REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2845 of 2017

COAL INDIA LIMITED AND ANR. ...APPELLANT(S)

VERSUS

COMPETITION COMMISSION OF INDIA AND ANR...RESPONDENT(S)

WITH
CONTEMPT PETITION (C) No.896/2018 in C.A. No.2845/2017
T.C.(C) No.19/2023
T.C.(C) No.20/2023
T.C.(C) Nos.16-18/2023
T.C.(C) No.21/2023
JUDGMENT

K.M. JOSEPH, J.

1. The Civil Appeal is directed against the Order

passed by the Competition Appellate Tribunal, New Delhi

(hereinafter referred to as ‘Tribunal’), by which

Order, the Tribunal affirmed the findings and

conclusion recorded by the Competition Commission of

India (hereinafter referred to as ‘CCI’) on various

facets of abuse of dominant position.

Signature Not Verified The abuse of
Digitally signed by
Nidhi Ahuja
Date: 2023.06.15

dominant position was ascribed to the appellants.

16:01:40 IST
Reason: The

appeal was dismissed.

1
2. 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.

3. The appellants have filed Interlocutory

Application, viz., I.A. No. 66587 of 2017 being an

application seeking permission to take additional

grounds. Parties exchanged pleadings in the

interlocutory application. We have allowed the

application seeking permission to urge the new grounds.

4. When the matter came up on 16.09.2022 before a

Bench of two learned Judges, the Court felt that since

modification of order dated 03.08.2017 was sought, it

would be appropriate that these matters are heard by a

Bench of three learned Judges. It is, accordingly,

that the matter stood posted before a Bench of three

learned Judges.

5. The principal bone of contention of the appellants

in the I.A. 66587 of 2017 appears to be that Coal India

Limited, the first appellant (hereinafter referred to

as ‘CIL’) being a monopoly created by a statute and

what is more important, geared and duty bound to achieve

the objects declared in Article 39(b) of the

2
Constitution of India and the second appellant, Western

Coalfields Limited, a subsidiary company of the first

appellant cannot be bound by the Competition Act, 2002

(hereinafter referred to as the ‘Act’). 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. Since it was found that there

were proceedings pending before the Commission/Tribunal

wherein a similar question would directly arise,

transfer petitions were filed to call for such

proceedings to this Court. It is hence, that the

Transfer petitions which we are dealing with came to be

allowed. This is however, on the understanding that

the Court would not go into the merits of the individual

cases but would confine itself to ruling on the question

of law raised by the appellants, viz., the

applicability of the Act to them.

6. We have heard Shri K.K. Venugopal, learned Senior

Counsel, ably assisted by Shri Yaman Verma, learned

3
Counsel. Shri Maninder Singh, learned Senior Counsel,

also appears on behalf of the appellant. Also, we have

heard Shri N. Venkataraman, learned Additional

Solicitor General, on behalf of CCI and Shri Ranjit

Kumar, learned Senior Counsel, appearing on behalf of

the second respondent in the Appeal/Application. We

have further heard learned Counsel appearing in the

transferred cases.

SUBMISSIONS OF THE APPELLANTS/APPLICANTS

7. Shri K. K. 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. This is for the reason that the

very purpose and policy underlying the Nationalization

Act, was to monopolise the operation of the coal mines

and coal mining in the hands of the Central Government

and its agencies such as the appellants. It is not an

ordinary monopoly. It is a monopoly created by the

Nationalization Act; it is, having regard to the need

4
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. It is pointed

out, with reference to the Nationalisation Act, that

the superintendence of the mines vests with the Central

Government or with a corporate body or the company,

which it may create. The first appellant is the holding

company and there are subsidiary companies under it.

5
This is contemplated under the Nationalisation Act.

The mantle of operating the monopoly therefore, fell on

the appellants. The appellants are State within the

meaning of Article 12 of the Constitution. They

continue to be charged with the duty to be guided by

the Directive Principles contained in Article 39(b).

Learned Senior Counsel would point out that the Act

does not deal with a company like the appellant. In

other words, while there may be indication in Section

19(4)(g) of the Act that the fact that a body is a

monopoly under the statute may indicate the presence of

dominant position, there is a subtle distinction.

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. Such a monopoly is outside the purview of the

Act. 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.

and Others v. Union of India and Others1 following

1
(2007) 2 SCC 640
6
Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd. and

Another2).

8. Learned Senior Counsel drew our attention to

Sections 3 and 11 of the Nationalisation Act to contend

that general superintendence, direction, control and

management of the affairs and business of a coal mine,

inter alia, as contained in Nationalisation Act, must

be given the widest interpretation. In this regard,

reliance is placed by appellants on Judgments

interpreting similar words in Article 324 of the

Constitution (See In Re Gujarat Assembly Election

matter3 and Election Commission of India v. Ashok Kumar

and Others4). Our attention is drawn also to Article

31C of the Constitution for the proposition that a law

which gives effect to Article 39(b) or 39(c) cannot be

impugned on the ground that it is inconsistent with

Articles 14 and 19 of the Constitution. Such a law is

to be treated as reasonable. On the other hand, if an

action is inconsistent or runs counter to the Directive

2
(1983) 1 SCC 147
3
(2002) 8 SCC 237
4
(2000) 8 SCC 216
7
Principles, it may, prima facie, be brushed with the

tarnish of it being unreasonable. (See Kasturi Lal

Lakshmi Reddy and Others v. State of Jammu and Kashmir

and Another5). It is further pointed out by the

appellants that on a conspectus of the Nationalisation

Act and on placing it side-by-side with the provisions

of the Act, the divergence and the consequent anomalous

results of bringing the appellant under the Act, would

clearly emerge. Our attention is drawn to the long title

of the Act. It is pointed out that the object of the

Act is to ensure freedom of trade. 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. It is contended that CIL does not operate

in the commercial sphere. Great emphasis is laid on the

fact that out of 462 mines operated by CIL, 345 have

suffered losses amounting to Rs.9,878 Crores in the

year 2012-2013. As part of its constitutional

responsibility, it engages 51 per cent of its manpower

5
(1980) 4 SCC 1
8
which is about 1,80,726 persons in such mines. 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.

9. Section 4(2)(a) of the Act prohibits unfair and

discriminatory price fixation or conditions for the

sale or purchase of goods or services. It is submitted

that the Court may bear in mind that price fixation of

coal, as far as the appellants and the coal companies

under it is concerned, it is based on the Constitutional

mandate under Article 39(b) which may be inconsistent

with market principles.

10. 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. Applying the Act would adversely

affect pursing such a differential pricing mechanism.

This again would defeat the object underlying the

Nationalization Act.

11. Next, the point of contrast consists of Section

4(2)(b) declaring it to be an abuse of the dominant

9
position where an enterprise limits or restricts

production of goods, provision of services or market.

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. As an illustration, it is

pointed out that the Ministry of Coal takes action to

encourage growth in backward areas by allocating more

coal supply. If such policy or actions thereunder are

to be tested on the anvil of Section 4(2)(b) of the

Act, it may not pass muster. This again would undermine

the object of the Nationalisation Act and what is more,

the wholesome principle enshrined in Article 39(b).

Section 3 of the Nationalisation Act, it is next pointed

out, vests the ownership of the coal mines in the

Central Government. However, under Section 19 the CCI

is obliged to take into consideration the monopoly

position whether controlled by the Government or not,

as a factor to determine the dominant position.

12. Next, it is contended that Section 27(a) of the

Act, clothes the CCI with the power to order the

cessation of abuse. This would be inconsistent with the

10
appellants pursuing welfare policy in relation to

pricing and distribution of coal. Under Section 32 of

the Nationalisation Act, the mining companies cannot be

wound up. This stands in contrast to Section 28 of the

Act which empowers the CCI to divide enterprises

abusing dominant position including adjustment of

contracts, formation of winding up of enterprises among

other things.

13. Next, it is pointed out that Section 28 of the

Nationalisation Act declares that the provisions of the

said Act would prevail notwithstanding anything

inconsistent therewith contained in any other law in

force, inter alia. (Reliance is placed on the Judgments

of this Court in Employees Provident Fund Commissioner

v. Official Liquidator of Esskay Pharmaceuticals

Limited6 as also Sanwarmal Kejriwal v. Vishwa Coop.

Housing Society Ltd. and Others7). 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

6
(2011) 10 SCC 727
7
(1990) 2 SCC 288
11
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. It

is contended that the appellants even if they

constituted a monopoly, they cannot act independently

of Presidential Directives, which are binding on them.

The policy framed by the Central Government must be

mandatorily followed. This brings about an inevitable

clash between the actions of the appellant with the

requirements which are stipulated in the Act. The

appellants are not to be driven by a profit motive. The

appellants are the extended arms of the welfare State.

The activities of the appellants are not any ordinary

commercial activities. 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. They

may lose their viability if they are operated at

notified prices.

14. Shri K. K. Venugopal, learned Senior Counsel, would

submit that the actions of the appellants are

12
susceptible to judicial review in proceedings under

Article 226 or even Article 32. It is, in fact, pointed

out there are other forums such as the Coal Controller

wherein complaints of the nature, viz., quality of coal

as for illustration could be ventilated. Subjecting the

appellants to the provisions of the Act is wholly

unjustified.

SUBMISSIONS OF THE RESPONDENTS

15. Per contra, the learned Additional Solicitor

General on behalf of the CCI, stoutly contended that

the Act, indeed, applies in spite of the non-obstante

clause contained in Section 28 of the Nationalisation

Act. He would point out that the object of the Act is

to bring out a paradigm shift in the economic policy of

the nation. 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. The Act was born

after great deal of contemplation. A Committee known

as the Raghavan Committee, a high-level Committee, went

into the issue relating to State monopoly as well. A

13
perusal of the said Report would indicate that it was

realized that the operation of the State monopolies did

not conduce to secure the best interest of the Nation.

