The second respondent had provided information to the CCI which the CCI proceeded to consider and it found the abuse of dominant position by the appellants. We have allowed the application seeking permission to urge the new grounds. In other words, having regard to the very object and purpose for which it was brought into being and the law surrounding such a body, applying the Act would produce such anomalous results as would stultify the sublime goal enshrined in Article 39(b) as also the statute under which CIL witnessed its birth. Venugopal, learned Senior Counsel, would submit that the coal mines operated by the appellants pursuant to the provisions of the Coal Mines (Nationalization) Act, 1973 (hereinafter referred to as the ‘Nationalisation Act’) would be wholly outside the purview of the Act. It is a monopoly created by the Nationalization Act; it is, having regard to the need 5 to immunize it from challenge, that it was accorded protection of Article 31B of the Constitution of India; it has been inserted in the Ninth Schedule to the Constitution; Article 39(b) of the Constitution of India takes it out of the category of ordinary monopoly; this is for the reason that the State has been charged with the duty to bear in mind the principles of ‘common good’ being secured by the ‘distribution of scarce resources’; coal, with which mineral we are concerned with, is, indeed, a mineral of the highest importance in the economic life of the nation; its equitable distribution in the manner so as to secure the common good which is the directive contained in Article 39(b) led to the creation of a statutorily mandated monopoly; when such is the thrust of the Nationalisation Act, then, it is wholly inconceivable that the Act would still be applicable to the appellants.
Unlike an ordinary monopoly, a corporate body like the appellant represents a case of a monopoly with the added and unique feature that it is an ‘Article 39(b)’ monopoly.
Reliance is placed on decisions of this Court to emphasize the point that the Nationalization Act was enacted with a view to give effect to the provision of Article 39(b) (See Ashoka Smokeless Coal India (P) Ltd.
This is contrasted with a long title of the Nationalisation Act which indicates that the Law-Giver intended to vest ownership and control of the coal mines in the State so that the said resource is so distributed as to best serve the common good. Despite the fact that these underground mines only contribute 9 per cent to its total coal production, it is emphasized that the appellants are not free as a private player to lay off its employees. Under the Nationalisation Act as much as under Article 39(b), the appellants may have to follow differential pricing mechanism to encourage captive coal production. The impact of the provisions would have on policy decisions taken by the Ministry of Coal to encourage certain industries through a coal supply and pricing mechanism is emphasized. Section 3 of the Nationalisation Act, it is next pointed out, vests the ownership of the coal mines in the Central Government.
Section 60 of the Act, which declares that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being (2011) 10 SCC 727 (1990) 2 SCC 288 12 in force, may not assist the second respondent or the CCI in the stand that a Nationalisation Act must make way for the operation of the Act on its own terms. They must not be so perceived when a complaint of abuse of dominant position is considered under Section 4 of the Act. The mines in question were cost plus mines operated by the appellants to ensure more availability of coal. There is no conflict between the Nationalisation Act and the Act in keeping with the changing times and the imperative need to ensure the best economic interest of the Nation. He would point out that the Court should keep in mind that an examination of the merits of the case would clearly indicate that the attempt of the appellants is to wriggle out of the situation when its actions have been found to be violative of the Act and the fine questions which have been raised do not actually even arise on the defense actually set up before the CCI. It is only when a clear case of abuse of dominant position, inter alia, is found established, that the CCI acts.
Thus, the Commission is governed by pre- determined and objective criteria to arrive at a finding as to whether an enterprise occupies the dominant position both with reference to the explanation provided in Section 4(2) as also the factors which have been elaborately laid down in Section 19(4). When this Court delivered the Judgment relied upon by the appellants as well, viz., Ashoka Smokeless Coal India (P) Ltd. Venkataraman would point out again that the Court may not lose sight of the fact that while the (2007) 2 SCC 640 19 first appellant was fully owned by the Central Government in terms of its shareholding, after 2010, following disinvestment, the Government shareholding has declined to nearly 67 per cent.
