Calcutta High Court
Sree Jagadamba Coke Mfg. Enterprises ... vs Union Of India (Uoi) And Ors. on 26 August, 1988
Equivalent citations: AIR1989CAL337, AIR 1989 CALCUTTA 337, (1988) 93 CAL WN 673
Author: G.N. Ray
Bench: G.N. Ray
JUDGMENT G.N. Ray, J.
1. These appeals arise out of the judgment passed by the learned trial Judge on Feb. 28, 1985 disposing of the five writ petitions concerning C.R. Nos. 14809(W) to 140812(W) of 1983 and C.O. No. 19444(W) of 1984. Against the said judgment disposing of the writ petitions by the learned trial Judge. Shree Jagadamba Coke Manufacturing Enterprises, Sree Shyam Industries, Bajarangbali Coal Co. Ltd., Tentulia Coke Plant. G. N. Coke Manufacturing Co. Private Limited and Premium Fuels preferred appeal and such appeals have been heard analogously and are being disposed of by this judgment because in all these appeals a common question of law and fact is involved.
2. It appears that Premium Fuels did not move any writ petition but they made application for being added as parties in the pending writ petition and it appears that Premium Fuels were allowed to intervene in the pending writ proceedings and make submission.
3. It appears that there are about 100 coke oven plants operating in Bihar and West Bengal out of which only one coke oven plant viz. Premium Fuels is situated in West Bengal and the rest are in Bihar. For manufacturing hard coke, these coke oven plants require coking coal and such coking coal is supplied by the Bharat Coking Coal Limited (B.C.C.L.) which own the collieries containing coking coal in the area. B.C.C.L and other subsidiaries of Coal India Limited (hereinafter referred to as CIL) distribute diverse quantities of coal every month from various collieries to these coke oven plants. The entire coalsupplied to these oven plants come from CIL and/or its subsidiaries. The quality and/or grade of coal varies from colliery to colliery. It is an admitted position that the total quantity of suitable quality or grades of coal for manufacturing hard coke by the coke oven plants in question is not sufficient to meet the requirements of the said coke oven plants. Because of the scarcity of the availability of the suitable coking coal to meet the demands of all the coke oven plants, disputes and differences arose in the matter of supply of such coal to the different coke oven plants in Bihar and West Bengal. It appears that being dissatisfied with the policy and/or orders and/or directions passed by the CIL and BCCL to supply different grades of coal to the said coke oven plants, some of the said coke oven plants had moved writ petitions before this Court, inter alia, alleging that they had been discriminated against in the matter of supply of suitable grade of coat to such coke oven plants and direction and/or policy decision of CIL and/or BCCL had caused serious prejudice to them. It also apears that on such writ petitions interim orders had been passed by this Court from time to time and the Court of Appeal had also passed interlocutory orders in connection with such writ proceedings. It also appears that some of the coke oven plants had entered into an agreement with the CIL or BCCL for supply of specified grades of coal of specified amount and in the writ petitions some of the writ petitioners contended that because of such agreements made by CIL or BCCL with some of the coke oven plants and in view of the policy decision made by CIL or BCCL to supply different grades of coal from different collieries to the said coke oven plants, some of the coke oven plants had been suffering serious prejudice. Accordingly, in the writ petitions, such agreements entered into between the BCCL and CIL with other coke oven plants and/or the decision taken by the BCCL or CIL to supply different grades of coal from different collieries to the coke oven plants in question were sought to be challenged on the ground that the said arrangements had resulted in hostile discriminaton and such agreements and/or directions were unjust, unfair and arbitrary. It may be noted that collieries of CIL and BCCL are all nationalised collieries.
4. The learned trial Judge in his judgment has put much industry and has endeavoured to analyse the facts and circumstances relating to the writ petitions and various orders passed by this Court from time to time by which directions to supply particular grades of coal from particular collieries had been given by this Court in such writ proceedings or appeals arising out of the same. The learned trial Judge has also analysed the requirement of the coke oven plants and the grades of coal and the quantity thereof supplied by different collieries of BCCL and CIL. It appears that the learned trial Judge in his ultimate analysis has come to the finding that there was no reasonable or rational logic or factual justification demonstrated for preferential treatment either to Premium Fuels or other four writ petitioners mentioned in the judgment. It has been held by the learned trial Judge that distribution of raw materials owned by the State must be based on equitable and fair considerations. It is the actual requirement of the raw materials by the consuming units which must form the basis of fair and equitable scheme of distribution. The learned trial Judge has further held that the decision of the BCCL and CIL in the context of scarcity of suitable coal to supply the entire coal to Premium Fuels from Damagoria Colliery was prima facie discriminatory in favour of the said Premium Fuels. The learned Judge has further held that CIL and BCCL had no justification to enter into an agreement on the basis of a clause containing an order of this Court in earlier writ proceedings in view of the fact that such order stood vacated and could not form any basis of arbitration agreement. The learned trial Judge has also held that even assuming that the BCCL had entered into such arbitration agreement and thereby created rights in favour of some of the coke oven plants to obtain coal from nine specified collieries, the question requires serious consideration as to whether or not any agency of the State can allocate more suitable quality of coal in favour of a few selected consumers when the general policy is undoubtedly to make a pro rata distribution. The learned trial Judge has come to the finding that although the other consumers had also obtained coal from the nine collieries specified for the writ petitioners, the quantities received by such other consumers were extremely meagre and it was therefore manifest that there was no uniform pro rata allocation. The learned trial Judge inter alia held that it is incumbent on the respondents to make equitable distribution of coal to all the cokeries, and each cokery should get fair and equitable share of coal available for distribution to the cokeries. The learned Judge did not accept the contention made by the five cokeries that unless particular grades of coal are made available to them, they cannot manufacture particular quality of hard coke which was being manufactured by them. The learned trial Judge has pointed out that some of the cokeries are using coke of inferior grade having more than 24% ash content for the manufacture of the hard coke. The learned trial Judge has further held that as no legal right has been established by any of the parties for favourable, discriminatory and differential treatment the agreement and/or direction or order to supply different grades of coal from various collieries To such coke oven plants should be set aside, in such view of the matter, the learned trial Judge disposed of the writ petitions, inter alia, giving various directions as to how and in what manner the distribution of various grades of coal from various collieries should be made to all coke oven plan ts in Bihar and West Bengal. The learned trial Judge has also directed that the CIL and/or its subsidiaries shall not act on the basis of any arbitration agreement or any other agreement or any order of status quo passed by the CIL and/or its subsidiaries.
