Andhra HC (Pre-Telangana)
The Sirpur Paper Mills Ltd. vs Singareni Collieries Company Ltd. And ... on 29 June, 2001
Author: Bilal Nazki
Bench: Bilal Nazki, E. Dharma Rao
JUDGMENT Bilal Nazki, J.
1. These three Writ petitions raise common questions of fact and law therefore they are decided by this common judgment.
2. M/s. West Coast Paper Mills Limited is a Public Limited company having its registered office at Dandeli, Karnataka. It is a paper mill and has got a power generation plant in its factory and it is asserted that the entire coal purchased from the respondent No. 1 by the petitioner company is utilised for captive power generation.
3. M/s A.P. Paper Mills is a Public Limited company and a joint sector undertaking with the Government of Andhra Pradesh. 27% of the share capital is held by the State of Andhra Pradesh. The factory is located at Rajahmundry and its corporate office is at Secunderabad. It has also a captive power generation plant and it is asserted that the coal supplied by respondent No. 1 is entirely utilised for the purpose of captive power generation which is used for running the factory.
4. Similarly, the Sirpur Paper Mills Limited is a Public Limited company having its head office at Hyderabad and factory at Sirpur Kagaz Nagar. It is also consumer of coal and it is asserted that the coal received from the respondent No. 1 is being used for the generation of the power for running the factory.
5. The contentions raised in the Writ petitions and the contentions raised in the counter affidavits are almost similar in the three Writ petitions therefore the insertions made in one of the petitions being W.P. No. 11330/99 shall be referred to herein below. It is stated that second respondent issued a notification on 16-6-94, it defined the core sector for the purpose of supply of coal. According to the notification core sector includes steel, loco, cement, power (utility), power (captive) and fertilizers. Therefore, it is submitted that an Industry generating power for its captive consumption is a core industry for the purpose of supply of coal in terms of the notification mentioned above. The petitioner is using 100% of its coal for the purpose of production. It is further stated that supply of coal is done by various undertakings of Central Government like Coal India Limited, Western Coal Fields Limited and the 1st respondent. The first respondent is a joint undertaking of the Central and State Governments. The industries located in North India get their coal requirements from the Coal India Limited whereas the industries located in South India purchase coal from the 1st respondent. The average coal requirement of the petitioner for captive power generation was previously estimated at 5000 MTs and now it was around 10000 MTs due to expansion of the factory. A price notification No. 3/96-97 was issued on 14th March,1997 which was communicated to the petitioner on 15-3-97. By this notification the price of coal of various grades had been revised with effect from 15-3-97. Apart from laying down certain conditions the first respondent also stated that, "Unlinked customers who are drawing B,C & D grades of coal are required to pay 20% additional prices over and above the notified prices". The 1st respondent after issuance of the notification started charging 20% extra prices in respect of coal supplied in the grades B, C and D. The petitioners requested the respondents to charge at the rates mentioned in the notification and not charge the additional 20% price as mentioned in clause 10 of the notification. The 1st respondent did not accept the request of the petitioners and they filed Writ petitions before this Court. Similar orders were passed by this Court in all the Writ petitions but the detailed order was passed in W.P. No. 21053/97, that order is reproduced;
"This Writ petition has been heard along with a batch of other Writ petitions in which the price of coal supplied to the petitioners is in issue. In view of the counter filed in this Writ petition and on the facts of the case, we are of the view that the general issue need not be decided and it should be delinked from the batch. Accordingly, we hereby dispose of this writ petition separately.
From what is stated in paragraphs 16 and 17 of the counter affidavit it is clear that the Ministry of Coal has given the benefit of linkage in so far as the coal required for consumption in captive power plant. This decision was taken on 17-6-1997 and the same is applicable for the quarter July to September,1997. It is specifically stated in the counter filed on 11-9-1997, "Now, petitioner is not being charged 20% extra for 'B', 'C' & 'D' grades drawn for their captive power plant i.e., 8000 tonnes. The remaining quantity of their quota which is being consumed for processing for manufacturing of paper is being charged 20% extra as the paper industry has not been identified as core-sector".
It is not in dispute that the petitioner is only buying coal to the extent of 8000 tonnes per month which is within the range of requirement for captive power plant. In view of the statement made in the counter, the grievance of the petitioner does not survive for consideration. As there is some controversy whether the extra rate was charged for the coal supplied after the receipt of orders, we consider it just and proper to direct that if any representation in this regard is submitted by the petitioner, the same shall be promptly considered and if any refund is due to the petitioner the same shall be made available.
Accordingly the Writ petition is disposed of."
