Case No. 12 of 2014. Case: Vidharbha Industries Association Vs MSEB Holding Co. Limited. Competition Commision of India

Case NumberCase No. 12 of 2014
CounselFor Appellant: K.K. Sharma and Danish Khan, Advocates
JudgesAshok Chawla, Chairperson, Anurag Goel, S.L. Bunker and Sudhir Mittal, Members
IssueCompetition Act, 2002 - Sections 19(1) (a), 26(1), 4, 4(2) (a) (ii), 4(2) (b)(ii), 4(2) (c), 4(2)(a)(i)
Judgement DateAugust 05, 2014
CourtCompetition Commision of India


  1. The present information has been filed by Vidharbha Industries Association ('the Informant') under section 19(1) (a) of the Competition Act, 2002 ('the Act') against MSEB Holding Company Limited ('OP 1'), Maharashtra State Power Generation Company ('OP 2'), Maharashtra State Transmission Company Limited ('OP 3') and Maharashtra State Electricity Distribution Company Limited ('OP 4') alleging contravention the provisions of section 4 of the Act.

  2. Factual matrix of the matter, as unfolded in the information, is stated below:

    2.1. The Informant is a trade association in the region of Vidarbha in the State of Maharashtra. OP 1 is a public limited company incorporated under the Companies Act, 1956. OP 2, OP 3 and OP 4 are subsidiaries of OP 1, formed w.e.f. 06/06/2005 by virtue of the new Electricity Act, 2003 of the Government of Maharashtra. OP 2, OP 3 and OP 4 are engaged in the business of generation, transmission and distribution of electricity respectively in the state of Maharashtra.

    2.2. The Informant alleged that the Opposite Parties, as a group, have abused their dominant position inter alia by deliberately generating and distributing electricity in extremely inefficient manner and by denying market access to other efficient and economical power generating companies. The inefficient activities of OP 2 and OP 4 are reflected in the exorbitant cost structure submitted by OP 2 and OP 4 to Maharashtra Electricity Regulatory Commission (MERC) which results in increase in tariff, as determined by MERC.

    2.3. The Informant has further alleged that irrespective of the price charged by OP 2, OP 4 purchases all the power generated by OP 2. Since the tariff for the power purchase is decided by the MERC as per the cost structure and revenue forecast submitted by OP 4, due to inefficiency of OP 2 the cost structure invariably remains very high. In such a scenario, MERC is bound to determine tariff at a rate which is much higher than the prevailing market rate. Resultantly, the consumers of OP 4 are paying the highest electricity tariff compared to all other states in India.

    2.4. It has been stated that the power purchase cost of OP 4 during the financial year 2011-12 and 2012-1 has increased by 18% and 15% respectively. Further, the power purchase cost of OP 4 from OP 2 is the highest amongst the major conventional energy power sellers. It has also been alleged that OP 4 has violated the Merit Order Dispatch Principles whereby it is mandatory to purchase the least expensive electricity first and the most expensive electricity last.

    2.5. The Informant has further stated that while purchasing power from...

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