The Competition Commission of India (CCI) received an application from the Madhya Pradesh Power Generation Company (MPPGCL) to probe the monopolistic behaviour of Coal India (CIL) and South Eastern Coalfields (SECL).
According to MPPGCL, both the coal miners abused their dominant position in coal supply and because of this MPPGCL suffered losses and injury.
MPPGCL alleges that the coal supplied to its 1,340 mw Sanjay Gandhi thermal power station by SECL are unfair, one-sided, discriminatory and in violation of Section 4 (2) (a) of the Competition Act, 2002.
According to MPPGCL, the boilers of the Sanjay Gandhi thermal power station are designed for a calorific value of around 3,700 kilocalorie per kg, but SECL is supplying a higher grade of coal exceeding 5,800 kcal per kg, which is causing various technical problems to the plant besides being economically unviable to the company.
Moreover, MPPGCL argued that higher grade coal is being supplied by SECL in particular with intent to restrict competition in the relevant market and the entire conduct is based on the policy of “Pay Whether Agree or Not” basis.
Under this method, the purchaser has to accept the coal whether he is satisfied or not with the qualities and quantities of coal supplied. Even if the purchaser refuses to accept the said standard or lower coal, the delivery would be considered as “Deemed Delivery” and the purchaser would be bound to make the payment thereof.
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