Maharashtra State Power Generation Co has filed before the Competition Commission of India claiming that subsidiaries of state run Coal India is abusing its dominant position by supplying it with low grade coal at inflated prices.

Mahagenco asked the CCI that Mahanidhi Coalfields Limited a subsidiary of CIL to start proceedings against CIL and MCL, to allow for the joint sampling of the coal and to impose a fine for the abuse by MCL of its allegedly dominant position.

Mahagenco claimed in its complaint, a draft of which Legally India has seen that between 4 January and 31 December 2011 it received extremely poor quality coal which was also “lumpy (of very large size)” and “sticky and wet” because CIL did not follow international practices of washing coal before supplying it to its customers.

Mahagenco in its CCI complaint stated that “The coal companies have not made any investment in washeries, as a result power utilities and other beneficiaries are compelled to get some of their supplies washed through private supplier, which has led to serious pilferage.”

Mahagenco and MCL signed a memorandum of understanding on September 30th 2010, according to the complaint, under which MCL would provide grade-F coal to Mahagenco.

Under the MoU, MCL was under no obligation to process the coal in washeries but Mahagenco alleged that MCL intentionally did not enter into a clearer contract about the coal, its quality and other parameters because it was a dominant player in the market.
Mahagenco stated in its complaint that the MoU violated the government policy, the constitutional rights of Mahagenco and offended the constitutional scheme under which coal was nationalized.

(Sourced from www.legallyindia.com)