📌 Background
The has upheld the validity of the dual pricing policy adopted by (CIL), wherein coal is sold at different prices to core and non-core sector consumers. The policy involved a 20% increase in coal prices for non-core sector industries, which include cement, steel, aluminium, paper, and other manufacturing units not directly linked to power generation.
Several non-core sector companies had challenged the pricing mechanism, alleging that it was arbitrary, discriminatory, and violative of competition laws. The matter had previously been examined by the (CCI), and later reached the Supreme Court.
⚖️ Supreme Court’s Observations
- The Court observed that CIL, as a state-controlled monopoly, is entitled to adopt differential pricing strategies provided they are based on rational and justifiable criteria.
- It held that the distinction between core (power, fertiliser, defence, railways) and non-core sectors was rooted in public interest, ensuring priority supply to essential sectors at stable prices.
- The Court noted that the 20% hike for non-core consumers was neither excessive nor unreasonable, and was proportionate considering the rising costs of extraction, transportation, and operational expenses.
- The Bench further stated that pricing decisions fall within the domain of commercial policy, and courts should not interfere unless they are manifestly arbitrary or violative of statutory provisions.
⚖️ Competition Law Aspect
- The Court upheld the findings of the CCI, which had earlier ruled that the dual pricing policy did not amount to abuse of dominant position under the .
- It clarified that differential pricing, when based on objective criteria and public interest, does not constitute anti-competitive conduct.
- The judgment underscores that state-owned enterprises can implement sectoral prioritisation to safeguard national interests, even while operating in competitive markets.
📌 Implications
- The ruling reinforces the autonomy of public sector undertakings like CIL to structure pricing policies based on national priorities.
- It provides clarity for other PSUs on balancing commercial interests with socio-economic responsibilities.
- Industries in the non-core sector will need to factor in the cost differential while planning production and procurement strategies.
Conclusion:
The Supreme Court’s verdict marks a significant endorsement of CIL’s pricing discretion and recognises the legitimacy of prioritising core sectors in the allocation of essential natural resources. By affirming the 20% price hike for non-core sectors, the Court has drawn a clear line between commercial policy decisions and judicial review, reinforcing the principle of economic pragmatism in public resource management.