5. On behalf of Shri Jagadamba Coke Manufacturing Enterprises and Anr., being appellants in F.M.A.T. No. 1081 of 1985, Mr. S. K. Gupta, the learned counsel for the appellant, has contended that there is an association called Indian Colliery Owners Association now known as Industrial and Commercial Association which at all material times controlled and stilt controls the distribution of coal to all the coke oven plants in and around the coalfields of Ranigunj and Jharia. The said Association at all material times was controlled by one Sri P. K. Agarwalla and his group and year after year the said Agarwala and/or his nominees and/or his family members got themselves elected as President. Secretary and Office bearers of the said Association. The appellant Sri Jagadamba Coke Manufacturing Enterprises along with other three appellants viz. Shree Shyam Industries, Bajrangbali Coal Co. and Tctulia Coke Plant were once members of the said Association but in view of the disputes and difference between the appellants and the said Agarwalla Group representing the said Association, discontinued to be the members of the said Association and they made application for allotment of coal to them separately. The appellant Sri Jagadamba Coke Manufacturing Enterprises was allotted 3000 MT of coal and other three appellants were allotted coal to the extent of 3500 M.T. It is the allegation of the appellants that due to the intervention of the said Agarwala Group the quota of the appellants was reduced by more than 20% but there was no reduction of coal to the said Agarwala Group or any other members of the said Association. Being aggrieved by the said decision of the BCCL, the appellants filed writ petitions before this Court and obtained interim order containing directions of supply of coal to the said writ petitioners an interim measure. Contempt petitions were also initiated on behalf of the said writ petitioners against alleged violation of the interim directions of this Court in the said writ proceedings. Ultimately, the disputes between the parties were settled by agreeing to refer the same to the arbitration of Chief Mining Adviser of the Railway Board, Government of India and it was also agreed that pending the arbitration proceedings, the BCCL would continue to supply coal of the quality and quantity in terms of the order passed in the interlocutory application as contained in the order dt. 9th Aug., 1979. In view of such agreement to refer the disputes to arbitration, the writ petitions were ultimately withdrawn and four several arbitration agreements in writing were executed by and between the BCCL and CIL on one hand and the appellants on the other hand, inter alia, providing for reference of all disputes between the parties to the Chief Mining Adviser. Railway Board and it was one of the conditions in the said arbitration agreement that until the disputes were finally disposed of by the Arbitrator supply of coal of the quantity and quality in terms of the order dt. 9th Aug., 1979 of this Court should be made, After such agreements were entered between the appellants and the CIL and BCCL to refer the disputes to the arbitration, five of the members of the said Association including one Akash Coke Industries and Pawan Hard Coke Industries filed five several writ petitions in this Court, inter alia, contending that BCCL and CIL had been discriminating against the said writ petitioners and the members of the Association and in order to give a favourable treatment to the appellants the said arbitration agreement had been entered into. Later on several other writ petitions were also filed including one of Industrial Engineering Company. By the impugned judgment of the trial Judge dt. 28th Feb., 1985 which is the subject-matter of the instant appeals, the learned trial Judge dealt and disposed of the following proceedings : --
(i) Five main writ applications (four of the appellants and one of the Industrial Engineering Co.)
(ii) Three applications of Premium Fuels for addition of parties and for variation of interim orders.
(iii) Interim applications of the appellants and of Industrial Engineering Co.
6. The apellants Sri Jagadamba Coke Manufacturing Enterprises and three other appellants (Shyam Industries, Bajrangbali Coal Co. and Tentulia Coke Plant) have sought to challenge the impugned order of the learned trial Judge principally on five grounds viz.
(a) Although none of the writ petitions were filed in representative capacity, the learned trial Judge has given directions and/or orders which cover not only the writ petitioners or the respondents in such writ proceedings but a large number of coke oven owners and consumers of coal spread over through West Bengal, Bihar Madhya Pradesh and other parts of India without giving such coke oven plants and other interested persons any opportunity of being heard.
(b) Power to lay down a policy of distribution of coal lies solely with the Central Government and/or through its agency viz. Coal Controller and the learned trial Judge has gone wrong in usurping such functions of the Central Government and/or its agency and the Court should not have taken upon itself the burden of laying down the policy of the distribution as has been done by the learned trial Judge in the impugned judgment.
(c) There has been violation of principle of natural justice and the learned trial Judge based his judgment principally upon the facts alleged in an affidavit dt. 20th Sept., 1984 filed by BCCL in one of the writ proceedings in respect of which no copy was ever supplied to the appellants.
(d) The learned trial Judge has erred in setting aside the arbitration agreement entered into by the appellants and the CIL and BCCL under the Arbitration Act, 1940 and such arbitration agreement could only be set aside under the special provisions of the Arbitration Act and in exercising of the writ jurisdiction the learned trial Judge should not have set aside the said arbitration agreement without taking recourse to the special provisions of the Arbitration Act.
(e) The orders and directions given by the learned trial Judge for distribution of coal are wholly inconsistent and completely unworkable and should not have been so given.
7. Mr. S. K. Gupta has contended that it was sought to be contended on behalf of the Industrial Engineering Company that for challenging a policy decision of the Government, it is not necessary to implead all the persons who may be affected by such policy decision and in support of such contention, a reference to the decision of the Andhra Pradesh High Court since upheld by the decision of the Supreme Court in and were relied on. Mr. Gupta has contended that the aforesaid decisions are not applicable to the facts and circumstances of the case. There was no challenge to the policy of the BCCL as such but certain acts of the BCCL were challenged on the ground of discrimination. Mr. Gupta has contended that if the writ petitioner does not challenge the policy of the decision as such but only challenges its action on the ground that the same is wrongful and discriminatory such application on the part of the writ petitioner cannot be said to be a representative action and as such notice to the persons who may be affected by the adjudication need be given, Mr. Gupta has contended that in the aforesaid circumstances, the learned trial Judge should not have given guidelines as a general policy decision to be followed by the BCCL and CIL in regard to all the owners of the coke oven plants. Such laying down of an all India Policy affecting large number of persons who were not parties before this Court was not warranted and on that score alone, the impugned judgment should be set aside. Mr. S. K. Gupta has further submitted that power to lay down the policy of distribution of coal lies on the Central Government and/or the Coal Controller under the Colliery Control Order, 1945. Mr. Gupta has contended that the impugned judgment dated 28th February, 1985 is not limited to any particular period of time namely one year, two years or three years and it also does not not indicate that if the situation improves and/or the circumstances warrant, the Central Government will be at liberty to supersede the judgment and lay down a policy of its own by making the Colliery Control Order. 1945 applicable for the distribution of the grade of coal required by the coke oven plants. It has been contended by Mr. Gupta that the working of the distribution policy of coal throughout India is of such a vast magnitude that it will involve year to year week to week and even day to day supervision by a very large body of high executive officers and staff spread throughout India There will arise necessities and emergent situations for variation and/or adjustment of the distribution policy from time to time and it is inconceivable that such a situation can be controlled and/or managed by any Court of law. He has, therefore, submitted that the learned trial Judge should not have embarked upon laying down a general policy for distribution of coal to the coke oven plants throughout the country. Mr. Gupta has contended that the impugned judgment of the learned trial Judge is based on facts contained in the affidavit-in-opposition of B.C.C.I. affirmed on 20th Sept., 1984. No copy of such affidavit-in-opposition had been supplied to the appellants. B.C.C.L. had not admittedly filed any affidavit-in-opposition in the writ applications of the appellants and the learned trial Judge himself recorded the said fact in his judgment (Para 3.27). The said affidavit-in-opposition affirmed on 20th Sept., 1984 was filed by the B.C.C.L. in the writ petition of Industrial Engineering Co. (C.O. No. 49444(W) of 1983) and such fact has been noted by the learned trial Judge in para 7.2 of the judgment. The facts and/or contentions alleged in the said affidavit-in-opposition are not correct and if opportunity had been given to the appellants to deal with the said affidavit-in-opposition, the appellants could have placed relevant facts for which there would have been no occasion for the learned trial Judge to base his decision on the facts stated in the said affidavit-in-opposition of B.C.C.L. Mr. Gupta has contended that for such reliance on the said affidavit-in-opposition, the appellants have been seriously prejudiced and on the ground of violation of the principles of natural justice in basing the decision on facts not disclosed to the appellants, the impugned judgment of the learned trial Judge should be set aside. Mr. Gupta has also contended that the decision of the learned trial Judge is based on surmises, conjectures and probabilities and not on facts.
