Case Nos. 72 and 76 of 2015. Case: DB Power Limited and Ors. Vs Coal India Limited and Ors.. Competition Commision of India

Case NumberCase Nos. 72 and 76 of 2015
Party NameDB Power Limited and Ors. Vs Coal India Limited and Ors.
JudgesAshok Chawla, Chairperson, S.L. Bunker, Sudhir Mital, Augustine Peter, U.C. Nahta, M.S. Sahoo, Members and Retd. G.P. Mittal, J. (Member)
IssueCompetition Act, 2002 - Sections 19(1)(a), 26(1), 26(2), 4, 4(2)(a)(i)
Judgement DateNovember 17, 2015
CourtCompetition Commision of India

Order:

Order under section 26(2) of the Competition Act, 2002

  1. This common order shall dispose of these informations as the grievances in both the cases emanate out of Spot e-Auction Scheme, 2007 framed by Coal India Limited.

    Facts

  2. Facts, in brief, may be noticed from the respective cases.

    Case No. 72 of 2015

  3. The information in this case has been filed by M/s. DB Power Limited ("the Informant") under section 19(1)(a) of the Competition Act, 2002 ("the Act") against M/s. Coal India Limited ("the Opposite Party No. 1"/OP-1/CIL) and M/s. Northern Coalfields Limited ("the Opposite Party No. 2"/OP-2/NCL) alleging inter alia contravention of the provisions of section 4 of the Act.

  4. The Informant is stated to be a company incorporated under the provisions of the Companies Act, 1956 and is engaged in generation and sale of electricity. It has set-up a 1200 MW (2 x 600) coal based thermal power plant at village Badadarha in District Champa, Chhattisgarh.

  5. The Opposite Party No. 1 is a Government of India undertaking and produces coal through mechanised open cast mines through its various subsidiaries. The Opposite Party No. 2 is one of the subsidiaries of CIL and is empowered by CIL to control the mining activities and operations of Singrauli coalfields, District- Singrauli, Madhya Pradesh.

  6. It is averred in the information that CIL framed a Spot e-auction Scheme, 2007 for conducting e-auction of coal. Further, it is stated that in terms of the said scheme, an e-auction of coal by road and rail mode was notified by NCL vide notification dated 07.10.2014 incorporating by reference all the terms and conditions of the Spot e-Auction Scheme.

  7. The Informant is stated to have been selected as a successful bidder pursuant to the e-auction of coal by road conducted by NCL under the said notification in respect of Jhingurda Colliery for 1000 MT coal @ Rs. 2,662/- per MT vide email dated 16.10.2014 (Sale Intimation Letter) and thereafter an allotment letter dated 30.10.2014 was issued by NCL in favour of the Informant. The grade of coal specified in the Sale Notification, the Sale Intimation Letter as well as the allotment letter is described as G-10, the Gross Calorific Value (GCV) of coal is 4301-4600 and the size is crushed Run- of- Mine (ROM).

  8. The Informant avers that the Opposite Parties are dominant in the relevant market of sale of non-coking coal to the thermal power generators in India as held by the Commission vide its order dated 09.12.2013 in Case Nos. 03, 11 and 59 of 2012 filed against CIL and its subsidiaries. The Informant also points out that in view of provisions of the Coal Mines (Nationalization) Act, 1973, production, distribution and sale of coal is in the hands of the Central Government and the Government discharges the said functions through CIL and its subsidiary companies, which are majorly owned and controlled by the Central Government. Thus, it is averred that these companies have, by operation of law, been vested with monopolistic power for production, distribution and sale of coal in India.

  9. The Informant has challenged the various terms and conditions of Spot e-Auction Scheme as also the Sale Notification issued pursuant thereto besides the conduct of the Opposite Parties as arbitrary and unfair being in contravention of the provisions of section 4 of the Act.

  10. It is stated in the information that under Sale Notification, the reserve price of coal offered to be sold by e-auction is fixed on the basis of the grade, GCV and the size of the coal. Based on this, it is contended that the Opposite Parties are obligated to supply to the successful bidder/buyer, the exact grade, GCV and size of coal which is specified in the Sale Notification and based on which the bidders participate in the e-auction.

  11. It is further pointed out that as per the terms and conditions of Spot e-auction Scheme, the coal is supplied by NCL after receiving the entire coal value from the buyer/successful bidder by way of demand draft/pay order. It is further alleged to be stipulated therein that even if the coal supplied is not suitable or is of sub-standard quality, the buyer has no right or option...

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