M/S Babul Smokeless Fuel Industries (P) Ltd. a company incorporated v. The Central Coalfields Ltd

application is being disposed of at this stage itself. The petitioner is a company incorporated under the Companies Act, 1956. The respondents, Central Coal Fields Limited is a subsidiary Company of Coal India Limited, a Government of India 2 enterprise. Central Mines Planning and Design Institute Limited (hereinafter referred to as CMPDIL) as well is one of the subsidiary of Coal India Limited. It appears that in order to encourage private small units to establish units for manufacturing special smokeless fuel, CMPDIL developed a special technology. It advertised asking for private entrepreneurs to come and take its technology and make special smokeless fuel. Units agreeing to do would be provided coal linkage by Coal India Limited to ensure adequate coal supplies, according to the capacity assessment made by technical experts of CMPDIL. Being persuaded by the said invitation by CMPDIL, the petitioner approached it and purchased the technology and under assistance of CMPDIL started setting up of a special smokeless fuel producing unit at Industrial Area, District- Madhubani, Bihar, where it got registered as a small scale unit with the Industries Department, Government of Bihar. In order to meet the financial commitments for setting up the said unit, on the said assurances by the CMPDIL of providing coal linkage and coal supply, petitioner took huge financial assistance from Bihar State Credit and Investment Corporation incurring a loan liability of about Rs. 54.50 lacs. Once the industry was established technical experts of CMPDIL inspected the factory and assessed the technical viability of petitioner’s unit and also assessed the installed capacity of petitioner’s unit for determining coal requirement. On such assessment being made, CMPDIL recommended for grant of coal linkage in favour of the petitioner’s unit for 5000 MT of coal per month, in order to run the unit 3 in its full capacity and in an economically viable manner. Accordingly on such recommendation of CMPDIL, which was subsidiary of Coal India Limited, CIL granted coal linkage to the petitioner with an assured supply of 5000 MT of coal per month. This linkage of petitioner was made available by Coal India Limited through its subsidiary Central Coal Fields Limited, the respondents. Later, the petitioner found that petitioner was being deprived of full allotment of coal in terms of the linkage granted without there being any justification. Enquiries further revealed that while the members of one Special Smokeless Fuel Association, who had similarly established unit were being given full allotment linked quantity of coal, petitioner was being deprived of the same. On enquires, it was revealed that this was being done pursuant to orders of the then Ranchi Bench of this Hon’ble Court in C.W.J.C. No. 2750 of 1997 (R) being order dated

28.11.1997 in the said writ petition, which has been annexed as Annexure-1, to this writ application. The Petitioner on coming to know this step motherly treatment meted out to it by the respondents filed a writ application being C.W.J.C. No. 8951 of 2000 before this Court, which was after hearing the parties disposed of on 02.01.2001. The order inter-party is between the petitioner and the respondents, who are respondents in that case as well, is annexed as Annexure-2, to this writ application. A reference to the said order would clearly shows that the parties on the facts agreed that the petitioner’s case stand on similar footing of that of the Special Smokeless Fuel Manufacturers Association, as decided by Ranchi Bench in C.W.J.C. No. 2750 of 1997 4 (R), which was disposed of on 28th November, 1997. It is better to reproduce the order of this Court in the said writ application inter-party, which is quoted hereunder:- “Heard learned counsel for the parties. It is admitted at the bar that the case of the present petitioner stands on similar footing with that of the case of Special Smokeless Fuel Manufacturers Association and Others Vs. The Chairman cum Managing Director and others (C.W.J.C. No. 2750 of 1997 (R) which was disposed of on 28th November, 1997. It is also admitted that against this order of the High Court, Central Coalfield Limited moved the Supreme Court but the Apex Court did not interfere with the order except modifying the same to certain extent. Learned counsel for the petitioner submits that the petitioner will be satisfied if the same order of the Supreme Court is also followed in respect of the present petitioner. Learned counsel for the Respondents frankly submits that subject to availability the direction for