CCI in its order dated November 17, 2015 dismissed allegations of unfair business practices against the state owned miner, CIL. In a complaint filed by DB Power Ltd., under Section 19(1)(a), it was alleged that the scheme for e-auction of coal had a lack of reciprocity and mutuality in the terms and conditions thereof.
It was challenged that the grade and calorific value of the coal supplied to the winners of e-auction schemes was not specific. Even if the coal supplied is of sub-standard or poor quality, the buyers have no option to refuse it.
However, the CCI observed that the tender document clearly mentioned that the buyer should satisfy himself about the quality of coal before bidding. Further, it was observed that once the terms and conditions of sale had been put explicitly, the agreement had to be understood accordingly and not as per some perceived understanding of the buyer.
However, recognizing that the e-auction scheme had come up in challenge in various cases where buyers had alleged a lack of reciprocity and mutuality of obligations in the terms and conditions, the CCI ordered CIL to examine the entire scheme afresh after inviting suggestions from the stakeholders. The CCI also mentioned that such an act would inspire confidence amongst shareholders and at the same time remove any possible anti-competitive effects.
(Source: CCI: Order dated November 17, 2015. For full text see CCI website)