad divisions and in 2018 for Bareilly, Aligarh and Moradabad divisions on behalf of M/s Satish Kumar and M/s Siddhi Vinayak on the directions of Mr. Praveen Kumar Agarwal. Further, Mr Vivek Saxena, another employee of M/s Yash Solutions, had submitted bids as an authorised signatory of M/s Siddhi Vinayak in the 2017 tenders for Moradabad division. Mr. Anuj Sharma, an employee of M/s Yash Solutions, had submitted bids as an authorised signatory in respect of Mr Satish Kumar in the 2018 soil testing tenders for Bareilly, Aligarh and Moradabad divisions. Mr. Praveen Kumar Agarwal of M/s Yash Solutions submitted evasive replies and could not provide any plausible justification as to why his own employees, Mr. Suraj Singh, Mr. Vivek Saxena and Mr. Anuj -19- Competition Appeal (AT) No. 39 of 2022 Sharma, had submitted bids on behalf of rival bidders in the 2017 and 2018 soil testing tenders on his directions. Further, Mr. Praveen Kumar Agarwal stated that there was no justification for the actions of his senior employee Mr. Rachit Agarwal (General Manager) in assisting the submission of bids of rival bidder, M/s Siddhi Vinayak. (xv) The Commission also noted that Mr. Satish Kumar Agarwal submitted evasive replies of \"I do not know”, when he was questioned about the authorised signatories namely, Mr. Suraj Singh and Mr. Vivek Saxena, employees of M/s Yash Solutions, who had submitted bids in respect of his concerns M/s Satish Kumar and M/s Siddhi Vinayak as well as of rival bidders, namely, M/s Saraswati Sales, in the 2017 and 2018 soil testing tenders. Further, Mr. Satish Kumar Agarwal admitted to have known Mr. Nitish Kumar Agarwal (CEO of M/s Yash Solutions and Director of Chaitanya Business Outsourcing) and Mr. Rachit Agarwal (General Manager of M/s Yash Solutions). In his statement before the DG, Mr. Satish Kumar Agrawal admitted to taking Mr. Rachit Agarwal's assistance in completing and submitting the tender documents of both his concerns. (xvi) The Commission, from the above, noted that it clearly comes out to the fore that fake and fabricated documents were arranged/ provided by M/s Yash Solutions, to M/s Satish Kumar, M/s Siddhi Vinayak and M/s Saraswati Sales with a view to ensure their -20- Competition Appeal (AT) No. 39 of 2022 technical eligibility and submission of cover bids in favour of M/s Yash Solutions in the 2017 tenders for Bareilly and Moradabad divisions and in the 2018 tenders for the Bareilly, Moradabad and Aligarh divisions. (xvii) The Commission further noted that, as per records of e-bidding submitted by the National Informatics System, the bids of M/s Yash Solutions, M/s Siddhi Vinayak and M/s Satish Kumar were submitted from the same IP Address in the Bareilly tenders of 2018. Further, in the Moradabad tenders of 2018, the bids of M/s Yash Solutions, M/s Siddhi Vinayak, M/s Saraswati Sales and M/s Satish Kumar Agarwal were also submitted from the same IP Address. The bids submitted by M/s Siddhi Vinayak in both the tenders were submitted using the login id acs.yop@gmail.com, which is the email address of M/s Yash Solutions. (xviii) The Commission noted that, in response to the notices of the investigation dated 25.03.2021 regarding common IP address for submission of e-bids, Mr. Satish Kumar Agarwal of M/s Satish Kumar and M/s Siddhi Vinayak and Mr. Praveen Kumar Agarwal of M/s Yash Solutions, vide their affidavits, submitted that, being technically incapable, they could not submit any clarifications in the matter. The Commission, in agreement with the DG finding, observed that it is highly inconceivable as to how all the aforesaid bidders, who were independent entities having separate ownership, -21- Competition Appeal (AT) No. 39 of 2022 had a common IP address, which indicates collusion and cartelisation by M/s Yash Solutions, M/s Siddhi Vinayak, M/s Saraswati Sales and M/s Satish Kumar Agarwal in the soil testing tenders of 2018. (xix) The Commission observed that the evidence on record coupled with the statements of the individuals of the above-mentioned Opposite Parties point to their complicity in manipulating the tenders issued by the Department of Agriculture, Government of Uttar Pradesh. Further, even acts of forgery were resorted to in such processes, which speaks about the conduct of such Opposite Parties. Further, M/s Yash Solutions, M/s Satish Kumar and M/s Siddhi Vinayak were blacklisted by the procurer. The Commission did not find any merit in the submissions made by the said Opposite Parties in their objections/ written submissions as well as the arguments advanced during the oral hearing and in subsequent submissions. The Commission thus concluded that M/s Yash Solutions, M/s Satish Kumar, M/s Siddhi Vinayak, M/s Saraswati Sales and Chaitanya Business Outsourcing had contravened the provisions of Section 3 (3)(d) read with Section 3(1) of the Act. Issue 2: If the Opposite Parties are found to have contravened the provisions of Sections 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act, who are the persons in charge thereof and responsible for the conduct of business of the respective enterprises under Section 48 of the Act? -22- Competition Appeal (AT) No. 39 of 2022 17. After establishing the contravention by the Opposite Parties, the Commission then proceeded to analyse the conduct of directors/ proprietors of the Opposite Parties, who were directly involved in the activities and affairs of such parties and had full knowledge and played an active role in the anti-competitive conduct and hence, are liable in terms of Section 48 of the Act. The DG in his investigation identified Mr. Satish Kumar Agarwal, Proprietor (M/s Satish Kumar and M/s Siddhi Vinayak) liable in terms of the provisions of Section 48 of the Act. 18. In regard to Mr. Satish Kumar Agarwal of (M/s Satish Kumar and M/s Siddhi Vinayak) the commission noted that he was solely responsible for the conduct of business as well as the decisions taken in respect of both M/s Satish Kumar as well as M/s Siddhi Vinayak, in which his wife Ms. Sangeeta. Agarwal is the Sole Proprietor. All the decisions pertaining to both concerns are taken by Mr. Satish Kumar Agarwal. Further, Mr. Satish Kumar Agarwal stated that he had bid on behalf of both M/s Satish Kumar as well as M/s Siddhi Vinayak in soil testing Tenders issued by the Department of Agriculture, State of Uttar Pradesh in 2017 and 2018. He also admitted that both his concerns had no infrastructure for soil testing and had never purchased any soil testing machine. Mr. Satish Kumar Agarwal also admitted that he had bid separately for both concerns just to show that there is enough competition and to avoid the cancellation of tenders because of lack of participation by his concerns. The Commission noted that Mr. Satish Kumar Agarwal was evasive in his replies regarding -23- Competition Appeal (AT) No. 39 of 2022 evidence collected by the DG of collusion and bid rigging by way of submission of cover bids in support of Yash Solutions by M/s Satish Kumar and M/s Siddhi Vinayak. He could also not submit any justification for the use of a common IP address in the submission of e- bids by his concerns as well Yash Solutions in the 2018 Bareilly and Moradabad tenders. The Commission noted that Mr. Satish Kumar Agarwal failed to dispel the findings of the DG in relation to his anti- competitive conduct and is thus liable under Section 48 of the Act. 19. The Commission noted that Shri Satish Kumar Agarwal has not been able to rebut or deny the respective roles played by him in cartelization, for which the DG has gathered cogent and clinching evidences, which are primarily based on his active conduct in perpetuating the anti-competitive conduct with a view to manipulate and vitiate the tender process as discussed in the foregoing paragraphs. The concerned individuals of different OPs have not been able to credibly refute the evidence against them unearthed by the investigation nor been able to explain the conduct. From the statements of the individuals, it can be discerned that they have chosen to be evasive in submitting before the investigation. Mere perfunctory justifications have been proffered to escape their liability, neither the Opposite Parties nor their individuals have been able to rebut the presumption that stares them in their faces. The Commission was therefore convinced that the Opposite Parties acted in a concerted manner to rig the tenders, which is in violation of Section 3(1) read with Sections 3(3)(c) and 3(3)(d) of the Act. Therefore, the Commission -24- Competition Appeal (AT) No. 39 of 2022 found the concerned individuals of the Opposite Parties are liable in terms of the provisions of Section 48(1) and 48(2) of the Act. 20. The Commission noted that cartelisation, including bid rigging, is a pernicious form of anti-competitive conduct under the provisions of Section 3 of the Act. None of the Opposite Parties or their individuals have been able to rebut the evidence found against them by the DG of having indulged in anti-competitive conduct and manipulating the bids/bid rigging in respect of tenders floated by the Department of Agriculture, State of Uttar Pradesh. The Commission gave the finding that certain Opposite Parties and their individuals had also resorted to the production and submission of fake invoices and grant of false certificates for making some of the Opposite Parties eligible for participating in the bid process, so as to effectively act as cover bidders in respect of the winning bidders. Some of the Opposite Parties did not even have prior experience and were later blacklisted. 21. In view of these findings, the Commission held that the Appellants have contravened the provisions of Section 3(1) of the Act read with Section 3(3)(c) and 3(3)(d) thereof. 22. Further, the Commission, in terms of Section 27 (a) of the Act, directed the Opposite Parties and their respective proprietors and directors who have been held liable in terms of the provisions of Section 48 of the Act to cease and desist from indulging in practices, which have been found -25- Competition Appeal (AT) No. 39 of 2022 in the present order to be in contravention of the provisions of Section 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act, as detailed earlier. 23. The Commission found the present case fit for imposition of penalty, under the provisions contained in Section 27(b) of the Act. Under the aforesaid section the Commission may impose such penalty upon the contravening parties as it may deem fit, which shall be not more than ten percent of the average of the turnover for the last three preceding financial years, upon each of such person or enterprises which are parties to such agreement. 24. The commission noted that the twin objectives behind the imposition of penalty are. (a) to reflect the seriousness of the infringement, and (b) to ensure that the threat of penalties will deter the infringing undertakings from indulging in similar conduct in the future. Therefore, the quantum of penalty imposed must correspond to the gravity of the offence, and the same must be determined after having due regard to the mitigating and aggravating circumstances of the case. 25. On the issue of penalty, the Opposite Parties in their objections to the Investigation Report and subsequent submissions had averred, referring to the decision of the Hon'ble Apex Court in the case of “Excel Crop Care Limited vs. Competition Commission of India and others” [(2017) 8 SCC 47], that the turnover to be calculated under Section 27 of the Act has to be the relevant turnover, which relates to the product in question, in respect whereof, the provisions of the Act are found to be -26- Competition Appeal (AT) No. 39 of 2022 contravened. The Opposite Parties had averred that, as that they could not derive any income from the soil testing tenders for never being involved in the business of soil testing, zero penalty would naturally arise out of nil income and turnover. Opposite Parties had prayed for mitigation of penalty on the grounds of being Micro Small and Medium Enterprises (MSME). 26. With regard to the submission of the Opposite Parties that they have derived no income from tenders in question and hence zero penalty would arise, the Commission found no merit in the said submission and stated that no narrow interpretation of the relevant turnover can be taken as suggested. The Commission, in this regard, reiterated its decision dated 03.02.2022 in Suo Motu Case No. 2 of 2020 (In Re: Alleged anticompetitive conduct by various bidders in supplying and installation of signages at specified locations of State Bank of India across India): \"115. In relation to the contention that turnover derived from the Impugned Tender alone should be considered, it is noted that a bare perusal of the Excel Crop Care judgement makes it clear that nowhere is held or otherwise declared that relevant turnover should be limited to the turnover earned from the specific customer or tender. Such a plea would frustrate the underlying policy objective of deterring the cartelists besides providing them a fertile ground for regulatory arbitrage. For example, if owing to the understanding between the bidders. If some or few bidders have refrained from participating in the particular tender under investigation, the turnover of the said parties from the said -27- Competition Appeal (AT) No. 39 of 2022 tender would obviously be mil, resulting in nil penalty. To allow such parties to walk free without incurring any monetary penalty for their anti-competitive conduct simply because they did not have any turnover from the concerned tender, would not only smultify the Parliamentary intent in providing deterrence through penalties against such behaviour hut would also run contrary to the underlying spirit of the judgment of the Hon'ble Supreme Court of India in Excel Crop Care Judgment. Taking such a pedantic interpretation would provide a virtual free run to the infringing parties and an effective immunity against any antitrust action for their anti-competitive behaviour. This cannot be the purport or intent either of the Parliament or the Hon'ble Supreme Court of India in laying down the parameters and perimeter for Imposition of monetary penalty upon the contravening parties. Therefore, such contentions by the OPs need to be rejected.\" 27. The Commission noted that the instant case emanates out of conduct pertaining to public procurement in soil testing tenders and, as such, is a fit case to impose penalties upon the infringing parties. On a holistic appreciation of the facts and circumstances of the case and the mitigating factors put forth by the Opposite Parties, the Commission observed that the findings of the DG clearly indicate the active role played by each of the Opposite Parties in rigging the tenders. The Commission accordingly imposed the penalty upon the Opposite Parties @ 5 percent of the average of their turnover for the three financial years, i.e, 2017-20. -28- Competition Appeal (AT) No. 39 of 2022 28. Keeping in view the facts, clinching evidence, own admissions along with circumstantial evidence, the Commission vide the Impugned Order, imposed a penalty of 5% on their average turnover for FY 2017-18 to 2019- 20 INR 15,59,451/- on M/s Satish Kumar Agarwal and INR 12,62,007/- on M/s Siddhi Vinayak and Sons. The Commission further noted that since M/s Satish Kumar Agarwal and M/s Siddhi Vinanyak are sole proprietorship concerns, no separate penalty is being imposed on their respective proprietors. Submissions of Appellants 29. The Counsel for the Appellants submitted that the impugned order proceeds on two erroneous assumptions: firstly, that the appellant employed fake or fabricated documents to establish technical eligibility, and secondly, that the appellant participated in submission of cover bids to manipulate the tender process. Both premises are found to be misconceived. As per the tender conditions only original documents, including experience certificates from government or semi-government bodies, were admissible for establishing technical eligibility. In the present case, the experience certificate submitted by the appellant was admittedly issued by a private entity, M/s Yash Solutions, and no original documents, as required under the tender, were submitted, this clearly negated any inference of deliberate misrepresentation or intent to qualify technically. -29- Competition Appeal (AT) No. 39 of 2022 30. Ld. Counsel stated that for a charge under Section 3(1) read with Sections 3(3)(c) and (d) of the Competition Act, 2002, it is essential to establish that the appellant was engaged in an identical or similar line of trade. However, it remains undisputed that the appellant was involved in the retail and wholesale trade of food articles and had neither prior experience nor any engagement in the domain of soil testing, which was the subject matter of the tenders under scrutiny. The appellant had also never been awarded any such tenders in the past. Therefore, the allegation of bid rigging is unsustainable. 31. The appellant further contended that they were not perpetrators but victims of fraud in the alleged bid-rigging exercise. It is submitted that one Mr. Rachit Aggarwal, introduced to the appellants during their exploration of a new business venture the business opportunity in soil testing; took complete charge of the tender process; which was executed through his associates Mr. Suraj Singh, Mr. Vivek Saxena, and Mr. Anuj Sharma. These individuals submitted the bids, arranged the experience certificates, and handled all documentation without the knowledge or consent of the appellants, who merely provided basic documents such as authority letters, ID proofs, financials, and educational records. 32. The Counsel asserted that in the investigation, only Mr. Suraj Singh was called as a witness. His initial statement did not suggest any wrongdoing by the appellants, but he later gave conflicting accounts. Importantly, individuals like Mr. Rachit Aggarwal, who submitted an -30- Competition Appeal (AT) No. 39 of 2022 affidavit in support of the appellants, and others directly connected to the matter were never examined. Although the appellants made repeated requests, they were not allowed to cross-examine these individuals. This not only undermines the fairness of the process, but also violates the principles of natural justice. The lack of cross-examination has caused serious prejudice to the appellants and adversely influenced the outcome, which is inconsistent with the Supreme Court’s ruling in M/s ICDS Ltd. v. CIT, order date 12.02.2020 in Civil Appeal No(s). 