The fair trade regulator Competition Commission of India (CCI) has levied a penalty of Rs 591.01 crore on public sector undertaking Coal India (CIL). The Commission has imposed a penalty on CIL of 1 per cent of the average turnover of the last three years.
The CCI has found 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.
Coal India is the world’s largest coal mining company. It also produces non-coking coal and coking coal of various grades for diverse applications.