Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) v.

Competition Commission of India

The Madras High Court (MHC) through an order dated 22nd December, 2021 has dismissed a writ petition filed
by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) in 2013 challenging a decision taken by
Competition Commission of India (CCI) to inquire into a complaint of the corporation having abused its dominant
position by shutting down power distribution for only 2-3 hours in Chennai whereas extending it up to 14-16
hours in other districts much to the disadvantage of industries over there.

Brief Facts:

 The TANGEDCO is owned by the Government of Tamil Nadu and Electricity Supply and is engaged in
both electricity generation and distribution.
 Southern India Engineering Manufacturers’ Association (SIEMA) had sent a complaint to the CCI alleging
that TANGEDCO was imposing discriminatory conditions by abusing its dominant position in the
purchase of electricity in the relevant market within the meaning of Section 4 (2) (a) (i) of the
Competition Act, 2002 by shutting down power distribution for only 2-3 hours in Chennai whereas
extending it up to 14-16 hours in other districts much to the disadvantage of industries over there.
 The CCI on receipt of complaint from SIEMA, found that it is evident prima facie that TANGEDCO was
abusing its dominant position by imposing discriminatory conditions in the sale of electricity in the
relevant market within the meaning of section 4 (2) (a) (i) of the Competition Act, 2002. Thus, the CCI
formed an opinion that it is a fit case for Director General investigation. The proceedings dated
08.10.2013 is only an acceptance of complaint and thereafter, a notice under Section 41(2) read with
Section 36 (2) of the Competition Act, 2002 in CCI Case No.38 of 2013 was issued to TANGEDCO dated
03.12.2013.
 The impugned order dated 08.10.2013 of Case No.38 of 2013 and the consequential notice dated
03.12.2013 are under challenge in the present writ petition.

Judgement

The MHC adjudged the scope of the entertainability of such complaint under the provisions of the Competition
Act by the CCI through the following two-fold analysis:

1. Whether there was a prima facie case of abuse of dominance?

 The Court answered this in the affirmative by observing that the difference in the load shedding in
Chennai and other parts of Tamil Nadu was enormous, as shown in the information. Whereas, Chennai
was facing 2-3 hours of load shedding, other parts of Tamil Nadu were facing 14-16 hours of load
shedding, which would adversely affect the functioning of industries in those areas. Based on this the
 court noted that there was prima face case of abuse of its dominant position by TANGEDCO by imposing
discriminatory conditions in the sale of electricity in the relevant market within the meaning of section
4(2)(a)(i) of the Act. Therefore, making it a fit case for DG investigation. The report of DG was directed to
be submitted within 60 days from receipt of the order. It was clarified that nothing stated in this order
shall tantamount to a final expression of opinion on merit of the case.
2. Whether the Tamil Nadu Electricity Regulatory Commission is vested with any power to conduct
investigation regarding the abuse of dominant position under Section 23 of the Electricity Act 2003
thereby ousting the jurisdiction of CCI?
 MHC noted that the Section 23 of the Electricity Act, 2003 does not provide any power to the Tamil
Nadu Electricity Regulatory Commission to conduct investigation, more specifically, with reference to
the allegations of abuse of dominant position, which is a specific provision under Section 4 of the
Competition Act. It was held that once anti-competitive practices are brought to the notice of the CCI by
way of complaint and such allegations are falling under Section 4 of the Competition Act, then the CCI is
empowered to conduct investigation and form a final opinion for the purpose of initiation of actions.
 With reference to the case of Competition Commission of India Vs. Bharti Airtel Limited and Ors.,
(2019) 2 SCC 521 which was relied on by the counsels of TANGEDCO to oust the jurisdiction of CCI, the
MHC observed that in that case the issue raised fell within the adjudicatory power of the TRAI. Under
those circumstances, the Hon'ble Supreme Court held that the CCI lacks jurisdiction. However, the
Hon'ble Supreme Court had iterated that if any complaint is falls under any one of the three kind of anti-
competitive practices prohibited by the Competition Act, then the CCI is empowered to conduct an
investigation and proceed in accordance with the provisions of the Competition Act. MHC noted that
when TANGEDCO is in dominant position, the allegations set out in the complaint indicates certain
abuses and therefore, the said abuse of dominant position warrants any further action or not, is to be
investigated and all appropriate proceedings are to be allowed for the purpose of forming a final opinion

Holding that the writ petition was premature, MHC dismissed it and he that TANGEDCO would be at liberty to
submit its explanations or objections before the CCI within four weeks. Thereafter, the commission should
conduct a detailed inquiry by affording an opportunity of hearing to the writ petitioner and conclude the
proceedings within four months. If TANGEDCO fails to cooperate in the inquiry, such non cooperation should be
recorded in the proceedings itself.