Mr. Gautam Swarup, Mr. Ankur Das, Mr. Rudra Deoshthali, and Ms. Sakshi Pandey, Advocates v. Through

Judgment

1. The present batch of writ petitions have been filed under Article 226 of the Constitution of India, aggrieved by the unilateral rescindment by the Coal India Limited (for short “CIL”) from the Memorandum of understanding (for short “MoU”) dated 12.12.2013 vide communication dated 26.06.2020 and

30.06.2020. These petitions seek direction for allocation of coal transportation work under ‘Coal Loading and Transportation Scheme’ (for short “Coal Scheme”).

2. Since the issues arising in the present batch of writ petitions are identical and grievance raised by the petitioners are similar, all petitions have been heard together and are as such being disposed of by way of this common judgment. W.P.(C) 4384/2020 titled as “Col. Laxmi Narayan (Retd.) & Ors. v. Coal India Limited & Ors.”, is treated as the lead matter for the purposes of adjudication of the present batch of writ petitions. W.P.(C) 4384/2020 and connected matters W.P.(C) 4384/2020

3. The present petition under Article 226 read with Article 227 of the Constitution of India, 1950 has been filed seeking following prayers:- “i. Issue a Writ of Certiorari, or any other Writ/Order/Direction in the nature thereof quashing the Impugned Letters dated 26.06.2020 and 30.06.2020 and any unilateral action by Respondent No.1 discontinue the Scheme; ii. Issue of Writ of Mandamus directing the Respondents to implement and give effect to the object and purpose of the Scheme, and making allocation of coal transportation work to ESMs in waiting for the Calendar Year 2020. iii. Issue a Writ of Mandamus directing the Respondents to make a minimum allocation of 32% of coal transportation work of Respondent No. 1, on the basis of past practice, to ESM Cos. and Eligible Persons under the Scheme; iv. Issue a Writ of Mandamus directing the Respondents to disclose and make available the policy basis of allocation of coal transportation work to various classes of persons, i.e. ESM Cos., Civilian contractors, Project Affected Persons; v. Issue a Writ of Mandamus directing the Respondents, that in the absence of any policy for allocation of coal transportation of work to various classes of persons, such policy be formulated expeditiously by giving proper consideration to the rights of the Petitioners under the Scheme; vi. Issue a Writ of Mandamus directing Respondent No.1 to make further allocations for the present Year 2020 to ESMs. in waiting, in priority to other classes of persons; vii. Issue a Writ of Mandamus directing that the eligibility of all persons reaching the age of sixty (60) I sixty-two 62 years, as applicable, shall be extended by one year, or for any other period deemed appropriate by this Hon'ble Court so as to avail the benefits and opportunities of re-settlement and rehabilitation under the Scheme; viii. Issue a Writ of Mandamus directing the Respondents to take immediate and expeditious steps towards execution of the revised MoU giving effect to the Scheme; ix. Award the costs of the present Petition in favour of the Petitioners and against the Respondents; x. Grant any such further reliefs and/or pass any such further orders in W.P.(C) 4384/2020 and connected matters favour of the Petitioners and against the Respondents as this Hon'ble the present facts and Court may deem fit and pro0per circumstances;”