6053-6054/2014. 33. Ld. Counsel further submitted that no penalty can be levied against the Appellants on the ground that they had zero turnover from the business activity of soil testing in the past. In this regard, the Appellants relied upon the judgment of the Hon’ble Supreme Court in Excel Crop Care Limited v. Competition Commission of India [(2017) 8 SCC 47], asserting that the judgment categorically held that the concept of Relevant Turnover aligns with the ethos of the Competition Act for the following reasons: (a) Alleged agreement may relatable to one product, so concept of total turnover would lead to inequitable results. Hence; there is no justification to add the turnover of other products. (b) Principle of Strict interpretation of penal statute support above view. (c) If 2 views are emerging, view favourable to infringer should prevail. -31- Competition Appeal (AT) No. 39 of 2022 (d) Doctrine of proportionality suggest to lean in favour of relevant turnover. Penalty imposed cannot be disproportionate. (e) Doctrine of Purposive Interpretation also leans in favour of relevant turnover. Relationship between nature of offense and benefit derived to be considered, which would lead to penalty on affected/relevant turnover. Like other countries, In India, there is no guidelines to ensure penalty not to be disproportionate. Hence; penalty on total turnover would bring disastrous results. 34. The Ld. Counsel for the Appellant further submitted that the reliance placed by the Hon’ble CCI on the decision in Suo Motu Case No. 2 of 2020 is misplaced and misconceived, as the law laid down by the Hon’ble Supreme Court in Excel Crop Care Limited v. Competition Commission of India is clear and unambiguous. It was further submitted that the issue in the Suo Motu case pertained to whether the alleged business activity formed part of, or was a sub-set of, an existing business activity—an issue that is distinct from the one involved in the present matter. 35. The Ld. Counsel for the appellant submitted that the finding of the Hon’ble CCI treating the imposition of penalty as mandatory for deterrence is erroneous and misconceived. Section 27 of the Competition Act, 2002 does not mandate imposition of a penalty, but grants the authority discretion to either issue a cease-and-desist order and/or impose a -32- Competition Appeal (AT) No. 39 of 2022 penalty. In the present case, a cease-and-desist order alone would have served as adequate deterrence, as any breach thereof would expose the appellant to penal consequences under Sections 42 and 42A of the Act, including fines, prosecution, and liability for compensation. Therefore, the CCI ought to have exercised its discretion judiciously and confined the order to a cease-and-desist directive. 36. The Ld. Counsel for the appellant further submitted that the distinction drawn by this Hon’ble Tribunal in M/s Yash Solutions (Competition Appeal (AT) No. 38 of 2022) for not applying the Excel Corp principles is misplaced. Unlike Yash Solutions, the appellant has zero turnover from the alleged business activity of soil testing, making that distinction irrelevant. Further, a review of the Excel Corp judgment and its audited financial statements shows that Excel Corp also reported composite turnover, contrary to the Tribunal’s conclusion. Therefore, the principles laid down in Excel Corp are fully applicable to the appellant’s case. 37. The Ld. Counsel for the appellant further argued that the penalty imposed at 5% amounting to Rs. 15.59 lakh and Rs. 12.62 lakh on the Appellants 1 and 2 respectively, is manifestly excessive and disproportionate to the nature of the allegations and the appellant’s minimal role. The appellant did not derive any financial benefit, has a clean track record, and has never engaged in similar conduct before. Being an MSME with a modest turnover of Rs. 3 to 4 crore and profits between -33- Competition Appeal (AT) No. 39 of 2022 Rs. 6.5 to 8.5 lakh, the penalty is unjustified. In Excel Corporation, despite involving large companies with significantly higher turnover and profits, the Supreme Court reduced the penalty to 1% on turnover relevant to the alleged activity. Here, the appellant has zero turnover from the alleged soil testing business, making the penalty wholly unwarranted and disproportionate. 38. Summing up his arguments, Ld. Counsel for the appellant has prayed for the following reliefs: (i) Allow the present appeal and set aside the order dated 04.04.2022 passed by the Hon'ble Competition Commission of India. (ii) Pass such other(s) as this Hon’ble Tribunal may deem fir in the interest of justice. Submission of the Respondent 39. The Ld. Counsel for the Commission/Respondent submitted that the appellants, being sole proprietorships engaged solely in the retail and wholesale business of food articles, have no experience, equipment, or infrastructure related to soil testing. Despite this, the appellants submitted fabricated experience certificates issued by M/s Yash Solutions to falsely establish their technical eligibility. During the investigation, Mr. Satish Kumar Agarwal admitted that neither of his firms had ever purchased any -34- Competition Appeal (AT) No. 39 of 2022 soil testing machines before or after submitting bids in the tender. Additionally, Mrs. Sangeeta Agarwal confirmed that she only signed documents on behalf of her firm, with all key decisions taken by her husband. These admissions and documentary evidence establish that the appellants lacked bona fide experience in soil testing and deliberately submitted false documents to secure tender eligibility. 40. The Ld. Counsel for the Respondent submitted that according to the e-bidding records from the National Informatics System, the bids submitted by Yash Solutions and the appellants in the 2018 tenders for Bareilly and Moradabad originated from the same IP address. Furthermore, the login ID used by Appellant No. 2 to submit these bids belonged to Yash Solutions. This evidence indicates collusion and coordination between the appellants and Yash Solutions in the bidding process. 41. The Ld. Counsel submitted that the appellants submitted fake invoices for the purchase of an ICP-OES soil testing machine during the 2018 tender process, which bore identical account and serial numbers as those submitted by Yash Solutions and Saraswati Sales. During his deposition, Mr. Satish Kumar Agarwal was evasive about the origin of these invoices, which is highly improbable, especially as he admitted before the Director General that these invoices were fake or altered. This clearly demonstrates the appellants’ deliberate submission of false documents to mislead the tendering authority. -35- Competition Appeal (AT) No. 39 of 2022 42. The Ld. Counsel further submitted that the appellants submitted fake experience certificates, purportedly issued by their rival bidder, Yash Solutions, claiming to have conducted 50,000 to 55,000 soil samples. Mr. Satish Kumar Agarwal admitted that neither appellant had any experience in soil testing, without providing any justification for the issuance of these fake certificates. Mr. Praveen Kumar Agarwal also acknowledged that fake work orders and experience certificates were issued by Yash Solutions to the appellants during the 2018 tender process for Bareilly, Aligarh, and Moradabad, but failed to explain the circumstances. Furthermore, Yash Solutions had subcontracted work to the appellants, thereby indicating collusion. This clearly indicates the submission of fabricated documents to secure tender advantages. 43. It was submitted by Ld. Counsel that Mr. Satish Kumar Agarwal admitted during his deposition that the appellants submitted cover bids intentionally to create the appearance of adequate competition and to prevent the cancellation of the tender process due to insufficient participation. This admission demonstrates the appellants’ involvement in manipulating the bidding process. 44. Ld. Counsel further stated that there is a clear connection between the appellants and Yash Solutions, shown by the fact that the mobile number of Mr. Rachit Agarwal, the authorized representative of Yash Solutions, was -36- Competition Appeal (AT) No. 39 of 2022 linked to the character certificate of Ms. Sangeeta Agarwal (Proprietor of Appellant No. 2). During deposition, Mr. Satish Kumar Agarwal admitted that Mr. Rachit Agarwal assisted in procuring the character certificate and that the documents were connected to Yash Solutions, though he claimed ignorance as to how this occurred. This establishes collusion between the appellants and Yash Solutions. 45. Ld. Counsel further submitted that although Mr. Satish Kumar Agarwal initially denied knowing Mr. Praveen Kumar Agarwal of Yash Solutions, he later admitted, when confronted with Call Detail Records (CDR), to having regular telephonic communication with him during the 2018 tender process for Bareilly and Moradabad. This evidence indicates close coordination between the appellants and Yash Solutions. 