NCLAT Rejects Sundaram Brake Linings' Plea Against Anti-Competitive Practices Order

NCLAT Rejects Sundaram Brake Linings' Plea Against Anti-Competitive Practices Order

The National Company Law Appellate Tribunal (NCLAT) has thrown out an appeal by Sundaram Brake Linings, a Chennai-based company, challenging an order issued by the Competition Commission of India (CCI) in July 2022. The CCI order directed Sundaram Brake Linings, along with nine other companies and some of their officials, to cease and desist from engaging in anti-competitive practices related to tenders issued by the Indian Railways.

The CCI order of July 2022 originated from an investigation into suspected cartel formation among companies participating in the bidding process for Indian Railways tenders. The CCI concluded that these companies, including Sundaram Brake Linings, had colluded to manipulate bids and rig the tendering process. However, Sundaram Brake Linings contested the CCI's findings, arguing that they were wrongly included in the order.

The company maintained that they had only submitted bids for three tenders and had not participated in any anti-competitive activities. They argued that a statement made by one of their employees before the CCI, without proper authorisation, should not be used as evidence against the company. Additionally, Sundaram Brake Linings contended that merely receiving emails containing information about potential collusion would not constitute participation in a cartel.

The NCLAT bench rejected Sundaram Brake Linings' arguments, citing "strong evidence of cartelisation" based on statements from other involved parties. The tribunal emphasised that even attempting to manipulate bids falls under the definition of cartelisation in the Competition Act.

The NCLAT's verdict upholds the CCI's order, requiring Sundaram Brake Linings to cease and desist from any such anti-competitive practices in the future. The tribunal dismissed the appeal and all associated applications filed by the company.