CCI issues Order
against CIL and its Subsidiaries for Abusing Dominant Position, imposes Penalty
of Rs. 1773.05 Crores
The
Competition Commission of India (CCI) has imposed a Penalty of Rs. 1773.05 Crores
on Coal India Limited for abusing its dominant position. The final order was
passed on 09.12.2013 on a batch of informations filed by Maharashtra State
Power Generation Company Ltd. and Gujarat State Electricity Corporation Limited
against Coal India Ltd. and its subsidiaries (Mahanadi Coalfields Ltd., Western
Coalfields Ltd., South Eastern Coalfields Ltd.).
The
CCI held that CIL through its subsidiaries operates independently of market
forces and enjoys undisputed dominance in the relevant market of production and
supply of non-coking coal in India. The Commission inter alia also held CIL and
its subsidiaries in contravention of the provisions of Section 4(2)(a)(i) of
the Competition Act, 2002 for imposing unfair/ discriminatory conditions in
Fuel Supply Agreements (FSAs) with the power producers for supply of non-coking
coal.
Apart
from issuing a cease and desist order against CIL and its subsidiaries, the CCI
directed modification of FSAs in light of the findings and observations
recorded in the order. The impugned clauses related to sampling and testing
procedure, charging transportation and other expenses for supply of ungraded
coal from the buyers, capping compensation for supply of stones etc.
Further,
for effecting these modifications in the agreements, CIL was ordered to consult
all the stakeholders. CIL was also directed to ensure parity between old and
new power producers as well as between private and PSU power producers, as far
as practicable. The common order of the Commission was passed in Case Nos. 03,
11 and 59 of 2012.
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