The State monopoly could not be allowed to operate in

a state of inefficiency. It had to set its house in

order and pull up its socks. It was specifically

contemplated that such State monopolies must fall in

line and operate in the midst of forces of competition.

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.

He poses the question as to whether the appellants could

justify the supply of substandard goods and justify it

on the high pedestal of a Constitutional goal being

imperiled if the same is questioned under the Act.

16. He would point out that there is no challenge

mounted to the vires of the Act. There is no scope for

reading down the law in the absence of the challenge.

14
He also relied upon the Judgment of this Court in the

New Delhi Municipal Council v. State of Punjab & others8

to contend that when the instrumentality of the State

proceeds to enter the commercial field and is carrying

on a business activity, it cannot claim immunity from

the laws of the land. Though the said case was delivered

in the context of Article 286, he would submit that the

principle is apposite.

17. It is submitted that the Act provides for a

detailed procedure where information is received or it

acts suo motu. Invariably, it calls for a report by the

investigation wing. The Constitution of the CCI is

sufficient safeguard as it is composed of people who

are experts in various branches of knowledge.

Complaints such as abuse of dominant position are gone

into at great length, full opportunity is given to the

persons concerned to place their objections. It is

only when a clear case of abuse of dominant position,

inter alia, is found established, that the CCI acts.

He would contend that the appellant is a government

8
(1997) 7 SCC 339
15
company within the meaning of Section 617 of the

erstwhile Companies Act. He would point out that it is

not the law that such an entity can claim that its acts

are placed beyond the pale of scrutiny by reason of the

fact that the law under which they operate has been

placed in the Ninth Schedule. He would point out that

there are three filters provided in the Act insofar as

information relating to abuse of dominant position is

concerned. In the first place, an entity must answer

the description of an enterprise as contained in

Section 2(h) of the Act. Once the said hurdle is

crossed, the CCI must ascertain whether the enterprise

occupies a dominant position. This is a matter which

is covered in Section 19(4) of the Act. There are

several factors which are indicated. The rear is

brought up by the residuary clause, viz., Section

19(4)(m) which provides for any other factor which the

Commission may consider relevant for the enquiry. This

is the second filter. In other words, it is not the

abuse by any entity but it must be abuse by an

enterprise. Next, the enterprise must enjoy a dominant

position. As to what is a dominant position, has been

16
detailed in the second explanation to Section 4(2) of

the Act. 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). It is after the second filter is passed,

that CCI must pass on to actually find whether there is

abuse of its dominant position. Section 4(2) appears

to provide for what shall be abuse of dominant position.

This being the scheme of the Act, he contends that there

may be no merit in the attempt of the appellants to

extricate themselves from a well thought out law

provided by the same Law-Giver.

18. He would point out that initially coal was an

essential commodity under the Essential Commodities

Act, 1955. When this Court delivered the Judgment

relied upon by the appellants as well, viz., Ashoka

Smokeless Coal India (P) Ltd. and Others v. Union of

17
India and Others9, coal was an essential commodity. The

Court proceeded on the said basis as well. However, in

February, 2007, coal ceased to be an essential

commodity. Next, it is pointed out that the

Nationalisation Act itself, which is projected as the

sheet anchor of the appellants entire case was itself

taken out from the Ninth Schedule in the year 2017.

The Nationalisation Act itself stands repealed.

Therefore, he would point out that the Court is being

invited to pronounce on the basis of the ‘hallowed’

position that the Nationalisation Act occupied, which

itself is no longer the case. (We must notice here

that even in his opening submissions Shri K. K.

Venugopal, learned Senior Counsel, pointed out these

developments. However, it is his contention that the

contracts with which this Court is concerned all arose

during the period of time when the Nationalisation Act

continued to grace the Ninth Schedule.)

19. Shri N. Venkataraman would point out again that the

Court may not lose sight of the fact that while the

9
(2007) 2 SCC 640
18
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. The balance of the

shareholding is in private hands. Reliance is placed

on the Judgment of this Court in Waman Rao and Others

v. Union of India and Others10. Considerable support

is sought to be drawn from the I.R Coelho (dead) by LRs

v. State of T.N.11 for the proposition that the

immunity, laws enjoyed on their insertion in the Ninth

Schedule and the laws, which may be placed in the Ninth

Schedule, stands considerably diluted. It is pointed

out further with reference to Judgment in Khoday

Distilleries Ltd. v. State of Karnataka & others12

(paragraph-25) that Fundamental Rights are not absolute

and they are ‘qualified Fundamental Rights’. Placing

reliance on the Judgment in Parag Ice & Oil Mills &

another v. Union of India13, it is pointed out that

unlike the law which may be protected under Article

10
(1981) 2 SCC 362
11
(2007) 2 SCC 1
12
(1995) 1 SCC 574
13
(1978) 3 SCC 459
19
31C, an order passed under the law may not be entitled

to the same immunity. He would caution the Court

against adjudicating matters which may at best arise in

the abstract. Questions must be answered when they

arise on facts.

20. He would contend that the Court may place an

interpretation as would advance the object of the law,

which in this case, is to bring about a transformation

in the economy for the greater good of the common man

(See in this regard Ajaib Singh v. Sirhind Coop.

Marketing-cum-Processing Service Society Ltd. and

another14).

21. 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. 80 per

cent of the coal is supplied by CIL to power companies.

Second respondent is a power company. The second

respondent it is pointed out in fact supplies power

14
(1999) 6 SCC 82
20
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. The continual supply

of coal and prompt performance of the contracts and the

reasonableness of the rates and quality of coal, in

other words, according to the second respondent, are

related to the very common good, which is emphasized by

the appellants. He would further point out that the

Nationalisation Act was an expropriatory legislation.

22. 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. In the said Act, Section 3 clearly declared that,

unless it was otherwise notified, the MRTP Act would

not apply to Government Agencies, as indicated therein.

There is no such provision in the Act. He drew our

attention to Section 21A of the MRTP Act. Drawing

inspiration from the preamble to the Act, he emphasizes

that the center stage of attention in the Act is

occupied by the consumer. Common good in other words,

21
must be associated with the good of the consumer. He

drew our attention to Section 54 of the Act which

provides for power to exempt. He pointed out two

notifications granting exemptions which were in favour

of rural regional banks. 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. As long as there is no exemption, the Act applies

to the appellants. He would further contest the case

of the appellants that the appellants were running at

a loss as a result of a number of mines running at a

loss. He would purport to provide figures to

demonstrate that the appellants have been making huge

sums by way of profits and what is more, making it over

to the Government of India by way of dividend. This is

besides highlighting the dilution of the shareholding

of the Government of India. He would point out that

there can be no claim by the appellants that it is

carrying on of any sovereign functions. In this regard,

he drew our attention to the following decisions.

Bangalore Water Supply & Sewerage Board v. A. Rajappa15

15
(1978) 2 SCC 213
22
(See paragraphs-163 and 168), N. Nagendra Rao & Co. v.

State of A.P.16 (See paragraphs-9, 13, 19 and 25),

Chairman, Railway Board and others v. Chandrima Das

(Mrs.) and others17 (See paragraphs-38, 41 and 42) and

Agricultural Produce Market Committee v. Ashok Harikuni

and another18 (See paragraphs-21 and 32).

23. Shri M. Mishra, learned Counsel appearing on behalf

of one of the parties in the Transferred Cases would

support the respondents in the Appeal. He would point

out that in fact, he appears for the Maharashtra Power

Generation company. He would submit that the Court may

bear in mind that it is not as if the complaint against

the appellants is being voiced only by private players

like the second respondent in the Appeal. The acts and

omissions of the appellants is being objected to even

by public sector units such as his client. He would

point out that under the Electricity Act, 2003, the

price of power is regulated by the Commission under the

said Act. The return on investment is highly regulated.

16
(1994)6 SCC 205
17
(2000) 2 SCC 465
18
(2000) 8 SCC 61
23
Coal constitutes 60-70 per cent of the costs. The price

of coal has a bearing on both the Consumer Price Index

as also the Wholesale Price Index. He would submit

that the report of the Director General under the Act

brings out the facts. 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

drew our attention to the Judgment of this Court in

Hasan Murtza v. State of Haryana19 and also Employees

Provident Fund Commissioner v. Official Liquidator20.

Similar contention in support of the CCI and the second

respondent has been voiced by the other respondents in

the Transferred Cases.

24. In response to the submissions, Shri K.K Venugopal

would point out that it is not the case of the

appellants that the appellant is immune from all laws.

He would further point out that the deletion of the

Nationalisation Act from the Ninth Schedule may not

affect his contentions as the contracts in question

19
(2002) 3 SCC 1
20
(2011) 10 SCC 727
24
relate to the period when the Nationalisation Act was

very much in the 9th Schedule. He would submit that as

held in Ashoka Smokeless Coal India (P) Ltd. and Others

v. Union of India and Others21, it is not as if the

actions of the appellants are immune from judicial

review under Article 14. He would reiterate that an

affected party could seek redress in other forums. 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 9th

Schedule at the relevant point of time. The words in

Article 39(b) “so distributed” is a continuing command

to the State even after the Nationalisation Act was

passed. This is by way of countering the argument that

with the Nationalisation Act all was done and it was a

one-time affair. 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

21
(2007) 2 SCC 640
25
resource of the country, which must be distributed to

achieve common good. He reiterates his contention in

this regard. He drew our attention to the distinction

between an ordinary monopoly and a State Monopoly,

which is covered by Article 39(b). They are not birds

of the same feather, it is pointed out. In fact, Shri

Yaman Verma, learned Counsel ably supplemented by

pointing to the constraints under which the appellants

are bound to operate. He points out to the new coal

policy and the Presidential Directives. He would then

point out that even if the Act were found to be

applicable, the Court may clarify that the appellants

could claim justification of their actions by relying

on criteria, which they are bound to follow. We must,

here at this juncture, record that when we queried Shri

K. K. Venugopal, learned Senior Counsel, as to whether

he was claiming that the appellants were carrying on

activities, which can be described as sovereign

functions, the answer was clear and forthright, namely,

that he was not having such a case.

