COMPAT sets-aside penalty of INR 1,773 Crores penalty on Coal India Limited (CIL) by CCI |

Competition Appellate Tribunal (COMPAT) by its order dated May 17, 2016 has set aside CCI’s order dated April 15, 2014 wherein CCI had imposed penalty of Rs. ,773 Crores on Coal India Limited for imposing unfair and discriminatory conditions in its fuel supply agreements with various customers.

COMPAT considered whether the orders passed by CCI are vitiated due to violation of the principles of natural justice, i.e., one who hears must decide.

In one of the appeals, it was alleged that the CCI comprising the Chairperson, Mr. Ashok Chawla and three Members namely – Dr. Geeta Gouri, Mr. Justice (Retd.) S.N. Dhingra and Mr. S.L. Bunker heard the arguments on 16th and 17th July, 2013. However, the final order was passed on 09.12.2013 by the CCI comprising the Chairperson, Mr. Ashok Chawla and five Members namely – Dr. Geeta Gouri, Mr. Anurag Goel, Mr. M.L. Tayal, Mr. Justice (Retd.) S.N. Dhingra and Mr. S.L. Bunker (Mr. Anurag Goel and Mr. M.L. Tayal were not party to the hearing held on 16th and 17th July, 2013) whereby penalty @ 3% of the average turnover of preceding three years total amounting to INR 1773.05 crores was imposed on Coal India Limited. Similar allegations were also made in the connected appeals.

COMPAT disagreed with the CCI’s contention that the CCI functions as an executive/administrative body and is thus not bound by the principles of natural justice and fairness. It reiterated the Supreme Court’s position that the functions performed by the bodies like the CCI which are clothed with the power to decide the rights of the parties or pass order adversely affecting a person are quasi-judicial in nature and are bound to comply with different facets of the principles of natural justice.

Thus COMPAT allowed the appeals and remitted the matters to the CCI for deciding the issues arising out of the information filed by Maharashtra State Power Generation Company Limited, Gujarat State Electricity Corporation Limited, Madhya Pradesh Power Generating Corporation Limited, West Bengal Power Development Corporation Limited, Sponge Iron Manufacturers Association and GHCL Ltd. afresh. The CCI has been directed to dispose-off the matters within 2 months. (Source: Order dated May 17, 2016. For full text see COMPAT website-www.compat.nic.in)

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About the author

M M SHARMA

 Comdt. (Retd.) M. M. Sharma heads the Competition Law & Policy team in VA since 2009 and has over 30 years’ experience as an Advocate of Delhi High Court and holds a Post Graduate Diploma in Economics of Competition Law from Kings College, London. He has worked in the Competition Commission of India (CCI) as Additional Registrar during 2006-2008 and was responsible for drafting the Implementing Regulations under the Competition Act, 2002. He has experience of working as Head-Legal /In-house Counsel for a large Corporate Group in the Steel and Power sector before joining VA in 2009. He has represented clients as an independent arguing Counsel in landmark cases decided by CCI, the Competition Appellate Tribunal (COMPAT) , High Courts and the Supreme Court. As a prolific writer, he contributes articles and is regularly quoted on competition issues in National Newspapers and interviewed by TV Channels. He also teaches as a visiting faculty in various Universities and Institutions and is widely regarded as a subject expert in various Committees of Apex Business Chambers, such as FICCI, CII, ASSOCHAM and PHD CCI.  Mr. Sharma has been mentioned as a “Notable Practitioner” in the “Competition/Antitrust” category of Chambers & Partners (Asia Pacific) Ranking of Leading Lawyers for Business in India for the year 2012 and 2013. VA’s competition law and policy team has also been awarded the Law Firm of the Year Award for “Competition/Antitrust Law” for 2013 by the Indian Business Law Journal. Included as a ‘Recognised Practitioner’ in Individual Lawyers’ranking by Chamber’s Asia Pacific Guide 2020 for Antitrust/Competition Law.