46. The Respondent submitted that Mr. Satish Kumar Agarwal admitted before the Director General that the Department of Agriculture had blacklisted both his firms for two years due to doubts regarding the genuineness of the documents and bids submitted by them in soil testing tenders. Notably, this blacklisting was never challenged or appealed by the appellants. This further substantiates the appellants’ misconduct in the tender process. 47. In regard to penalty imposed the Ld. Counsel stated that the appellants have placed reliance on Excel Corp Limited v. Competition -37- Competition Appeal (AT) No. 39 of 2022 Commission of India and Others [(2017) & SCC 47), to which, the Commission rightly noted that there is no merit in these submissions and no narrow interpretation of the relevant turnover can be taken, as contended by the Appellants. In support, the Commission had placed reliance on its decision dated 03.02.2020 in Suo-Moto Case No. 2 of 2020. Further, the Commission had considered both aggravating and mitigating factors, while imposing the penalty at 5% of average turnover for the past 3 years on the Appellants, whereas, the penalty permissible under Section 27(b) of the Act is a maximum of 10% of the turnover and further, for violations under Section 3 of the Act, a penalty of up to three times of its profits for each year of the continuance of such agreement or ten percent whichever is higher. He further submitted that in cases of cartelisation, if the relevant turnover is to be considered qua the unlawful monies generated from act of cartelisation, which in the present case would be zero, then the entire purpose of the Act would be defeated. 48. Summing up his arguments Ld. Counsel submitted that Section 3 violations are considered the most egregious violations under the Competition Law regime. In so far as reliance on the decision of Excel Corp (supra) is concerned, it was nowhere held or otherwise declared that the relevant turnover should be limited to the turnover earned from the specified customer or tender. If such an interpretation is permitted, then it would frustrate the entire objective of the imposing penalty to deter -38- Competition Appeal (AT) No. 39 of 2022 cartelists, and this could not have been the intent of the Parliament or the Hon'ble Supreme Court. He therefore prayed for dismissal of the appeal. Analysis and findings 49. We have considered the evidence on record and heard the submission of Ld. counsels in detail. We need to examine the evidence of key persons in the organisations identified by the DG to establish the relationship between the Appellants and M/s Yash Solutions and the role played by them in Collusive bidding and bid rigging. 50. Sh. Satish Kumar Agarwal, Smt. Sangeeta Agarwal and Mr. Suraj Singh are the key persons involved. We first have a look at the statement of Sh. Satish Kumar Agarwal, Proprietor of M/s Satish Kumar Agarwal recorded on 12.01.2021 by the DG, which is extracted below: “M/s Satish Kumar Agarwal (A-1) had submitted its bids in the soil testing tenders of Moradabad Division in the year 2017. It had also submitted bids in the 2018 tenders issued by Bareilly, Moradabad and Aligarh divisions Q.3 What is your role and responsibilities in your firm M/s Satish Kumar Agarwal? A.3. For both M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons, I take care of all the business and all the responsibility rests with me only Q.5. Has your Firm ever bid in any tenders floated by Govt. of UP? If yes, please provide details? -39- Competition Appeal (AT) No. 39 of 2022 A.5. Yes, in the year 2017 & 18. Q.6. Please explain your understanding of Government's Soil testing Program? A. 6. No, I was not aware about the soil testing program as it was newly launched. Q.7 Do you or your Firm have any experience in soil testing work? A. 7. No, either of my firms have no any experience in soil testing Q.8 What are the requirements for soil testing work? A.8 I have no knowledge about the soil testing work Q.9. Does your Firm have the necessary infrastructure such as Laboratory Equipment, trained manpower etc required for lasting of soil samples? A.9. No, neither of my Firms have any experience in soil tasting work. Q.10. Who else was associated with your firm for Soil Testing work? A.10. I knew few persons who had some knowledge about the soil testing work. I do not remember their names Q.11. Who are your competitors engaged in soil testing activities? A. 11 business I have no knowledge about the firms who are in the soil testing business. Q.12. Has either of your Firm ever bid in any tenders for Soil Testing floated by Department of Agriculture, Govt. of UP? If yes, please provide details. -40- Competition Appeal (AT) No. 39 of 2022 A. 12. Yes, I had bid in the name of M/s \"Satish Kumar Aggarwal and another tender in the name of my other firm namely M/s Siddhi Vinayak & Sons which is registered in the name of my wife Mrs. Sangeeta Agarwal. Q. 13 What was the eligibility criteria for bidding in those tenders? A 13 I had no information about eligibility criteria when I had bid in these soil testing tenders I had bid assuming that if my firm is found eligible, I will be given the contract then I will fulfil the contract Q. 14 Who were the other bidders in the said tenders? A 14 I do not remember Q 15. Did your firms fulfil the technical eligibility criteria in the said tenders? A 15 I did not examine the eligibility criteria for soil testing tender as it was first time such tenders were issued by UP Government Q. 16. Details of any other related firms or sister concerns who may be engaged in soil testing work/business. A. 16. My other firm registered in the name of my wife had also bid in these tenders. However, all the business-related work of M/s Siddhi Vinayak & Sons is looked after by me personally Q18. Did your Firm have the necessary infrastructure such as a Lab, Laboratory Equipment, trained manpower etc. required for testing of soil samples? -41- Competition Appeal (AT) No. 39 of 2022 A 18. No, both my firms namely M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons did not have the necessary infrastructure such as Lab, Laboratory Equipment, trained manpower etc, required for testing of soil samples when I had submitted those bids. Q. 19. I am showing you the \"Undertakings submitted by your Firms Satish Kumar Agarwal & Siddhi Vinayak & sons to the Agriculture Department during the tender process for having established a lab for soil testing in Bareilly. Where in Bareilly was your Soil Testing lab situated and what machines were available? A. 19. My both firms namely M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons did not have any lab and other infrastructure which was required for soil testing work Q. 20 I am showing the terms & condition laid down by the Department of Agriculture, Government of U.P for the soil testing work in the Bareilly & Moradabad tenders. A. 20. Yes. I have seen it. Q. 21. In clause no. 24 of the said terms & conditions of the Moradabad tenders, it is categorically mentioned that bidder/ company should have a functional soil testing lab nearest place to Moradabad. As you yourself have admitted on oath above that either of my firms did not have any soil testing laboratory or any other infrastructure related to soil testing work, why did your firms submitted false undertaking along with your tender documents to the Agriculture Department of U.P Government? -42- Competition Appeal (AT) No. 39 of 2022 A. 21. I have nothing to say Q. 22. Did you Purchase any Soil testing Machine (ICP-OES) for analysing soil samples? A. 22. Both my firms namely M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons had never purchased any Soil testing Machine (ICP-OES) that is before or after submitting the bids in soil testing tenders during 2017 and 2018. Q. 23. I am showing you the Commercial Invoices for purchase of the ICP- OES machine by your firm Satish Kumar Agarwal. The sane were submitted by your firm during the soil testing tenders for Bareilly & Moradabad divisions. A. 23. I do not remember. Q. 24. Were the aforesaid Commercial Invoices issued by the seller to your firm? A. 24. I do not know. Q. 25. How is the said Invoice submitted by you in the Bareilly Moradabad tenders are having common Account Number 1532236 and Serial Number IC74DC173313 for Your firm & the Invoice of Siddhi Vinayak & Sons)? A. 25. I do not know. Q. 26. How is the said Invoice submitted by you in the Moradabad tenders is having same Account Number 1532236 and Serial Number IC74DC173313 for Your firm & the Invoice of Saraswati Sales Corporation submitted in the Bareilly & Moradabad tenders? A. 26. I do not know. -43- Competition Appeal (AT) No. 39 of 2022 Q. 27. How is the said Invoice submitted by you in the Moradabad tenders are having same Account Number 1532236 and Serial Number IC74DC173313 for Your firm & the Invoice of M/s Yash Solutions Pvt Ltd submitted in the Bareilly & Moradabad