Competition Commission of India has imposed a penalty of ₹591.01 crore on public sector undertaking Coal India.
The Competition Commission of India (CCI) has found Coal India Ltd (CIL) and its subsidiaries to be 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.
Due to the statutory monopoly enjoyed by CIL and its subsidiaries, the buyers are heavily dependent upon the coal companies and insertion of such clause gives CIL through its subsidiaries an overpowering advantage in the relevant market, which is patently unfair.
The Commission has imposed a penalty on CIL of 1 per cent of the average turnover of the last three years. This comes to ₹591.01 crore.
In its order, the CCI noted that the empowering clause reserving the right to unilaterally terminate the fuel supply agreements without any scope of review by any independent agency is unfair on the buyers.