26
25. When the aspect about the Presidential Directives

and the policy of the Government was pointed out to the

learned Additional Solicitor General, N. Venkataraman,

he would ask the question as to what is it that prevents

such a contention being raised is not pointed out. The

case must be decided on the basis of the actual

contentions raised and the relevant facts. He would

exhort the Court that bearing in mind the paramount

need to allow the Act to succeed in its operation, the

Court may not allow the appellants to wriggle out of

the well thought out provisions of the Act which law

will subserve the highest public interest. 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.

ANALYSIS

26. As we have noticed the question, we are called upon

to decide is whether the Act applies to the appellants

or not. It is necessary that we tread carefully so

27
that we skirt an incursion into the merits, which can

be undertaken only when the Appeal is heard on merits.

27. Before we pass on to the Act, it may be necessary

to look at the law, which it repealed. The MRTP Act

was enacted in the year 1969. It was intended to deal

with monopolistic and restrictive trade practices as

the very long title suggests. It held sway till the

Act repealed it in the year 2002. However, the Act

itself was actually brought into force in the year 2009.

What is relevant is to notice some of the provisions of

the MRTP Act.

28. Section 2(d) of the Act, as substituted by Act 30

of 1982, provided for definition of the words ‘dominant

undertaking’. The definition itself appears to be

fairly convoluted. The word ‘goods’ was, indeed,

defined as goods as defined in the Sale of Goods Act,

1930, and pertinently, it included products mined in

India, inter alia. The MRTP Act went on to deal with

concepts like associated persons, interconnected

undertakings and finally, the word ‘undertaking’. Sans

the three explanations, the word ‘undertaking’ was

contained in Section 2(v) and it read:

28
“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.
Explanation I.—In this clause,—
(a) “article” includes a new
article and “service” includes a new service;
(b) “unit” or “division”, in relation to an
undertaking includes,—
(i) a plant or factory established for the
production, storage, supply, distribution,
acquisition or control of any article or goods;
(ii) any branch or office established for the
provision of any service.
Explanation II.—For the purpose of this clause,
a body corporate, which is, or has been,
engaged only in the business of acquiring,
holding, underwriting or dealing with shares,
debentures or other securities of any other
body corporate shall be deemed to be an
undertaking.
Explanation III.—For the removal of doubts, it
is hereby declared that an investment company
shall be deemed, for the purposes of this Act,
to be an undertaking;”

29
 The MRTP Act also provided for definition of the

words, monopolistic trade practice as also, restrictive

trade practices.

29. Section 3 of the MRTP Act, read as follows:

“3. 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.

30
 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.”

30. 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. It also did not apply to any

undertaking, the management of which was taken over by

any person or body of persons in pursuance of any

authorization made by the Central Government under any

law enforced for the time being in force [Clause (e)].

Conspicuous by its absence, is any such provision in

the Act.

31. The Colliery Control Order came to be passed in the

year 1945 under the Rules. It is the said Order, which

came to be continued under the Essential Commodities

Act. The Coal Controller controlled the quality and

quantity as noticed in Ashoka Smokeless Coal India (P)

31
Ltd. and Others22. Considering its vital importance, it

became the only mineral which was nationalized in terms

of the Coking Coal Mines Nationalization Act, 1972 and

the Coal Mines Nationalisation Act 1973. The Colliery

Control Order 1945 was repealed and replaced by the

Colliery Collar Control Order 2000 w.e.f. 01.01.2000.

32. 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.”

33. Section 3(1) of the Nationalisation Act reads as

follows:

“3. Acquisition of rights of owners in respect

of coal mines.—(1) On the appointed day, the
right, title and interest of the owners in

22
Ashoka Smokeless Coal India (P) Ltd. and Others v.
Union of India and Others (2007) 2 SCC 640
32
 relation to the coal mines specified in the
Schedule shall stand transferred to, and shall
vest absolutely in, the Central Government free
from all incumbrances.”

34. It came to be amended by the Coal Mines

(Nationalisation) Amendment Act, 67 of 1976. There was

subsequent amendment, viz., Act 47 of 1993 dated

09.06.2003. After the amendment, Section 3(3) reads:

“3(3) 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

33
 (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 granted in favour of any person other than
the Government, company or corporation,
referred to in clause (a):

Provided that the Government, company or

corporation to whom a lease for winning or
mining coal has been granted may grant a sub-
lease to any person in any area on such terms
and conditions as may be specified in the
instrument granting the sub-lease, if the
Government, company or corporation is
satisfied that—

(i) the reserves of coal in the area are in

isolated small pockets or are not sufficient
for scientific and economical development in a
co-ordinated and integrated manner, and

(ii) the coal produced by the sub-lessee will

not be required to be transported by rail.”

35. Under Section 4, the Central Government was to

become the lessee of the State Government when vesting

took place under Section 3. Section 5 read as follows:

“5. Power of Central Government to direct

vesting of rights in a Government company.—

34
(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.

(2) Where the right, title and interest of an

owner in relation to a coal mine vest in a
Government company under sub-section (1), the
Government company shall, on and from the date
of such vesting, be deemed to have become the
lessee in relation to such coal mine as if a
mining lease in relation to the coal mine had
been granted to the Government company and the
period of such lease shall be the entire period
for which such lease could have been granted
under the Mineral Concession Rules; and all the
rights and liabilities of the Central
Government in relation to such coal mine shall,
on and from the date of such vesting, be deemed
to have become the rights and liabilities,
respectively, of the Government company.

(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.”

35
36. Section 11 is significant for the purpose of the

case. It read:

“11. 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.
(2) The Central Government may appoint an
individual or a Government company as the
Custodian of a coal mine in relation to which
no direction has been made by it under sub-
section (1) of section 5.”

37. Suffice it for the purpose of this case that we

notice next Section 28:

“28. Effect of this Act on other laws.- The

provisions of this Act shall have effect
notwithstanding anything inconsistent
therewith contained in any other law for the
time being in force or in any instrument having

36
 effect by virtue of any law other than this
Act, or in any decree or order of any court,
tribunal or other authority.”

38. Finally, we notice Section 32. It read as follows:

“32. 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.”

39. The Nationalisation Act came to be inserted in the

Ninth Schedule to the Constitution. It remained in the

Ninth Schedule till it is removed therefrom in the year

2017.

40. Article 31B of the Constitution of India reads as

under:

“31B. 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

37
 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.”

41. Article 31C of the Constitution of India reads:

“31C. 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.”

42. 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.

43. A high-level Committee known as Raghavan Committee

delved into the issues. It is, inter alia, stated in

38
the Report as follows: “the object of competition

policy is to promote efficiency and maximize welfare.

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. and Mark A. Dutz,
1996). The objective of competition policy is
to promote efficiency and maximize welfare.
In this context the appropriate definition of
welfare is the sum of consumers' surplus and
producers' surplus and also includes any taxes
collected by the Government.1[1] It is well
known that in the presence of competition,
welfare maximization is synonymous with
allocative efficiency. Taxes are generally
welfare-reducing.”

44. After referring to the reforms initiated in 1991

and dealing with public sector, it is stated as follows:

“2.6.4 Public sector

In 1991, Government abolished the monopoly of

the public sector industries except those where
security and strategic concerns still
39
 dominated. These include arms and ammunition
and allied defence equipment, atomic energy and
nuclear minerals and railway transport. Major
industries including iron and steel, heavy
electrical equipment, aircraft, air transport,
shipbuilding, telecommunication equipment and
electric power are now open for private sector
investments. A large number of loss-making
public enterprises were referred to the Board
for Industrial and Financial Reconstruction
(BIFR). Essentially two different types of
reforms were envisaged: greater autonomy for
public sector enterprises and greater private
sector ownership.”

45. 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.
From the point of view of economic efficiency
and competition policy, it is important that
the public sector does not enjoy monopoly power
and is subject to market disciplines through
competition. Most of the sectors where the
public sector operates have in recent years
been opened up to entry by private sector
firms. However, as we have noted earlier, the
public sector is given preferential treatment
in Government procurement. We are of the view
that the public sector should be exposed to
competition and not given any preferential
treatment.”

46. State Monopolies Policy is seen dealt with under

paragraphs-3.4.5 and 3.4.6. They read as follows:

40
“3.4.5 State Monopolies Policy State
monopolies are not only a reality but are
regarded by many countries as inevitable
instruments of public growth and public
interest. While ideology may have played some
role in spurring the growth of State
monopolies, much of this increase can be
attributed to the pragmatic response to the
prevailing milieu, which is frequently an
outcome of the historical past in different
countries. 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.
Nonetheless, there is also a recognition,
consequent on the adverse financial results and
the resultant pumping of budgetary oxygen from
the Government treasury to those enterprises,
that there is not only scope for their
reformation but also for structural and
operational improvements. This recognition has
led to the trend towards privatising some of
them. This is also a part of the general
process of liberalisation and deregulation.
Privatisation involves not only divestiture
and sale of Government assets but also a
gradual decline in the interventionist role
played by them.

3.4.6 State monopolies may lead to certain

harmful effects, anti-thetical to the scheme
of a modern Competition Policy. They are :

A. The dominant power enjoyed by State

monopolies may be abused because of Government
patronage and support.