8. Mr. Gupta has further submitted that in para eight of the judgment, the learned trial Judge has been pleased to observe "that the case of the appellant and its associates was no better than that of Premium Fuels and that was a case where B.C.C.L. had acted in a manner which was not only unwarranted but also spelt out collusion". Mr. Gupta has submitted that a party pleading fraud or collusion is under an obligation to prove such collusion. In the absence of giving any particulars, the Court should not have proceeded that there was any collusion and the said sweeping remark of collusion by the learned trial Judge was wholly unwarranted. Mr. Gupta has submitted that the learned trial Judge in paragraph 8.20 of the judgment has been pleased to observe that "the entering into of the arbitration agreement between B.C.C.L and the appellants was a novel way of getting indirectly what could not be obtained directly inasmuch as the order dt. 9th Aug., 1979 of T. K. Basu, J. had spent its force." Mr. Gupta has contended that the order of T. K. Basu, J. dated 9th August. 1979 was not vacated on merits in a contested hearing. Such order was vacated at the express request of the appellant by mentioning before the Court that disputes between the parties had been resolved and as such they did not wish to proceed further with the writ petitions and other pending applications. Mr. Gupta has contended that arbitration agreement was entered between the parties lawfully for settling the disputes and the Chief Mining Adviser of the Railway Board was chosen to be the Arbitrator. The interim order dt. 9th Aug., 1979 would have remained in force even if the parties had not entered into arbitration agreement. No application was made by any of the parties for writ proceedings ' for vacating the said order dt. 9th Aug., f 979 passed by T. K. Basu, J. and as such the said order was expected to continue. There was nothing illegal and unjust in providing for continuance of the interim arrangement as contained in the order dt. 9th Aug.. 1979 until the dispute is settled by the award made in the arbitration proceedings. Mr. Gupta has contended that the orders and/or directions contained in the impugned judgment of the learned trial Judge are unworkable and/or inconsistent. As an illustration for the said contention, Mr. Gupta has submitted that according to Clause (c) of the direction contained in the judgment, in case of coke oven plants which are already working, coal will be allotted to them on the basis of their performance of last three years but in case of newly installed coke oven plants, coal will be allotted to them on the basis of their installed capacity. Such direction, according Mr. Gupta, is wholly unreasonable and unworkable. Under such direction, a new coke oven plant having a capacity of consuming 4000 tonnes of coal will always get 4000 tonnes of coal and will show its performance on the basis of consumption of 4000 tonnes of coal, but the coke oven plants which arc in existence and have their quota curtailed to 50% or 40% can never show their performance according to their capacity. Moreover, requirement of each coke oven plant cannot be the same. The learned trial Judge by the impugned order has put all unequals into an equal category and has provided that the coal will be allotted on pro rata basis. As a result, some of the coke oven plants have been undoubtedly benefited and some of the coke oven plants including the appellants have suffered prejudice.
9. Mr. Anindya Kumar Mitra, the learned counsel appearing for M/s. G. N. Coke Manufacturing Company Private Limited has supported Mr. Gupta. Mr. Mitra has submitted that Coke oven plant of G. N. Coke is situated in Mugma Coalfields and the coke ovens of Mugma Coalfields used to get supplies of coal partly from BCCL or partly from ECL. The coal of ECL is of better quality and suitable for manufacturing coke. The coke ovens of Mugma Coalfields were lifting the entire quota of coal from the collieries of ECL and hardly they lifted any coal from collieries of BCCL. Mr. Mitra has contended that the learned trial Judge has passed the impugned judgment containing direction for such supplies of coal from different Coalfields to various coke oven plants spread over a vast area but such direction has been passed by the learned trial Judge without hearing G. N. Coke Manufacturing Co. Ovt. Ltd and the said G. N. Coke Mfg. Co. Pvt. Ltd. has been seriously prejudiced by the direction given by the learned trial Judge for distribution of coal to various coke oven plants. Mr. Mitra has supported the contention of Mr. Gupta appearing for the other appellants that the learned Judge had no jurisdiction to pass any order affecting strangers to the applications when the writ petitions had not been made in a representative character. Mr. Mitra has contended that if the order passed by the learned trial Judge is made applicable to the parties to the writ proceedings then the very purpose of the judgment will become frustrated and the same will loose all its significance. But in the facts of the case such direction need be passed by the Appeal Court and/or the impugned judgment is required to be set aside.
10. Mr. Shakti Nath Mukherjee, the learned counsel appearing for Premium Fuels has contended that the writ petitioners in all the five matters out of which the impugned judgment was passed by the learned trial Judge have their coke oven plants in the State of Bihar and they were claiming relief against BCCL which has its registered office as well as Sales Office at Dhanbad. Simply on the ground that the said writ petitioners have their registered office at Calcutta, the writ petitions were moved before this Court, although reliefs were really claimed against the respondents in the activities in the territory of Bihar. In such circumstances, the writ petitions should not have been entertained by the learned trial Judge. It has also been contended by Mr. Mukherjee on behalf of the Premium, Fuels that Premium Fuels admittedly moved the writ petition against CIL and BCCL and obtained Rule being C.R. No. 12803(W) of 1983 together with an interim order directing inter alia maintenance of status quo with regard to supply of coal to Premium Fuels. The said facts were disclosed in para 17 of the affidavit-in-opposition of Premium Fules in the matter of writ petition of Shyam Industries and the learned trial Judge has noted the same in para 3, 19 of the said judgment. The interim order obtained by Premium Fuels in its writ application concerning C.R. No. 12803(W) of 1983 is still in force and was not one of the matters which was placed for hearing before the learned trial Judge and accordingly the learned trial Judge in exercise of his co-ordinate jurisdiction could not pass any order which would affect the operation of the interim order passed by this Court in another writ proceeding. In the aforesaid circumstances, the order passed by the learned trial Judge cannot affect the operation of the earlier order dt, 23rd Dec., 1983 passed in C.R. No. 12803' W) of 1983 in so far as the right of the said Premium Fules to get supply of coal under the said interim order is concerned. Mr. Mukherjee has also supported Mr. Gupta and Mr. Mitra that the impugned judgment cannot affect persons who are not parties in the proceedings before the learned trial Judge. Admittedly there are other proceedings initiated by other parties in other Courts including the proceeding before the Hon'ble Supreme Court since referred to in para 8.13 of the judgment. Accordingly, the learned Judge could not lay down a general principle of distribution of coal to the owners of various coke oven plants although they were not parties in the proceedings before the learned trial Judge since disposed of by the impugned judgment. Mr. Mukherjee has contended that Sri Shyam Industries, Jagadamba Coke Mfg. Enterprises and Tetulia Coke Plant were seeking to enforce their alleged right of getting supply of coal from the specified collieries including Damagoria Colliery (East Ramnagar Section). In the writ application, there was no allegation against Premium Fuels nor any allegations against B.C.C.L. for making supply to Premium Fuels from Damagoria Colliery (East Ram Nagar Section). In the writ application by industrial Engineering Co., there was, however, an allegation of preferential treatment of B.C.C.L. in favour of six coke oven plant owners including Premium Fuels., Mr. Mukherjee has submitted that the Premium Fuels is concerned only with the maintenance of supply of coal from Damagoria Colliery (East Ramnagar Section) and only to that extent the Premium Fuels is opposing the prayer of Shyam Industries. Jagadamba Coke Mfg. Enterprises and Tetulia Coke Plant. The Premium Fuels have no objection if after maintaining supplies from the Damagoria Colliery as in the past, any excess can be supplied to other coke oven plants. Mr. Mukherjee has submitted that Premium Fuels was objecting to the policy of pro rata distribution to Premium Fuels and was seeking to establish its cliam for preferential supplies from Damagoria on the ground that such special arrangement was just and reasonable because such supply from Damagoria Colliery is essentially necessary for its existence and the decision taken by the C.I.L. or B.C.C.L. to supply coal from Damagoria Colliery as per the requirement of Premium Fuels is based on just and reasonable grounds and such decision is not arbitrary or unreasonable as alleged by the writ petitioners and found by the learned trial Judge. Mr. Mukherjee has submitted that two basic questions are involved in the claim of Premium Fuels ;
(a) Whether or not Premium Fuels can justifiably claim any preference with regard to the supplies from Damagoria Colliery, and
(b) Whether or not facilities and preference extended to Premium Fuels by CIL/BCCL were just and reasonable.
