Competition Commission imposes Rs 591 crore penalty on Coal India

The Competition Commission of India (CCI) has imposed penalty of Rs 591.01 crore on Coal India Limited (CIL) for abusing its dominant position, an official statement said on Friday.

"CCI has found CIL and its subsidiaries to be in contravention of the provisions 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," said a Finance Ministry statement.

"CCI has imposed a penalty of Rs 591.01 crore upon CIL for the abusive conduct," it said.

The order has been passed by CCI on the directions issued by Competition Appellate Tribunal while sending the matter back to it after setting aside the CCI`s original order in which a penalty of Rs 1,773.05 crore had been imposed. 

"The final order has been passed on Friday on a batch of informations filed by Maharashtra State Power Generation Company and Gujarat State Electricity Corporation against Coal India and its subsidiaries (Mahanadi Coalfields, Western Coalfields, South Eastern Coalfields)," the statement said. 

After hearing the parties afresh in terms of the directions issued by appellate tribunal, CCI held that CIL, through its subsidiaries, operates independently of market forces and enjoys dominance in the relevant market of production and supply of non-coking coal in India, it said.

"CCI noted in the order that CIL did not evolve/draft/finalise the terms and conditions of FSAs through a bilateral process and the same were imposed upon the buyers through a unilateral conduct," it added.

CCI has also directed modification of FSAs in light of the findings. 

"For effecting the modifications in FSAs, CIL has been ordered to consult all the stakeholders. CIL has also been directed to ensure uniformity between old and new power producers as well as between private and PSU power producers," the statement said.