6. This order was materially followed in other Writ petitions. Same Bench passed the orders in other cases. As can be seen from the order the Court had given liberty to the writ petitioners to make a representation for refund of any disputed amounts on account of charging of extra price. The 1st respondent had collected 20% additional price from the petitioners from 14th March,1997 till September,1997. After the orders of this Court, it appears that the petitioners gave representations for refund of the amounts which have been rejected. Not only the representations were rejected with regard to refund of the amounts paid but the 1st respondent refused to supply coal to the petitioners without charging 20% excess price by letter dated 19-5-98 unless the petitioners obtained linkage from the Coal Ministry afresh. The 1st respondent made it clear that the petitioners would be treated as a non-core industry unless they obtain linkage certificate from the Coal Ministry.
7. In this back ground the petitioners case is that, since the captive power generation is declared a core-industry therefore they cannot be charged price 20% higher than those laid down in the notification. This according to them was even the direction of the Court earlier. On the other hand the respondents case is that it is not sufficient to be a core-industry to get the coal at a lower price, even if a consumer falls within the core-industry he has to pay 20% extra cost if it does not establish a linkage. Therefore, the short question before this Court is, whether the petitioners are entitled to coal at the cost fixed in the relevant notifications without the 20% increase on the ground that they are the core-industry, or even if they are core-industry whether they can be deprived of the benefits on the ground that they have not obtained a linkage certificate.
8. The main thrust of the arguments of the learned counsel for the petitioners is that this question is decided by the earlier Judgment of the Court and therefore the respondents by rejecting their applications for refund and again charging the price by enhancing it by 20% they have even committed contempt of the Court. We have our own doubts that where a controversy is already settled by the Court in a Writ petition whether second Writ petition would lie. But, since a representation has been made after the judgment of this Court which has been rejected we are deciding these petitions on merits.
9. The second contention raised by the petitioners is that it is not necessary to have a linkage certificate issued after every quarter as there is no relation between the fixation of price with linkage. It was also contended that the linkage was introduced for the first time by a notification in March,1997. On the other hand the respondents contend that price notification No. 3/96-97 dated 14th March,1997 laid down specifically in clause 10 that, "Unlinked customers who are drawing 'B', 'C' & 'D' grades of coal are required to pay 20% additional price over and above the notified prices". This notification was challenged in the earlier Writ petitions but the High Court did not quash the notification, it merely passed an order on the concession of counsel for respondents given in paragraphs 16 and 17 of the counter affidavit and it becomes important to note as to what was the concession granted. It can be found in para-2 of the order of the Division Bench which is reproduced herein above. The Ministry of coal had given the benefit of linkage in so far as the coal required for consumption in captive power plant. The decision had been taken on 17-6-97 and it was applicable for the quarter July to September, 1997. Therefore, it is crystal clear that the decision for the purposes of grant of linkage had to be taken by the Government of India and they had taken a decision with regard to petitioners on 17-6-97 with respect to quarter July to September,1997. Therefore, in our view the Division Bench order would apply only for the quarter July to September,1997 and for that period the petitioners have no grievance.
10. It is conceded by both sides that the generation of captive power for utilization of the plants is a core-industry. Now the only question remains is, whether a linkage was necessary to get the benefit of reduced price and if so whether linkage once granted was for all times to come. In the counter affidavit it is stated that coal is a controlled commodity, its price is controlled by Government of India and respondent No. 1 has no say in fixation of the price. The Government of India had noticed that all coal mines including the 1st respondent company were running in losses and therefore decided to take steps to minimize the losses of coal companies. While taking steps to minimize the losses of the coal companies the Government was also conscious that the interests of Core-industries which were dependant on coal also do not suffered. A decision had been taken by Government of India which was notified by notification dated 6-1-73, it reads as under;
"No. CI-21(20)/72 - The Government of India have been considering for some time past the question of constituting a standing Linkage committee for the planning of coal supplies to thermal power stations in view of the need to supply fuel of appropriate quality to the various power stations and at the same time to make the most economic use of the available capacity for the production and transport of coal. It is hereby resolved to set up a Standing Linkage Committee consisting of the following:
Chairman:
Xxxxxxxx Members:
Xxxxxxxx
2. The terms of reference of the Committee will be as follows:
(1) To review from time to time the coal requirements of the existing thermal power stations and establishing rational linkages with collieries for raw coal supplies and with washeries for the supply of middlings having regard to:-
Xxxxxx Xxxxxxx"
11. Thereafter, another notification came to be passed on 24-3-1996. The relevant portion is given below:-
"Sub:- Guidelines for allocation of coal to core and non-core sector consumers.
Under the powers vested with the Government under clause 8 of the Colliery Control Order 1947 as amended from time to time, the following directions are being given for disposal of coal:
(i) All grades of coals which continue to be governed by notified prices in ECL/BCCL/CCL and NCL should be exclusively allocated to the power sector. Other consumers of coal may be given coals of grades for which prices have been decontrolled. Suitable modifications in the long-term linkages may also be made, if necessary. New linkages may also be given keeping the above in consideration.