11. Mr. Mukhcriee has submitted that Industrial Engineering Co. in its writ application has not taken any stand that no special preference or facilities can at all be extended to any manufacturer. On the other hand, the stand taken by the Industrial Engineering Co. is that special preference or facilities are being extended to some manufacturers without any justification. Mr. Mukherjee has submitted that some of the facts which do not seem to be disputed or cannot be seriously disputed may be set out hereunder :
(a) Damagoria Colliery was not even regarded by the authorities as containing coking coal and it was in fact not nationalised under the Coking Coal Mines (Nationalisation Act, 1972). It was nationalised under the Coal Mines (Nationalisation) Act, 1973 which provided for nationalisation of non-coking coal mines.
(b) Premium Fuels is the first coke oven plant in West Bengal being established in 1974 at a distance of about 2 K.M. from Damagoria Colliery (East Ramnagar Section) and registered with the Directorate of Cottage and Small Scale Industries, Government of West Bengal and approved by Small Industries Service Institute, Government of India.
(c) Damagoria Colliery (East Ramnagar Section) is the only Colliery in West Bengal from which supplies of suitable quality of coal can be had for production of Low Volatile Fuel (hard coke) and there is no other Colliery in close proximity of Premium Fuels and there was no other plant in close proximity of Damagoria Colliery.
(d) There are about 110 coke oven plants in the State of Bihar drawing the bulk of their supplies from about 50 collieries situated in the State of Bihar. Most of these coke oven plants in Bihar were established immediately after the nationalisation of the Coal Mines and during the period of 1973-74.
(e) The coke oven plants in the State of Bihar were never dependent upon the supply of coal from Collieries in other States, particularly in West Bengal and drawing of coal by the coke oven plants of Bihar from Collieries in other States were negligible.
(f) Premium Fuels in 1974 made an application for fixation of quota of supply of coal to BCCL and BCCL agreed to supply such coal from Damagoria Colliery (East Ramnagar Section) to Premium Fuels. No other coke oven plants made any demand from Damagoria Colliery and it was only Premium Fuels which at that time was taking regular supply from the Damagoria Colliery.
(g) At the point of time when Premium Fuels was established at its present site, there was sufficient stock of coal at Damagoria Colliery and the despatches were poor and BCCL entered into an agreement with Premium Fuels on 12-11-77 for supply of 2000 tonnes of coal per month with a clause that in the event of failure on the part of the Premium Fuels to lift the said quantity per month, a penalty would be imposed at a certain rate on the short fall.
(h) The supply of suitable coal for coke making from some of the collieries in Jharia Coalfields dwindled and it was also then a clamour for supply of coal from Damagoria Colliery.
(i) In order to obtain regular supply of coal from Damagoria Colliery, the Premium Fuels moved a writ petition and obtained an interim order from this Court on 27-7-79 for ensuring such supply of coal from Damagoria Colliery. Premium Fuels had also entered into negotiation and obtained assurance of an agreement for maintaining such supplies at the rate of 2000 MT per month from Damagoria Colliery on condition that the petitioner will withdraw the writ petition and acting on such assurance the Premium Fuels withdrew the writ petition and such fact of withdrawal of the writ petition was noted in the order of the Court dt. 16-1-81. In September, 1980, an agreement was entered into between the Premium Fuels and the BCCL for obtaining supply of coal from Damagoria (East Ramnagar Section) initially for a period of four months and Premium. Fuels thereafter negotiated with the authority and was given to understand that the supplies would be maintained. CIL had taken a decision on 30-8-82 for maintenance of status quo after careful consideration of the question at the highest level and in its affidavit BCCL also admitted that such agreement was continuing. The Coal Controller in its affidavit before the learned trial Court had stated that the BCCL by its letter informed the Coal Controller that there was arrangement of supply of coal required by the Premium Fuels from Damagoria (East Ramnagar Section).
12. Mr. Mukherjee has contended that Damagoria Colliery (East Ramnagar Section) is not only a colliery just adjacent to Premium Fuels but it is the only colliery situate within a reasonable distance. The other collieries from which coking coal can be made available are situated at a distance of about 60 K.Ms. and above and the said fact will appear in a chart incorporated in the judgment by the learned trial Judge under para 4.2. Mr. Mukherjee has contended that it will be evident from the said chart that other coke oven plants have several alternative sources of supply more or less at a comparable short distance, but Premium Fuels isthe only coke oyen plant which apart from Damagoria Colliery has no other alternative source of supply within a reasonable distance.
13. Mr. Mukherjee has submitted that the coke oven plant of Premium Fuels is situated in the State of West Bengal and if on the basis of the principle laid down by the learned trial Judge in the impugned judgment. Premium Fuels is to get supply coal from the Coalfields in Bihar not only the Premium Fuels had to carry such coal from a distance of 60 K.Ms. and above but will have to pay sales tax at a higher rate because sales-tax rate in Bihar is more than the State of West Bengal. That apart, there will be various other difficulties, namely, there will be necessity of obtaining road permits for the movement of coal across inter state border. Mr. Mukherjee has contended that in the event the judgment of the learned trial Judge is implemented, 97% of the supply of Premium Fuels would be from distant collieries and only 3% from Damagoria Colliery (East Ram Nagar Section). When most of the collieries supplying coal for coke oven plants are situated in Bihar and such collieries are in close proximity of the most of the coke oven plants, there cannot be any question of discrimination or special favour shown to Premium Fuels by supplying coal from Damagoria Colliery, in view of the fact that Damagoria is the only Colliery from which the required grade of coal can be supplied to the Premium Fuels which is only 2 K.Ms. away from such colliery and all other collieries supplying coal for the coke oven plants are at a considerable distance. If the order of the learned trial Judge is given effect to, all the coke oven plants situated in Bihar will continue the benefit of enjoying local supply or supply from the collieries near about the plants, but the Premium Fuels would be deprived of the main source of supply and would have to depend upon a distant source of raw materials, the cost of transportation and extra taxes would be such as to make it impossible for the Premium Fuels to compete with the other manufacturer. Mr. Mukherjee has contended that as a matter of fact after the decision of the learned trial Judge, the BCCL has stopped supplying the required coal from the Damagoria Colliery and is offering coal from distant coal fields for which the coke oven plants of Premium Fuels had to be closed.