tenders? A. 27. I do not know. Q. 28. From where did you get the above-mentioned invoice? A. 28. I do not know. Q. 29. Who provided the said Invoice to you and why? A. 29. I do not know. Q. 30. I am showing the letter received from M/s Thermo Fisher Scientific India Private Limited confirming that no sale of any ICP-OES machine was made to either to M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons. Why did you submit fake invoices for said machine in the tenders of soil testing in Moradabad and Bareilly Divisions during 2018? A. 30. I had submitted the said fake invoices with an intention to service the contract if it was awarded to my firms Q. 31. I am showing you the Invoice bearing no. 7000 dated 01.07.2017 raised by M/s Today Tech Scientific Solutions, Ambala Cantt in favour of your Firm M/s Satish Kumar Agarwal for purchase of certain items, which was submitted by your Firm to the Department of Agriculture, Govt. of UP, during the tendering process in the year 2018- 19 for Bareilly and Moradabad divisions. A. 31. Yes, I have seen it. -44- Competition Appeal (AT) No. 39 of 2022 Q. 32. Why were the aforesaid items procured by your firm? A. 32. I do not know. Q. 33. Were the aforesaid Commercial Invoices issued by the seller to your firm? A. 33. Yes. Q. 34. How is the invoice submitted by your firm and that of M/s Yash Ornaments having same time i.e. 02:37 PM? A. 34 I do not know. Q. 35. How is the invoice submitted by your firm and that submitted by M/s Siddhi Vinayak & Sons in the Bareilly & Moradabad tenders having same time i.e. 02:37 PM? A. 35. I do not know. Q. 36. Who provided the said Invoices to you and why? A. 36. I do not know. Q. 37 I am showing you the letter by Dy. Excise & Taxation Commissioner(ST) dated 30.06.2020 confirming that against the above said invoices raised by M/s Today Tech Scientific Solutions, Ambala Cantt in favour of both your firms namely M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons for purchase of certain items, that no sales were made to both your aforesaid firms. A. 37. Yes, I have seen it. Q. 38. Why were the said Invoices submitted after alteration in the bids of Soil testing tenders issued by the Uttar Pradesh Agriculture department? A.38. Yes, it was a mistake on my part to submit fake documents/invoices. -45- Competition Appeal (AT) No. 39 of 2022 Q. 39. When your firm did not have any Machine or Lab, why did you submit a false Undertaking? A. 39. It was a mistake on my part to submit such fake documents in the soil testing tenders. Q. 40. I am showing you the copy of \"Work Orders submitted in the Bareilly & Moradabad tenders issued by M/s Yash Solutions another bidder in the said tenders, to your firm namely M/s Satish Kumar Agarwal for conducting 50,000- 55,000 soil samples and also to M/s Siddhi Vinayak & Sons for conducting 50,000 to 60,000 soil samples for Bareilly and Moradabad divisions. A. 40. Yes, I have seen it Q. 41. I am showing you the \"Experience Certificates\" dated 02.11.2017 and 05.12.2017 issued by M/s Yash Solutions in favour of your Firm Satish Kumar Agarwal which was submitted by your firm in the Moradabad, Bareilly & Aligarh tenders. Why the aforesaid fake \"Work Orders & \"Experience Certificates for conducting Soil Sample testing were issued to both of your firms namely Mis Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons by Yash Solutions? A. 41. I have nothing to say. Q. 42. M/s Yash Solutions have certified that your Firm had conducted 52000 sample tests for them. How did your Firm receive this work as a sub- contract from M/s Yash Solutions as the original contract for 2017 was allotted by Department of Agriculture, Govt. of UP to M/s Yash Solutions? A. 42. I do not know -46- Competition Appeal (AT) No. 39 of 2022 Q 43. How did your Firm conduct those sample tests in absence of any soil testing machinery or Lab required for the work? A. 43. I have nothing to say. Q.44 Why M/s Yash Solutions Pvt. Ltd. issued a false \"Experience Certificate dated 05.12 2017 in favour of your Firm? A. 44. I do not know. Q 45. How did you decide your firm's financial bids for tenders floated by Department of Agriculture, Govt. of UP during 2018 for Soil testing? A. 45. My employees suggested me the rates which are to be quoted in the above said tender. Q. 46 Can you tell the names of those employees? A. 46. I do not remember the names of those employees. Q. 47. I am showing you the comparative statement of financial bids for 2017-18 for Moradabad Division, for 2018 for Bareilly Division tender and for 2018-19 tender for Moradabad Divisions. A. 47. Yes, I have seen it Q. 48 Why did you bid separately for M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons in the aforementioned tenders when both firms were in your direct control? A. 48. 1 bid separately for both the firms just to show that there is enough competition and to avoid the cancellation of tenders because of lack of participation of firms. -47- Competition Appeal (AT) No. 39 of 2022 Q. 49. Your firm quoted Rs 146.50 & Rs 98.50 for 12/6 parameters, in the Bareilly tender date of bid opening 18.06.2018, whereas in the Moradabad Tender having date of bid opening 19.06.2018, you quoted Rs 145 & Rs 97 for 12/6 parameters respectively. Why different rates were quoted when the tenders had opened at nearly the same time? A. 49. I have no justification for the same. Q. 50 Your other firm namely M/s Siddhi Vinayak & Sons quoted Rs 146.0 & Rs 98.0 for 12/6 parameters, in the Bareilly tender date of bid opening 18.06.2018, whereas in the Moradabad Tender having date of bid opening 19.06.2018, you quoted Rs 148 & Rs 98 for 12/6 parameters respectively. Why different rates were quoted when the tenders had opened at nearly the same time? A. 50. I have no justification. Q. 51. I am showing you the character certificate issued to Mrs. Sangeeta Agarwal by office of the district magistrate Bareilly dated 25.07.2016. In column no. 6 of the said certificate, mobile number of some Mr. Rachit Agarwal is given. How the mobile no. of Mr. Rachit Agarwal appeared on the character certificate issued to your wife Mrs. Sangeeta Agarwal? A 51. Mr. Rachit Agarwal helped in procuring the said character certificate and he must have given his mobile number -48- Competition Appeal (AT) No. 39 of 2022 Q. 52. I am showing you the authorization letter and other documents issued by M/s Yash Solutions in favour of Mr. Rachit Agarwal as their Authorised Signatory, which was submitted in the Jhansi tender having the same mobile number as mentioned in the character certificate of Mrs. Sangeeta Agarwal. How did it happen? A. 52. I have no idea how did it happen. Q. 53. How are documents submitted by your firms namely order for soil testing, experience certificate, character certificate are linked with your rival bidder M/s Yash Solutions? A. 53. Yes, I agree they are linked. However, I have no information as to how this has happened. Q. 54. Do you have any information about M/s Yash Solution or M/s Yash Ornaments and its owners? A. 54. I have no information about M/s Yash Solution or M/s Yash Ornaments. Q. 55. Do you or any of your employees have any interaction/discussion with any employee/partner of any other firm participating in soil testing tenders floated by Department of Agriculture, Govt. of UP for soil testing before or after quoting bid? A. 55. I had no interaction/discussion with any employee/partner of any other firm participating in soil testing tenders floated by Department of Agriculture, Govt. of UP for soil testing before or after quoting a bid. -49- Competition Appeal (AT) No. 39 of 2022 Q.56. Do you know Mr. Praveen Agarwal, partner of M/s Yash Solution /M/s Yash Ornaments? A 56. No, I do not know Mr. Praveen Agarwal. Q. 57. I am showing you CDR of your number 9837758888 which shows that you were in communication with Sh. Praveen Agarwal (Partner of M/s Yash Solutions) during the period of processing of soil testing tenders of Moradabad and Bareilly divisions in 2018. A. 57 Yes, I know Mr. Praveen Agarwal who is in the jewellery business and I admit to having regular interactions with him on telephone. Q 59 Do you know Mr. Nitish Agarwal (CEO of Yash Solutions)? A. 59. Yes, I know Mr. Nitish Agarwal and I am in regular touch with him. Q. 60 I am also showing you CDR of Sh. Rachit Agarwal (Authorised Signatory of M/s Yash Solutions) which shows that you were in regular communication with him during the period of processing of the said tenders. What did you discuss during those calls? A. 60. Yes, I know Mr. Rachit Agarwal and I used to take his help in completing and submitting the tender documents of both my firms. Q.61. Who was your Authorised Signatory in the Bareilly & Moradabad tenders for both of your Firms namely M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons? A. 61. I do not remember. -50- Competition Appeal (AT) No. 39 of 2022 Q. 62 I am Showing you the authorization letter issued by your firm M/s Siddhi Vinayak & Sons in favour of Mr. Vivek Saxena and copy of Aadhar of Mr. Vivek Saxena A. 62. Yes, I have seen it Q.63. I am showing you the authorization letter issued by M/s Saraswati Sales