New Delhi, January 07, 2026 : The National Company Law Appellate Tribunal (NCLAT), New Delhi, has upheld a ₹10 lakh penalty imposed by the Competition Commission of India (CCI) on Klassy Enterprises for bid rigging in a public procurement tender, holding that cartelisation can be established through circumstantial and conduct-based evidence even in the absence of a written agreement.
Dismissing Competition Appeal (AT) No. 33 of 2022, a Bench comprising Justice Mohd. Faiz Alam Khan (Judicial Member) and Naresh Salecha (Technical Member) affirmed the CCI’s order dated March 17, 2021, passed under Section 27 of the Competition Act, 2002. The tribunal observed that “direct evidence of formation of any cartelization or bid rigging is seldom available” and that such arrangements are typically inferred from surrounding circumstances and the conduct of the parties 1768372377_klassy-v-cci-645352-1.
The case arose from an e-tender floated in November 2015 by the Pune Zila Parishad for procurement of Pico-fall-cum-Sewing Machines with ISI marks, intended for distribution under a welfare scheme of the Government of Maharashtra for backward classes, women, and persons with disabilities in rural areas of Pune district.
Three authorised dealers of Usha International Limited—Klassy Enterprises, Nayan Agencies, and Jawahar Brothers—participated in the tender. Their bids were found to be unusually close: Klassy quoted ₹12,621 per unit (inclusive of taxes), while the other two bidders quoted ₹12,649 and ₹12,638 respectively. After negotiations, Klassy reduced its price to ₹12,250, following which the contract was awarded to it.
Based on a detailed investigation by the Director General, the CCI concluded that the three dealers had colluded to rig the bidding process, in contravention of Section 3(3)(d) read with Section 3(1) of the Competition Act. A penalty of ₹10 lakh was imposed on Klassy Enterprises.
Before the NCLAT, Klassy argued that marginal price differences were natural since all bidders operated in the same geographical area with similar cost structures. It also claimed that a common IP address was used because it ran a cybercafé and provided tender-filing services to other bidders. Klassy further relied on the post-bid price reduction to argue that there was genuine competition and no prior agreement.
Rejecting these submissions, the tribunal relied heavily on the financial trail uncovered during the investigation. It noted that Klassy Enterprises had routed over ₹38 lakh through third-party accounts to pay tender fees and earnest money deposits for all three bidders. When the two unsuccessful bidders received refunds of their earnest money, the amounts eventually flowed back to Klassy Enterprises. According to the NCLAT, this “entire trail of movement of the funds” constituted clear evidence of a prior agreement and cartel formation.
The tribunal also found the cybercafé explanation unconvincing, observing that it was highly unlikely for independent competitors to upload both technical and financial bids from the same IP address on the same day. In addition, call data records showed frequent contact between the bidders, with 51 calls exchanged in the two days immediately preceding the submission of bids, further reinforcing the inference of collusion.
On the legal standard, the NCLAT reiterated that once an agreement falling under Section 3(3) is established, a statutory presumption of appreciable adverse effect on competition arises, shifting the burden to the concerned party to rebut it. Klassy Enterprises, the tribunal held, had failed to discharge this burden.
While affirming the penalty, the tribunal also took note of the fact that the collusion affected a public welfare scheme funded by public money. Considering the gravity of the conduct and the relevant turnover from the sale of sewing machines, it held that the ₹10 lakh penalty was proportionate. The appeal was accordingly dismissed, and the CCI’s order was upheld in its entirety.
