Decade-Old Complaint Without Direct Evidence: CCI Closes Coal Mine Auction Cartelisation Case Against Adani, Aditya Birla, Vedanta [Read Order]
CCI closes alleged coal mine auction cartelisation case against Adani, Aditya Birla, Vedanta and others citing lack of evidence and a decade-long delay in filing.
Competition - commission - India - Taxscan
Competition - commission - India - Taxscan
The Competition Commission of India (CCI) closed the case against several companies from Adani, Aditya Birla, Vedanta and other groups, on finding that there was no prima facie evidence of cartelisation or bid-rigging in coal mine auctions and that the complaint regarding the 2015 auctions was filed nearly ten years after the cause of action.
The Information in the present matter was filed by Ms. Deepika, a public-spirited individual, under Section 19(1)(a) of the Competition Act, 2002 against fifteen opposite parties, including entities from the RP-Sanjiv Goenka Group, Adani Group, Aditya Birla Group, Vedanta Group, Jindal Power Limited, Mandakini Exploration and Mining Limited, Cavill Mining Private Limited and Adicorp Enterprises Private Limited.
The Informant alleged contravention of Section 3(3) of the Act through cartelisation and bid-rigging in the 1st and 2nd tranche of coal mine auctions in 2015 and the 16th tranche in 2023.
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It was argued that in the 2015 Sarisatolli coal mine auction, certain group entities shared the same IP address while bidding, some submitted only one final price offer, and coal from the winning bidder was diverted to a plant linked to another group entity. It was also claimed that Adani Enterprises, despite being a financially strong bidder, refrained from submitting a final price offer, indicating bid-suppression.
The Informant relied on observations in the Comptroller and Auditor General (CAG) Report of 2016 and alleged similar patterns of reduced competition in other 2015 auctions. In the 2023 auctions, the Informant alleged that Adani subsidiaries and companies linked to Cavill Mining coordinated bids, supported by alleged financial transactions and personnel links, to prevent annulment of auctions due to insufficient bidders and secure coal blocks at low revenue share rates for the government.
The Ministry of Coal (MoC) explained that the auctions were conducted transparently through MSTC’s e-auction platform under the Coal Mines (Special Provisions) Act, 2015, with safeguards in the Standard Tender Document to prevent collusion. It stated that at least three independent bidders participated in every auction, no procedural lapses occurred, and no complaints or evidence of cartelisation were received for the tranches in question.
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The Commission observed that for the 2023 auctions, the only material before it was circumstantial evidence of financial links between certain parties, with independent bidders also participating in the process.
For the 2015 auctions, the Commission observed that the information was filed almost ten years after the cause of action and the reason cited non-disclosure of bidder names until 2023 did not constitute sufficient cause for condoning the delay under Section 19(1) of the Act.
It also observed that beyond the Sarisatolli mine, no specific details were provided for other coal blocks, and in the case of Sarisatolli, there was no evidence linking Adani Enterprises to any collusive arrangement.
In light of the absence of direct evidence, the presence of independent bidders, the delay in filing, and the lack of concerns from the procurer, the Commission held that no prima facie case of contravention of Section 3 of the Act was made out. The matter was closed under Section 26(2) of the Act, and the application for condonation of delay was also disposed of.
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