CCI: Entry Of More Players And Increase In Prices Indicates Greater Competition, Citing No Contravention Of Competition Act

The Competition Commission of India ('CCI') comprising Ravneet Kaur (Chairperson) Mr. Anil Agrawal (Member) and Ms. Sweta Kakkad (Member) closed the complaint filed by Mr. Jarnail Singh ('Informant') against Madhav KRG Ltd ('OP-1') and Punjab Pollution Control Board ('OP-2') alleging contravention of provisions of the Competition Act, 2002 ('Act'). The CCI held that the entry of atleast two entities for purchase pollution dust shows that more players are coming into the market and increase in procurement prices are indicative of greater competition. Brief Facts: OP-1 carries out extraction of zinc out of the pollution dust and OP-2 is the state pollution control board entrusted with the implementation of environmental laws in Punjab. The Informant provided that pollution dust is a by-product of the steel induction furnaces in the core production process and has installed Air Pollution Control Devices ('APCD') as per the directions issued by OP 2. The APCDs, while controlling the pollution, produce pollution dust with around 40 per cent of zinc composition. OP 2 treates the pollution dust as hazardous waste and very few entities are allowed to purchase the same from the induction furnaces. It also imposes penalties if pollution dust if traded in open market. OP-1 is allowed by OP-2 to purchase pollution dust and is allegedly a dominant player. The pollution dust is to be sold at a very low price and thereby, unduly profiting itself. OP-1 via its dominant position purchases pollution dust at Rs. 8 per kg when zinc was priced at Rs. 325 per kg. Later, with the entry of two other entities, namely, Jogindra Castings Pvt. Ltd. and R.P. Multimetals Pvt. Ltd., OP-1 and few other units started purchasing it at Rs. 20 per kg and later, at Rs. 25 per kg. Given the content of zinc in the pollution dust, market value of the pollution dust is estimated to be around Rs. 40 per kg, which is significantly higher than what is offered to the induction furnaces. The Informant accusses OP-1 with the connivance of OP-2 of abuse of its dominant position in contravention of Section 4 of the Act by is making undue profits by extracting zinc from the pollution dust, procured from induction furnaces at low prices vis-à-vis market rate of zinc. Informant prays for CCI's directions to the relevant authorities removing pollution dust from the category of hazardous waste, for the determination of prices by market forces rather than certain business entities. Further, fixation of lower limit at which the commodity can be traded and criminal action be taken, alongwith imposition of penalties, against OP-1. Observations of the Commission: The CCI closed the case and held that that OP-2's approval and entry of atleast two entities for purchase pollution dust shows that more players are coming into the market and increase in procurement prices are indicative of greater competition. CCI noted that the bills/invoices provided alongwith the Information indicate that the procurement price of pollution dust has increased from Rs. 8 per kg to Rs. 25 per kg. In conclusion, it noted that there is no specific allegation against OP-2 in respect of violation of provisions of Section 4 of the Act. Case Title: In Re: Jarnail Singh And Madhav KRG Ltd and Anr. Case No.: Case No. 29 of 2023 Click Here To Read/Download Order

CCI: Entry Of More Players And Increase In Prices Indicates Greater Competition, Citing No Contravention Of Competition Act

Sachika Vij

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