CCI issues order against Nair Coal Services

The Competition Commission of India (CCI) on Thursday issued an order against Nair Coal Services Pvt. Ltd., Karam Chand Thapar and Bros (CS) Ltd. and Naresh Kumar and Co. Pvt. Ltd. for rigging bids and dividing market by forming hardcore cartel in respect of tenders floated by Maharashtra State Power Generation Co. Ltd. (MAHAGENCO) for procuring coal liasoning services.

The CCI said that it found the companies to be in contravention of the provisions of Section 3(1) read with Section 3(3)(c) and Section 3(3)(d) of the Competition Act, 2002 for acting in a collusive and concerted manner which eliminated and lessened the competition besides manipulating the bidding process in respect of the tenders floated by MAHAGENCO for award of contract of coal liasoning work for its various thermal power stations.

Taking a serious view of the collusive conduct of coal liasoning agents, the CCI opined that the case fell in the category of hardcore cartels as the parties reached an agreement to submit collusive tenders and to divide the markets which warranted the matter to be dealt with utmost severity.

Accordingly, CCI invoked the stringent provision of the law which enables it to impose a higher penalty in case of agreements entered into by cartels.

Hence, a penalty at the rate of two times of the total profits earned from the provision of coal liasoning services to all power generators for the continuance of the cartel for 2010-11 to 2012-13 years was imposed upon the parties.

Resultantly, CCI has imposed a penalty of Rs. 7.16 crore, Rs. 111.60 crore and Rs. 16.92 crore upon NCSL, KCT and NKC for the anti-competitive conduct.

A cease and desist order was also issued against the above companies.

The CCI has also deprecated the conduct of the informant in breaching the confidentiality and sanctity of the inquiry by circulating copies of the investigation report to B.S.N Joshi and Sons Ltd., a rival of the opposite parties, who, in turn, forwarded copies thereof to various authorities.

The order was passed on January 10, 2018, in Case No. 61 of 2013.