CCI again directs Coal India to desist from unfair business ways

The Competition Commission of India had last year slapped a penalty of Rs 1,773.05 crore on the company for indulging in unfair business practices

In yet another directive against Coal India for abusing its dominant position, Competition Commission today asked the state-owned miner to cease and desist from unfair business practices.

Competition Commission of India (CCI), which last year slapped a penalty of Rs 1,773.05 crore on Coal India for indulging in unfair business practices, today passed two fresh orders on different complaints.

The two complaints, filed last year, pertain to anti- competitive practices in an e-auction scheme and fuel supply pacts, respectively.

In recent times, the Commission -- which keeps a tab on unfair business practices at the market place -- has passed quite a few orders against Coal India and is also probing certain complaints against the miner.

The Rs 1,773.05 crore penalty has been challenged by it.

In one of its ruling today, the Commission found Coal India in violation of fair trade norms with respect to provisions in the spot e-auction scheme 2007.

There was a provision in the scheme whereby a buyer is liable for penalty for non-lifting of coal after successful participation in the e-auction without any corresponding liability upon the miner and its subsidiaries for failure to deliver the dry fuel in respect of accepted bids. This has been found to be in violation of competition norms.

"Such arrangement in the scheme was noted to be a result of market power exercised by CIL and its subsidiaries," the Commission said in a statement today.

Finding that Coal India imposed unfair conditions upon the bidders under the scheme, the Commission has issued a "cease and desist order" apart from directing the miner to suitably modify the terms and conditions of the scheme.

The ruling follows a complaint made by one Bijay Poddar against Coal India and its subsidiaries.

In a separate case, the Commission found that Coal India imposed unfair conditions in Fuel Supply Agreements (FSAs) with the power producers for supply of non-coking coal.

The fair trade regulator found that Coal India and its subsidiaries operate independently of market forces and enjoy undisputed dominance in the relevant market of "production and supply of non- coking coal to the thermal power producers in India".

This case was taken up following a complaint by Sai Wardha Power Company against Coal India and its subsidiary Western Coalfields with respect to cost plus mines.

Further, the Commission has decided not to penalise the company since fine was already slapped in an earlier case.