Competition Commission of India (CCI), a fair practice regulator, penalized the state miner Coal India Limited (CIL), of INR 17.7 billion due to negligence of market governance. CIL was charged for abusing its dominant position, said corporate affairs ministry.
According to the sources, absolute order regarding penalty to CIL was passed on 9 Dec, 2013. Various grievances received against CIL and its subsidiaries Mahanadi Coalfields, Western Coalfields and South Eastern Coalfields. CIL penalized INR 17.7 billion. Complaints were filed by Maharashtra State Power Generation Co. (MAHAGENCO) and Gujrat State Electricity Corporation (GSEC). Worth noting that mentioned subsidiaries of CIL are in the elite club of 100 MnT Coal producing companies which number only a few worldwide.
Coal ministry confirmed that, CIL through its subsidiaries operates independently and enjoys market monopoly and undisputed supremacy in the supply of non-coking Coal in India. CCI also held that CIL and its subsidiaries were imposing unfair conditions in Fuel Supply Agreement (FSA) with power generators on supply of non-coking Coal. Such imposing is against the law of section 4(2) (a).
CCI aimed at amendment of FSAs in view of the findings and observations recorded in the order, apart from issuing a cease order against CIL and its subsidiaries.
MAHAGENCO complained regarding Coal supply from CIL in an ad hoc manner. Grade and quality of Coal has also been misrepresented. Also, GSEC reported that on supply of poor quality, CIL regard it as deem delivery and state it as customer’s liability to pay.
The Director General, CCI said, “The conduct of CIL in this regard has been found to be independent of the market forces and it has been able to affect the consumers and market in its favor.”