Union of India, it is pointed out that unlike the law which may be protected under Article (1981) 2 SCC 362 (2007) 2 SCC 1 (1995) 1 SCC 574 (1978) 3 SCC 459 20 31C, an order passed under the law may not be entitled to the same immunity. Shri Ranjit Kumar, learned Senior Counsel for the second respondent, would point out that concept of common good so heavily relied upon by the appellant, found in Article 39(b), must be interpreted as meaning the interest of the common man or the citizens. The second respondent it is pointed out in fact supplies power (1999) 6 SCC 82 21 generated using coal to distribution companies (represented, in fact, before us incidentally by the Maharashtra State Agency), who, in turn, would finally supply power to the end consumer. Next, he would point out that the predecessor enactment, viz., the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as MRTP Act), which stood repealed by the Act, may be borne in mind. If the appellants legitimately wished to be taken out of the purview of the Act, Section 54 holds the key and there is a lawful way. (See paragraphs-9, 13, 19 and 25), Chairman, Railway Board and others v. Chandrima Das (Mrs.) and others (See paragraphs-38, 41 and 42) and Agricultural Produce Market Committee v. Regarding the contention of the appellants that Writ Courts can go into the question, it is pointed out that the cases may involve facts, which are best dealt with by a Body like the CCI. He would emphasize again that the Act and even the Raghavan Committee Report does not refer to the species of public sector company which are geared to achieve the common good under Article 39(b) and whose operation was immunized from challenge by their insertion in the 9 Schedule at the relevant point of time.
In other words, the command of Article 39(b) is that the State shall bear in mind the common good and, therefore, coal even if it is taken out of the Essential Commodities Act, remains a material (2007) 2 SCC 640 26 resource of the country, which must be distributed to achieve common good. He would submit that if a defense is set up that bonafide adherence to Presidential Directives is being made under the Act, it would be a matter which may have to engage the CCI. Section 2(d) of the Act, as substituted by Act 30 of 1982, provided for definition of the words ‘dominant undertaking’. Sans the three explanations, the word ‘undertaking’ was contained in Section 2(v) and it read: 29 “ 2( v ) “undertaking” means an enterprise which is, or has been, or is proposed to be, engaged in the production, storage, supply, distribution, acquisition or control of articles or goods, or the provisions of services, of any kind, either directly or through one or more of its units or divisions, whether such unit or division is located at the same place where the undertaking is located or at a different place or at different places.
Act not to apply in certain cases.—Unless the Central Government, by notification, otherwise directs, this Act shall not apply to— (a) any undertaking owned or controlled by a Government company, (b) any undertaking owned or controlled by a Government, (c) any undertaking owned or controlled by a corporation (not being a company) established by or under any Central, Provincial or State Act, (d) any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees, (e) any undertaking engaged in an industry, the management of which has been taken over by any person or body of persons in pursuance of any authorisation made by the Central Government under any law for the time being in force, (f) any undertaking owned by a co-operative society formed and registered under any Central, Provincial or State Act relating to co-operative societies, (g) any financial institution. 31
Explanation.—In determining, for the purpose of clause (c), whether or not any undertaking is owned or controlled by a corporation, the shares held by financial institutions shall not be taken into account.” In other words, inter alia, the provisions of the said Act did not apply to an undertaking owned or controlled by a government company or any undertaking owned or controlled by a corporation (not being a company established by or under a central, provisional or State Act) unless it was expressly made applicable by a notification. The Preamble to the Nationalisation Act reads as follows: “An Act to provide for the acquisition and transfer of the right, title and interest of the owners in respect of the coal mines specified in the Schedule with a view to re- organising and reconstructing such coal mines so as to ensure the rational, co-ordinated and scientific development and utilisation of coal resources consistent with the growing requirements of the country, in order that the ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the common good, and for matters connected therewith or incidental thereto.” Acquisition of rights of owners in respect of coal mines.—(1) On the appointed day, the right, title and interest of the owners in Ashoka Smokeless Coal India (P) Ltd.