supply of coal shall be made to the petitioner in view of the order of the Supreme Court as contained in annexure-12. In the facts and circumstances of the 5 case, I dispose of the writ application with a direction that the case of the present petitioner will be governed by the direction of the Supreme Court dated 25.3.1999 passed in Civil Appeal No. 6317 of 1998 to be read with the order of the High Court dated 16.3.2000 as contained in annexure-13. The writ application is disposed of accordingly”. It may be noted that the respondents preferred Letters Patent Appeal against the judgment in the case of Special Smokeless Fuel Manufacturers Association (supra), which was dismissed and except for small modification it was declined to interfere with by the Apex Court. The Apex Court set aside that part of the order in which directions were made to supply coal to petitioners from specific collieries otherwise the order was not interfered with. This is evident from order dated 16.03.2000 passed in C.W.J.C. No. 2750 of 1997 (R), which is the case of Special Smokeless Fuel Manufacturers Association and is part of the Annexure-2, to this writ application. Pursuant to the aforesaid order passed by this Court, the respondents started full quantity of supply from July 2001 onwards. But, suddenly with effect from 30th July 2002 without notice or without information the supplies were abruptly stopped. Petitioner on advice filed Writ Petition (Civil) No. 536 of 2003 before the Jharkhand High Court, which was finally heard and disposed of along with the batch of cases by judgment and order dated 10th September, 2003. The Hon’ble 6 Jharkhand High Court found that without proper enquiry merely on basis of wireless message dated 30th July 2002 supplies had been stopped to various units including the petitioner, which was found to be wrong and was set aside. Direction was given to the Central Coalfield Limited (CCL) to get the units inspected with due information to the units and then review the supply of coal linkage and resume the same within three months. This order of the Jharkhand High Court passed inter alia in C.W.J.C. No. 536 of 2003 dated 10.09.2003 has been appended as Annexure-3, to this writ application. It appears that thereafter Central Coalfield Limited requested the experts of CMPDIL to inspect the units including petitioner’s unit to find out whether petitioner’s unit was technically viable or not. So far as existence of petitioner’s unit is concerned that was not in dispute inasmuch as it had been set up under the guidance of CMPDIL and it was on their certification that linkage was provided. While, pursuant to the request of the respondents, Central Coalfield Limited CMPDIL constituted a three man committee of technical expert to inspect petitioner’s unit and submit a detailed report, the Central Coal Field Limited filed a Letters Patent Appeal against the judgment in case of petitioner being L.P.A. No. 878 of 2003, just before the L.P.A. was taken up, CMPDIL made an inspection and reported that petitioner’s unit was capable of running at full capacity and then reconfirmed the situation to the respondents. In the L.P.A. CCL took a technical plea that petitioner not having consumed coal for over two years, the linkage stood expired. 7 This was specifically noted and rejected on the simple ground that CCL itself have stopped coal supply could not take this ground to deprive petitioner of his supply. They then objected to the order of the Hon’ble Single Judge that the inspection had to be conducted with due information to the parties. This was disapproved but otherwise the Division Bench did not interfere in the matter and held that the supplies would be dependent on the future standing of the plant which would be as assessed by the CMPDIL. This order is annexed as Annexure-6 and was passed on 26.03.2004. Thus, it would be seen that now CCL first has been bound by the judgment inter-party to treat petitioner similar to that of the Special Smokeless Fuel Manufacturers Association, now became bound to supply coal as per assessment of CMPDIL. As noted earlier, CMPDIL assessed at the request of CCL and had clearly opined that it could operate at full capacity meaning thereby that it could utilize 5000 MT of coal per month. Here, it may be relevant to mention that CCL, the respondents then sought various legal opinions, all of which were in favour of the petitioner, being supply full quantity of coal but not being satisfied respondents then preferred Special Leave to Appeal to the Supreme Court, which was dismissed on 07.02.2005, without even notice being issued in the matter, which order has been annexed as Annexure-9, to this writ application. At this juncture, it may be noted that it was almost for three years in spite of all favourable orders from Court, petitioner had incurred heavy financial liability due to non-supply of coal. In course of 8 discussions with respondents, the respondents agreed to supply smaller quantity if petitioner agreed. In order to survive, petitioner had no alternative. It either had to litigate afresh, having already suffered the consequences of the units being shut down for three years or accept the meagre that amount was being given to it. Accordingly under duress it signed and agreed to take smaller quantities. In the mean time, CCL came up with what is now known as MPQ policy, in which, coal supplies were to be made on basis of past performance. It sought to enforce the said policy against members of Special Smokeless Fuel Manufacturers Association. This was challenged by them before the Hon’ble Jharkhand High Court. The parties do not dispute that it could not enforce against them and the parties were ordered to follow the earlier judgment inter-party. Again, in 2005 coal supplies were abruptly stopped, which was again challenged by the petitioner again in Jharkhand High Court in C.W.J.C. No. 4807 of 2005, which was allowed on 02.02.2006 and the respondents were directed to resume the coal supplies to the petitioner. Regrettably, again, the petitioner alleges that it has been discriminated. It is not receiving the same treatment as that of the members of the Special Smokeless Fuel Manufacturers Association and hence the writ application. The respondents have filed their counter affidavit and have alleged that petitioner is a habitual litigant. There being mentioned that after the decision of the Division Bench of the Jharkhand High Court in L.P.A. No. 878 of 2003, petitioner’s coal supply was resumed 9 on specific undertaking given by it agreeing to norms under MPQ. In my view, these two statements itself show the attitude of the respondents. If a person is unable to get justice at the hands of a State undertaking what else it can do but to fight for its survival before Courts. Consequentially, the L.P.A., as referred to above, was virtually dismissed as against CCL, still petitioner was forced/coerced to give an undertaking for lesser supply, which cannot be said to be voluntary, under the circumstances noticed above. Respondents have further given instances of various other writ applications, wherein Courts have held that MPQ would apply for supplies but suffice to say that in none of those writ applications petitioner was a party. Petitioner is only contending that judgment inter-party be honoured and petitioner be given the same treatment as the members of Special Smokeless Fuel Manufacturers Association. Why respondents want to discriminate between the two? The respondents are unable to give any explanation. No rational is being given for this hostile discrimination. It is then submitted by respondents that the entire system has undergone change and the petitioner can now obtained coal under the e-auction policy. I am unable to accept this contention. The e-auction policy was the subject matter of challenge before the Apex Court in the case of Ashoka Smokeless Coal India (P) LTD. & Ors. Vs. Union of India & Ors since reported in (2007) 2 Supreme Court Cases 640. In the elaborate judgment of the Apex Court, the Apex Court has noted in paragraph 56 to 59 of the reports the special position in relation to Special Smokeless 10 Fuel Manufacturers, who had set up their unit on invitation by the subsidiary of Coal India Limited. The Apex Court in paragraph 159 has noted the disadvantage of such unit if they were forced to participate in e-auction. It also noticed that MPQ could not get them full supply for their demand. Their Lordships in paragraph 173 have held that for such unit, the principles of promissory estoppels would apply. In effect, the Lordships rejected the concept of e-auction. In that view of the matter, I am left with no option but to hold that the judgment inter-party that is as between the petitioner and the respondents in the case in C.W.J.C. No. 8951 of 2000, which was disposed of on 02.01.2001, would continue and to apply and bind the parties. The said judgment has not been either modified or deviated from in any further litigation as between the parties. Petitioner would be entitled to receive the same treatment that is being given by the respondents to the members of Special Smokeless Manufacturers Association, there being no valid reason to depart from there. I order accordingly. With the aforesaid observations and directions, the writ application is allowed. Trivedi/ (Navaniti Prasad Singh, J.)