CCI Can Scrutinise PSUs: A Stepping Stone Towards Competitive Neutrality

Recent decision in the case Coal India Limited v. Competition Commission of India by the Supreme Court of India has revived the discussion around the principle of Competitive Neutrality in the Indian market. In an appeal filed by the Railways before the Delhi High Court, assailing the order passed by CCI, Delhi High Court upheld that the Competition Act states that only primary, inalienable, and non-delegable functions of a constitutional government qualify for exemption as ‘sovereign functions’ as envisaged under section 2 of the Competition Act. It is noteworthy that in MaaMetakani Rice Industries v. Odisha State Civil SuppliesCorporation Ltd., the CCI concluded that a desist order under section 27 of the Competition Act would serve justice. CCI has time and again followed the dictum laid down by section 2 of the Competition Act and the verdict of Delhi High Court in Union of India v. Competition Commission of India that Competition Act exempts only core, essential, and non-delegable functions of a constitutional government as ‘sovereign functions’. Also, In Re: Beach Mineral Producers Association and IREL Ltd., CCI relying upon Kalpit Sultania, again ordered an investigation by the DG under section 26 of the Competition Act, taking a prima facie view that IREL has abused its dominant position in mining and supply of beach sand ilmenite by apparently forcing local consumers to accept the extraneous conditions mentioned in the Standard Quantity Sales Contract.