The Competition Commission of India (CCI) has imposed a penalty of Rs.1,773 crore on Coal India Ltd (CIL), the country’s largest coal miner and its subsidiaries (Mahanadi Coalfields Ltd, Western Coalfields Ltd and South Eastern Coalfields Ltd).
A spokesperson for the antitrust regulator said that the state-owned coal miner, the world’s largest, had been found guilty of violating section 4(2) (a) (i) of the Competition Act of 2002, which relates to abuse of a dominant position.
The case against Coal India was registered by the Maharashtra State Power Generation Co. Ltd and Gujarat State Electricity Corp. Ltd, the spokesperson said.
“CCI held that CIL through its subsidiaries operates independently of market forces and enjoys undisputed dominance in the relevant market of production and supply of non-coking coal in India. The commission inter alia also held CIL and its subsidiaries in contravention of the provisions of section 4(2)(a)(i) of the Competition Act, 2002, for imposing unfair/ discriminatory conditions in fuel supply agreements (FSAs) with the power producers for supply of non-coking coal,” a CCI release said.
“Apart from issuing a cease and desist order against CIL and its subsidiaries, CCI directed modification of FSAs in light of the findings and observations recorded in the order. The impugned clauses related to sampling and testing procedure, charging transportation and other expenses for supply of ungraded coal from the buyers, capping compensation for supply of stones, etc.,” the release further added.
Phone calls made on the mobile phones of S. Narsing Rao, chairman of CIL, and a company spokesperson remained unanswered.
“Further, for effecting these modifications in the agreements, CIL was ordered to consult all the stakeholders. CIL was also directed to ensure parity between old and new power producers as well as between private and PSU (public sector unit) power producers, as far as practicable.,” the release said.
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