Coal India Vs CCI: SC holds that CIL falls under competition act despite being a PSU

Coal India CCI

The Supreme Court on June 15 held that Coal India Limited cannot seek an exemption from Competition Act, 2002 because it is a public sector undertaking under Coal Mines (Nationalisation) Act, 1973.

As a consequence of this order, public sector undertakings such as Coal India Limited (CIL) will now come under the purview of Competition act and the Competition Commission of India.

The case will now be heard on aspects such as the correctness of penalty levied by CCI on CIL and other aspects.

CIL had filed an application contending that since it operates coal mines covered by the  Coal Mines (Nationalisation) Act, 1973 it would not be in the  purview of the Competition Act, 2002. CCI opposed the plea and contended that there is no constitutional challenge to any provision of the Competition Act.

CIL had filed an appeal against the order of Competition Appellate Tribunal (COMPAT)  from December 2016 dismissing it appeal against  CCI's order.

In 2013, CCI held that CIL was in a dominant position in the coal market and abused its position. CCI further held that CIL through its subsidiaries, operated independently of market forces and enjoyed a dominant position in the market and contravened the provision of competition act. The CCI  directed CIL to cease and desist from indulging in anti-competitive practices and make necessary modifications to its agreements with others. While CCI's initial penalty was Rs. 1773 crore, it was reduced to Rs. 591 crore in 2017 on COMPAT's order