Corporation, Bareilly in favour of Mr. Vivek Saxena 'and Copy of Aadhar of Mr. Vivek Saxena A. 63, Yes, I have seen it. Q. 64. Is Mr. Vivek Saxena the same person in the both the cases? A. 64. Yes, he is the same person. Q. 65. How can the same person namely Mr. Vivek Saxena also became an authorized signatory for your rival bidder M/s Saraswati Sales Corporation? A 65. I do not know how he became the authorized signatory of M/s Saraswati Sales Corporation. However, Mr. Naresh Sharma who has authorized Mr. Vivek Saxena as his Firm's authorized signatory, is known to me and he is in the business of electric contracts. Q. 66. I am showing you the authorization letter & Aadhar issued by M/s Team-1 Data Management Ltd. in favour of Mr. Suraj Singh and Copy of Aadhar of Mr. Suraj Singh who is also the authorized signatory of your Firm Siddhi Vinayak & Sons in Moradabad & Bareilly tenders of 2018. A. 66. Yes, I have seen it. -51- Competition Appeal (AT) No. 39 of 2022 Q. 67 How can the same person namely Mr. Suraj Singh also became an authorized signatory for your rival bidder M/s Team-1 Data Management Ltd.? A. 67. I do not know how he became the authorized signatory of M/s Team-1 Data Management Ltd. also. Mr. Suraj Singh as well as Mr. Vivek Saxena came into my contact through some of my other employee. Q. 68. I am showing you affidavit submitted by your firm M/s Siddhi Vinayak & Sons in the Aligarh Soil testing tender for the year 2018. The said affidavit mentioned that \"Yash Ornament Pvt. Ltd. Company incorporated in terms of the provision of the Companies Act 1956.\" How it is possible that in your firm's affidavit the name of Yash Ornaments Pvt. Ltd which is a rival bidder of your firm in the soil testing tenders is mentioned. A. 68. I do not know. Q. 69. Has any of your Firms namely M/s Satish Kumar Aggarwal or M/s Siddhi Vinayak & Sons ever been blacklisted by the UP Government? A. 69. Yes. The Agriculture Department of U.P Government blacklisted both my firms namely M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons for two years questioning the genuineness of the documents submitted by my Firms along with my Bids for the soil tenders. Q. 70. Whether you had appealed the backlisted done by U.P Government. -52- Competition Appeal (AT) No. 39 of 2022 A.70. No, as I was well aware that my firms have submitted manipulated documents in these tenders hence, I did not want to escalate the matter further and appeal in the court.” 51. It can be seen from the statement on oath and documents on record that: i) Sh. Satish Kumar Agarwal was having complete control and responsibility in respect of his firm M/s Satish Kumar Agarwal as well as his other firm M/s Siddhi Vinayak & Sons, in which his wife Smt. Sangeeta Agarwal is the Proprietor. ii) He had submitted bids for both M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons, in the soil testing tenders issued by Agriculture Department, Government of Uttar Pradesh Government in the year 2017 & 2018. iii) M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons had submitted Experience Certificate of soil testing work, issued by his rival firm M/s Yash Solutions. Sh. Satish Kumar Agarwal had admitted that both his firms had no experience of soil testing work and his firms did not have any soil testing lab or had purchased any soil testing machines. He had no answers when questioned as to why such a false certificate was issued by M/s Yash Solutions. iv) Sh. Satish Kumar Agarwal submitted invoices for purchase of soil testing machine ICP-OES, having common Account number and machine number with the invoice submitted by M/s Yash Solutions in the Soil testing tenders. However, Sh Agarwal continuously -53- Competition Appeal (AT) No. 39 of 2022 submitted evasive replies \"I do not know and provided no explanation as to how this could be possible and who provided the invoices. v) As per reply received from M/s Thermofisher the vendor for the soil testing machine, it was confirmed that the Invoices submitted by M/s Satish Kumar and M/s Siddhi Vinayak & Sons in the 2018 soil testing tenders were altered and fake. vi) Sh. Satish Kumar Agarwal also submitted invoices for purchase of various items related to soil testing, issued by M/s Today Tech Scientific Solutions, Ambala Cantt which had exactly the same number of items, amount and time mentioned therein, as mentioned in the invoices submitted by M/s Yash Solutions. Sh Agarwal admitted that the said invoices were fake/altered. He however, evasively replied \"I do not know” when questioned as to who provided the said invoices and for what purpose. The Excise Department Haryana, confirmed that the Invoices submitted by M/s Satish Kumar & M/s Siddhi Vinayak & Sons purchase of items related to soil testing, in the 2018 soil testing tenders were altered and fake. vii) Sh. Satish Kumar Agarwal admitted that there was clear linkage between the bid documents submitted by his firms with M/s Yash Solutions including False Experience Certificate issued by Yash Solutions, fake Invoices for purchase of ICP-OES machine fake Invoice for purchase of soil testing items, name of Yash Solutions appearing in the Affidavit submitted by M/s Siddhi Vinayak & Sons, -54- Competition Appeal (AT) No. 39 of 2022 phone number of the Authorised Signatory of M/s Yash Solution in the Character Certificate issued to Smt Sangeeta Agarwal, etc but continuously submitted evasive replies \"I do not know\" or \"I do not remember and submitted no explanation for the linkage. viii) Sh. Satish Kumar Agarwal initially denied knowing Sh Praveen Kumar Agarwal, Managing Director, M/s Yash Solutions, however when confronted with the CDR of his Mobile number, he admitted having regular interactions with Sh Praveen Kumar Agarwal. He also admitted to be in regular communication with Sh Nitish Agarwal, CEO as well as Sh Rachit Agarwal (GM), of M/s Yash Solutions. He admitted that he used to take Sh Rachit's help in completing and submitting tender documents of both his firms. ix) Sh. Satish Kumar Agarwal confessed that he had bid separately for both the firms just to show that there is enough competition and to avoid the cancellation of tenders because of lack of participation of firms. x) Sh. Satish Kumar Agarwal also confessed that the Agriculture Department of UP Government had blacklisted both his firms namely M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons questioning the genuineness of the documents submitted by his firms in the soil testing tenders and he had not appealed against that order as he did not want to escalate the matter further and appeal in the court, as he was well aware about the fact that both his firms have submitted manipulated documents in the said tenders. -55- Competition Appeal (AT) No. 39 of 2022 xi) It is seen that despite the fact that neither Sh. Satish Kumar Agarwal himself nor any of the firms controlled by him namely M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons, had any experience or infrastructure for soil testing work, both the firms had submitted bids in the soil testing tenders of Agriculture Department Uttar Pradesh Government during 2017 and 2018. However, none of his firms was L-1 in any the bids and hence did not win any contract. Sh Agarwal could not even provide any justification for the price bids submitted by his firms and admitted to have taken help of Sh Rachit Agarwal (General Manager) of M/s Yash Solutions in completing and submitting the tender documents of both his firms. xii) The documents submitted by both M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons in the soil testing tenders, like the Experience Certificate. Invoices. Affidavit, Authorised Signatory clearly shows a nexus with M/s Yash Solutions however, during his statement Sh Satish Kumar Agarwal has only submitted evasive replies like \"I do not know\" or \"I do not remember to a number of questions regarding who provided the said documents and for what purpose. xiii) The Electronic bids submitted by M/s Siddhi Vinayak & Sons, M/s Satish Kumar Agarwal and M/s Yash Solutions, in the 2018 Moradabad and Bareilly tenders, were having the same IP Address. The bid submitted by Siddhi Vinayak & Sons in both the above -56- Competition Appeal (AT) No. 39 of 2022 tenders were having Login Id acs.yopl@gmail.com, which is a mail Id of M/s Yash Solutions. xiv) M/s Satish Kumar Agarwal vide his affidavit dated 27.03.2021 submitted that being non-technical person he is totally unaware about the IP address used by him or his firm's Authorised representative. Although all the aforesaid bidder firms are independent entities having separate ownership & addresses, a common IP Address for uploading bids OP-1, OP-2, OP-3 & OP4 as well as usage of Login Id of OP-1 by OP-3, only indicates that, parties had colluded in the submission of bids with a common intention to rig bids in the soil testing tenders of 2018. xv) In view of the above, it is clear that the submission of bids by M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons in the 2017 & 2018 soil testing tenders had no other locus, but to submit cover bids, as has already been admitted by Sh