CIL case: Compat to issue notice to Competition Commission

Competition Appellate Tribunal will issue notice to fair trade regulator CCI on its order slapping Rs 1,773 crore penalty on state-owned Coal India ltd on charges of anti-competitive practices.

Hearing an appeal filed by CIL today, the tribunal said that status quo should be maintained until further orders regarding CCI's direction to modify fuel supply agreements and to cease and desist from unfair practices.

However, the tribunal did not stay the CCI penalty on CIL and the matter will be looked into during the next hearing, scheduled on February 11.

Besides the Competition Commission of India (CCI), the tribunal will issue notices to Maharashtra State Power Generation Co Ltd (MAHAGENCO) and Gujarat State Electricity Corporation Ltd (GSECL).

During the hearing here, the tribunal decided to issue notices to the three entities. CCI ruling, on December 9, had come on complaints filed by MAHAGENCO and GSECL.

Coal India has sought stay on the CCI order slapping penalty on it for allegedly abusing its dominant position in fuel supplies. The Rs 1,773.05 crore penalty is equal to 3% of the PSU's average turnover for the last three years.

CCI had directed CIL to modify fuel supply agreements as well as "cease and desist from indulging in the conduct which has been found to be in contravention of the provisions of the (Competition) Act".

It had also said that these directions must be complied within a period of 30 days from the date of receipt of the order (dated December 9, 2013).

According to the fair trade regulator, Coal India is operating independently of market forces and enjoys an undisputed dominance in the country over production and supply of non-coking coal.

Coal India abused its dominance and did not try to evolve/ draft/finalise terms and conditions of FSAs through a mutual bilateral process with procurers, the order had said.

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