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Competition Commission cuts Coal India penalty to Rs 591

The CCI has found the co violating competition norms by "imposing unfair/ discriminatory conditions in the matter of supply of non- coking coal to power producers".

, ET Bureau|
Mar 25, 2017, 12.17 AM IST
NEW DELHI: The Competition Commission of India has cut the penalty it imposed on Coal India Ltd (CIL) for abuse of its dominant position to Rs 591 crore, a third of what the watchdog had ordered the state-run miner to pay up more than three years ago.

The new ruling comes after the Competition Appellate Tribunal (COMPAT) in May 2016 ordered a fresh investigation into the case involving CIL and three of its subsidiaries, reasoning not all the members of the CCI who signed off on the ruling were present during the hearings.

Coal India and subsidiaries Mahanadi Coalfields, Western Coalfields and South Eastern Coalfields were found guilty by the commission in December 2013 of misusing their monopoly in the market.

Maharashtra State Power Generation Co and Gujarat State Electricity Corp had complained to the commission that Coal India and its subsidiaries had abused their monopoly.

The CCI initially imposed a fine of Rs 1,773 crore, one of the biggest penalties levied on a public-sector enterprise in such a case. CIL has to deposit the penalty within 60 days of receiving the order.

According to lawyers from Shardul Amarchand Mangaldas and Co, which advised CIL in this matter, this is the first time that the watchdog has reduced the penalty it imposed earlier.

While evaluating the monetary penalty, the order notes that while the "CIL enjoys operational commercial freedom, its conduct is constrained by directions received from various stakeholders including Ministry of Power, Ministry of Coal, CEA etc., all of whom exert influence and are involved in making decisions that impact various aspects of CIL's business."

The order also took cognisance of the continuous steps taken by CIL in resolving issues with stakeholders, which contributed to the reduced penalty amount.

On March 20, in a separate case, the appellate tribunal dismissed CIL's appeal against an October 2014 CCI order that also found the coal supplier guilty of unfair trade practices.
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