14. Mr. Mukherjee has contended that the Coal Controller who is the competent authority under the Colliery Control Order, 1945, after proper scrutiny and examination has classified the coal of Damagoria Colliery (East Ramnagar Section) as washery grade III and in the Coal Directory of India issued by the Government of India, 1982-83, the coal of Damagoria Colliery is described as washery grade III. From the quarterly release order of Coal Controller, it will appear that amongst total release of 24,87.000 tonnes of coking coal meant for distribution to different consumers including private cokeries, release from Damagoria is only 15000 tonnes for a quarter which is less than 1% of the total release of coking coal. Out of the said 15000 tonnes, on the basis of the agreement entered between the parties, less than 50% of the said coal from Damagoria Colliery is to be allotted in favour of Premium Fuels. Hence, the allegation of exclusive supply in favour of Premium Fuels is a mere allegation and far from the actual state of affairs. Mr. Mukherjee has contended that previously nobody had ever claimed and ever asked for supply of coal from Damagoria Colliery for the cokeries and the Premium Fuels set up their plants near about the Damagoria Colliery with a view to get supply of coal raised from the said Colliery and such selection of industrial site was made by the Premium Fuels with a hope to get supply of coal from the said collieries. without incurring much, expenses on transport. Referring to a book 'Industrial Economics, 1984 by R. R. Barthwal, Professor of Economics, Indian Institute of Technology, Kanpur, Mr. Mukherjee has contended that where the material index is greater than one then the industry is attracted towards the source of raw materials. He has submitted that weight losing process of production brings location of productive activity near the source of raw materials. Mr. Mukherjee has contended that Premium Fuels is claiming preference not on any unjust or unfair consideration but it is insisting upon maintenance of supply which it was receiving right from the beginning and it is only objecting to its disruption and discontinuance upon grounds which are wholly unjust and arbitrary.
15. Mr. B. N. Sen appearing with Mr. Gautam Chakravarti for the Coal India Limited and Bharat Coking Coal Ltd. has contended that Shree Jagadamba Coke Mfg. Enterprise and three others made writ petitions before this Court in the year 1979 and interlocutory applications were filed in those matters. Contempt applications were also filed by the said writ petitioners, inter alia, alleging violation of the interim orders passed in the said writ proceedings. As the hearing of the said writ petitions could not be held because of various interlocutory matters and contempt applications being filed, it was agreed by the Coal India Limited and Bharat Coking Coal Ltd. that the disputes should be better decided by referring the same to arbitration and pursuant to such decisions, four separate arbitration agreements were entered into between the then General Manager (Sales). BCCL and the said writ petitioners. The said agreements contain a supply clause which, inter alia, provides that until such lime the arbitrator would make and publish his award. BCCL should continue to supply every month a certain quantity of coal in terms of the order dt. 9th Agu., 1979 as passed by Mr. Justice T. K. Basu in the writ petition. It is the case of CIL and BCCL that by the said arbitration agreement the said writ petitioners got a better treatment over other similarly placed cokeries. It has been stated that Pavvan Hard Coke and four others also filed writ petitions and obtained interim orders in such writ proceedings wherein the said arbitration agreements were stayed. In view of such stay of arbitration agreements, the very purpose of the agreement became frustrated The learned trial Judge by the impugned judgment has not only expressly set aside the arbitration agreements but has also directed that the CIL and/or its subsidiaries shall not act on the basis of any arbitration agreement which will allow any party to get preferential treatment over other similarly placed consumers. In view of such mandate of the learned trial Judge, the CIL and/or its subsidiaries cannot give effect to the arbitration agreement. Mr. Sen has, however, pointed out that by the impugned judgment, the learned trial Judge did not pass any blanket order restraining the BCCL from entering into any arbitration agreement, but only restrained CIL and BCCL to enter into any arbitration agreement which would create discrimination amongst the similarly placed consumers. It has been contended on behalf of the BCCL and CIL that Premium Fuels preferred an appeal against the order dated 28th February passed by Mr. Justice Ajit Kumar Sengupta. The Court of Appeal at the time of disposing of such appeal directed that the BCCL need not file any affidavit in the trial Court so that the main writ petition may be disposed of without delay. In view of such decision. BCCLdid not file any af f idavit-in-oppositing to the writ petitions of Sree Jagadamba Coke Mfg. Enterprises and three others. BCCL however filed an affidavit in the writ petition filed by Industrial Engineering Co. and such affidavit was not served upon Jagadamba Coke Mfg. Enterprises and three other writ petitioners. It has been however contended that non-service of such affidavit was not raised before the Court and in the grounds of appeal such point has also not taken. Accordingly, such objection should not be permitted to be raised at the hearing of this appeal. Mr. Sen has contended that by the impugned judgment, the learned Judge has given directions upon CIL and BCCL in the matter of distribution of coal on the basis of pro rata distribution policy. Such direction was passed by the learned trial Judge upon BCCL and CIL who are parties in the proceedings and in the facts of the case it was not at all necessary that other consumers should have been parties in the writ proceedings and in their absence such direction upon the BCCL and CIL could not have been made by the learned trial Judge. It has been contended that such order has not adversely affected any consumers who are not parties to the writ proceeding and excepting G. N. Coke Manufacture no other manufacturers have also come up before this Court with a grievance that such direction of the learned trial Judge has adversely affected the interest of such consumers. Mr. Sen has contended that power to lay down policy regarding distribution of coking coal not required for metallurgical consumers and coal produced in Assam lies with the BCCL. Coking coal not required for metallurgical consumers and coal produced in Assam are under the control of the appropriate authority under the Coal Control Order as will be evident from notification dt. 24th July, 1967 bearing S.O. No. 2464 issued by the Central Government. The learned trial Judge has given directions so that equitable distribution on pro rata basis is made by BCCL or CIL. Since BCCL has accepted such guidelines the question of jurisdiction of the Court for laying down a policy or guideline becomes academic. It has been contended that even if it is held that the Court had no jurisdiction to give such guidelines, BCCL on its own may accept the guidelines unless such guidelines are held illegal or opposed to public policy by the Court of Appeal. Referring to the contention made by Premium Fuels to get supply of coal from Damagoria Colliery it has been contended on behalf of the BCCL and CIL that an agreement was entered into between CIL, BCCL and Premium Fuels for supply of certain quantities of coal at a time when there was no demand of coal from Damagoria Colliery. During the subsequent years, the quality and grade of coal of Damagoria Colliery became superior as new seams were found. As a result, the demand of coal from Damagoria Colliery increased day by day and all the consumers and cokeries including Shree Jagadamba Mfg. Enterprise and others had also made demand of coal from Damagoria Colliery. It has been contended that BCCL being the principal supplier of coal cannot allow any coke oven plant including Premium Fuels to get supply exclusively from Damagoria Colliery. It is contended that BCCL has an obligation to supply different grades of coal equally to all the consumers and locational advantage of Premium Fuels may not be treated as the guiding factor for getting special treatment, Mr. Sen has submitted that the learned trial Judge has given various directions in the matter of supply of coal to different consumers of coke oven plants and main object of such directions is equitable distribution of coal to such cokeries. CIL and BCCL being the State authorities are also under an obligation to make equitable distribution. It is quite likely that some of the cokeries may suffer some prejudice by the policy of distribution of coal as indicated by the learned trial Judge but such distribution will generally enure to the benefit of majority of cokeries. Mr. Sen has, therefore, contended that no interference is called by the Court of appeal with the judgment of the trial Court,
16. Mr. Dipankar Gupta, the learned counsel appearing for Industrial Engineering Company has contended that there are two broad aspects involved in these appeals viz. (i) Whether the special agreement or arrangement for supply of coal to the five appellants arc justified or not? and (ii) Whether and to what extent the learned trial Judge is justified in giving directions on policy matters?
