CCI again asks Coal India to 'cease, desist' from unfair ways

Commission believes there is a differential treatment by CIL with small buyers vis-à-vis power producers

Fair trade watchdog Competition Commission of India (CCI) has again directed Coal India Ltd (CIL) to "cease and desist" from unfair business ways after finding the state-owned miner violated competition norms with respect to dry fuel supply. "The Commission is of opinion that there is a differential treatment by CIL with small buyers vis-à-vis the power producers," said CCI in its judgement.

CCI added that CIL has contravened the provisions of section 4(2)(a)(i) of the Act - which pertains to the abuse of the dominant position - on this count as well. CIL, the country's largest coal producer, has been censured by the Competition Commission earlier also. In December 2013, a penalty of about Rs 1,773 crore was imposed. The complaint was filed by Gujarat based GHCL, which is into the business of soda ash, detergent, chemicals, silicates and host of other basic chemicals. Besides directing Coal India to "cease and desist" from indulging in unfair business practices, the regulator has asked to remedial steps, as per an order made public on Tuesday. According to the CCI, Coal India and its subsidiaries operate independent of market forces and enjoy undisputed dominance in the relevant market.

"CCI is of opinion that the CIL has imposed unfair and discriminatory conditions relatingto quality, sampling & analysis, stones and oversized coal upon GHCL," it said. The regulator added that the CIL and its subsidiary have accepted that there was no provision for testing of quality of coal in the FSA (Fuel Supply Agreement) for the small buyers. The fair trade watchdog noted that since penalty was imposed earlier, it was refraining from doing so again. "... it is made clear that in the facts and circumstances of the present case, the Commission refrains from imposing any penalty upon the opposite parties as a penalty of Rs 1,773.05 crore was already imposed upon them in the previous batch of informations with respect to inter alia similar issues," the order said. The Commission's penalty order, issued in December 2013, has been challenged by CIL at Competition Appellate Tribunal.