B. Because of the said patronage, State

monopolies may adopt policies which tantamount
to restrictive trade practices. For example,
preference to public sector units in tenders

41
 and bids, insistence on using public sector
services for reimbursement from Government
(travelling allowance for Government
officials).

C. State monopolies suffer from the schemes of

administered prices, contrary to the spirit of
Competition Policy.”

47. In paragraph-3.4.7, it is, inter alia, 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. Thereafter,

it is stated:

“3.4.7 It is well accepted that competition is

a key to improving the performance of State
monopolies and public enterprises. The oft-
noted inefficiency of Government enterprises
stems from their isolation from effective
competition (Aharoni, Yair, 1986). In the
interest of the consumers, State monopolies and
public enterprises need to be competitive in
the production and service delivery. While
Government should reserve the right to grant
statutory monopoly status to select public
enterprises in the broad national interest, it
is desirable for the Government to always keep
in mind that de-regulation of statutory
monopolies and privatisation are likely to
engender competition that would be healthy for
the market and consumers.”

48. In the summary contained in paragraph-3.5.2, we

only notice the following:

42
 “3.5.2 Summary
xxx xxx xxx

6. Government should divest its shares and

assets in State monopolies and public
enterprises and privatise them in all sectors
other than those subserving defence and
security needs and sovereign functions. All
State monopolies and public enterprises will
be under the surveillance of Competition Policy
to prevent monopolistic, restrictive and
unfair trade practices on their part.”

49. 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.

In a number of countries, Government
enterprises are excluded from the purview of
the Competition Law. With the exception of
Government entities engaged in sovereign
functions, there is no valid justification for
such exclusion and all other Government
enterprises should be within the ambit of the
law.
4.2.4 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)

43
50. In paragraph-4.4.7, we notice the following:

“4.4.7. Before assessing whether an

undertaking is dominant, it is important, as
in the case of horizontal agreement, to
determine what the relevant market is. There
are two dimensions to this – the product market
and the geographical market. On the demand
side, the relevant product market includes all
such substitutes that the consumer would switch
to, if the price of the product relevant to
the investigation were to increase. From the
supply side, this would include all producers
who could, with their existing facilities,
switch to the production of such substitute
goods. The geographical boundaries of the
relevant market can be similarly defined.
Geographic dimension involves identification
of the geographical area within which
competition takes place. Relevant geographic
markets could be local, national,
international or occasionally even global,
depending upon the facts in each case. Some
factors relevant to geographic dimension are
consumption and shipment patterns,
transportation costs, perishability and
existence of barriers to the shipment of
products between adjoining geographic areas.
For example, in view of the high transportation
costs in cement, the relevant geographical
market may be the region close to the
manufacturing facility.”

51. In the summary, we may notice paragraph-4.8.8, it

is stated as follows:

“4.8.8. Summary

44
1. The State Monopolies, Government
procurement and foreign companies should be
subject to the Competition Law. The Law should
cover all consumers who purchase goods or
services, regardless of the purpose for which
the purchase is made.

2. Bodies administering the various

professions should use their autonomy and
privileges for regulating the standard and
quality of the profession and not to limit
competition.

3. If quality and safety standards for goods

and services are designed to prevent market
access, such practices will constitute abuse
of dominance/exclusionary practices.

4. Certain anti-competitive practices should

be presumed to be illegal. Blatant price,
quantity, bid and territory sharing agreements
and cartels should be presumed to be illegal.

5. Abuse of dominance rather than dominance

needs to be frowned upon for which relevant
market will be an important factor.

6. Predatory pricing will be treated as an

abuse, only if it is indulged in by a dominant
undertaking.

7. Exclusionary practices which create a

barrier to new entrants or force existing
competitors out of the market will attract the
Competition Law.

8. Mergers beyond a threshold limit in terms

of assets will require pre-notification. If no
reasoned order, prohibiting the merger is
received within 90 days it should be deemed to

45
 have been approved. In adjudicating a merger,
potential efficiency losses from the merger
should be weighed against potential gains.”

52. It is following the said Report, that in the year

2002, the Act came to be enacted. The Preamble to the

Act reads:

“An Act to provide, keeping in view of the

economic development of the country, for the
establishment of a Commission to prevent
practices having adverse effect on
competition, to promote and sustain
competition in markets, to protect the
interests of consumers and to ensure freedom
of trade carried on by other participants in
markets, in India, and for matters connected
therewith or incidental thereto.”

53. We notice the scheme of the Act by taking note of

the following provisions.

54. 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

46
 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.
Explanation.-For the purposes of this clause,—
(a) “activity” includes profession or
occupation;
(b) “article” includes a new article and
“service” includes a new service;
(c) “unit” or “division”, in relation to an
enterprise, includes
(i) a plant or factory established for the
production, storage, supply, distribution,
acquisition or control of any article or goods;
(ii) any branch or office established for the
provision of any service;”

55. Section 2(i) defines the word ‘goods’:

“2(i) “goods” means goods as defined in the

Sale of Goods Act, 1930 (8 of 1930) and
includes—
(A) products manufactured, processed or mined;
(B) debentures, stocks and shares after
allotment;
(C) in relation to goods supplied, distributed
or controlled in India, goods imported into
India;”

56. Section 2(l) defines the word ‘person’:

“2(l) “person” includes—

47
 (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. The words ‘relevant market’, ‘relevant

geographical market’, ‘relevant product market’, are

all separately defined:

“2(r) “relevant market” means the market

which may be determined by the commission with
reference to the relevant product market or the
relevant geographic market or with reference
to both the markets;

2(s) “relevant geographic market” means a

market comprising the area in which the
conditions of competition for supply of goods
or provision of services or demand of goods or
services are distinctly homogenous and can be
48
 distinguished from the conditions prevailing
in the neighbouring areas;

2(t) “relevant product market” means a

market comprising all those products or
services which are regarded as interchangeable
or substitutable by the consumer, by reason of
characteristics of the products or services,
their prices and intended use;”

58. Section 3 prohibits anti-competitive agreements.

They are declared void.

59. We are, in the main, concerned in this case, with

Section 4. Section 4 prohibits abuse of dominant

position. Section 4 reads as follows:

“4. (1) No enterprise or group shall abuse its

dominant position.

(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.

Explanation.— For the purposes of this clause,

the unfair or discriminatory condition in
purchase or sale of goods or service referred
to in sub-clause (i) and unfair or

49
discriminatory price in purchase or sale of
goods (including predatory price) or service
referred to in sub-clause (ii) shall not
include such discriminatory condition or price
which may be adopted to meet the competition;
or

(b) limits or restricts— (i) production of

goods or provision of services or market
therefor; or (ii) technical or scientific
development relating to goods or services to
the prejudice of consumers; or

(c) indulges in practice or practices resulting

in denial of market access in any manner; or

(d) makes conclusion of contracts subject to

acceptance by other parties of supplementary
obligations which, by their nature or according
to commercial usage, have no connection with
the subject of such contracts; or

(e) uses its dominant position in one relevant

market to enter into, or protect, other
relevant market.

Explanation.—For the purposes of this section,

the expression—

(a) “dominant position” means a position of

strength, enjoyed by an enterprise, in the
relevant market, in India, which enables it to—

(i) operate independently of competitive

forces prevailing in the relevant market; or

(ii) affect its competitors or consumers or the

relevant market in its favour.

50
 (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.

(c)“group” shall have the same meaning as

assigned to it in clause (b) of the Explanation
to section 5.”

60. Section 5 deals with regulation of combinations.

At this stage, we may only sum up and state that the

law prohibits anti-competitive agreements and also

abuse of dominant position. It also regulates

combinations as explained in Section 6. Chapter 3 deals

with the establishment of the CCI. Section 9 provides

that the Selection Committee for appointment of Members

of the CCI, including Chairperson, will include the

Chief Justice of India or his nominee among others.

61. Section 8 speaks about the composition of the

Commission. There must be a chairman and not less

than two and not more than six other members to be

appointed by the Central Government.

62. 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
51
 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.”

63. Section 17 reads as follows:

“17. (1) The Commission may appoint a

Secretary and such officers and other employees
as it considers necessary for the efficient
performance of its functions under this Act.
(2) The salaries and allowances payable to and
other terms and conditions of service of the
Secretary and officers and other employees of
the Commission and the number of such officers
and other employees shall be such as may be
prescribed.
(3) The Commission may engage, in accordance
with the procedure specified by regulations,
such number of experts and professionals of
integrity and outstanding ability, who have
special knowledge of, and experience in,
economics, law, business or such other
disciplines related to competition, as it deems
necessary to assist the Commission in the
discharge of its functions under this Act.”

64. The duties of the CCI are spelt out in Section 18.

It reads as follows:

“18. 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,

52
 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.”

65. The aforesaid provisions indicate the width of the

power lodged with CCI to bring about the sweeping

changes in the economy. Section 19 empowers the

Commission to make inquiries into agreements which are

anti-competitive within the meaning of Section 3. More

importantly, Section 19(4) deals with inquiring into

the question as to whether an enterprise enjoys a

dominant position.

66. Being a crucial provision, we notice the same.

“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;

53
 (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) any other factor which the Commission may

consider relevant for the inquiry.”

67. Section 19(5) declares that for determining whether

the market constitutes a relevant market for the

54
purpose of the Act, the CCI shall have due regard to

the relevant geographic market and relevant product

market.

68. Section 19(6) deals with the factors which are

relevant for determining the relevant geographic

market.

69. Section 19(7) deals with matters which are relevant

for determining the relevant product market.

