Keeping up with Competition - February 2026
A monthly newsletter by Axiom5
Welcome to the February 2026 edition of Keeping Up with Competition, where we highlight the key competition law developments from January 2026.
This month saw the Competition Commission of India (CCI) finding a contravention of bid rigging and imposing a penalty for gun-jumping. The National Company Law Appellate Tribunal (NCLAT) also issued multiple decisions. In two cases, it upheld the CCI’s discretion to close inquiries under Section 26(2) of the Competition Act, 2002 (Competition Act), as long as it has applied its mind to the material on record and issued a reasoned order. In two other cases, the NCLAT delved into the merits, upholding the CCI’s order in a bid rigging case, while in the other, it overturned the CCI’s finding of no contravention based on inconsistencies in the CCI’s approach on defining the relevant market during the inquiry.
We discuss these developments below.
1. The CCI finds KKK Mills and Sankeshwar Synthetics guilty of bid rigging but refrains from imposing monetary penalty (see here)
On 2 January 2026, the CCI passed an order finding M/s KKK Mills and M/s Sankeshwar Synthetics Pvt. Ltd. guilty of engaging in bid rigging in a public tender. The case was initiated based on a reference from the Master General of Ordnance Service.
The CCI’s preliminary order directing the investigation noted that identical pricing (down to two decimal points) across multiple tenders raised a strong suspicion of prior understanding rather than independent decision-making. The CCI’s inquiry revealed other evidence of collusion, such as simultaneity in submitting bids on two separate occasions, evidence of communication through a related entity, and deliberate deletion of emails to conceal evidence. Based on these “plus factors”, the CCI held that synchronised bidding, coupled with familial ties and evidence of information exchange, established a concert of action in violation of Section 3(3)(d) of the Competition Act.
The CCI’s contravention finding included individual liability for the companies’ office bearers. However, the CCI did not impose a monetary penalty in this case and only directed the parties to cease and desist from cartelization. The CCI considered mitigating factors such as: (a) the parties involved being MSMEs; (b) having a long history of supplying the armed forces without default; and (c) the potential economic impact of penalties on their solvency. The CCI noted that the primary purpose of the Competition Act, which is to rectify market distortions and regulate conduct, was achieved through the cease-and-desist direction.
2. Allcargo penalised for failure to notify a transaction resulting in a shift from joint to sole control (see here)
On 8 January 2026, the CCI penalised Allcargo Logistics Limited (Allcargo) for failing to notify a transaction involving its acquisition of the remaining 30% stake in Gati-Kintetsu Express Private Limited (Target), taking its shareholding from 70% to 100%.
Allcargo argued that the transaction was exempt under the intra-group acquisition exemption1 since it had always exercised “decisive” and “sole” control as the majority shareholder, and that there was no change in the “quality of control”. Allcargo also highlighted that the exiting shareholder, KWE, was merely a financial investor with no interest in management or governance.
However, the CCI disagreed. Aligning with its Combination FAQs, the CCI observed that control is a matter of degree and includes de jure negative control. It observed that regardless of how active KWE was in daily operations, it had veto rights over reserved matters and the right to block special resolutions through its 30% shareholding, which constituted control for the purposes of the Competition Act. As such, the transaction resulted in a transfer from joint to sole control, rendering the intra-group exemption inapplicable.
While Allcargo pleaded mitigating factors, including its bona fide intent and the initiation of a robust competition compliance program, the CCI imposed a penalty of INR 50,00,000 (Rupees Five Million). The CCI’s decision aligns with its established approach, which involves a strict reading of the notification requirements and a broad interpretation of what constitutes “control” under the Competition Act.
3. The NCLAT upholds CCI’s closure of inquiries under Section 26(2) of the Competition Act
The NCLAT affirmed the CCI’s discretion to close proceedings under Section 26(2) of the Competition Act in two judgments, Singareni Collieries and Apaar Infratech. These rulings emphasise that the CCI is not duty-bound to hold oral hearings or seek further information at this preliminary stage before concluding whether or not a further inquiry is warranted.
A key point from Apaar Infratech is the NCLAT’s view on the CCI seeking information from the opposite party. The appellant noted that the CCI sought a response from the opposite party, but never received it. The NCLAT held that merely requesting information does not automatically indicate a prima facie case exists. Consequently, the CCI was justified in closing the matter based solely on the existing material on record, even without the opposite party’s reply. The CCI’s only obligations at the preliminary stage are to consider the material on record and issue a reasoned order.
4. The NCLAT upholds CCI’s bid rigging penalty, affirming use of circumstantial evidence (see here)
On 7 January 2026, the NCLAT affirmed a CCI order imposing a penalty for bid rigging in a public procurement case, reinforcing the validity of using circumstantial evidence.
The CCI’s finding against M/s Klassy Enterprises (Klassy) was based on several “plus factors,” including the use of a common IP address for three tender participants’ bids, Klassy’s payment of tender fees and Earnest Money Deposits (EMD) on behalf of the other bidders, and the subsequent refund of EMDs back to Klassy’s account. The CCI had imposed a penalty of INR 10 lakhs each on Klassy and the other bidders.
