CCI dismisses Eastern Railways’ complaint against Laxven, Medha Servo

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Updated: January 04, 2019 10:22 AM

The competition watchdog dismissed the complaint as it found no case of contravention of anti-competitive agreements under Competition Act against the two vendors - Laxven Systems and Medha Servo Drives Pvt Ltd.

The Competition Commission has dismissed Eastern Railways’ complaint against two vendors, alleging anti-competitive practices

The Competition Commission has dismissed Eastern Railways’ complaint against two vendors, alleging anti-competitive practices in a tender floated to procure systems for electric locos. The competition watchdog dismissed the complaint as it found no case of contravention of anti-competitive agreements under Competition Act against the two vendors – Laxven Systems and Medha Servo Drives Pvt Ltd. According to CCI order, the two vendors were the only approved vendors qualified to submit bids for the opening of tender floated by the Eastern Railways for procuring “microprocessor control and fault diagnostics system” in 2017.

The complainant alleged that due to non-participation of Laxven in the tender, Medha enjoyed a monopoly status by being the only approved vendor and thus quoted high rate.
Besides, the complainant said that as there was no option left, it had to accept the high rate quoted by Medha in order to avoid shortage of the system, thereby suggesting a cartel between the two vendors in contravention of anti-competitive agreements.

In an order dated January 2, the fair trade regulator said that non-participation of Laxven in the bid was due to its inability to produce the required system as mandated under the tender, hence allegation of collusion between the two vendors is “unsubstantiated”.
Regarding the high rate, the CCI observed the system required by the Eastern Railways has additional features as compared to the system procured earlier hence this “appears to have led to increased price quoted by Medha”.
Accordingly, the Competiton Commission of India (CCI) dismissed the complaint after finding no contravention of Competition Act.

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