70. Section 27 provides for orders which the CCI may

pass after inquiring into agreement or abuse of

dominant position:

“27. 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

55
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. of its turnover for each year
of the continuance of such agreement, whichever
is higher.

(c) Omitted by Competition (Amendment) Act,

2007

(d) direct that the agreements shall stand

modified to the extent and in the manner as
may be specified in the order by the
Commission;

(e) direct the enterprises concerned to abide

by such other orders as the Commission may pass
and comply with the directions, including
payment of costs, if any;

(f) Omitted by Competition (Amendment) Act,

2007

(g) pass such other order or issue such

directions as it may deem fit.

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

56
 for, or have contributed to, such a
contravention, then it may pass orders, under
this section, against such members of the
group.”

71. Section 28 provides for power to order division of

enterprise enjoying dominant position.

72. The CCI is given power to pass interim orders in

Section 33. The CCI can regulate its procedure as

provided in Section 36. Section 41 provides for the

duty of the Director General. He is to assist the CCI

by investigating into any controversies. Penalties are

contemplated under the Act. An appeal is provided to

the Tribunal and Section 53T provides for an appeal to

the Supreme Court against the order of the Tribunal.

Section 54 deals with the power to exempt. It reads:

“54. Power to exempt.— The Central Government

may, by notification, exempt from the
application of this Act, or any provision
thereof, and for such period as it may specify
in such notification—

(a) any class of enterprises if such exemption

is necessary in the interest of security of the
State or public interest;
(b) any practice or agreement arising out of
and in accordance with any obligation assumed

57
 by India under any treaty, agreement or
convention with any other country or countries;
(c) any enterprise which performs a sovereign
function on behalf of the Central Government
or a State Government:

Provided that in case an enterprise is engaged

in any activity including the activity
relatable to the sovereign functions of the
Government, the Central Government may grant
exemption only in respect of activity relatable
to the sovereign functions.”

73. Section 60 reads as follows:

“60. The provisions of this Act shall have

effect notwithstanding anything inconsistent
therewith contained in any other law for the
time being in force.”

74. We must proceed on the basis that there is no

challenge to the Act. This means that we must take the

Act as it is and place an interpretation on it as would

be most suitable in accordance with well-established

principles. In other words, this is not a case where

the Court has been invited to pronounce on the vires of

the Act.

75. Coal continues to be an important and scarce

natural resource. Nothing more is required to establish

58
the same than the very lis over it. It forms an

important raw material in the production of vital final

products. Also, it forms a kind of fuel, which drives

power plants. A monopoly, undoubtedly, stood created by

the Nationalisation Act. The mines, which were the

subject matter of the Act, stood vested with the Central

Government. The first appellant is a Government

Company, which came into being, as contemplated under

Section 5 of the Nationalisation Act. The appellant-

Company operates the mines. It is tasked with the power

and the duty to distribute coal. This attracts the

Directive Principle enshrined in Article 39(b). The

said Directive Principle contemplates that the ‘State’

should direct its policy towards securing that the

ownership and control of the ‘material resources’ are

so ‘distributed’ so as to ‘subserve the common good’.

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

Nationalisation Act was inserted in the Ninth Schedule

59
on 10th August, 1975. We are not, in this case, called

upon to sit in Judgment over the insertion of the

Nationalisation Act on the basis that it is violative

of the basic structure of the Constitution in terms of

what has been laid down in I.R. Coelho (supra). We

proceed on the basis, therefore, that the

Nationalisation Act was insulated by virtue of Article

31B. Equally, we proceed on the basis that it can be

treated as a law giving effect to the policy of the

State towards securing the principles enshrined in

Article 39(b).

76. Here we are not dealing with a plea to overturn the

Nationalisation Act on the score that it is violative

of any of the Fundamental Rights. The Nationalisation

Act was enacted to vest in the Central Government, the

rights of the lessees in the coal mines so that they

could be operated so as to ensure the rational,

coordinated and scientific development and utilization

of the coal resources consistent with the growing

requirements of the country. The Preamble clearly

indicates that the Law-Giver had in mind the goal in

Article 39(b), viz., acquiring ownership over coal

60
mines so that coal mined from the mines could be so

distributed so that common good was best subserved. The

Statement of Objects and Reasons of Act 67 of 1976, by

which the Nationalisation Act was amended, indicated

that after the nationalisation took place, persons

holding mining leases took to unauthorized mining and

in a most reckless and unscientific manner. This was

noted to be without bearing in mind considerations of

conservation, safety and the welfare of the workers. A

valuable national asset was being destroyed. There were

safety concerns. Large profits were being reaped but by

paying very low wages to the workers. All privately

held coal leases were brought under the umbrella of the

Nationalisation Act except those held by privately

owned steel companies. The Nationalisation Act came to

be again amended by Act 22 of 1978. Thereafter, again

it was amended by Act 57 of 1986 and finally by Act 47

of 1993. Suffice it to notice that with the commencement

of the Coal Mines Nationalisation (Amendment) Act, 1976

on 29.04.1976, carrying on a coal mining operation or

leasing for mining coal by any private party, was

prohibited.

61
77. 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. The first appellant is the

holding Company and there are subsidiary companies.

Reliance is placed on the Judgment of this Court

rendered in the context of Article 324 of the

Constitution. It is true that the said Article, which

deals with the powers of the Election Commission of

India, employs the words general superintendence,

direction and control of, inter alia, for the conduct

of all elections to Parliament and the State

62
Legislatures, apart from elections to the Office of the

President and the Vice-President. It is, undoubtedly,

true that this Court has held that the words

‘superintendence, direction and control’, are words of

the widest import. It is subject to limitations,

flowing from constitutional provisions, binding laws

and directions, which may be issued by the Courts. It

is true that the Election Commission of India has been

clothed with the plenary jurisdiction. We must, no

doubt, not lose sight of the fact that Article 324 deals

with one of the most important Constitutional

Functionaries. The importance of holding free and fair

elections, cannot be understated. Even, according to

the appellants, the appellants are bound to act in

accordance with Presidential Directives and the extant

policy in the superintendence, control and management

of the affairs of the nationalized mines. 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. However, we do

agree that subject to such directives and policy

considerations, there is a large measure of power with

63
the appellants. The appellants cannot, however, seek

immunity from the operation of laws, which otherwise

bind them. In fact, Shri K.K. Venugopal did state at

the bar that the appellants are not impervious to the

operation of laws, which would otherwise apply.

78. Exception, however, is taken by the appellants to

the applicability of the Act. This objection is founded

upon the inconsistencies and consequent anomalous

results, which would arise from the Act being applied

to the appellants. We have already captured the various

perceived inconsistencies in paragraphs-10-12.

79. Before we proceed to deal with the grievances of

the appellants, we must undertake a survey of the Act

to ascertain, whether the Act, in any manner, advances

the case of the appellants. The Act has been made in

the year 2002 and it was not a pre-existing Statute.

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. Let us decode it. An

‘enterprise’ is defined as a person or a Department of

the Government. Let us pause here for a moment. The

word ‘person’ has been defined in Section 2(l) as

64
including a company, a corporation established by or

under any Central, State or Provincial or a Government

Company, as defined in Section 617 of the Companies

Act, 1956. We need not probe further. The appellant is

a Government Company within the meaning of Section 617

of the Companies Act, 1956. Therefore, the appellant is

a person within the meaning of Section 2(h). The next

limb of Section 2(h) contemplates that the person is

one, ‘who’ or ‘which is’. Being an artificial person,

the appropriate word is ‘which’. Therefore, the first

appellant is a person, which is or has been engaged in

any activity. The activity must relate to the

production, storage, supply, distribution, acquisition

or control of articles or goods. There can be an

enterprise under Section 2(h) equally, if the activity

relates to the provision of services of any kind, inter

alia. We need not deal with the wide width of the other

part of Section 2(h). The word ‘goods’ has been defined

in Section 2(i) to mean goods, as defined in Sale of

Goods Act, 1930 and includes products manufactured,

processed or mined. There cannot be the slightest

amount of doubt that the appellant is a person, which

65
is engaged in activity relating to production, storage,

supply, distribution and control of goods, as defined

in the Act. It may also be within the ambit of Section

2(h) in regard to services it may provide, having regard

to the wide words used in Section 2(h).

80. It is noteworthy that the Law-Giver has taken care

to expressly include even Departments of the Government

separately within the ambit of the word ‘enterprise’.

Things could not be more clear. 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. Sovereign

functions would include, undoubtedly, all activities

carried on by the Departments of the Central

Government, dealing with atomic energy, currency,

defense and space.

81. As we have noted earlier on, in answer to a specific

query, as to whether the appellants are carrying on any

sovereign functions, both Shri K.K. Venugopal and Shri

Yaman Verma, would contend that they are not carrying

66
on any sovereign functions. This relieves the Court of

undertaking a discussion, which, even otherwise, may be

unnecessary, having regard to the nature of the

function. The first appellant is not a Department of

the Government. It is a Government Company. In fact,

what is excluded from the definition of the expression

‘enterprise’, is a Government Department carrying on

Government functions. Carrying on business in mining,

cannot, by any stretch of imagination, be described as

a sovereign function. There is nothing in the

definition which excludes a State monopoly which is

even set up to achieve the goals in Article 39(b) of

the Constitution.

82. As mentioned earlier, the Act aims at tabooing

anti-competitive agreements and thereby promoting

competition. It also prohibits abuse of dominant

position. What is prohibited is, however, abuse of

dominant position by an enterprise or a group. A group

has been defined in the context of Section 5 which deals

with regulation of combination. We find that the

67
appellant answers the description of an enterprise as

defined.

83. When it comes to Section 3, dealing with anti-

competitive agreements, it encompasses a prohibition of

such agreements by not merely enterprises or

association of enterprises but by any person or

association of persons.