17. Mr. Dipankar Gupta has submitted that the said two questions are quite independent and answer of the first question has nothing to do with the second. Mr. Gupta has contended that there are two groups of appellants viz. (i) Jagadamba. Sree Shyam Industries, Bajrangabali and Tetulia and (ii) Premium Fuels.
The facts relating to Jagadamba and three others are similar and the facts relating to Premium Fuels are slightly different. It is contended by Mr. Gupta on behalf of the Industrial Engineering Company that all the parties in these appeals use the beehive process for producing coke and in such process coking coal is burnt inside oven made of firebricks, stone etc. Setting up a coke oven plant requires the permission of the Directorate of Industries of the concerned State Government and the installed capacity (expressed in tons per month) is also determined by the concerned State Government authorities. The nature of the coke oven plants including those of the appellants and the requirements of the quality of coking coal are similar. The Colliery Control Order was initially promulgated under the Defence of India Rules and it has been continued under the Essential Commodities Act. Under the Colliery Control Order, the Central Government has the power to control the distribution of any coal, including allocation of quotas. By notification dt. 24th July, 1967, the Central Government authorised any person to deal in non-coking coals and coking coals not required for metallurgical consumers without any allotment or written order of the authority. As a result, coking coal except coking coal meant for steel plants was decontrolled and Clause 12G was introduced in the Colliery Control Order by which sale and disposal of hard coke produced from beehive ovens were decontrolled. There is therefore no statutory control over coking coal distributed by CIL and its subsidiaries to coke oven plants and accordingly there is no occasion for overriding any statutory provision of the Colliery Control Order if any direction for distribution of coal by the CIL and its subsidiaries is given. The Central Government under the Colliery Control Order has categorised different grades of coal. Mr. Gupta has contended that CIL has a definite policy with regard to the distribution of coking coal to the coke oven plants and such policy ensures distribution of coking coal to coke oven plants on pro rata basis. Such policy is clearly indicated in the meeting held by CIL on 24th June, 1982 and the policy outlined in the said meeting was placed before the learned trial Judge. The linkage of the eoke ovens to the different subsidiaries are on the basis of geographical proximity. The coke ovens of Bengal and Bihar are situated in two belts. Jharia and Mugma. The other coke ovens are elsewhere. With reference to Jharia belt, it is the case of the BCCL that there are about 70 beehive hard coke ovens situated in and around Jharia Coalfields which get supply of coal from BCCL and the total demand of such coke oven plants is about 1,30,000 tonnes per month. Such demand is being made from several collieries which are having a surplus production of W-I, W-II, W-III and W-IV grades of coal after meeting the requirements of priority sector and BCCL's own consumption. The surplus availability from each of such collieries is calculated and thereafter each of these cokery is given a proportionate quota from each of the collieries on the said proportion as their monthly requirement compares with the total monthly requirement of all cokeries. Such quotas are notified and cokeries book their requirements accordingly and this system ensures that there is a total equitable distribution of all the available resources in relation to the requirement and no cokery can claim favour being shown to any other cokery. With reference to Mugma belt, it is the case of the BCCL that 35 cokeries situated in Mugma Coalfield which are somewhat away from Jharia Coalfield. Mr. Gupta has further contended that BCCL feels that M/s. Premium Fuels should be treated on the equal footing and it should first get its coal requirement from Eastern Coalfields Limited and thereafter the balance quantity from BCCL strictly on pro rata basis. Mr. Gupta has, therefore, contended that the guidelines indicated by the learned trial Judge are wholly justified and ensures the equitable distribution on the pro rata basis to all the coke oven plants whose requirements are similar and CIL and BCCL have also endorsed that such equitable distribution is only fair and just and CIL and BCCL intend to make such equitable distribution. Accordingly, there cannot be any occasion for the appellants to challenge the decision of the learned trial Judge and the writ court being also a court of equity should not interfere with any arrangement which ensures fair and equitable distribution of coal. Mr. Gupta has contended that Premium Fuels admittedly belonged to Mugma group of collieries but in the matter of getting equitable distribution on pro rata basis, the relevance of State boundary sought to be highlighted by the Premium Fuels should be totally ignored. Mr. Gupta has contended that the learned trial Judge was not also oblivious of the factor like geographical location and in the consideration given by the learned trial Judge consideration of such geographical location by the CIL and BCCL has been indicated. Mr. Gupta has contended that since 1984, the coal seam of East Ramnagar section of Damagoria Colliery has been regarded from W-III to W-II and such coal is the best available coal for the coke oven plants. The other coke oven plants are being allotted W-III and W-IV coal and some times even inferior grades. If the entire requirement of Premium Fuels is supplied from Damagoria Colliery, the other coke oven plants will be deprived of getting a better grade of coal and the Premium Fuels will gain advantage over others for no just reason. Mr. Gupta has contended that the special arrangements and/or agreements with five collieries appear to be discriminatory and placing other coke oven plants on a disadvantageous position. The learned trial Judge, therefore, gave direction to the CIL and BCCL to ensure pro rata distribution of coal to all the cokeries similarly circumstanced and restrained them from giving any preferential treatment in terms of any agreement and/or arrangement. Mr. Gupta has submitted that the writ court has not only power to give such direction for equitable distribution to CIL and BCCL but the directions given by the learned trial Judge are also justified and in the interest of the most of the coke oven plants.
18. Referring to the second limb of the question involved in these appeals viz. whether and to what extent the learned trial Judge could give direction on policy matter. Mr. Gupta has pointed out that it is contended by the appellants that the learned Judge should not have given direction on policy matter and the court has no jurisdiction to embark upon the policy matter and the same should be left to the discrimination of CIL and BCCL. Mr. Gupta has submitted that the learned trial Judge has not really entered into the matter of policy. Law is well settled that the Courts will not go into the question of policy but there are important qualifications for such proposition. Mr. Gupta has submitted that the Court can interfere if the policy is shown to be arbitrary, discriminatory and unreasonable and the Court may, in such circumstance, strike down the policy and leave it to the authority to formulate a suitable policy free from the vices. If the Court finds that the policy being pursued is arbitrary, discriminatory or unreasonable, the Court may after striking down the policy itself lay down the policy to be followed thereby indicating to the authority concerned how the vice can be avoided. The Court may also examine whether or not a particular policy laid down by an administrative authority has been properly followed when such policy is not otherwise bad. In this connection, Mr. Gupta has referred to a decision of the Supreme Court made in Bennett Coleman's case . The Supreme Court has held that policy whether the import and distribution of newsprint as contained in the Newsprint Policy is purely a matter of Government policy and the Court cannot adjudicate upon such policy measures unless the policy is alleged to be mala fide. The Supreme Court accepted the right of a party to challenge the policy on the ground that such policy violates provisions of Articles 14 and 19 of the Constitution and as a matter of fact the Supreme Court examined various restrictions of newsprint policy and found the same to be unconstitutional. As a result, certain remarks in the Newsprint policy 1972-73 were struck down. He has also referred to another decision of the Supreme Court made in the case of E.P. Royappa v. State of Tamil Nadu, . The Supreme Court has held in the said decision that from a positive point of view, equality is opposed to arbitrariness. In fact equality and arbitrariness are sworn enemies, one belongs to the rule of law in a republic while the other to the whim and caprice of an absolute monarch. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. Mr. Gupta has also referred to a decision made in the case of Ajay Hasia v. Khalid Mujib, for the proposition that wherever there is arbitrariness in State action whether it be of the legislature or of the executive or of the authority under Article 12. Article 14 immediately springs into action and strikes down such State action. The concept of reasonableness and non-arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution.
