Kiran Raj

The Competition Commission of India (CCI) has dismissed allegations of anti-competitive conduct and abuse of dominance against Navodaya Vidyalaya Samiti (NVS) and RailTel Corporation of India Ltd., finding no prima facie case under the Competition Act, 2002. The Commission, comprising Chairperson Ravneet Kaur and Members Anil Agrawal, Sweta Kakkad, and Deepak Anurag, held that the claims lacked substantive evidence to warrant an investigation. The information was accordingly closed under Section 26(2) of the Act.

The case arose from a complaint filed by an informant under Section 19(1)(a) of the Act, alleging that NVS, an autonomous body under the Ministry of Education, awarded a work order to RailTel without a competitive process. The contract, valued at ₹162.73 crores, pertained to the supply and implementation of integrated infrastructure and IT solutions under the Prime Minister Schools for Rising India (PM SHRI) scheme in Jawahar Navodaya Vidyalayas (JNVs). RailTel subsequently issued a Request for Proposal (RFP) for selecting a partner for executing the project. The informant contended that the RFP contained arbitrary and restrictive conditions that favored certain bidders while excluding others.

The informant alleged that the selection of RailTel was opaque and that NVS failed to provide reasonable justification for awarding the contract without a transparent bidding process. It was further claimed that RailTel’s RFP imposed stringent technical specifications and restrictive eligibility criteria, such as a high turnover requirement and mandatory Capability Maturity Model Integration (CMMI) certification, which allegedly disqualified many potential bidders. The informant argued that the process contravened the Public Procurement Policy for Micro and Small Enterprises (MSEs) and violated Section 3(1) and 4(2)(b)(i) of the Competition Act by limiting market access.

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The Commission examined whether the allegations under Section 3 of the Act, which prohibits anti-competitive agreements, were substantiated. The informant contended that NVS and RailTel had engaged in a tacit arrangement to manipulate the tender process, effectively engaging in bid rigging. However, the Commission found no documentary or material evidence to support this claim. It recorded: “The informant has alleged a tacit agreement between OP-1 and OP-2 in awarding the tender; however, it has not provided any evidence or material which could indicate bid rigging in violation of Section 3 of the Act.” The Commission therefore deemed it inappropriate to proceed further on these allegations.

Regarding the claims under Section 4, which deals with abuse of dominant position, the informant argued that NVS had appointed RailTel as the Project Management Consultant (PMC) without due consideration and that RailTel had subsequently issued an RFP that unjustly limited competition. The Commission noted that mere selection of an entity as PMC or issuance of an RFP does not constitute an abuse of dominance unless it is demonstrated that the process excluded competitors in a manner that harmed market competition. The Commission stated: “Simply selection or non-selection of an agency as PMC or issuance or non-issuance of RFP or issuance of defective RFP by an entity cannot be said to be abusive in terms of Section 4 of the Act unless and until there is availability of ingredients of the same as required under the Act.”

The Commission held that public procurement processes are primarily the prerogative of the procuring entity. It referred to past decisions affirming that procurers have the discretion to set procurement terms that align with their operational requirements. The Commission recorded: “Every consumer/procurer must have the freedom to exercise their choice freely in the procurement of goods and services. While exercising such choice, they may stipulate standards for procurement which meet their requirements, and the same as such ipso facto cannot be held as anti-competitive.” It further noted that unless a clear pattern of exclusionary behavior or demonstrable harm to competition is established, intervention under the Competition Act is not warranted.

The informant had also sought interim relief under Section 33 of the Act, requesting the Commission to restrain RailTel from proceeding with the bidding process. However, as no prima facie case was established, the Commission rejected the request, stating that “no case for grant for relief(s) as sought under Section 33 of the Act arises.”

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Before concluding, the Commission addressed the informant’s request for confidentiality. It granted confidentiality over the informant’s identity, including name and contact details, for a period of three years in accordance with Regulation 36(1) of the Competition Commission of India (General) Regulations, 2024.

In view of the findings, the Commission ordered the closure of the information under Section 26(2) of the Competition Act, stating: “In the facts and circumstances of the present case and analysis carried out hereinabove, the Commission is of the view that no prima facie case of contravention of either Section 3 or Section 4 of the Act is made out in the present matter against OP-1 and OP-2.”

Case Title: In Re XYZ v. Navodaya Vidyalaya Samiti & RailTel Corporation of India Ltd.

Case Number: Case No. 25 of 2024

Bench: Chairperson Ravneet Kaur, Member Anil Agrawal, Member Sweta Kakkad, Member Deepak Anurag

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