4. Relevant facts as per the petitioners herein are as follows:- i) The petitioners are Ex-Servicemen (for short “ESM”), who are beneficiaries of the Coal Scheme. The said Scheme provides for re- employment and rehabilitation of ESM, War Widows, Dependents of War Veterans and disabled ESM (and their Widows) (for short “Eligible Persons”), by ensuring allocation of coal transportation work for the respondent no. 1/ CIL and its subsidiaries on an ongoing basis. However, the discretion to allocate work under the Coal Scheme vests wholly with the respondent no. 1. For availing the benefits under the Coal Scheme, the Eligible Persons are required to register themselves with the respondent no. 2/ Director General Resettlement (for short “DGR”). As a result of such registration, the Eligible Persons are deemed to be ineligible for registering with other employment/ rehabilitation schemes operated under the aegis of the respondent no. 2 and also for rehabilitation and resettlement ‘Training Courses’ in Business Management offered by the respondent no. 2. ii) Respondent no. 1 is a state owned Public Sector Undertaking, having seven subsidiary companies - Eastern Coalfields Limited, Bharat Coking Coal Limited, Central Coalfields Limited, Western Coalfields Limited, South Eastern Coalfields Limited, Northern Coalfields Limited and Mahanadi Coalfields Limited (for short “CIL Subsidiaries”). W.P.(C) 4384/2020 and connected matters iii) Respondent no. 2 is an entity acting under the Department of Ex- Servicemen Welfare, Ministry of Defence, and has an overall responsibility of implementing the schemes/ policies of Department of Ex-Servicemen Welfare. The main thrust of respondent no. 2 is resettlement, rehabilitation and welfare of Entitled Persons. iv) Respondent no. 3 is responsible for inter alia all matters relating to production, supply, distribution and prices of coal. It controls respondent no. 1 as its 100% shareholder and also holds two seats in its Board as Independent Directors. Further, it also maintains an oversight over the conduct and actions of respondent no. 1 and its functionaries. v) The Coal Scheme was formulated by the erstwhile Ministry of Energy (now Ministry of Coal) and Ministry of Defence in 1979, to raise ESM Coal Transportation Companies (for short “ESM Cos.”), with dual objectives i.e. (a) to provide resettlement opportunities to ESM and (b) to have union free captive transport organization in the CIL Subsidiaries. vi) The Coal Scheme is administered by way of an MoU, between the respondent no. 1 and 2. The first MoU was executed on 08.04.1993, which was later superseded on 16.04.1999 and then on 12.12.2013. Later, in order to give effect to the MoU, respondent no. 2 issued ‘Guidelines on Formation and Running of Ex-Servicemen Coal Transport Companies’ (for short “Guidelines”). Subsequently, upon expiry of five years of execution of MoU dated 12.12.2013, the Coal Scheme was extended in terms of the said MoU vide letter dated 10.12.2018 issued by the respondent no. 1, until execution of a new MoU. W.P.(C) 4384/2020 and connected matters vii) It is the case of the petitioner that in 1979, Eligible Persons and ESM Cos. constituted to be the 100% of coal transportation service providers to the respondent no. 1. However, now the petitioners registered under the Coal Scheme in the year 2016, are yet to receive the benefit under the Coal Scheme. viii) Vide letter dated 02.04.2020, while refusing to extend the tenure of one ESM Company (M/s Triton Facilitators and Logistics Pvt. Ltd.), it was communicated by one of the CIL Subsidiaries vide 129th meeting of the CMDs of CIL Subsidiaries dated 05.03.2020 that respondent no. 1 has taken a decision that extension of tenure is not mandatory. ix) Subsequently, in March 2020, one of the CIL Subsidiaries i.e. Mahanadi Coalfields Limited made allocations for coal loading and transportation work to civilian contractors and Project Affected Persons Co- operatives (for short “PAPs”) only and totally neglected in allocating any work to the ESM Cos. x) The petitioners vide representation dated 12.06.2020 and 21.06.2020 to the respondent no. 2 and the Defence minister respectively, sought for equitable allocation of work to ESM Cos. on the ground that ESM Cos. are far more profitable and commercially efficient for transportation of coal when compared to the civilian contractors. However, the said representation went in vain. W.P.(C) 4384/2020 and connected matters xi) Thereafter, respondent no. 1 refused to extend the contracts of five ESM Cos.. Moreover, vide letter dated 26.06.2020 and 30.06.2020 (for short “Impugned Letters”), respondent no. 1 communicated to the respondent no. 2 that it has approved the Transition plan for coal transportation work from ESM Cos. to civilian contractors, no further request for new contracts/ extension of running contracts for ESM Cos. shall be given from any CIL Subsidiaries on the basis of MoU dated 12.12.2013 and that the respondent no.1 shall exit from MoU dated 12.12.2013 on completion of running ESM contracts. xii) Hence, the present petition has been preferred assailing the Impugned Letters dated 26.06.2020 and 30.06.2020. xiii) The learned Single Judge of this Court vide interim order dated

21.07.2020 directed that the petitioners seniority and eligibility shall be maintained during the pendency of the present petition.