Satish Kumar Agarwal. The nexus with M/s Yash Solutions makes it evident that the cover bids were issued in support of M/s Yash Solutions, to ensure that tenders are not cancelled due to lack of bids. 52. Smt. Sangeeta Agarwal in her statement on oath stated that her firm is a contractor/ supplier of vegetables. Her husband manages the entire affairs of her firm and her role is to only sign documents on behalf of the firm as she is the sole proprietor. Relevant extracts from the Statement of -57- Competition Appeal (AT) No. 39 of 2022 Smt. Sangeeta Agarwal, Proprietor of M/s Siddhi Vinayak & Sons, recorded on 28.01.2021by the DG are reproduced below: “Q. 3. What is your role and responsibilities in your firm M/s Siddhi Vinayak & Sons? A. 3. My role is only to sign essential documents related to the business of my firm M/s Siddhi Vinayak & Sons. The actual work of the firm including all decisions are taken by my husband Sh. Satish Kumar Agarwal Q. 5. Has your Firm ever bid in any tenders floated by Govt, of UP? If yes, please provide details? A. 5. I have no information as the entire affairs of the business of M/s Siddhi Vinayak & Sons are managed and looked after by my husband Sh. Satish Kumar Agarwal. Being the Sole Proprietor of the firm and also its signing authority, my role in the company is only to sign the documents which are related to the business. Q. 7. Do you or your Firm have any experience in soil testing work? A. 7. I do not know. Q. 17. Your Company had submitted Bids in soil testing tenders issued by Bareilly. Aligarh & Moradabad floated by Department of Agriculture, Govt, of UP in 2018, which is being shown to you as (Exhibit -1, 2 & 3). Please Confirm. A. 17. Yes, company had submitted bids, but entire work was looked after by my husband Sh. Satish Kumar Agarwal. -58- Competition Appeal (AT) No. 39 of 2022 Q. 18. Your Company had submitted Bids in soil testing tenders issued by Department of Agriculture, Govt, of UP in 2017, Moradabad Division, which is being shown to you as (Exhibit-4 ). Please Confirm. A. 18. Yes, company had submitted bids, but entire work was looked after by my husband Sh. Satish Kumar Agarwal. Q. 24. I am showing you the Commercial Invoice for purchase of the ICPOES machine by your firm (Exhibit- 6). The same was submitted by your firm during the soil testing tenders for the Bareilly division in 2018 A. 24. Yes, it was submitted by my film in the said tender Q. 26. How is the said Invoices submitted by you in the Moradabad tender having the same Account Number 1532236 with the vendor for Your firm & the Invoice submitted by Yash Ornaments for purchase of ICP-OES machine in the Bareilly & Moradabad tenders (Exhibit- 7)? A. 26. I do not know as the entire work including tendering related work is looked after by my husband Sh. Satish Kumar Agarwal. My role is only to sign documents being the Sole Proprietor. Q. 31. I am showing you the “Undertakings” submitted by your Firm to the Agriculture Department, Bareilly, Aligarh & Moradabad Divisions in 2018 during the soil testing tendering process, for having established a lab for soil testing in Bareilly (Exhibit - 11, 12 & 13). When your firm did not have any Machine or Lab, why did you submit a false Undertaking? A. 31. I do not know as my husband took all -59- Competition Appeal (AT) No. 39 of 2022 decisions and managed the entire affairs of the business of my firm. Q. 32. I am showing you the Invoice bearing no. 7017 dated 17.07.2017 raised by M/s Today Tech Scientific Solutions, Ambala Gantt in favour of your Firm M/s Siddhi Vinayak & Sons for purchase of some items, which was submitted by your Firm to the Department of Agriculture, Bareilly & Moradabad, Govt, of UP, during the tendering process in the year 2018 (Exhibit-14 & 15). A. 32. I do not know as my husband took all decisions and managed the entire affairs of the business of my firm. Q. 50. Why two different bids were submitted separately for M/s Satish Kumar Aggarwal and M/s Siddhi Vinayak & Sons in the aforementioned tenders, when both are related concerns? A. 50. I do not know as all decisions in relation to my firm were taken by my husband Sh. Satish Kumar Agarwal” 53. It can be seen from the statement on oath and documents on record that: i) Smt. Sangeeta Agarwal stated that her firm, M/s Siddhi Vinayak & Sons, operates as a contractor and supplier of vegetables. She clarified that her husband, Sh. Satish Kumar Agarwal, manages all aspects of the firm’s operations, including tendering and other related affairs. As the sole proprietor of the firm, her role is limited to -60- Competition Appeal (AT) No. 39 of 2022 signing documents on behalf of M/s Siddhi Vinayak & Sons. Smt. Agarwal further emphasized that all decisions concerning the business activities of her firm are made by her husband, who is also the sole proprietor of M/s Satish Kumar Agarwal. ii) The statement of Smt. Sangeeta Agarwal clearly establishes that she was merely a namesake owner of M/s Siddhi Vinayak & Sons, with her husband, Sh. Satish Kumar Agarwal, overseeing and managing all aspects of the firm. It is evident from her deposition that all business decisions, including those related to the firm’s operations, were made solely by her husband. This position is consistent with the statement given by Sh. Satish Kumar Agarwal, which had already been recorded on oath, further corroborating her claim. iii) Satish Kumar Agarwal admitted on oath that he had placed bids separately in the names of M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons only to create an appearance of competition and prevent the tender from being cancelled due to insufficient participation. iv) Thus, it is evident that the bids submitted by M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons in the 2017 and 2018 soil testing tenders were merely cover bids, as already admitted by Sh. Satish Kumar Agarwal. 54. We now have a look at statement of Sh Suraj Singh S/o Sh. Shyarn Singh Employee of M/s Yash Solutions/Chaitanya Business Outsourcing Pvt Ltd -61- Competition Appeal (AT) No. 39 of 2022 recorded on 01.03.2021. As per records, Sh Suraj Singh had submitted bids in the 2017 soil testing tenders as an Authorised Signatory for M/s Team-1 Data Management Pvt Ltd and M/s Satish Kumar Agarwal in the Bareilly and Moradabad tenders respectively. He also submitted bids in the 2018 tenders for M/s Siddhi Vinayak and Sons in the Bareilly, Aligarh and Moradabad tenders. The relevant extracts of his deposition before the DG are extracted below: “Q3. Did you submit any bids in any soil testing tenders of 2017 & 2018 issued by UP Government, as an Authorised Signatory? A. 3. Yes, in 2017 I was working with one Mr. Jafri for his company in Lucknow. The company was doing data entry work or NPR related work and I was data entry operator. During 2018 I worked for hotel Bareilly palace situated at station road Bareilly, which is owned by Shri Satish Kumar Agarwal. I had submitted tenders for companies of Shri Jafri as well as Shri Satish Kumar Agarwal in the soil testing tender issued by Agriculture Department Government of U.P. Q. 7. I am showing you the bids submitted for M/s Siddhi Vinayak & sons in 2018 for Aligarh and Moradabad Division as well as M/s Satish Kumar Agarwal in 2017 for Moradabad Division (Exhibit-13 & 14). A. 7. Yes, I have seen and admit that I had signed all the above-mentioned documents as an authorised signatory for the above-mentioned firms and submitted to the Agriculture Department of U.P Government. I had signed the documents. -62- Competition Appeal (AT) No. 39 of 2022 Q. 19. Why did you submit bid documents in Moradabad tender in 2017 for M/s Satish Kumar Agarwal and for M/s Siddhi Vinayak & Sons during 2018? A. 19. Yes, I agree that I had submitted the bid documents for M/s Satish Kumar Agarwal in 2017 for Moradabad and for M/s Siddhi Vinayak & Sons during 2018 soil testing tender for Moradabad, Bareilly and Aligarh tenders, as per directions of my employer Chaitanya Business Outsourcing/Yash Ornaments Pvt Ltd. Q.21. Do you know any of the Directors/Proprietors/Partners/Employees of any other firms which had submitted bids in the soil testing tenders? A. 21. Yes, I know Sh. Satish Kumar Agarwal of M/s Satish Kumar Agarwal which supplies fruits and vegetables to Army and is also owner of Hotel Bareilly Palace. Q. 22. How did you submit the bids for M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons, when you were employed with M/s Chaitanya Business/Yash Ornaments during 2017 & 2018? A. 22. I received Bid documents in respect of M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons from my employer M/s Yash Solutions/ M/s Chaitanya Business Outsourcing which were submitted by me after duly signing the bid documents as per their directions, to the Agriculture Department, UP Government in the Soil testing tenders 2017 & 2018.” -63- Competition Appeal (AT) No. 39 of 2022 55. The following findings emerge from the statement on oath of Sh. Suraj Singh: i) Sh. Suraj Singh confessed that he had submitted bids in the names of M/s Satish Kumar Agarwal and M/s Siddhi Vinayak & Sons in the 2017 and 2018 soil testing tenders under the instructions of his employer, M/s Yash Ornaments/M/s Chaitanya Business Outsourcing. Even though he was employed by M/s Yash Ornaments/ Chaitanya Business Outsourcing, he was authorised signatory for signing and submitting the bids on behalf of appellants in the 2017 and 2018 Tenders. This clearly shows strong nexus between Yash Solutions and the appellants. ii) His statement further discloses that Sh. Vivek Saxena and Sh. Anuj Sharma, both employees of M/s Yash Solutions, were actively involved in the process. The evidence on record establishes that they had submitted bids for rival bidders, namely M/s Sarawati Sales Corporation, M/s Satish Kumar Agarwal, and M/s Siddhi Vinayak & Sons, in the said tenders. 