On and from the commencement of section 3 of the Coal Mines (Nationalisation) Amendment Act, 1976 (67 of 1976),— (a) no person, other than— (i) the Central Government or a Government, company or a corporation owned, managed or controlled by the Central Government, or (ii) a person to whom a sub-lease, referred to in the proviso to clause (c), has been granted by any such Government, company or corporation, or (iii) a company engaged in— (1) the production of iron and steel, (2) generation of power, (3) washing of coal obtained from a mine, or (4) such other end use as the Central Government may, by notification, specify, shall carry on coal mining operation, in India, in any form; (b) excepting the mining leases granted before such commencement in favour of the Government, company or corporation, referred to in clause 34 (a), and any sub-lease granted by any such Government, company or corporation, all other mining leases and sub-leases in force immediately before such commencement, shall, in so far as they relate to the winning or mining of coal, stand terminated; (c) no lease for winning or mining coal shall be — 35 (1) Notwithstanding anything contained in sections 3 and 4, the Central Government may, if it is satisfied that a Government company is willing to comply, or has complied, with such terms and conditions as that Government may think fit to impose, direct, by an order in writing, that the right, title and interest of an owner in relation to a coal mine referred to in section 3, shall, instead of continuing to vest in the Central Government, vest in the Government company either on the date of publication of the direction or on such earlier or later date (not being a date earlier than the appointed day), as may be specified in the direction. (3) The provisions of sub-section (2) of section 4 shall apply to a lease which vests in a Government company as they apply to a lease vested in the Central Government and references therein to the “Central Government” shall be construed as references to the Government company.” Management, etc., of coal mines.—(1) The general superintendence, direction, control and management of the affairs and business of a coal mine, the right, title and interest of an owner in relation to which have vested in the Central Government under section 3, shall,— (a) in the case of a coal mine in relation to which a direction has been made by the Central Government under sub-section (1) of section 5, vest in the Government company specified in such direction, or (b) in the case of a coal mine in relation to which no such direction has been made by the Central Government, vest in one or more Custodians appointed by the Central Government under sub-section (2), and thereupon the Government company so specified or the Custodian so appointed, as the case may be, shall be entitled to exercise all such powers and do all such things as the owner of the coal mine is authorised to exercise and do.
No proceeding for the winding up of a mining company, the right title and interest in relation to the coal mine owned by which have vested with Central Government called a government company under this Act or for the appointment of a receiver in respect of the business of the company, shall lie in any Court except with the consent of the Central Government.” Validation of certain Acts and Regulations Without prejudice to the generality of the provisions contained in Article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or tribunal to 38 the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force.” Saving of laws giving effect to certain directive principles Notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19 and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy: Provided that where such law is made by the Legislature of a State, the provisions of this Article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent Right to Constitutional Remedies.” The working of the MRTP Act was found to be inadequate particularly in the context of changes which happened not only in the country but also on a larger scale. In this context, the appropriate definition of welfare is the sum of consumer surplus and producer’s surplus and also includes any taxes collected by the Government.”(See paragraph-2.1.1) We notice the following observations as well: “2.1.1 Competition policy is defined as “those Government measures that directly affect the behaviour of enterprises and the structure of industry” (Khemani, R.S. Essentially two different types of reforms were envisaged: greater autonomy for public sector enterprises and greater private sector ownership.” We may next notice paragraph-2.8.5: “2.8.5 Public Sector To a large extent, the imperative for privatisation of the public sector has arisen from fiscal considerations. We are of the view that the public sector should be exposed to competition and not given any preferential treatment.” State Monopolies Policy is seen dealt with under paragraphs-3.4.5 and 3.4.6. A view shared by many is that State monopolies and public enterprises in India have played a vital role in its developing process, have engineered growth in critical core areas and have performed social obligations. State monopolies suffer from the schemes of administered prices, contrary to the spirit of Competition Policy.” In paragraph-3.4.7, it is, interlia, stated that in the interests of the consumer the State Monopolies and Public Enterprises need to be competitive in production of goods and service delivery. Under the head, the Contours of Competition Policy, in paragraphs-4.2.2 and 4.2.4, we notice the following: “4.2.2 Scope State Monopolies and Government Procurement. 2.4
