Case Number: Civil Appeal No(s). 10820-10822 OF 2014

Judges Name: Hon’ble Judges Sanjay Kishan Kaul J, M.M. Sundresh J

Order dated: 19.01.2022

Facts of the case: 

• This is an appeal preferred by Competition Commission of India (Appellant herein and referred to as “CCI”) against the State of Mizoram and Others (Respondents) challenging the decision of the Hon’ble High Court of Gauhati. CCI received a complaint on 16.05.2012 from Respondent No.4 to investigate the allegations of bid rigging, collusive bidding and cartelization in the tender process for lotteries run by the State of Mizoram (Respondent No.1) for expression of interest invited on 20.12.2011. The Complaint alleged that the bidders cartelized and entered into an agreement which has appreciable adverse effect on lottery business in Mizoram. CCI investigated and found prima facie evidence for cartelization and bid rigging against the bidders and no prima facie case against Respondent No. 1. Director General (DG)’s report mentioned that Respondent No.5 and No.6 have colluded and indulged in bid rigging. Respondent No.1 filed a writ petition before the Hon’ble High Court of Gauhati challenging the report of DG and CCI and a stay was granted restraining CCI from passing final orders. Similar writ petitions were filed by Respondent No. 5 and 6. The Hon’ble High Court held CCI has no jurisdiction to entertain the complaint of Respondent No.4. Aggrieved, CCI has preferred this appeal before the Hon’ble Supreme Court..

Supreme Court observed/held as follows:

• CCI contended that it is concerned about potential bid rigging in the tender process, cited the case of CCI v Bharti Airtel to highlight that CCI can find out whether a particular agreement has appreciable adverse effect and definition of services should be read with the widest amplitude. 
• Respondent No. 1 sought deletion from the array of parties as the CCI opined that there was no fault on its part and sought to provide assistance.  Respondent No.5 argued that the lottery does not fall under the defection of goods and lottery business is a res extra commercium. 
• Court opined the based on the report of CCI and DG not to proceed against Respondent No.1, the State could have closed the proceedings at that stage itself instead of approaching the High Court. 
• Definition of ‘Service ‘under the Act means “service of any description”, which is to be made available to potential users and there was no need for the Hon’ble High Court to have proceeded in the matter was highlighted by the Court. 
• In the event the tendering process has an anti-competition element, CCI can investigate the same and affected parties can avail the remedy of appeal under Section 53B of the Competition Act.

The Hon’ble Supreme court allowed the appeal.