On February 6, 2018, CCI dismissed an information filed by the Industries and Commerce Association (‘ICA’), comprising of 72 small scale industries that are involved in the manufacture and sale of hard coke, against Coal India Limited (‘CIL’), its subsidiary Bharat Coking Coal Limited (‘BCCL’), and the Ministry of Coal (‘MoC’) alleging contravention of Section 4 of the Competition Act.By way of background, National Coal Distribution Policy, 2008 (‘NCDP’) was introduced by the MoC basis which the ICA was required to procure coal through following mechanism: 75% of its total requirement through Fuel Supply Agreements (‘FSAs’) at notified prices to be fixed / declared by CIL, and the remaining 25% through e-auction / imports. More recently, the MoC issued guidelines in 2016 (‘2016 Guidelines’) addressed to CIL, directing that none of the existing FSAs would be renewed and the members of ICA would be required to procure coal through e-auction process post expiry of the existing FSA.The ICA challenged various terms of the existing FSAs that were due to expire in 2018 (‘Existing FSAs’), relating to calculation of the price of coking coal, deemed delivery quantity, renewal terms, and security deposits, as being unfair. The ICA challenged the e-auction process (through which it procured 25% of its requirement) as being (i) unfair in imposing 10%-20% higher prices on coal and (ii) discriminatory between those purchasers who procure coal by way of FSAs and those who don’t. The ICA also alleged that the proposed 2016 Guidelines which required ICA to procure its entire requirement through e-auction is unfair and would lead to excessive pricing of coal, given that CIL is a monopolist. The ICA further challenged the certain terms of the model FSA proposed to be entered into as part of the e-auction as per the 2016 Guidelines.In order to bring the above challenge to 2016 Guidelines within the purview of the Competition Act, ICA alleged that MoC is an ‘enterprise’ within the meaning of Competition Act and the purpose of 2016 Guidelines was to generate supra-normal profits by generating profits through companies under its control. Further, ICA alleged that BCCL, CIL and MoC formed a part of same group under the provisions of the Competition Act.As regards the allegation pertaining to unfair condition under the Existing FSAs, CCI was of the view that the ICA, which had entered into two consecutive FSAs since the introduction of the NCDP in 2013, had filed the information at a belated stage i.e. at the time only when the second FSA was expiring. CCI noted that the actual trigger for the information was the update in the policy as per the 2016 Guidelines.Further, CCI rejected ICA’s contention that the MoC is an ‘enterprise’ under the provisions of the Competition Act, reasoning that the policy making function of MoC did not fall within the category of economic activity in order to satisfy the definition of the term ‘enterprise’. In view of the above, ICA’s contention that CIL, BCCL, and the MoC constituted a ‘group’ was categorically dismissed. CCI held that the challenge to the 2016 Guidelines was speculative and premature since the e- auction had not yet taken place, the model FSA was not yet implemented and, therefore, the allegations did not merit an investigation.

*Case No. 60 of 2017.