5. Learned counsel for the petitioners, made following submissions in support of the present petition: - i) The respondent no. 1 failed to implement the Coal Scheme and sufficiently accommodate ESMs registered, with the effect that from 2018 onwards, virtually no allotments were made to such veterans. ii) Having registered under the Coal Scheme, the petitioners were deemed to be ineligible for other employment/ rehabilitation schemes operated under the aegis of the respondent no. 2. Thus, on one hand, no re-employment of W.P.(C) 4384/2020 and connected matters petitioner took place under the Coal Scheme and on the other hand, the petitioner lost their seniority and time in applying for other various re- employment opportunities available. Breach of Doctrine of Promissory Estoppel iii) The respondents through formulation and implementation of the Coal Scheme, periodical executions of the MoUs and allocation of coal transportation work to ESM Cos., represented to the petitioners the availability of benefits under the Coal Scheme. In lieu of such representation, the petitioners registered themselves under the Coal Scheme and consequently, were rendered ineligible to register under other similar schemes of re-employment and resettlement offered by the respondent no. 2. Therefore, there has been a direct loss caused to the petitioners. iv) As a result of petitioners’ upcoming age of superannuation, they are due to be ineligible even to the benefits of the Coal Scheme, even though they have received no rehabilitation. v) Thus, any deviation on part of the respondents in terms of the existing Coal Scheme and rescindment from the MoU, would be in violation of the well-established doctrine of promissory estoppel as well as cause grave injustice and irreparable loss to the petitioners. Respondent No. 1’s action are ex-facie arbitrary vi) The respondent no. 1 have acted in a wholly arbitrary and unreasonable manner, by issuing the Impugned Letters, unilaterally and without according W.P.(C) 4384/2020 and connected matters any opportunity of hearing to the petitioners. vii) Following material on record evidently shows that the respondents were extremely satisfied with the high level of performance of ESM Cos. and indicated their commitment to increase the allocation of coal transportation work made to ESM Cos:- a. Parliamentary Report of the High-Level Committee dated

27.10.1984 recommended increasing allocations to ESM Cos. and since the allocations were happening in an ad hoc manner, to further institutionalize/codify the implementation of the Coal Scheme. b. In 2015, Mahanadi Coalfields Ltd. stated that the allocations of coal transportation work to ESM Cos. should be almost one-third of its total transportation work. c. In 2018, respondent no. 1 had advised its subsidiary companies to employ the services of the ESM Cos. whenever feasible. The same was also recorded in the 2015 Report of CAG. Further, the said report also raised the issue of non-revision and non-escalation of rates for ESM Cos. viii) The ‘irregularities’ in the functioning of some ESM Cos. pointed out by the respondent no. 1, as a basis for termination of the Coal Scheme, cannot be a ground for denial of benefits of the said Scheme to the others, including the petitioners. In fact, the Coal Scheme under MoU, 2013 itself provides for the penalties and consequences in case of such irregularities. W.P.(C) 4384/2020 and connected matters Breach of Doctrine of Legitimate Expectation ix) The Coal Scheme has been in continuous operation for around 40 years and ESMs have been continuously gaining out benefits from such scheme. The periodical execution of the MoUs between respondents no. 1 and 2, exchange of various communications between respondents no. 1 and 2, and communications between respondent no. 2 and CIL Subsidiaries, highlight that there is a promise by the respondents along with a regular and consistent practice of the ESMs enjoying the benefits of the Coal Scheme. Thus, the Coal Scheme and its benefits were legitimately and reasonably expected by the petitioners to continue. x) After the passing of the interim order dated 21.07.2020, respondent no. 2 vide letter dated 20.06.2022 took a position that the seniority/ eligibility of the wait-listed ESM officers will be frozen till the final resolution of the instant case, while responding to the inquires made about the status of the Coal Scheme by other waitlisted officers. Therefore, respondent no. 2 has not only taken this stand in case of the instant petitioners but had also reiterated the aforesaid as a general observation to the other waitlisted officers of the Coal Scheme and a legitimate expectation was made in the eyes of the petitioners that they would be benefited under the Coal Scheme. xi) Reliance for such legitimate expectation can be placed upon the Hon’ble Supreme Court Judgments in Madras City Wine Merchants’ W.P.(C) 4384/2020 and connected matters Association and Another v. State of T.N. and Another1, Food Corporation of India v. M/s Kamdhenu Cattle Feed Industries2 and Shiba Prasad Roy and Ors. v. State of West Bengal and Ors. 3 , where, under identical circumstances the Hon’ble Supreme Court quashed the State action withholding the benefits under such Schemes. Respondent no.1 not competent to terminate the Coal Scheme xii) The Coal Scheme was brought out by the erstwhile Ministry of Energy (now Ministry of Coal- respondent no. 3) and the Ministry of Defence in the year 1979. Respondent no. 1 was not a formulating party to the Coal Scheme and thus, it did not possess any requisite competence to terminate the same unilaterally de hors any consultation/ recommendation of the respondent no. 2 or 3. xiii) Para 22 of the MoU, 2013 which provides for “Amendment, supplement and addendum to the MoU can be issued when mutually agreed”, clearly demonstrate that Impugned Letters by the respondent no. 1 unilaterally and without any agreement with respondent no. 2, is contrary to the express wordings of the binding MoU, 2013. Thus, the respondent no. 1 lacks the competence to issue the Impugned Letters and thereby exit the said MoU and terminate the Coal Scheme unilaterally.