CCI dismisses unfair biz practices complaint against SBI, Patanjali, International Traders
NEW DELHI: Fair trade regulator CCI on Thursday dismissed a complaint alleging abuse of dominant position by SBI and collusion with Patanjali Ayurveda and International Traders in a bidding process.
The order came on the complaint filed by RH Agro Pvt Ltd, a large scale basmati rice manufacturer.
The matter pertains to auctioning of RH Agro's property by State Bank of India (SBI) after its account was classified as non-performing asset (NPA).
RH Agro's manufacturing plant at Sonepat, Haryana had been extended as primary security to a consortium of banks for availing term loan and working capital requirement for its business.
However, after the firm's payments were constrained in 2012-13, the primary security was shut down and seized by SBI.
The complainant's account was declared as NPA and valuation of land, building and assets was also undertaken.
The initial valuation undertaken by SBI had come out to be nearly Rs 70 crore. The same valuation when undertaken by the complainant through government approved valuers in July 2016 came out to be Rs 121 crore. SBI, in January 2015, stated the current value to be Rs 141.65 crore.
Afterwards, an e-auction was held for the mortgaged property in 2016.
The two bidders who participated in the auction were Patanjali Ayurveda Ltd and International Traders.
The assets were sold to the highest bidder Patanjali -- which made a bid of Rs 69,72,50,000.
However, RH Agro alleged that the earnest money on behalf of International Traders was also arranged by Patanjali in order to make it participate in the bidding process and create a smokescreen to make it look like as though it was an independent bidder.
The proprietor of International Traders was in collusion with Patanjali Group in order to rig the bidding process, which directly led to an appreciable adverse effect on competition, RH Agro alleged.
The proprietor of International Traders is also a director of Swasth Aahar Private Ltd, which is stated to be a group company of M/s Patanjali Ayurveda.
"The Informant alleges that arbitrary practices adopted by the officials of the State Bank of India are anti-competitive in nature as the officials of the Bank abused their dominant position by restricting access to market to other players to make the bid," the CCI order noted.
However, CCI said any bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act has the right of enforcement of its security interest and if a borrower makes any default in loan repayment, then the account is classifiable as NPA.