Klassy appealed, arguing that the common IP addresses and fee payments were explained by its public “tender filling” service at a cyber cafe. Klassy also claimed that it had reduced its bid price during negotiations (which a cartel member would not do), and that the price parallelism observed was due to the standardized nature of the product (sewing machines).
In its review of CCI cartel decisions, the NCLAT has consistently demanded that contravention findings be based on reliable, cogent, and well-investigated evidence, which can include circumstantial evidence. It has previously overturned CCI orders lacking sufficient or properly analysed evidence.2 In the Klassy case, the NCLAT highlighted the importance of circumstantial evidence in cartel cases, since direct evidence of a cartel is rare. It affirmed the CCI’s analysis that the evidence suggested collusion between the tender participants, and further, that they had not presented sufficient material to overturn the presumption of anti-competitive effect.
5. The NCLAT remands Chettinad Coal Terminal case to CCI based on inconsistencies in relevant market definition (see here)
On 21 January 2026, the NCLAT set aside a CCI order that had dismissed competition concerns against Chettinad International Coal Terminal Pvt. Ltd. (CICTPL), remanding the matter for fresh adjudication. The case centered on allegations by the Tamil Nadu Power Producers Association (TNPPA) that CICTPL exploited a lack of port alternatives to impose excessive tariffs and mandatory third-party “coordination” charges for coal terminalling services at the Kamarajar Port.
The core of the dispute involved whether the relevant geographic market was limited to Kamarajar Port or included the more distant Krishnapatnam Port (176 km away):
Initial Order: The CCI directed the Director General (DG) to investigate based on a preliminary finding of dominance within a relevant market defined as the “provision of coal terminal services in and around Kamarajar Port“.
DG’s investigation: In its investigation, the DG considered evidence such as common customers (including some power producers that were part of TNPPA) between Kamarajar port and the Krishnapatnam port and the latter’s significantly larger capacity, to support its conclusion that the two ports were viable substitutes to each other. With the relevant geographic market having expanded to include both ports, the DG found that CICTPL was not dominant, and consequently, there was no abuse of dominance.
CCI directs supplementary investigation: TNPPA objected to the DG’s analysis, resulting in the CCI directing the DG to conduct a supplementary investigation. Notably, the CCI highlighted that the DG ought to have distinguished between coal traders and fixed-plant consumers (such as thermal power producers), which operate under different constraints.
Supplementary DG investigation: The DG’s subsequent analysis evaluated the “captive” hinterland areas of both ports (i.e. fixed-plant customers), and noted limited overlap. The DG also noted that transportation costs were critical to power producers’ choice of coal-terminaling services. On this basis, the DG”s supplementary investigation report excluded the Krishnapatanam port from the relevant market - this led the DG to conclude that CICTPL was dominant and the mandatory imposition of third-party charges violated Section 4 of the Competition Act.
CCI’s final order: In its final order, the CCI diverged from the DG’s supplementary analysis. The CCI rejected the DG’s “captive” hinterland approach noting that this led to the exclusion of about half of CICTPL’s demand; it also noted that the DG’s consumer survey indicated that at least half of the respondents source coal from both ports. On this basis, the CCI determined the relevant geographic market to include both Kamarajar port and the Krishnapatnam port. Within this wider geographic market, the CCI concluded that CICTPL was not dominant, and that the imposition of mandatory third-party charges were merely “opportunistic” behaviour that could not be penalised absent a finding of dominance.
Following an appeal by TNPPA, the NCLAT overturned the CCI’s decision, which involved a detailed review of the case’s merits. The NCLAT highlighted the CCI’s deviation from its own prima facie order and its failure to consider various aspects of the DG’s analysis in the supplementary investigation report. The NCLAT affirmed the narrower market definition based on the evidence, primarily driven by the nature of power producers as a distinct consumer group and the impact of transportation cost on their commercial decision making, and rejected the CCI’s analysis in the final order as erroneous. As a result, the NCLAT determined that CICTPL was dominant, and that the mandatory collection of charges by three Chettinad group entities constituted an abuse of dominance under Section 4 of the Competition Act.
The NCLAT’s decision is unusual for the specificity of its directions. Despite having evaluated the merits in detail, the NCLAT did not simply set aside the CCI’s decision - it remanded the matter to the CCI for fresh consideration “in accordance with law”, directing that the parties be given the opportunity to be heard and present fresh evidence. The NCLAT has previously remanded matters to revisit the quantum of penalty imposed while agreeing with the CCI’s finding of contravention on merits, or to address procedural infirmities in the CCI’s handling of the case (e.g., final order issued by members who were not present during the hearing). In this case, the NCLAT’s decision to remand could possibly have been driven by the fact that the CCI expressed opposing views in the course of the inquiry
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Item 2 of Schedule I of the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 exempts any acquisition of shares or voting rights, where the acquirer already holds 50% in the target, but excludes transactions where such further acquisition results in a change from joint to sole control. The current equivalent of this exemption is Item 5 of the Competition (Criteria for Exemption of Combination) Rules, 2024.
See for instance, CEAT Tyres v. CCI, Competition Appeal (AT) No. 5 of 2022, judgment dated 1 December 2022, where the NCLAT remanded the matter to the CCI for reconsideration, based on arithmetic errors in price calculations, among other things.