In Brief
Coal India Limited, a state monopoly created under the Coal Mines Nationalization Act 1973, challenged whether the Competition Act 2002 applied to it. The company argued that as a statutory monopoly designed to serve constitutional goals under Article 39(b), it should be exempt from competition law. The Supreme Court held that the Competition Act applies to all government companies and public sector enterprises unless specifically exempt under section 54. State monopolies created to achieve public interest goals are not automatically exempt from competition law. The Court affirmed that Parliament's later competitive policy overrides earlier monopoly-creating legislation through the non-obstante clause. However, state monopolies may defend actions by showing compliance with constitutional directives and bonafide government policy. The power to divide dominant enterprises is reserved for serious cases of abuse.
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