Context
The Supreme Court recently ruled that Coal India Ltd (CIL), a public sector undertaking, cannot be exempted from the Competition Act as it found no valid reasons for such exclusion. The court was addressing CIL’s appeal against the Competition Appellate Tribunal’s order, which accused the company of engaging in abusive practices.Background
- In 2017, the Competition Commission of India (CCI) fined Coal India Ltd (CIL), ?591.01 crore for imposing unfair conditions in fuel supply agreements (FSAs) with power producers.
- CIL supplied lower quality coal at higher prices and included unclear conditions regarding supply parameters and quality.
- The CCI argued that Coal India and its subsidiaries operated without competition and held a dominant position in the non-coking coal production and supply market in India.
Points made by Coal India | Point made by CCI |
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- The court dismissed the argument that the Competition Act does not apply to CIL due to its governance under the Nationalisation Act, stating that it cannot be reconciled with the Competition Act.
- It emphasized that the essence of the Act would be undermined if state monopolies, government companies, and public sector units were allowed to violate the competition law.
- Additionally, it stated that entities cannot act arbitrarily or discriminate against similar entities in an unfair manner.
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