Ease of doing business for MSMEs: The Competition Commission of India (CCI) on Tuesday issued cease and desist order against eight MSMEs found guilty of bid rigging and cartelization in tender floated by Eastern Railway from 2015 to 2019. CCI said the companies were involved in cartelization in the supply of axle bearings to Eastern Railway through directly or indirectly determining prices, allocating tenders, coordinating bid prices and manipulating the bidding process.  

Axel bearings, which play an important role in the safety of trains, are devices located at each mounting end of an axle that allows them to spin without resistance or wear. 

Subscribe to Financial Express SME newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises 

“The evidence in the matter included e-mails, call detail records and the statements of the representatives of the firms. The e-mails exchanged showed that the firms discussed quantity allocation with respect to the tenders of Indian Railways for the procurement of Axle Bearings amongst themselves,” CCI said in the order statement. 

The eight MSMEs included Krishna Engineering Works, Chandra Brothers, Rama Engineering Works, Sriguru Melters & Engineers, Chandra Udyog, Janardan Engineering Industries, Jai Bharat Industries and V K Engineering, according to a PTI report. Of the eight companies, two were lesser penalty applicants before the CCI, said CCI.  

Under Section 46 of the Competition Act, 2002, the entity involved or cartel member may approach CCI seeking lesser penalty provided it shares complete, true and critical disclosures with respect to the alleged cartel to the Commission, it added. 

Importantly, CCI said it didn’t impose any monetary penalty on eight companies considering they were MSMEs with limited staff and turnover, the cooperative and non-adversarial approach adopted by firms in acknowledging their involvement apart from the economic stress the MSME sector faced amid Covid.  

“Thus, the Commission considered the aforesaid fact as the mitigating factors for not imposing any monetary penalty and issued a cease and desist order against the firms.”

Also read: Microfinance: Credit disbursed jumps nearly 90% in June quarter from year ago: Report