Beach Mineral Producers Association Vs Government of India (NCLAT Delhi)
The appeal was filed against an order of the Competition Commission of India (CCI) dated 25.07.2019, which had closed proceedings initiated under Section 19(1)(a) of the Competition Act, 2002. The information was filed alleging abuse of dominant position under Section 4 of the Act by the Directorate General of Foreign Trade (DGFT), its Director General, and a public sector undertaking engaged in processing beach sand minerals (BSMs).
The informants, including an association representing beach mineral producers and a trader, contended that a notification dated 21.08.2018 issued under the Foreign Trade (Development and Regulation) Act, 1992, brought exports of BSMs under the State Trading Enterprise (STE) mechanism. This resulted in a public sector undertaking being designated as the canalising agency for exports, allegedly placing it in a dominant position and distorting competition. It was argued that this policy change adversely affected private players in a sector that had earlier seen liberalisation and increased participation.
The CCI examined the matter and noted that BSMs are classified as atomic minerals and prescribed substances under relevant laws, including the Mines and Minerals (Development and Regulation) Act, 1957 and the Atomic Energy Act, 1962. It observed that State Trading Enterprises operate pursuant to government policies concerning industries of strategic importance. The Commission concluded that the allegations arose from policy formulation and implementation by government authorities and, therefore, were not amenable to examination under Section 4 of the Competition Act. Accordingly, the matter was closed under Section 26(2).
