Compat imposes status quo in Coal India-CCI case

Company has sought stay on the CCI order slapping penalty on it for allegedly abusing its dominant position in fuel supplies

Competition Appellate Tribuna,l which reviews appeals against the orders of Competition Commission of India (CCI), has imposed a status quo on the fair trade regulator’s earlier judgment directing the state-owned miner Coal India to pay Rs 1,773 crore penalty for alleged abuse of monopoly position.

The Tribunal said an unconditional status quo has to be maintained in the case and the miner need not enter into negotiations with its consumers for a review of provisions related to coal supply under Fuel Supply Agreements (FSAs), said a senior official close to the development.

CCI had last month slapped on CIL a penalty of Rs 1,773 crore -- equal to 3 per cent of the PSU miner’s average turnover in the previous three years – based on a complaint by MAHAGENCO and GSECL, the state-owned power generation firms of Maharashtra and Gujarat.

The Competition Commission had directed CIL to modify FSAs and "cease and desist from indulging in the conduct which has been found to be in contravention of the provisions of the (Competition) Act". The regulator had asked CIL to comply with its directions within 30 days. The coal miner had later challenged the order in the tribunal which decided to issue notices to CCI and the two generation companies in its hearing today.

Coal India was found to be operating independently of market forces and enjoying an “undisputed dominance in the country over production and supply of non-coking coal”, According to the fair trade regulator. The CCI said Coal India abused its dominance and did not try to evolve terms and conditions of FSAs through a mutual bilateral process with procurers.