By the same logic, Government enterprises and departments engaged in any sovereign function (like defence, law and order, currency functions) may not be subjected to the rigours of Competition Law.” (Emphasis supplied) 44 50. Some factors relevant to geographic barriers are consumption and shipment patterns, transportation costs, perishability and existence of barriers to the shipment of products between adjoining geographic areas. If quality and safety standards for goods and services are designed to prevent market access, such practices will constitute abuse of dominance/exclusionary practices. Exclusionary practices which create a barrier to new entrants or force existing competitors out of the market will attract the Competition Law. In adjudicating a merger, potential efficiency losses from the merger should be weighed against potential gains.” It is following the said Report, that in the year 2002, the Act came to be enacted. Section 2(h) defines the word ‘enterprise’: “2(h) “enterprise” means a person or a department of the Government, who or which is, or has been, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, either directly or through one 47 or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or at different places, but does not include any activity of the Government relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence and space. Section 2(l) defines the word ‘person’: “2(l) “person” includes— 48 (i) an individual; (ii) a Hindu undivided family; (iii) a company; (iv) a firm; (v) an association of persons or a body of individuals, whether incorporated or not, in India or outside India; (vi) any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); (vii) any body corporate incorporated by or under the laws of a country outside India; (viii) a co-operative society registered under any law relating to co-operative societies; (ix) a local authority; (x) every artificial juridical person, not falling within any of the preceding sub- clauses;” 57. Section 3 prohibits anti-competitive agreements. (2) There shall be an abuse of dominant position under sub-section (1), if an enterprise or a group.—- (a) directly or indirectly, imposes unfair or discriminatory— (i) condition in purchase or sale of goods or service; or (ii) price in purchase or sale (including predatory price) of goods or service. 51 (b) “predatory price” means the sale of goods or provision of services, at a. price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors. Section 8(2) reads as follows: “8(2) The Chairperson and every other Member shall be a person of ability, integrity and standing and who has special knowledge of, and 52 such professional experience of not less than fifteen years in, international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs or competition matters, including competition law and policy, which in the opinion of the Central Government, may be useful to the Commission.” Section 17 reads as follows: “17. Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, 53 protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India: Provided that the Commission may, for the purpose of discharging its duties or performing its functions under this Act, enter into any memorandum or arrangement with the prior approval of the Central Government, with any agency of any foreign country.” “19(4) The Commission shall, while inquiring whether an enterprise enjoys a dominant position or not under section 4, have due regard to all or any of the following factors, namely:— (a) market share of the enterprise; (b) size and resources of the enterprise; (c) size and importance of the competitors; 54 (d) economic power of the enterprise including commercial advantages over competitors; (e) vertical integration of the enterprises or sale or service network of such enterprises; (f) dependence of consumers on the enterprise; (g) monopoly or dominant position whether acquired as a result of any statute or by virtue of being a Government company or a public sector undertaking or otherwise; (h) entry barriers including barriers such as regulatory barriers, financial risk, high capital cost of entry, marketing entry barriers, technical entry barriers, economies of scale, high cost of substitutable goods or service for consumers; (i) countervailing buying power; (j) market structure and size of market; (k) social obligations and social costs; (l) relative advantage, by way of the contribution to the economic development, by the enterprise enjoying a dominant position having or likely to have an appreciable adverse effect on competition; (m)
Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the following orders, namely:— (a) direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be; (b) impose such penalty, as it may deem fit which shall be not more than ten percent of the average of the turnover for the last three preceding financial years, upon each of such 56 person or enterprises which are parties to such agreements or abuse: Provided that in case any agreement referred to in section 3 has been entered into by a cartel, the Commission may impose upon each producer, seller, distributor, trader or service provider included in that cartel, a penalty of up to three times of its profit for each year of the continuance of such agreement or ten percent. Provided that while passing orders under this section, if the Commission comes to a finding, that an enterprise in contravention to section 3 or section 4 of the Act is a member of a group as defined in clause (b) of the Explanation to section 5 of the Act, and other members of such a group are also responsible 57 for, or have contributed to, such a contravention, then it may pass orders, under this section, against such members of the group.” Section 28 provides for power to order division of enterprise enjoying dominant position. An appeal is provided to the Tribunal and Section 53T provides for an appeal to the Supreme Court against the order of the Tribunal.
The first appellant is a Government Company, which came into being, as contemplated under Section 5 of the Nationalisation Act. The argument of the appellants is partly based on the dictate of Article 31(B), which, together with the Ninth Schedule, the insertion in which Schedule, immunizes laws from being invalidated on the ground that they take away or abridge Fundamental Rights. The Preamble clearly indicates that the Law-Giver had in mind the goal in Article 39(b), viz., acquiring ownership over coal 61 mines so that coal mined from the mines could be so distributed so that common good was best subserved. Section 11 of the Nationalisation Act contemplates that the general superintendence, direction, control and management of the affairs and business of a coal mine, where the right of an owner, stood vested in the Central Government under Section 3, would stand vested in the Government Company specified in terms of the direction made by the Central Government under Section 5.
