The Competition Commission of India (CCI) on Friday cut the fine on Coal India and its arms to Rs 591 crore from Rs 1,773 crore imposed earlier for discriminatory fuel supply agreement (FSA) conditions imposed on power producers for supply of non-coking coal. The fine imposed on the coal miner is 1% of the total turnover of the company in the last three years.

CCI passed the revised order after the matter was remanded back to it by the Competition Appellate Tribunal after setting aside the earlier order from CCI. “After hearing the parties afresh in terms of the directions issued by Competition Appellate Tribunal, CCI held that CIL through its subsidiaries operates independently of market forces and enjoys dominance in the relevant market of production and supply of non-coking coal in India,” the government said in a statement.

While reducing the penalty, CCI noted the steps taken by CIL to improve the sampling procedure even post-passing of the original order by CCI. However, while holding the extant sampling procedure as unfair, CIL has been directed to incorporate suitable modifications in FSAs to provide for a fair and equitable sampling and testing procedure, besides considering the feasibility of sampling at the unloading end, in consultation with power producers and adopting international best practices.

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Further, CCI noted in the order that CIL did not finalise the terms and conditions of FSAs through a bilateral process and the same were imposed upon the buyers through a unilateral conduct. Apart from issuing a cease and desist order against CIL and its subsidiaries, CCI, in its order, has directed modification of FSAs. For effecting the modifications in FSAs, CIL has been ordered to consult all the stakeholders. CIL has also been directed to ensure uniformity between old and new power producers, as well as between private and PSU power producers.

The final order was passed on Friday on information filed by Maharashtra State Power Generation Co and Gujarat State Electricity Corp against Coal India and its subsidiaries (Mahanadi Coalfields, Western Coalfields and South Eastern Coalfields.