(ii) In case of the above coal companies, certain collieries which produce grades of coal governed by notified prices and which cannot be dispatched to the power sector, the same may be allocated to permanently linked consumers in the core sector only. Any difficulty in this respect be brought to the notice of the government immediately for suitable decision.
(iii) In other coal companies also, for the coal governed by notified prices the first priority in allotment shall be given to the power sector. Only after the requirements of this sector are met in full, these coals shall be given to the linked consumers of other sectors.
(iv) The stipulation of allocating only D & below grades of coal to the SSF/Briquetting units is hereby withdrawn."
12. Again on 18-3-97 another notification came to be issued. The relevant portions are given below:
"Subject;- Guidelines for allocation of coal to core and non-core sector consumers Under the powers vested with the Government under clause 8 of the Colliery Control Order,1945 as amended from time to time, the following directions are being given for disposal of coal:
It is hereby clarified that the term 'power sector' as contained in the guidelines issued vide letter of even number dated 23rd April, 1996 will include captive power stations and boilers converted to fluidized bed boilers on the advise of the coal companies, provided lower grade linkages had been accorded to them."
13. Under this notification guidelines for allocation of coal for core and non-core 0 sector consumers were given. Under clause 8 of the Colliery Control Order the Central Government has power to issue directions as it deems fit to any Colliery owner regulating the disposal of its stocks of coal or of the expected output of coal in the colliery during any period. It can also give directions as to the class, grade, size and quantity of coal which may be disposed of. Under clause 9 of this Order, notwithstanding any contract to the contrary, every Colliery owner will have to abide by the directions given under clause-8. Under clause 12A the Central Government has the power to issue a notification specifying the authorities competent to allot quotas of coal to any person or class of persons. Under clause 12B a person who has been allotted coal is bound to use it in accordance with the conditions contained in the order of allotment. He is also bound not to divert or transfer any such coal to any other person except under a written authority from the Central Government. Under clause 12D all persons who are allotted coal have to keep a record with respect to utilization and consumption of the coal. The Central Government may also call for returns. In order to implement the Coal Order guidelines have also been issued. The guidelines to be followed for supply of coal to consumers, issued under the provisions of Clause 8 of the Colliery Control Order, 1945 contain guidelines for various contingencies. Guideline 1.0 deals with Linkages . 1.1 states that linkages shall be given to consumers which shall form the basis of making coal supplies to them. Under 1.2 eligibility for linkage is given. Two broad distinctions have been made, one is core-sector consumer and the other is non-core sector consumer. Their priorities have been fixed. Under 1.9 authorities have been identified for grant of linkages and procedure for grant of linkage has been laid down. In 1.9 (i) it is stated that for all power utilities linkages can be given by a Standing Linkage Committee (Long Term) set up under the Ministry of Coal. Quantity of linkage is dealt with under 1.17. Under 4.1 it is laid down; "For the power utilities the monthly allotments shall be made at quarterly intervals by the Standing Linkage Committee, Short-term (power) in the Ministry of Coal".
14. Now, it is the contention of the learned counsel for the respondents that the full scheme envisages that coal is supplied to the genuine consumers and it is the endure of Government of India to ensure that the coal supplied for particular purpose is used for that purpose. Therefore, there is a requirement to get a linkage certificate in terms of guidelines after each quarter. As is seen from the guidelines and the Coal Order it becomes abundantly clear that, under the Coal order and the guidelines issued under clause 8 of that order for every quarter Government of India should certify a linkage. That was what exactly was done for a particular quarter when the earlier Writ petitions were disposed of. This had been communicated even as early as on 18th March,1997 by Government of India's letter which laid down, "It is hereby clarified that the term "power sector" as contained in the guidelines issued vide letter of even number dated 23rd April,1996 will include captive power stations and boilers converted to fluidized bed boilers on the advise of the coal companies, provided lower grade linkages had been accorded to them." In these Writ petitions neither the guidelines have been challenged nor it was shown that the petitioners have gone to the Government of India for grant of linkage in terms of the guidelines for different quarters. Therefore, these Writ petitions in our view are not maintainable. The judgments in the earlier Writ petitions did not decide the rights of the parties nor they went into the scope of the 1996 Price notification.
15. The learned counsel for the petitioners relied on a judgment reported in Union of India Vs. Cynamide India Ltd., AIR 1987 SC 1802, which is not relevant for the purpose of present controversy because neither the Guideliens have been challenged nor the 1996 price notification has been challenged. Possibly the 1996 Price notification could not have been challenged in view of the earlier litigation.
16. Another judgment reported in Prag Ice & Oil Mills Vs. Union of India, has also been pressed into service which is also not relevant for the purpose of this case because there is no factual data laid down in the Writ petitions with regard to the charging of prices by different companies.
17. For these reasons we do not find any merits in these Writ petitions which are accordingly dismissed. No costs.