The Supreme Court of India recently noted that State Monopolies, Government Companies, and Public Sector Units(PSUs) must not engage in anti-competitive practices that violate the Competition Act of 2002. This observation was made by a bench consisting of Justices KM Joseph, BV Nagarathna, and Ahsanuddin Amanullah while ruling that Coal India Ltd (CIL) is subject to the provisions of the Competition Act. CIL argued that as a state monopoly operating under the Coal Mines (Nationalisation) Act of 1973, it should be exempt from the Competition Act.
The bench clarified that CIL, being a government company, falls within the definition of “person” and is therefore considered an “enterprise” under Section 2(h) of the Competition Act. The Act also explicitly includes “government departments” in the definition of enterprise. The only activities excluded from this definition are those related to the sovereign functions of the government, which CIL acknowledged it is not performing.
