COMPAT upholds CCI order against 9 cos; reduces penalty to 10%
The Competition Appellate Tribunal has reduced the penalty to 10 percent of total fine imposed by the regulator CCI on nine explosives manufacturers for forming a cartel to bid for supply to Coal India.
New Delhi: The Competition Appellate Tribunal has reduced the penalty to 10 percent of total fine imposed by the regulator CCI on nine explosives manufacturers for forming a cartel to bid for supply to Coal India.
Competition watchdog CCI had imposed a fine of Rs 58.83 crore on nine companies after finding that the companies formed a cartel to bid for supply of explosives to state-owned Coal India.
While dismissing the manufacturers' petition against CCI order, a COMPAT bench headed by Chairman Justice V S Sirpurkar said, "There is a clear cut finding given by the CCI and we find no error in that finding".
However, the tribunal reduced the penalty to 10 percent of the total fine imposed by the CCI. Earlier, in an interim order, COMPAT had directed the explosive manufacturers to pay 5 percent of the amount.
The tribunal said there was "application of the concerted mind" between the explosive manufacturers for quoting the rates to Coal India and had "nipped the bidding process in bud".
"We would choose to order reduction of the penalty to the extent of total of 10 percent penalty imposed by the CCI...," the tribunal said.
The firms are: Gulf Oil, Ideal Industrial Explosives, Regenesis Industries, Solar Industries, Balastec India, Indian Explosives, Emul Tek India, Black Diamond Explosives and S Keltech Energies.
In an order on April 14, CCI had imposed a fine of Rs 28.94 crore on Gulf Oil Corporation, Rs 11.34 on Solar Industries and Rs 11.34 on Indian Explosives.
The regulator has directed its probe unit Director General of Investigations (DGI) after receiving a complaint from Coal India alleging that the producers had formed a cartel while quoting bids floated it.
CIL had submitted to the Commission that from 2005 onwards, it had effectively been at the mercy of the explosive suppliers and often not received the quantities of explosives that it was supposed to receive from them.
As a result, CIL alleged that it was forced to give in to several of their "unreasonable demands regarding prices as well as the quality of explosives, causing an AAEC (appreciable adverse effect on competition) in the market".