84. 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. What is dominant position? The second

explanation in Section 4(2) defines that dominant

position for the purposes of Section 4 to be ‘a position

of strength enjoyed by an enterprise in the relevant

market in India’. Relevant market has been defined in

Section 2(r) to mean “the market which may be determined

by the CCI with reference to the relevant product market

or the relevant geographic market or with reference to

both the markets”. The words, relevant product market

has been defined in Section 2(t) as meaning “a market

comprising all of those products or services which are

regarded as interchangeable or substitutable by the

68
consumer, by reason of characteristics of its products

or services, their prices and intended use”. Section

2(s) defines ‘relevant geographic market’, as meaning

”a market comprising the area in which the conditions

of competition for supply of goods or provision of

services or demand of goods or services are distinctly

homogenous and can be distinguished from the conditions

prevailing in the neighbouring areas”. Thus, the

lawgiver has provided for a position of strength

enjoyed by an enterprise not in the vacuum. It is not

based on any subjective criteria. The question of

dominant position must stand answered with reference to

carefully thought-out objective norms, as aforesaid.

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. Another test to

find out whether the enterprise enjoys a dominant

69
position is to find out the said position with reference

to its ability to “affect its competitors or consumer

or the relevant market in its favour”.

85. The Act further expatiates and dwells on the method

to find out dominant position. Section 19(4) enumerates

the factors to be considered. We have referred to

Section 19(4)in paragraph-66.

86. The CCI is bound to take into consideration the

factors which have been indicated. Section 19(4) in

fact, empowers the CCI to have regard to “all” or “any”

of the factors to arrive at the finding that an

enterprise enjoys a dominant position or not. Does not

this mean that even a single factor being “any” factor

may form the foundation to find whether an enterprise

enjoys dominance? We would think that in a given case

the answer would be in the affirmative. 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. We will at once

notice that this is a clear indication that far from

70
excluding governmental bodies like a government

company, a public sector undertaking or a body under a

Statute from the purview of the Act, the lawgiver has

evinced its intention to include government companies,

public sector companies and bodies acquired under a

Statute within the ambit of the Act. Now, we proceed

on the basis that the appellant is a monopoly. Further

that it is a government company within the meaning of

Section 5 of the Nationalisation Act. The interplay of

Sections 3, 5 and 11 of the Nationalisation Act has the

said inevitable effect. A monopoly position under

Section 19 (4)(g) is treated essentially as being in

the league of a dominant position.

87. But does the inquiry end on an enterprise answering

the description of a monopoly or having a dominant

position pertinent to Section 19(4)(g)? In a given

case, it may. On the other hand, in the facts, it may

provide the CCI with one part of a larger whole. Other

factors whether expressly culled out or forming part of

the inexhaustibly large residuary clause, viz., Section

19(4)(m), may be projected to contend that, in reality,

despite its appearance, it is wholly but deceptive. In

71
other words, the CCI may be invited to have a cumulative

view of all the factors which are relevant in a given

case. In fact, the learned Additional Solicitor

General fairly states that the factors may be read as

cumulative.

88. Apposite in the facts is Section 19(4)(k). It

requires the CCI to factor in social obligations and

social cause. Equally, we may notice Section 19(4)(l).

It declares the relative advantage by way of

contribution to economic development having or likely

to have an appreciable effect on competition to be a

relevant factor. What we have deliberately omitted and

now supply are the following words to be found in

Section 19(4)(l). They are the words “by the enterprise

enjoying the dominant position”. Therefore, being found

in a dominant position under Section 19(4)(g) is only

one of the factors. We do not intend to elaborate

further on the scope and impact of the other factors.

It would all depend upon the facts of the individual

case. Equally, we may only indicate, that, in

particular, countervailing buying power would be a

relevant factor. Section 26 provides for the procedure

72
for holding the inquiry employing the methods declared

in Section 19(4) to find the presence or absence of

dominant position. Section 26 contemplates the CCI

acting on:

a. Reference by the Central Government or a

State Government or a statutory authority.

b. Information given under Section 19 of the

Act.

c. On its own motion.

89. 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. The Director General

is obliged to submit a report on his findings. The CCI

is to forward the report to the parties. The Director

General may recommend that there is no contravention of

the Act. In such an eventuality, the CCI is obliged to

invite objections or suggestions on the said report.

73
The CCI may thereafter decide to close the matter after

considering the objections or it may order further

investigation or further inquiry by the Director

General. The CCI may itself proceed with the further

inquiry. Under Section 26(8), if the recommendation by

the Director General points to contravention of any of

the provisions of the Act, and the CCI is of the opinion

that further inquiry is to be held, it must hold an

inquiry. Section 27 speaks about the orders that may

be passed in the case of anti-competitive agreements

and abuse of dominant position. The orders which may

be passed include a direction to discontinue abuse of

dominant position as found in the case of abuse of

dominant position. The CCI may impose penalty as

provided therein. It can direct modification of the

agreement. It can also direct the enterprise to abide

by the orders that the CCI may pass. It has a residuary

power to pass any other order as is deemed fit. Section

28, no doubt, contemplates a division. Section 31 deals

with orders that may be passed on certain combinations.

Chapter V deals with the duty of the Director General.

The Director General is provided with powers available

74
to the CCI under Section 36(2). We may notice in this

regard that the CCI under Section 36 is to be guided by

Principles of Natural Justice and subject to the

provisions of the Act and any of the Rules made by the

Central Government, the CCI is to have powers to

regulate its own procedure. Section 36(2) confers

powers vested in a civil Court in regard to certain

matters on the CCI. Section 36(3) is significant. It

reads:

“The Commission may call upon such experts,

from the fields of economics, commerce,
accountancy, international trade or from any
other discipline as it deems necessary, to
assist the Commission in the conduct of any
inquiry by it.”

90. We have already noticed that the CCI itself is to

consist of persons of ability, integrity and standing

who have special knowledge of and such professional

experience of not less than 15 years in international

trade, economics, business, commerce, law, finance,

accountancy, management, industry, public affairs or

competition matters including competition law and

policy. We notice this for the reason that both the

75
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. There is also a

provision for an appeal to the Tribunal and further

appeal to the Supreme Court.

91. As contended by the learned Additional Solicitor

General in the matter of proceeding under Section 4

read with Section 19 of the Act, in the matter of abuse

of dominant position, there are three stages. There

must be an enterprise as defined or a group as provided

under Section 5. Once it is so found, then, it must be

inquired as to whether the said enterprise or group

enjoys a dominant position. We have explained how this

is to be found with the aid of Sections 19(4) and the

second explanation to Section 4. After it is found

that there is an enterprise or group which enjoys a

dominant position, the matter progresses to the third

stage. At this stage, the CCI would have to inquire in

an appropriate case as to whether there is abuse of

dominant position by the enterprise or group. The third

stage is embraced by Section 4 (2) of the Act. Under

76
Section 4(2), the law giver has declared certain acts

or omissions to constitute abuse of dominant position.

We have already extracted the provision. 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). In other words, is

Section 4(2) exhaustive of abuse of dominant position

prohibited under Section 4(1) or is it only

illustrative of what can constitute abuse of dominant

position? The learned Additional Solicitor General

would submit that this question may not be gone into in

the facts of this case. We agree with his request.

92. 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. It further likewise forbids an imposition

of an unfair or discriminatory price in purchase or

sale including a predatory price of goods or service.

77
The explanation indicates that discriminatory

conditions or prices, which may be adopted to meet

competition, is not within the scope of the mischief.

Next, under Section 4(2)(b), the Law-Giver has

proclaimed that there will be abuse of a dominant

position by an enterprise or group if it limits or

restricts production of goods or provision of services

or market therefor.

93. The appellants are Government Companies. They were

brought into being in the context of Sections 3 and 5

of the Nationalisation Act. Undoubtedly, they were

created to take the place of the Central Government in

the matter of supervising control and managing the

affairs of the mines. Still further, and, more

importantly, the Nationalisation Act itself was

intended to achieve the goals in Article 39(b) of the

Constitution. 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. The

exclusive right in regard to the mines as also the power

to manage and supervise the mines was vested with the

first appellant company and its subsidiaries. The ambit

78
of the power is unquestionably wide. We proceed on the

basis that the appellants cannot be oblivious to its

duty to bear in mind the sublime goal in the Directive

Principle, viz., “distribution”, so as to subserve the

‘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. The appellants may

qualify as State for the purpose of Chapter IV if it

fulfills the requirement of State under Article 12. We

bear in mind in this regard the argument of the

appellants that a remedy is open to a party against the

appellant in proceedings under Article 226 or Article

32 of the Constitution. Thus, the appellants also,

even if the appellants are Government Companies but

being State, have a duty to keep uppermost, in their

minds, the goal in Article 39(b). The argument runs

that it would require countenancing an irreconcilable

conflict between such a duty and the mandate of Section

4 (2) of the Act. To be more specific, the contention

goes that the appellants would have to follow the policy

79
of the Government of India in regard to coal, be it in

the matter of pricing or any other matter. There may

be necessity to resort to differential pricing so as to

encourage captive coal production. If this is to be

treated as being discriminatory or unfair within the

meaning of Section 4(2)(a), the question that is posed

is how can the appellant company which is the product

of the Nationalisation Act, a monopoly under the same

and obliged to observe the mandate of Article 39(b)

achieve its undoubted goal or perform its

unquestionable duty under law. The answer of the

respondents is that questions are being raised in the

abstract. The Act overrides all laws to the extent of

their inconsistency with the Act. It is also contended

that as far as the question relating to compliance with

Presidential Directives is concerned, if there is a

bona fide adherence to Presidential Directives, it may

pass muster. 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. The respondents would point out that

questions are being raised in the air without there

80
being foundation on facts. Next, coming to the placing

of restrictions or limits on the production of a mineral

like coal, there may be Doctrines like Public Trust and

Intergenerational Equity.

