CIL flouting presidential order: CCI

By Manish Gupta

The Competition Commission of India (CCI) has accused Coal India (CIL) of not following the presidential directive and challenged the definition of “common good” in current times in the Supreme Court.

The apex court on Thursday completed the hearing on the applicability of Competition Act, 2002, on CIL and reserved its verdict. CIL had made an interlocutory application on a civil appeal in 2017 raising the issue of applicability.

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Arguing on behalf of CCI, counsel N Venkataraman said CIL unilaterally fixed prices of coal and supplied substandard coal to power companies.

CCI further questioned the definition of “common good” as mentioned in Article 39 of the Constitution, saying the “Constitution is a evolving document” and the definitions have to keep up with the changes. “The company cannot hide behind Article 39 (b),” it said.

The bench comprising Justices KM Joseph, BV Nagarathna and Ahsanuddin Amanullah said though the definition has to keep up with the times, the more capitalist India of today is still a welfare state.

Article 39 (b) of the Indian Constitution says: “(The State shall, in particular, direct its policy towards securing) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good”.

And 39 (c) reads: “that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment”.

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Former attorney general of India and senior advocate KK Venugopal argued on behalf of CIL through video conference.

CCI counsel Venkataraman told the three-judge bench their ruling will have a wider ramification on all regulators as competition law is a new law that a lot of parties are trying to circumvent.

CCI had imposed a penalty of Rs 1,773 crore on CIL in 2013, later reducing it to Rs 591 crore, for abusing its dominant position by using unfair conditions in fuel supply agreements with power companies.