19. Relying on these decisions, Mr. Gupta has contended that if any arrangement or agreement or policy framed and pursued by the CIL and BCCL results in hostile discrimination against coke oven plants similarly circumstanced and if a challenge is thrown against such hostile discrimination, the writ court is quite within its power to examine such policy and/or arrangement and it can strike down such policy or arrangement or part thereof if it offends Article 14 and the Writ Court can also give direction so that there is no occasion for any further hostile discrimination in pursuing the policy. In this connection, Mr. Gupta has also referred to a decision of the Supreme Court made in the case of N.S. Mills Co. Ltd. v. Union of India where the Supreme Court devised a scheme for doing justice by returning small amounts to a large number of consumers. Mr. Gupta has also referred to a decision of the Supreme Court made in the case of Shiv Shankar Dal Mills v. State of Haryana where the Supreme Court has also devised a scheme for refund of market fees and in Azad Rickshaw Puller's case implementation of a law for rickshaw pullers was under question and without going into the vires of the legislation, the Supreme Court evolved a scheme which included granting of loan, setting up repair workshops, replacements during the agricultural season, group insurance etc. although the law merely provided for licensing of rickshaws. Mr. Gupta has contended that whenever any public policy appeared to be unjust and unfair not only such policy was criticised and declared illegal by the Court of law but the Court also indicated the policy to be followed for a fair deal to all concerned and the Supreme Court has often framed such scheme. Mr. Gupta has referred to the decision of the Supreme Court made in the case of Dr. Dinesh Kumar v. Motilal Nehru Medical College where the Supreme Court after declaring that the method of selection for admission to the Medical courses was arbitrary, directed the Indian Medical Council to come forward with a positive scheme on the basis of which further directions would be given to the Government of India, the State Governments and/or Universities for holding necessary entrance examination.
20. Referring to the contentions made by Mr. S. K. Gupta appearing for Jagadamba Coke Manufacturing Enterprise that the cancellation of the arbitration agreement was unjustified inasmuch as none of the parties had challenged the arbitration agreement and the Arbitration Act being self contained code, the agreement could be cancelled under the specific provisions of the Arbitration Act and not by a direction in a writ proceeding under Article 226 of the Constitution, Mr. Dipankar Gupta has contended that such contention is wholly misconceived. He has contended that Industrial Engineering Company did not challenge the arbitration agreement. The Industrial Engineering Co. in the writ proceeding contended that Shyam Industries and others were getting coal from certain specified collieries by virtue of orders obtained from this Court in the writ proceedings initiated by these collieries, and the Industrial Engineering Co. therefore prayed for an order of Mandamus directing the authorities to act fairly and equitably in the matter of distribution of coal. It however transpired that BCCL and CIL had entered into agreements with some of the coke oven plants by which such coke oven plants get undue advantage over others in the matter of supply of better grade of coal in a larger quantity. The learned trial Judge after examining the facts and circumstances of the case has come to the finding that some of the coke oven plants though similarly circumstanced have gained advantage because of the agreements and arrangements between such coke over plants and the CIL and BCCL. The learned trial Judge has therefore restrained the CIL and BCCL. from giving effect to such discriminatory arrangement and gave direction for supply of coal to coke over plants in equitable and pro rata basis.
21. Referring to the submissions made by Mr. Shakti Nath Mukherjee on behalf of Premium Fuels, Mr. Dipankar Gupta has contended that the Premiuhi Fuels have no subsisting contract in their favour to get supply exclusively from Damagoria Colliery and coal is a national product and cannot be distributed merely on the basis of State boundary. Mr. Gupta has submitted that when an essential national product is in short supply, it is the duty of the authorities concerned to distribute the available quantities to the consumers irrespective of the situation in the past when supplies might have been plentiful, Pro rata distribution is a measure of a fair distribution of a scarce commodity and unrestricted supply condition in the past cannot be relied upon in order to frustrate a pro rata equitable distribution. Mr. Gupta has therefore, submitted that the appeals should be dismissed and no interference should be made in the judgment appealed from.
22. After considering the respective contentions of the learned counsel appearing for the parties it appears to us that the court should refrain from embarking upon the unchartered ocean of public policy and the Supreme Court, in no uncertain term, has sounded a note of caution to that extent. But the said principle is not absolutely unqualified. There is no manner of doubt that the State authorities can frame the public policy and such right to frame public policy cannot be challenged but in framing such policy or implementing the same, if statutory right of any party is violated or the fundamental rights guaranteed by the Constitution of India are infringed, the Court is certainly within its jurisdiction to scrutinise such public policy framed by the executive authority and strike down such policy or part thereof which either infringes any statutory right or comes in conflict with any provisions of the Constitution of India. Law is well settled that the State and/or public bodies in discharging duties and functions of a public nature must not act arbitrarily or capriciously and in framing such policy or implementing the same, there should not be any hostile discrimination against any one similarly circumstanced unless for a very good and cogent reason any deviation from the general principle or norm is justified In our view, Mr. Dipankar Gupta is justified in his contention that in an appropriate case, if the court is satisfied that a particular policy framed in the discharge of public duties and functions has infringed a statutory or constitutional right of the person affected by such policy and/or the policy though otherwise unexceptionable has been implemented in such a manner that it has resulted in hostile discrimination to others similarly circumstanced, it cannot only strike down such policy and/or the unjust State action in implementing the policy, but may also give guidelines and in an appropriate case may even frame scheme as to how the policy should be framed and/or the same should be implemented so that it does not infringe any statutory or constitutional right of others likely to be affected by such policy and/or implementation thereof. The Supreme Court, as a matter of fact in an appropriate case has not only indicated the manner in which the scheme is to be framed or implemented but has framed the scheme itself and in our view. Mr. Dipankar Gupta has successfully drawn the attention of this court to a number of decisions of the Supreme Court in this regard as referred to hereinbefore. It, however, appears to us that it will be only judicious in confining to broad out lines of the scheme of equitable distribution instead of laying down the scheme itself when all the parties likely to be affected are not before the court and all the variable factors germane for implementing the scheme of equitable distribution are not before the court and/or it is not possible to take care of all reasonable contingencies affecting the parties to be subjected under the scheme. In such circumstances, it will be only desirable that the court should strike down the unfair policy of distribution and indicate the broad outlines under which the concerned authority should frame the scheme of equitable distribution so that it is not absolutely bound by the policy framed by the court and can successfully deal with any urgent situation requiring adjustments in the scheme. It also appears to us that although an arbitration agreement is to be set aside under the provisions of the Arbitration Act and generally in a writ proceeding initiated by a third party, such arbitration agreement between other parties is not to be set aside collaterally by the writ court, it cannot be contended that in no case the Court can pass any mandate by which the arbitration agreement in effect becomes inoperative. If the Governmental authorities in discharge of public duties and functions enter into an arbitration agreement with a party but such agreement results in hostile discrimination against others similarly circumstanced, a third party can certainly complain against hostile discrimination resulting from such arbitration agreement between the Governmental authority and the other party in a writ proceeding and in our view the court will not be powerless to restrain such governmental authority and/or third party from proceeding any further with the arbitration agreement.
