Cease and desist from indulging in unfair business ways: CCI to Coal India

This time, the CCI has decided not to penalise firms as a fine of Rs 591.01 cr was imposed on CIL

The Competition Commission of India (CCI) has again directed Coal India (CIL) and its units to "cease and desist" from indulging in unfair business ways after finding certain provisions in their fuel supply pacts as anti-competitive.

The latest CCI rulings come after some of the earlier orders against CIL and its subsidiaries were set aside by the Competition Appellate Tribunal (Compat), which had asked the regulator to have a fresh look at them.

This time, the CCI has decided not to penalise the companies as a fine of Rs 591.01 crore was imposed on CIL for unfair business practices in March this year.

In two separate orders, the watchdog said CIL through its subsidiaries operates independently of the market forces and enjoys dominance in the relevant markets pertaining to non-coking coal.

The entities have contravened competition norms by way of imposing "unfair/discriminatory conditions through FSAs (Fuel Supply Agreements) and indulging in unfair/discriminatory conduct in the matter of supply of non-coking coal", CCI said in the separate but similarly-worded orders.

While deciding not to impose any penalties, the regulator directed them "to cease and desist" from such practices and also make necessary changes in the FSAs.

The orders, passed on April 21, were made public on Tuesday.

There were different cases including the GHCL's complaint against CIL and Western Coalfields.

'Production and sale of non-coking coal to thermal power producers including captive power plants in India' was taken as the relevant market for this matter.

Four other cases were bunched together. Madhya Pradesh Power Generating Company had filed two separate complaints against CIL and South Eastern Coalfields.

West Bengal Power Development Corp had filed complaint against Coal India, Eastern Coalfields, Bharat Coking Coal and Mahanadi Coalfields.

In another matter, Sponge Iron Manufacturers Association complained against seven entities — CIL, Central Coalfields, Eastern Coalfields, Western Coalfields, South Eastern Coalfields, Northern Coalfields and Mahanadi Coalfields.

For these matters, 'production and sale of non-coking coal to consumers including thermal power producers and sponge iron manufacturers in India' was considered as the relevant market.