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Kailash Chander Sharma v Coal India Limited and ors. - (Competition Commission of India) (14 Jul 2016)

Coal India free to exercise ‘consumer choice’ in tender

MRTP/ Competition Laws

The Competition Commission of India dismissed a complaint alleging abuse of market position against Coal India Limited, holding that Coal India had ‘consumer choice’ and was free to choose between competing products and services.

The complaint was received from an entity empanelled with CIL for providing technical and scientific services with regard to coal samples. It alleged that by changing its tender requirements for bidders for scientific and technical services in collection, preparation and transportation of coal samples, Coal India had shown preference for certain bidders over others, and being the dominant entity in the field it was abusing its market position.

Coal India’s initial tender for the services had limited bidders to those with an annual turnover of Rs. 25 crores - while the revised requirements reduced it to Rs. 20 crores and specified that prospective budders would have to submit a certificate of solvency and deposit Rs. 1 crore with the tender document. It was alleged that the Ministry of Coal and Power had not instructed Coal India to include such onerous conditions.

The Commission rejected the complaint noting that no barriers to entry had been created by the pre-qualification conditions, and the lowered turnover requirement did not bar Indian firms. The requirement of pre-deposit with tender documents could also not be called abusive. It reiterated, “a consumer of services must be allowed to exercise its consumer choice and freely select between competing products or services.” The Commission, however, remained silent on the potential incongruence between tender requirements set by Coal India and those prescribed by the coal ministry.


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