WEST BENGAL POWER DEVELOPMENT CORPORATION LTD Vs. COAL INDIA LTD

JUDGEMENT

(1.) THE Informant filed this information under section 19(1)(a) of the Competition Act, 2002 (the 'Act') against OP1 and its subsidiaries (collectively referred to as 'CIL subsidiaries') in respect of violation of provisions of the Competition Law. The Informant alleged that OP1 and its subsidiaries were dominant in the relevant market of sale of coal, due to the fact that coal mines were nationalized by the Central Government vide Coal Mines (Nationalisation) Act, 1973 and the Opposite Party and its subsidiaries were the only supplier of coal in India. The abuse of this dominant position was alleged on the basis of different clauses of fuel supply as well as the practices adopted by the Opposite Parties.

(2.) THE Informant contended that it operated five power plants in State of West Bengal viz. (i) Kolaghat Thermal Power Station, (ii) Bakreshwar Thermal Power Station, (iii) Sagardighi Thermal Power Station, (iv) Bandel Thermal Power Station, and (v) Santaldih Thermal Power Station, generating 3860 megawatt of electricity, fulfilling 56% of energy demand in the State of West Bengal. Out of its total coal requirement of 18.60 million metric tons for purposes of power generation, it purchased bulk of its coal i.e. about 14.60 million metric tons of coal from OP2 to OP4. After the introduction of New Coal Development Policy by Ministry of Coal, Government of India, Fuel Supply Agreements (FSAs) were mandated to be executed between subsidiaries of OP1 and their consumers having demand of more than 4200 tonnes per annum. The Informant entered into agreements with OPs 2 to 4 during the year 2009. The FSAs were standard agreement with identical terms and conditions and no opportunity of negotiation was allowed to the informant with regard to the FSAs. The Informant contended that these agreements had a lock -in period of 20 years with no supply side substitutability open to the Informant.

(3.) ON the basis of above facts, the Informant alleged abuse of dominant position by the OPs who held dominant position in the relevant market of supply of coal to thermal power plants in India.