Competition Appellate Tribunal stays Rs 1,773 crore CCI fine imposed on CIL

NEW DELHI: Giving relief to the state-run coal miner, the Competition Appellate Tribunal ( Compat) on Wednesday stayed the Rs 1,773-crore penalty imposed on Coal India by the competition watchdog for abusing its dominant position in supplying non-coking coal to power producers. The tribunal has granted a stay on the condition that Coal India deposits Rs 50 crore in three weeks. The coal miner has also been asked to file an affidavit explaining its position on the changes that were suggested by CCI in its order.

Competition Commission of India (CCI) in its order on December 9 last year said that the coal miner is operating independent of market forces and enjoys an undisputed dominance in the country over production and supply of non-coking coal.

The tribunal will now hear the matter on March 13. It is the first time that CCI has imposed a penalty on a state-run entity, which is also the singlelargest penalty on any firm. The quantum of penalty at Rs 1,773 crore is equal to 3% of the PSU’s average turnover for the last three years.

As per the order, the CCI investigation found Coal India and its subsidiaries “imposing unfair/discriminatory conditions in FSAs (fuel supply agreements) with power producers for supply of non-coking coal”, in violations of the provision of the Competition Act, 2002. Thereafter, Coal India approached the appellate tribunal against the CCI order.

The competition regulator had also ordered a fresh probe against Coal India and its subsidiaries in a separate matter of abuse of dominance . The complaint was filed by Maharashtra State Power Generation Company and Gujarat State Electricity Corp against Coal India and three subsidiaries — Mahanadi Coalfields,Western Coalfields and South Eastern Coalfields.