Case No. 19 of 2011. Case: Arun Kumar Tyagi Vs The Software Engineering Institute, The High Court of Uttrakhand and The HCL Technologies Ltd.. Competition Commision of India
| Case Number | Case No. 19 of 2011 |
| Judges | Ashok Chawla (Chairperson), R. Prasad, Geeta Gouri, Anurag Goel and M.L. Tayal, Members |
| Issue | Competition Act, 2002 - Sections 2, 3, 3(3), 4, 19(1), 26(1) and 26(2); Constitution of India - Articles 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236 and 237 |
| Judgement Date | September 30, 2011 |
| Court | Competition Commision of India |
Order:
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The present information has been filed before the Competition Commission of India (hereinafter referred to as 'the Commission') by Arun Kumar Tyagi (hereinafter referred to as 'the informant') on 21.04.2011 under Section 19(1)(a) of the Competition Act, 2002 (hereinafter referred to as 'the Act').
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The information in this matter has been filed against the Software Engineering Institute, USA (hereinafter referred to as 'OP1'), the High Court of Uttrakhand (hereinafter referred to as 'OP2') and the HCL Technologies Ltd. (hereinafter referred to as 'OP3') with the allegation that the opposite parties have acted in concert in the tendering process for procurement of computer software by OP2 for digitizing its old records with a view to kill free and fair competition and to eliminate other competitors from the bidding process.
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The facts as stated in the information, in brief, are as under:
3.1 As per the information, the informant is a citizen of India having its residence at Uttam Nagar, New Delhi. The OP1 is an USA based Software Engineering Institute engaged in certifying the level of Document Management Software developed by different software companies. The OP3 is a company having its visible presence in the software market in India and is engaged in the business of various software and hardware products.
3.2 For digitizing its old records of approximately one crore pages, OP2 invited sealed tender (both technical and financial proposal) from those Original Equipment Manufacturers (hereinafter referred to as 'OME') of the proposed Document Management Software who satisfy the prescribed technical and financial requirements.
3.3 It is stated in the information that in order to monopolize the aforesaid bidding process for procurement of computer software, the OP1 and OP3 have formed a cartel and persuaded OP2 to stipulate certain minimum eligibility technical preconditions in the tender notice which are exclusively met by OP3. The informant has alleged that the minimum technical eligibility conditions have been stipulated by OP2 with a view to favour OP3 in the bidding process.
3.4. Besides others, certain minimum eligibility technical conditions as stipulated in the tender notification of OP 2 include:
(i) The OME of proposed document management software should be at least Capability Maturity Model Integration Level 5 (hereinafter referred to as 'CMMI Level 5')
(ii) Compliance of Integrated Database Management System (hereinafter referred to as 'IDMS').
(iii) Preference to IDMS compliance with DoD__5015.2-STD Version 3 standard (a document standard of USA defence with classified specifications).
3.5 The informant has alleged that specification of an OEM being of 'CMMI Level 5' and preference to IDMS compliance with DoD_5015.2-STD Version 3 standard as the essential and preferred requirements in the tender notice was aimed to favour the OP3. Stipulation of these technical specifications in the tender appears to be the outcome of cartelization between OP1, OP2 and OP3 which defeats the purpose of free and fair competition in the tendering process.
3.6 It is submitted by the informant that OP1 has issued 'CMMI Level 5' certificate to OP3 in order to participate in the said bidding process. But, it is alleged that OP1 is not an accredited certifying authority in India to certify the capability of OP3 in handling of the job required by OP2. Further, the OP1 has no sanction as well as no expertise in the work related to digitization as required by OP2. As per the Informant, since OP1 is a foreign entity and is not eligible to participate in the Indian tenders in its own name, it accredited OP3 with 'CMMI Level 5' in order to participate in the bidding process through OP3.
3.7 It is also alleged that OP1 is misleading the other bidders by prescribing 'CMMI level 5' as an essential requirement for the proposed document management software to OP2 which amounts to cartelization and restriction on free and fair competition. Further, the decision of OP2 to include the said minimum eligibility conditions in the tender notice is vitiated by unreasonableness. The said pre-conditions are violative of the fundamental rights of other bidders of the tender and are in violation of the principle of equity, justice and fair play.
3.8 According to the informant, the above conduct of the opposite parties amounts to cartelization which is anti-competitive as per the provisions of section 3 of the Act.
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The Commission considered this matter in its meeting held on 10.05.2011 and asked the informant to explain his case by filing written submissions or in person on 31.05.2011. Mr. Vijay Krishna, Advocate appeared on behalf of the informant and explained the allegations vis-a-vis the provisions of the Act and filed written submissions before the Commission. The Commission has considered the facts and allegations raised in the information and has examined all the relevant material available on record.
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It is noted that the activities being performed by OP1 and OP3 are covered in the definition of 'enterprise' under Section 2(h) of the Act. Similarly, the activity performed by OP2 i.e. the High Court of Uttrakhand in inviting tenders being purely administrative/ executive in nature and thus while carrying out such activities, OP2 is also covered within the definition of an 'enterprise' under Section 2(h) of the Act.
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The issue for consideration before the Commission in the present matter relates to the examination of alleged conduct of the opposite parties in violation of the provisions of Section 3 and Section 4 of...
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