CCI asks Coal India to examine spot e-auction scheme afresh

Fair trade regulator CCI has asked Coal India to examine afresh its spot e-auction scheme to obviate possible violation of competition norms even as the watchdog rejected a complaint of unfair business practices against the state-owned miner.
Earlier also, Coal India Ltd (CIL) had come under the scanner of the Competition Commission of India (CCI). In December 2013, the regulator had imposed a fine of Rs 1,773 crore on the miner which has challenged it.
In the latest instance, it was alleged by DB Power that CIL and its subsidiary Northern Coalfields Ltd abused their dominant positions with respect to spot e-auction of coal.

Competition Commission of India (CCI) considered 'sale of non-coking coal to the bidders under spot e-auction scheme in India' as the relevant market in the present matter.
While CIL and its subsidiaries were found to be dominant in the relevant market in earlier cases, the Commission said no case of abuse of dominance by opposite parties is there.
However, CCI said it was constrained to note that the e-auction scheme has come up in challenge in various cases where buyers have alleged lack of reciprocity and mutuality of obligations in the terms and conditions thereof.

"The Commission, therefore, believes that it would be appropriate that CIL examines the entire scheme afresh after inviting suggestions from the stakeholders.

"Such participatory and consultative process would not only inspire confidence of the stakeholders but such exercise would also make the scheme more acceptable besides obviating any possible violation of the provisions of the Act and challenge there to," the order, dated November 17, said.
Besides, the regulator said that such an exercise should preferably be completed within 60 days from the date of this order.
Even though no contravention of competition norms have been found, the regulator said it is still apparent that the parties are either aggrieved of the terms per se or the conduct emanating there from.
With regard to rejection of the complaint, CCI said it is of considered opinion that once the terms of sale were put in plain words in the scheme and the notification, the agreement has to be construed accordingly and not on the basis of some perceived understanding of the commerce by individual buyer.

"... The stipulation in the scheme envisaging levy of 'any other charges' at time of delivery may not be unfair per se as such terms have to be construed in light of other levies and accepted norms of interpretation and the same cannot be invoked to charge a totally unrelated levy," the order said.
In 2016, there will be a clear southward direction in
terms of the time taken to approve M&A deals, Chawla said.
The Commission has received as many as 355 cases seeking nod for deals since the regime for M&As came into force at the regulator in June 2011.

Out of them, 322 cases have been approved and 30-odd are in the pipeline, he said.
Noting that the number of such notices seeking approval for M&As has been on the rise in recent years, he said the regulator has received around 117 cases so far in 2015.
As many as 45 notices were received in 2013 and the count went up to 88 in 2014, he added.
While stating that majority of the M&A cases received by the regulator are relatively simpler cases, the CCI chief said the rise in numbers of notices seeking its nod is also a "proxy for improved business climate in the country".

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"We are actively and quickly reviewing regulations... We will make further changes on things which have been bothering companies in terms of authorised signatories, invalidation of notices, which has become a matter of concern," Chawla said while mentioning about changes that would be coming on process for seeking approvals for M&A deals.
According to him, M&A is relevant for corporates and should not be seen as a tax-saving or tax-evading instrument.
About the penalty regime under CCI, Chawla said there has to be a certain amount of proportionality in terms of fine that are imposed.
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