94. The State and its agencies may have to put a cap

on production of vital resources if they are not

inexhaustible. 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? Appellants also contended that as State, the

dictate of common good contained in Article 39(b) may

require of it to promote the interest of backward areas.

The question posed is would it be brushed with the paint

of unfairness or discrimination which is anathema to

the Act.

95. We have already noticed the report of the Raghavan

Committee. We have also perused the scheme of the Act.

We have culled out the consequences, which flow from

the Nationalisation Act. The economic condition of the

country at the time of its independence in 1947 stands

in stark contrast to its condition at varying points of

81
time thereafter. In the initial stages, for

understandable reasons, particularly, bearing in mind

the need for the State to be the prime mover of the

economy, huge investments by the State had to be made.

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 public sector units fulfilled more

roles than one. Not only were the units to produce

goods but they were also burdened with the goal of

providing employment. The economic policy of the State

had a distinct socialist flavour. No doubt, under the

Five-Year Plans, what was contemplated was, a mixed

economy. The economy was highly regulated. Out of

sheer necessity, perhaps, taxation had to be maintained

at high levels. From being a toddler, the economy slowly

grew. As the life of the nation progressed, the

aspirations of its people, not unnaturally, also

expanded. The economic life of a nation can never be

perceived in isolation. No nation can remain unaffected

by the changes in the state of the world economy.

Policies, which are suitable at a given point of time,

82
are not cast in stone. Each generation of people have

the right as also the duty to revisit economic policies

which found favour with the past. The present cannot

put posterity in chains. Equally, the past cannot hold

the present hostage to ideas which would then

degenerate into what was once original and suitable

into dogma which no longer can serve the people.

96. The expression ‘common good’ in Article 39(b) in a

Benthamite sense involves achieving the highest good of

the maximum number of people. 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. As far as

the time dictated content of common good goes, it simply

means that ‘economics’ itself not being bound in

chains, but it is a dynamic concept. The attainment of

common good would be dependent on the appreciation and

understanding of a generation as to how economic common

good is best achieved. The debate between the

advantages and disadvantages of pursuing the policy of

83
State intervention in economic policy which emasculates

private enterprise and competition has almost reached

its end. The advantages of a fearlessly competitive

economy have been realized by the Nation. There is a

backdrop to it. 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 permit raj, which

involved acute regulation of economic activity by the

State with all its attendant evils, cried out for

reforms. A slew of highly liberal reforms in 1991 set

the stage for the Nation to make a paradigm shift. As

discussed in the Raghavan Committee Report, things

moved further in the direction of attaining faster

economic growth. The Act is a measure which is intended

to achieve the same. The role which was envisaged for

the public sector company could not permit them to

outlive their utility or abuse their unique position.

Disinvestment done in a proper manner was perceived as

a solution. However, sans disinvestment, State

Monopolies, Public Sector Companies and Government

Companies were expected to imbibe the new economic

84
philosophy. 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. Now that the Nation was

more than 50 years old after it became a Republic and

it no longer was the infant it was, Parliament which

best knows the needs of its people, felt that the time

was ripe for ushering in the wholesome idea of fair

competition. Can it be said that free competition as

envisaged under the Act which involves avoidance of

anti-competitive agreements, abuse of dominant position

and regulation of combinations are against the common

good? As to how common good is best served is best

understood by the representatives of the people in the

democratic form of Government. We must bear in mind

the wholesome principle that when Parliament enacts

laws, it is deemed to be aware of all the existing laws.

Properly construed and operated fairly, the ‘Act’

would, in other words, harmonise with common good.

being its goal as well.

97. Therefore, we proceed on the basis that Parliament

was aware of the Nationalisation Act. We must also

85
take into consideration the fact that coal stood

removed from the list of essential commodities under

the Essential Commodities Act in February, 2007. 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. The Raghavan Committee Report

provides an invaluable input.

98. We may bear in mind that Government Departments are

also expressly covered within the expression

‘enterprise’ under the Act. No doubt, Departments

discharging sovereign functions are excluded but save

those Government departments which are excluded, the

Government Departments being State, are equally obliged

to bear in mind the Directive Principles. The radical

nature of the law contained in the Act has made a

perceptible departure from the erstwhile law contained

in the MRTP Act. We have noticed Section 3 of the MRTP

Act, which sought to protect Government entities, as

86
provided therein, from the reach of the MRTP Act. The

fact that Government Departments, which follow policies

of the Government, are expected to comply with the Act,

has a deep impact on the contentions of the appellant

that they are outside of 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.

99. What actually Article 31B and Article 31C purport

to provide for is constitutional immunity for the laws

covered by the same from challenge on the ground that

they fall foul of the Fundamental Rights as provided

therein. In other words, the Courts cannot invalidate

the laws covered by the said Articles. 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. Here, we may notice one aspect. Even

87
where State and its instrumentalities are obliged to

follow the Directive Principles, it cannot, in their

actions, act in an unfair or discriminatory fashion.

Even the appellants agree that judicial review, under

Article 226, is permissible.

100. It is the appellants’ contention that Section 60

of the Act may not avail the respondents to contend

that the Nationalisation Act would pale into

insignificance and irrelevance when it cannot square

with the provisions of the Act. Section 28 of the

Nationalisation Act, on the other hand, is set up to

counter the argument. What is more, decisions of this

Court in Employees Provident Fund Commissioner v.

Official Liquidator of Esskay Pharmaceuticals Limited23

and Sanwarmal Kejriwal v. Vishwa Coop. Housing Society

Ltd. and Others24 are enlisted in support. In Sanwarmal

Kejriwal (supra), the question, which was considered

was, whether the protection under Section 15A of a rent

control law would not be available to a person on whom

a fictional status of tenant was conferred. This was

23
(2011) 10 SCC 727
24
(1990) 2 SCC 288
88
as Section 91 of the Maharashtra Cooperative Society

Act provided for eviction of a person from a flat. The

Court harmonized both the Acts by holding that in

matters governed by the earlier Rent Act, its

provisions would continue to apply.

101. 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. Under Section

529A, workers’ dues and debts due to secured creditors

was to be paid in priority to all other debts. This

Court held that the EPF Act was a social welfare

legislation. 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. It is in the context

of the statutes and the object sought to be achieved

that this Court held that a non-obstante clause

contained in the later Act, viz., the Companies Act,

89
1956, would not prevail. This Court held, in

paragraphs-42 and 44, as follows:

“42. The argument of Shri Gaurav Agrawal that

the non obstante clause contained in the
subsequent legislation i.e. Section 529-A(1)
of the Companies Act should prevail over
similar clause contained in an earlier
legislation i.e. Section 11(2) of the EPF Act
sounds attractive, but if the two provisions
are read in the light of the objects sought to
be achieved by the legislature by enacting the
same, it is not possible to agree with the
learned counsel. As noted earlier, the object
of the amendment made in the EPF Act by Act 40
of 1973 was to treat the dues payable by the
employer as first charge on the assets of the
establishment and to ensure that the same are
recovered in priority to other debts. As
against this, the amendments made in the
Companies Act in 1985 are intended to create a
charge pari passu in favour of the workmen on
every security available to the secured
creditors of the company for recovery of their
debts. 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.

44. Another rule of interpretation of statutes

is that if two special enactments contain
provisions which give an overriding effect to
the provisions contained therein, then the
Court is required to consider the purpose and
the policy underlying the two Acts and the

90
 clear intendment conveyed by the language of
the relevant provisions.”

102. Apparently, the Court apart from noticing the

objects sought to be achieved by the enactment took

into consideration the fact that Section 529A of the

Companies Act did not give any indication that the

lawgiver wanted to create a first charge in respect of

the preferred creditors under the said provision

whereas a first charge stood created under the EPF Act.

103. 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. This is subject to what we shall hold

hereinafter.

104. We do not think that the appellants have indicated

any decision of this Court which would establish the

appellants’ case.

105. In Ashoka Smokeless Coal India (P) Ltd. v. Union

of India25, the Court was concerned with the validity

25
(2007) 2 SCC 640
91
of the decision taken by the first appellant herein to

go in for e-auction of coal. It must be noticed that

the judgment was pronounced on 01.12.2006. At that

time, coal was an essential commodity under the

Essential Commodities Act. This aspect is echoed in

the Judgment. The Court went on to hold that the

holding of e-auction did not amount to price fixation.

In the course of its Judgment, the Court, inter alia

held:

“106. 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. Directive
principles of State policy provide for a
guidance to interpretation of fundamental
rights of a citizen as also the statutory
rights.
109. It may be true that prices are required
to be fixed having regard to the market forces.
Demand and supply is a relevant factor as
regards fixation of the price. In a market
governed by free economy where competition is
the buzzword, producers may fix their own
price. It is, however, difficult to give effect
to the constitutional obligations of a State
and the principles leading to a free economy
at the same time. A level playing field is the
key factor for invoking the new economy. 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
92
 consumer to exercise choices for the purpose
of procurement of goods. If the policy of the
open market is to be achieved the benefit of
the consumer must be kept uppermost in mind by
the State.”

106. In paragraph-111, the Court, inter alia, held as

follows:

“111. The State when it exercises its power of

price fixation in relation to an essential
commodity, has a different role to play. Object
of such price fixation is to see that the
ultimate consumers obtain the essential
commodity at a fair price and for achieving the
said purpose the profit margin of the
manufacturer/producer may be kept at a bare
minimum. The question as to how such fair price
is to be determined stricto sensu does not
arise in this case, as would appear from the
discussions made hereinafter, as here the
Central Government has not fixed any price. It
left the matter to the coal companies. The coal
companies in taking recourse to e-auction also
did not fix a price. They only took recourse
to a methodology by which the price of coal
became variable. Its only object was to see
that maximum possible price of coal is
obtained. … .”

