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Competition Commission again finds CIL violating norms

Finding Coal India again guilty of abusing its dominant position in fuel supplies, Competition Commission has directed the state-run miner to "cease and desist" from indulging in unfair business practices. The latest ruling on a batch of complaints come a few months after the Competition Commission of India (CCI) slapped a Rs 1,773.05 crore penalty on Coal India and its subsidiaries in December last.

CCI's common order, made public today, has come on complaints filed by Sponge Iron Manufacturers Association, Madhya Pradesh Power Generating Company and West Bengal Power Development Corporation. The order, dated April 15, have been passed against Coal India and seven of its subsidiaries. They are South Eastern Coalfield, Eastern Coalfields, Bharat Coking Coal, Mahanadi Coalfields, Central Coalfields, Western Coalfields and Northern Coalfields.

Coal India through its subsidiaries "operates independently of market forces and enjoys undisputed dominance in the relevant markets of supply of non-coking coal to thermal power producers and sponge iron manufacturers in India", the watchdog said. CCI has directed the coal major and its subsidiaries to "cease and desist from indulging in the conduct which has been found to be in contravention of the provisions of the (Competition) Act".  Again the fair trade regulator has asked the coal miner to modify its fuel supply agreements.

"For effecting these modifications in the agreements, Coal India is further directed to consult all the stakeholders including the informants herein," CCI noted. However, CCI has decided not to slap a penalty since Rs 1,773.05 crore fine was imposed on Coal India in December last year "with respect to the substantially similar conduct".

The complainants had alleged Coal India of various anti- competitive practices such as one-sided Fuel Supply Agreement (FSA) and MoUs, restricting the supply by means of diverting the coal to sale through e- auction.


The Commission has found that Coal India and its subsidiaries had "imposed discriminatory terms and conditions in FSAs" and restricted the fuel through its MoUs. However, CCI said it has not found Coal India and its subsidiaries "to be restricting the supply by means of diverting the coal to sale through e- auction". CCI's December order has been challenged by the company at Competition Appellate Tribunal (Compat) which has ordered for maintaining status quo till further orders.

"It is not the case of the informants that opposite parties have indulged in abusive conduct post the passing of the order by the Commission in the earlier cases," CCI said.

Source: PTI