The first appellant is a Government Company, which was wholly owned by the Central Government and was the Company contemplated under Section 5 and, therefore, the general superintendence, direction, control and management of all the mines, ownership of which stood vested in the Central Government, vested with the first appellant. It may not be appropriate to describe the power, therefore, as fully akin to the powers that vests with the Election Commission of India under Article 324. When the National Act was made, central to the scheme of the Act, is the expression ‘enterprise’, as defined in Section 2(h) of the Act. The appellant is a Government Company within the meaning of Section 617 of the Companies Act, 1956. The only activity of the Government, which has been excluded from the scope of Section 2(h) and therefore, the definition of the word ‘enterprise’ is any activity relatable to the sovereign functions of the Government. In fact, what is excluded from the definition of the expression ‘enterprise’, is a Government Department carrying on Government functions. Dealing with abuse of dominant position being the theme of the lis, Section 4(1) declares that no enterprise or group shall abuse ‘its’ dominant position. Continuing with the definition of the words ‘dominant position’, it means a position of strength enjoyed by the enterprise in the relevant market which in turn involves adverting to the relevant geographic market or relevant product market or both as defined and it should enable the enterprise to enjoy the position of strength to operate independently of competitive forces prevailing in the relevant market. Closer home in the facts we find that Section 19(4)(g) declares that “monopoly” or “dominant position”, whether acquired as a result of the Statute or by virtue of being a Government Company or a Public Sector Undertaking or otherwise, is to be a relevant factor. Further that it is a government company within the meaning of Section 5 of the Nationalisation Act.
Therefore, being found in a dominant position under Section 19(4)(g) is only one of the factors. Section 26 contemplates that, in such conditions, if the CCI forms an opinion that a prima facie case exists, then, it should direct the Director General to cause an investigation into the matter. Under Section 26(2), the CCI may close the matter, if it finds that there exists no prima facie case. Section 27 speaks about the orders that may be passed in the case of anti-competitive agreements and abuse of dominant position. Section 36(2) confers powers vested in a civil Court in regard to certain matters on the CCI. We notice this for the reason that both the 76 composition of the CCI and it being enabled to call for inputs from experts would go a long way in assuring the Court that the decision-making process would be meticulous, fair and informed.
While on Section 4, we posed the question as to whether Section 4(2), which declares that there shall be an abuse of dominant position, if the facts attract Clauses (a) to (e), is a species of a genus, which genus is contained in Section 4(1). Dealing with what would indeed constitute abuse of dominant position as declared imperatively in Section 4(2), if we take Section 4(2)(a), it forbids imposing of unfair or discriminatory condition in purchase or sale of goods and services either directly or indirectly. This means that the Nationalisation Act contemplated coal to be a material resource and it was to be distributed so as to subserve common good. We agree further that the expression State for the purpose of Part IV of the Constitution is to be understood with reference to its meaning in Article 12 contained in Part III having regard to Article 36 of the Constitution. In fact, Shri Matrugupta Mishra, learned Counsel, would point out that it is his complaint that the appellant is not even following the Presidential Directives. A question may be raised if a bona fide decision is taken by the appellants that ‘slaughter mining’ which leaves little for the future must be avoided, would it fall foul of Section 4(2)(b) of the Act?
Public sector units became the arm for the State to realize its economic goal, which, at the earlier point of time, was to consist of building up the requisite infrastructure. The meaning of the words ‘common good’ may depend upon the times, the felt necessities, the direction that the Nation wishes to take in the future, the socio-economic condition of the different classes, the legal and Fundamental Rights and also the Directive Principles themselves. In the year 1991, the Nation was in a manner of speaking compelled to revisit its economic policy having regard to the precarious condition of its foreign exchange reserves. The novel idea, which permeates the Act, would stand frustrated, in fact, if State monopolies, Government Companies and Public Sector Units are left free to contravene the Act. The express reference in Section 19(4)(g) of the Act to monopolies created under Statutes as also Government Companies and Public Sector Units for determining existence of dominant position, undoubtedly, indicates the intention of Parliament to bring State Monopolies, Government Companies and Public Sector units within the purview of the Act. It would involve elevating the appellants to a status above that of a Government Department to approve of the argument that Article 39(b), would allow the appellants to resist action under the Act, when it does not allow the Government Department, under which, in fact, the appellants operate to do so. We may agree with the appellants that apart from providing protection to the laws, the Directive Principles would continue to govern ‘State’, which would include its instrumentalities, having regard to Article 12 read with Article 36.