107. 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. We are not for a moment

holding that coal has ceased to be a vital national

93
resource. All that we are observing is that, the basis

for the observations in paragraph-111, stood removed.

108. The Court went on to hold further:

“113. The State or a public sector undertaking

plays an important role in the society. It is
expected of them that they would act fairly and
reasonably in all fields; even as a landlord
of a tenanted premises or in any other
capacity. (See Baburao Shantaram More v. Bombay
Housing Board [AIR 1954 SC 153 : 1954 SCR 572]
SCR at p. 577, Dwarkadas Marfatia & Sons v.
Board of Trustees of the Port of Bombay [(1989)
3 SCC 293 : (1989) 2 SCR 751] SCR at pp. 760,
762 and Pathumma v. State of Kerala [(1978) 2
SCC 1 : (1978) 2 SCR 537] SCR at p. 545.)”

109. Still further, we find that in paragraph-115, it

has been held that “coal companies are monopolies

within the meaning of the provisions of the

Nationalisation Act”.

110. It is again observed in paragraph-118 that the

first appellant and its subsidiary company enjoyed the

monopoly of production, distribution and sale thereof.

111. We may further notice that in paragraph-167, this

Court held:

“167. In fact the decisions of this Court on

price fixation also point out that although a
94
 reasonable profit may be permissible,
profiteering would not be.”

112. Finally, we find the following observations to be

found in paragraph-193:

“193. However, discussions made hereinbefore

should not be taken to lay down a law that the
Central Government and for that matter the coal
companies cannot change their policy decision.
They evidently can; but therefor there should
be a public interest as contradistinguished
from a mere profit motive. 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. If the
coal companies intend to take any measure they
may be free to do so. But the same must satisfy
the requirements of constitutional as also the
statutory schemes; even in relation to an
existing scheme e.g. Open Sales Schemes,
indisputably the coal companies would be at
liberty to formulate the new policy which would
meet the changed situation. E-advertisement or
e-tender would be welcome but then therefor a
greater transparency should be maintained.

113. The appellants rely upon the judgment of this Court

in State of Tamil Nadu and Others v. L. Abu Kavur Bai

and Others26 for the proposition that the scheme of

monopoly or nationalisation subserves public good. In

26
(1984) 1 SCC 515
95
the said case, the Court was dealing with a case of

nationalisation of transport services. 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. Union

of India and Others27. The purpose of the vesting under

the Nationalisation Act was to distribute the resource

to subserve the common good. (See paragraph-32)

114. We may, in fact, notice the concern of the Court

about coal being not inexhaustible and the need for a

wise and planned conservation of the resources being

expressed in paragraph-39. No doubt, all this was at

the time when the Nation was confronted with the

condition of the mines being what it was as brought out

in the Statement of Objects.

115. We agree with the appellants and as held by this

Court in State of Karnataka and Another v. Shri

Ranganatha Reddy and Another28 that distribution is a

word of wide meaning and it is covered by Article 39(b)

of the Constitution. It must be remembered that the

27
1980 (4) SCC 179
28
1977 (4) SCC 471
96
Court had occasion to hold so by way of dealing with

the argument that nationalisation did not have a nexus

with the word distribution.

116. The Judgment of this Court in Waman Rao and Others

v. Union of India and Others29 holds that laws passed

to give effect to Article 39(b) and 39(c) could not be

found violative of Article 14. There cannot be any

quarrel. We are, in this case, called upon to deal

with the case based on the actions taken by the

appellant, which is a Government Company based on its

powers under the Nationalisation Act, being challenged

on the anvil of a later law made by Parliament, the

validity of which, relevantly is not under challenge.

117. Distribution of coal is intended to subserve common

good holds this Court in Samatha v. State of A.P. and

others30. The content of common good is itself not a

static concept. It may take its hue from the context

and the times in which the matter falls for

consideration by the Court. If Parliament has intended

that State monopolies even if it be in the matter of

29
(1981) 2 SCC 362
30
(1997) 8 SCC 191
97
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. We see no reason to hold that

a State Monopoly being run through the medium of a

Government Company, even for attaining the goals in the

Directive Principles, will go outside the purview of

the Act.

118. We have projected some of the concerns of the

appellants in the matter of the appellants being

disabled to put up a justifiable defense under Section

4 of the Act.

119. It is true that the actions of the appellants can

be challenged in proceedings in judicial review as

contended by the appellants. Equally, the appellants

are justified in pointing out as a matter of fact that

there may be forums other than the CCI such as the

Controller of Coal whereunder redress may be sought

against action of the appellants. But that by itself,

cannot result in denial of access to a party complaining

98
of contravention of a law which is otherwise

applicable. It must also be remembered that action can

also be taken by the CCI suo motu. Such is the width

of the power vouchsafed for the authority under the

Act.

120. We would only clarify that it will be open to the

appellant as the State monopoly to take up all

contentions to demonstrate that there is no abuse of

the dominant position. 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. If the appellants answer the

description of State in Article 36, then there is a

continuing duty to pay obeisance to the Directive

Principles. The Act cannot result in transforming the

appellants into mere profit-making engines or require

of them to be oblivious to their obligations under the

Constitution. But that cannot equally mean that they

99
can act with caprice, or unfairly or treat otherwise

similarly situated persons or things with

discrimination. We do not say more as the matter must

be considered on its own merits both in the appeal as

in all the transferred cases. We may only add that in

judicial review the appellants would be held to the

standard of fairness as also the duty not to

discriminate. 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.

CONFLICT BETWEEN SECTION 28 OF THE ACT AND

SECTION 32 OF THE NATIONALISATION ACT

121. Section 28 of the Competition Act, 2002, reads as

follows:

100
 “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. (2) In particular, and without
prejudice to the generality of the foregoing
powers, the order referred to in sub-section
(1) may provide for all or any of the following
matters, namely:— (a) the transfer or vesting
of property, rights, liabilities or
obligations; (b) the adjustment of contracts
either by discharge or reduction of any
liability or obligation or otherwise; (c) the
creation, allotment, surrender or cancellation
of any shares, stocks or securities; 48(d)
[Omitted by Competition (Amendment) Act, 2007]
(e) the formation or winding up of an
enterprise or the amendment of the memorandum
of association or articles of association or
any other instruments regulating the business
of any enterprise; (f) the extent to which, and
the circumstances in which, provisions of the
order affecting an enterprise may be altered
by the enterprise and the registration thereof;
(g) any other matter which may be necessary to
give effect to the division of the enterprise.
(3) Notwithstanding anything contained in any
other law for the time being in force or in
any contract or in any memorandum or articles
of association, an officer of a company who
ceases to hold office as such in consequence
of the division of an enterprise shall not be
entitled to claim any compensation for such
cesser.”

122. It is, undoubtedly, true that there has been a

vesting of rights in regard to the mines under the

Nationalisation Act. Still further, there has been a

101
vesting under Section 5 of the Nationalisation Act of

the rights of the lessee in the first appellant. Under

Section 11 of the Nationalisation Act, the power of

general superintendence, direction, control and

management of the vested minds, vest in the first

appellant-Company. 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.

123. There are certain salient features to be noticed.

In the first place, there is no challenge to the Act.

Secondly, taking the Act as it plainly reads, the power

to order division and, what is more, all the things

enumerated in Section 28(2), are clearly conferred on

the CCI. 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. Parliament has authored

both the Nationalisation Act as also the Act. There is

102
no question of lack of legislative competence. We are

not called upon to pronounce on the vires of the Act.

There is absolutely no scope, at any rate, for reading

down the provision even proceeding on the basis that an

attempt can be made even in the absence of the

challenge. The words of the provision do not admit of

reading down the same. 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. This

would include the appellants as well. We must, no doubt,

understand the provision to mean that it is not a power

to be exercised lightly. It is a special power intended

to ensure prevention of abuse of dominant position. The

generality of the power is revealed in Section 27. We

incidentally notice that though there can be abuse of

dominant position by an enterprise and a group, which

is sought to be prohibited, Section 28 speaks about the

division of an enterprise. Having regard to the

discussion above, we find no merit in the case sought

to be made for escaping from the net of the Act.

103
124. Section 54 of the Act gives power to the Central

Government to exempt from the application of the Act or

any provision and for any period, which is specified in

the Notification. The ground for exemption can be

security of the State or even public interest. It is

not as if the appellants, if there was a genuine case

made out for being taken outside the purview of the Act

in public interest, the Government would be powerless.

We say no more.

125. We would hold that there is no merit in the

contention of the appellants that the Act will not apply

to the appellants for the reason that the appellants

are governed by the Nationalisation Act and that

Nationalisation Act cannot be reconciled with the Act.

This is subject to the appellants having all the rights

to defend their actions under the law and as indicated

hereinbefore. The transferred cases shall be sent back

so that they may be dealt with on their own merits.

The transferred cases are disposed of.

126. Equally, the Appeal shall be posted for being dealt

with on its own merits. The interlocutory applications

seeking interim relief in the pending Appeal shall be

104
listed in the second week of July, 2023. The contempt

petition shall stand listed in the second week of July,

2023. The Applications filed in connection with I.A.

No. 66587 of 2017 shall stand disposed of.

………………………………………………………, J.
[ K.M. JOSEPH ]

………………………………………………………, J.
[ B. V. NAGARATHNA ]

………………………………………………………, J.
[ AHSANUDDIN AMANULLAH ]

New Delhi;
June 15, 2023

105