23. Considering the facts and circumstances of the case, it appears to us that most the coke oven plants situated in Jharia and Mugma belts follow the beehive process of producing coke and the requirement of particular grades of coal for such coke oven plants is similar. It is also an admitted position that after meeting the requirement of metallurgical plants and personal consumption of BCCL, the CIL and BCCL do not have sufficient quantity of such grades of coal which are required by all the coke over plants in Jharia and Mugma belts to meet their requirements on the basis of installed capacity of the coke oven plants. In the circumstances, the CIL and BCCL cannot but follow a policy of distribution of coal to such coke oven plants on a pro rata basis so as to ensure equitable supply. It, however, appears to us that there are number of variable factors including locational disadvantage which require serious consideration for ensuring fair and equitable distribution of different grades of coal to the coke over plants situated in Mugma and Jharia Coalfields. It also appears to us that in the writ proceedings all such variable factors and special requirements of various coke oven plants have not been placed in details by the concerned parties and in the disputes raised; in the writ proceedings, before the learned trial Judge, a large number of coke oven plants not being parties did not get full and reasonable opportunity to place their contentions. In the aforesaid circumstances, it appears to us that the court should not have laid down formulae for distribution of coal by the BCCL and/or CIL to all the coke oven plants but should have left the matter to the BCCL and CIL by giving broad outlines; In this context, we may refer the case of Premium Fuels. It appears to us that Premium Fuels had set up its coke oven plants by the side of Damagoria Colliery in West Bengal and the other collieries are in the State of Bihar and are situated at a considerable distance from the plant of Premium Fuels. If the coke oven plant of Premium Fuels is directed to get supply of coal strictly on the basis of pro rata distribution as indicated by the learned trial Judge, it will be forced to take almost the entire supplies from long distant collieries in another State namely the State of Bihar thereby incurring considerable extra expenditure and in such circumstances, the economic viability of the coke oven plant will be seriously jeopardised. As a matter of fact, it is the case of Premium Fuels that in view of the judgment of the learned trial Judge, the existing arrangement of getting supply from Damagoria Colliery has been scrapped by the BCCL and as a result, the coke oven plant of Premium Fuels had to be closed down because the cost factor involved in getting supplies of coal from distant collieries in the State of Bihar made the running of coke oven plant not economically viable. In our view, the special circumstances concerning some of the coke oven plants to get supply from nearabout collieries should not be lost sight of and even within the framework of equitable distribution on pro rata basis, some deviation in favour of one or two coke oven plants in the special facts and circumstances will not amount to hostile discrimination if on other considerations such deviation is warranted. In this connection we may refer to the decision of the Supreme Court made in the International Airport Authority's case where the Supreme Court has indicated that a departure from the usual norm may be justified if the reason of such departure can be reasonably explained. Mr. S. K. Gupta has strongly contended that his clients namely Jagadamba Coke Manufacturing Co. and others have been seriously prejudiced because the learned trial Judge has relied on an affidavit affirmed by BCCL in connection with another case and the clients of Mr. S. K. Gupta had no opportunity to deal with the allegations of BCCL in the said affidavit or explaining the same. Although normally a party should be given all reasonable opportunities to controvert and/or explain the contents of the affidavit intended to be considered by the court, it appears to us that in the instant case, the learned trial judge has relied on some broad features about the imbalance in the supply and demand position of the grades of coal required by the coke oven plants as indicated in one of the affidavits of BCCL. Moreover, as we feel that in the matter of distribution of coal to various coke oven plants, the court will only lay down broad guidelines and leave the ultimate decision to the BCCL or CIL so that various factors concerning large number of coke oven plants may be taken into consideration by BCCL or CIL, we do not think that the clients of Mr. S. K. Gupta may have any reasonable grievance to such general direction of equitable supply on pro rata basis. It has been contended by Mr. S. K. Gupta and also by Mr. Aninda Mitra appearing; for G. N. Coke Manufacturing Co. (P) Ltd. that in view of the provisions of Colliery Control Order, the Court should not have given decisions in the matter of supply of coal to different coke oven plants thereby interfering with the power of the statutory authority under the said Control Order to give directions for supply of coal. Mr. Prodosh Mallick appearing for Shyam Industries has supported Mr. S. K. Gupta in this respect and has contended that in the facts and circumstances the Court should have refrained from framing any scheme for distribution by itself. Mr. Dipankar Gupta has however submitted at the hearing that so far as the grades of coal supplied to the coke oven plants are concerned, there is no order under the said statute and such grades of coal are at present decontrolled and BCCL or CIL are free to distribute the same. It, however, appears to us that under the Colliery Control Order, suitable directions may be issued regarding distribution of various grades of coal from time to time and it would be only desirable to indicate in the order which we hereby do that the scheme or guidelines for distribution of coal to coke oven plants under the order passed in these proceedings will be subject to any order of distribution that may be passed by the appropriate authority under any appropriate statute authorising such authority to issue directions on the distribution of coal to different consumers including the coke oven plants.
24. In the aforesaid circumstances, we dispose of these appeals by modifying the judgment passed by the learned trial Judge to the effect that CIL and its subsidiaries including BCCL, would ensure equitable distribution of coal to all the coke oven plants situated in different belts and for such equitable distribution they should distribute the available coal of suitable grades to the cokeries on pro rata basis irrespective of any special agreement or arrangement but in giving effect to such equitable distribution on pro rata basis the CIL and its subsidiaries including BCCL should also take into consideration the case of special hardship to be suffered by some of the coke oven plants or any one of them in following the general principle, of pro rata distribution. In such circumstances, the CIL and its subsidiaries including the BCCL will be entitled to make deviation from the general equitable distribution policy applicable to other cokeries so, that on such special consideration the cokeries in question do not suffer unmerited hardship and do not become economically not viable on the score of getting supply from distant collieries. By way of abundant caution, it is made clear that special consideration will not entitle such coke oven plants to get exclusive supply of better quality of coal from a particular colliery or collieries so that they are placed in a position more advantageous to other cokeries on an overall consideration of all the factors but the CIL and its subsidiaries including BCCL will ensure that such coke oven plants on special consideration get supply of particular grades of coal from a particular colliery or collieries to a reasonable extent so that it can fairly compete with other coke oven plants. The CIL and/or BCCL should therefore remise the policy of supply of coal to the cokeries in Jharia and Mugma belts on the aforesaid broad principle of equitable distribution on pro rata basis. Save as aforesaid, the directions contained in the judgment of the learned trial Judge stand set aside.
25. The appeals are accordingly disposed of. There will be no order as to costs.
26. Let plain copy of the operative part of this judgment, duly countersigned by the Assistant Registrar (Court) be handed over to the learned counsel appearing for the parties.
K.M. Yusuf, J.
27. I agree.