56. It is absolutely clear from the findings based on the evidence tendered by Appellants and documents on record that Mr. Satish Kumar Agarwal, was solely responsible for decisions of both his firms (M/s Satish Kumar and M/s Siddhi Vinayak), he had admitted to submitting bids on behalf of both entities despite lacking infrastructure or experience; -64- Competition Appeal (AT) No. 39 of 2022 solely to create a false appearance of competition and support Yash Solutions. The DG’s investigation, corroborated by admissions and evidence such as common IP usage; use of fake and fabricated documents; prove bid rigging in collusion with Yash Solutions and submission of cover bids to support the bid of Yash Solutions. Based on the overwhelming evidence against the appellants the Commission found them violative of Section 3(1) read with Sections 3(3)(c) and 3(3)(d) of the Competition Act. 57. It is well established principle that in cases of alleged cartelization or anti-competitive practices, direct evidence of an agreement between parties is not required. Instead, a probabilistic standard of proof is sufficient, meaning that the existence of a cartel can be inferred from circumstantial evidence or behaviours. The said principle was reiterated by Hon’ble Supreme Court in the case of Rajasthan Cylinders and Containers Ltd. Vs. Union of India and Others, (2020) 16 SCC 615. The Hon’ble Supreme Court in further paras 81 & 84 of Judgment supra has made the following observations: “81. There may not be direct evidence on the basis of which cartelisation or such agreement between the parties can be proved as these agreements are normally entered into in closed doors. The standard of proof which is required is one of probability. 84. Even in the absence of proof of concluded formal agreement, when there are indicators that there was -65- Competition Appeal (AT) No. 39 of 2022 practical cooperation between the parties which knowingly substitute the risk of competition, that would amount to anti- competitive practices.” 58. In the present case the evidence is very direct and is proven from documents on record and conduct of the individuals involved making it a clear case of anti-competitive practices. 59. Based on the material on record; evidence of OPs; and judicial precedent Rajasthan Cylinders (Supra) we are of the considered opinion that Commission has correctly and legally held the appellants responsible for violation of Section 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act and there is no error in respect of order passed under Section 27(a) whereby the appellant was directed to cease and desist from such act, from indulging in the practices which were found in contravention of the provisions contained in Section 3(3)(c) and 3(3)(d) read with Section 3(1) of the Act. 60. Regarding the quantum of punishment, both the appellants and the Respondent/ Commission have relied upon the judgement of Hon’ble SC in Excel Crop Care (supra). The contention of the appellants being that the penalty is to be imposed based on the relevant turnover. The Commission, however, disagreed with the contention of the appellant and stated that such a narrow interpretation of relevant turnover would allow the OPs who are involved in pernicious practice of bid rigging/collusive bidding to go -66- Competition Appeal (AT) No. 39 of 2022 scot-free. This was never the intention of Hon’ble SC nor of the legislature while enacting the Competition Act. 61. In this context, we looked into the aforesaid Judgment of Excel Corp Care (supra) closely, regarding the facts of the case and whether the aforesaid ratio applies squarely to the present appeal. In the Excel Crop Care (supra) the matter related to procurement by FCI for Aluminium Phosphide tablets (for short APT) of 3 gm each between the year 2007- 2009. The relevant para of the judgement are extracted below: “3.2. There were only four manufacturers of APT, namely, M/s Excel Crop Care Ltd.. M/s UPL, M/s Sandhya Organics Chemicals (P) Ltd. (which are the three appellants herein) and Agrosynth Chemicals Ltd. 3.3. It was noted that FCI had adopted the process of tender, which is normally a global tender. The tender concerned had two-bid system, that is, first techno-commercial and then the financial bid. On the basis of the bids, the rate running contracts are executed with successful bidders. The DG found that there was also a committee comprising of responsible officers for evaluation of technical and price bids. As per the practice, the lowest bidder is invited by the Committee for negotiations and after negotiations, the Committee submits the report giving its recommendations and the contracts are awarded and after that the payment for the purchased tablets is released by the regional offices concerned. 3.4. It was found that right from the year 2002, up to the year 2009, all the four parties used to quote identical rates, excepting for the year 2007. In 2002, Rs 245 was the rate quoted by these four parties and in the year 2005 it was Rs 310 (though the tender was scrapped in this year and the material was purchased from Central Warehousing Corporation @ Rs 290). In November 2005, though the tenders were invited, all the parties had abstained from quoting. In 2007, M/s UPL had quoted the price which was much below the price of other competitors. In 2008, all the parties abstained from quoting. while in 2009 only the three appellants, barring Agrosynth Chemicals Ltd., participated and quoted uniform rate of Rs 388, which was ultimately brought down to Rs 386 after negotiations. It was also found that the tender documents were usually submitted in person and the rates were normally filled with hand.” -67- Competition Appeal (AT) No. 39 of 2022 62. It can be seen that the all the four companies referred to in the Excel Crop Care (supra) were in the same business since 2002, and their balance sheets had segment wise reporting, which made it possible to segregate the turnover from the APT business for each year of operation. In such cases, the ratio laid down by Hon’ble SC regarding imposition of penalty on the basis of relevant turnover is a very logical and correct way of calculating the penalty, as it brings in the doctrine of proportionality to the penalty for the offences under the Act. 63. In the present case, the appellants were acting as a member of the cartel and were providing cover bid for the successful bidder Yash Solutions. In view of peculiar facts and circumstances of the present case, where almost all bidders for soil testing are first time bidders and relevant turnover of firms from the aforesaid business is NIL, the concept of relevant turnover in such cases would not be correct, as it would lead to NIL penalty and allow the parties involved to go scot-free in spite of clear-cut case of cartel and bid rigging in violation of the Act. Hence, we agree with the Commission’s approach of taking the total turnover for computation and imposition of penalty. At the same time considering the fact that the Appellant was in a supporting role in this cartel, by providing the cover bids, we are of the view that the penalty in such cases should be less than for those in the main role. 64. In the same competition matter (Suo Moto Case No. 1 of 2020) in appeal filed by M/s Toyfort [Compt. App. (AT) No. 34 of 2022], a coordinate -68- Competition Appeal (AT) No. 39 of 2022 bench of this Tribunal had held that as the aforesaid company had provided only the cover bid and they were not the winning bidders. It accordingly, reduced the penalty to 3% of average annual turnover, instead of 5% as imposed by the Commission. An appeal was filed by M/s Toyfort in Hon’ble Supreme Court in the matter which was dismissed. The present matter is identical in all respects to above mentioned matter already decided by this Tribunal. 65. Based on the above findings, we hold: (i) The order of the Commission in respect of holding the appellant guilty under Section 3(3)(c) and 3(3)(d) read with section 3(1) and order passed under Section 27(a) regarding cease-and-desist order are upheld. (ii) The penalty under Section 27 (b) is reduced to 3% of average annual turnover for last 3 years, instead of 5% as imposed by the commission. The pending IAs if any, are accordingly disposed of. [Justice Rakesh Kumar Jain] Member (Judicial) [Justice Mohd. Faiz Alam Khan] Member (Judicial) [Mr. Indevar Pandey] Member (Technical) SA "