In Employees Provident Fund Commissioner (supra), the question which arose was whether the priority given to the dues payable by an employer under the employees under Section 11A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 was subject to Section 529A of the Companies Act, 1956. Section 11(2) of the EPF Act declared that any amount due under the Act shall be the first charge in priority to all other debts including debts due to a Bank which was found to be falling under the category of a secured creditor. There is nothing in the language of Section 529-A which may give an indication that the legislature wanted to create first charge in respect of the workmen’s dues, as defined in Sections 529(3)( b ) and 529-A and debts due to the secured creditors. In the context of Section 28 of the Nationalisation Act read with the object of the Act and bearing in mind the scheme of the Act and the language employed as it is, we would think that the later enactment must prevail.
It may not be correct to say that any action which is not in consonance with the provisions of Part IV of the Constitution would be ultra vires but there cannot be any doubt whatsoever that the principles contained therein would form a relevant consideration for determining a question in regard to price fixation of an essential commodity. Such a level playing field can be achieved when there are a number of suppliers and when there are competitors in the market enabling the 93 consumer to exercise choices for the purpose of procurement of goods. We may notice here that the observations were made at the time when coal was an essential commodity. Coal ceased to be an essential commodity after the date of the Judgment in February, 2007. Bombay Housing Board [AIR 1954 SC 153 : 1954 SCR 572] SCR at p. State of Kerala [(1978) 2 SCC 1 : (1978) 2 SCR 537] SCR at p.
Any change in the policy decision for cogent and valid reasons is acceptable in law; but such a change must take place only when it is necessary, and upon undertaking of an exercise of separating the genuine consumers of coal from the rest.
There can be no quarrel with the proposition that the purpose of the Nationalisation Act was indeed to subserve the common good as held in Tara Prasad Singh and Others v. The purpose of the vesting under the Nationalisation Act was to distribute the resource to subserve the common good. Shri Ranganatha Reddy and Another that distribution is a word of wide meaning and it is covered by Article 39(b) of the Constitution. If Parliament has intended that State monopolies even if it be in the matter of (1981) 2 SCC 362 (1997) 8 SCC 191 98 distribution must come under the anvil of the new economic regime, it cannot be found flawed by the Court on the ground that subjecting the State monopoly would detract from the common good which the earlier Nationalisation Act when it was enacted, undoubtedly, succeeded in subserving.
Be it differential pricing or a decision to limit or restrict production, if it is part of national policy or based on Presidential Directives and the appellant raises such a contention after bonafide following the Directives or policy themselves, it may be a matter, which the CCI would have to consider in deciding whether there is abuse of dominant position. The appellants cannot resist the imposition of standards of fairness and the duty to avoid discriminatory practices when a specialized forum has been created by Parliament under the Act where also apart from the CCI being an expert body, it can seek and receive valuable inputs from experts and what is more, the matter is preceded by the report of Director General of Investigation. Section 28 of the Competition Act, 2002, reads as follows: 101 “28 (1) The Commission may, notwithstanding anything contained in any other law for the time being in force, by order in writing, direct division of an enterprise enjoying dominant position to ensure that such enterprise does not abuse its dominant position.
Still further, there has been a 102 vesting under Section 5 of the Nationalisation Act of the rights of the lessee in the first appellant. If Section 28 of the Act is evoked and a direction is given to order division, undoubtedly, it would be inconsistent with the provisions of the Nationalisation Act. Apart from the general non-obstante Clause contained in Section 60 of the Act, a noticeable feature about Section 28 of the Act is that it is made even more clear, apparently, by way of abundant caution in Section 28(1), that all that the CCI could order would be notwithstanding anything contained in any other law for the time being in force. What follows is, therefore, Parliament has intended, in order to ensure the proper implementation of the Act, confer power to order division of an enterprise enjoying dominant power.
The interlocutory applications seeking interim relief in the pending Appeal shall be 105 listed in the second week of July, 2023. NAGARATHNA ]
Case Title: COAL INDIA LTD Vs. COMPETITION COMMISSION OF INDIA (2023 INSC 580)
Case Number: C.A. No.-002845-002845 / 2017
