Jharkhand High Court
M/S. Ruhi Enterprises Represented By ... vs Union Of India on 27 September, 2024
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad, Navneet Kumar
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No. 7068 of 2016
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1. M/s. Ruhi Enterprises represented by its proprietor Gyanendra
Kumar Singh, son of Late Shyam Bihari Singh, aged about 56 years
resident of Sukhdeo Nagar, P.O. Hehal, P.S. Hehal, Ranchi, District
Ranchi having its works at Kurari, G.T. Road, Karmnasha, Bihar and
office at Sukhdeo Nagar, P.O. Hehal, P.S. Sukhdeo Nagar, Ranchi
834005, District Ranchi unit at Kurari, G.T. Road, Karmnasha, Bihar
through its Proprietor Gyanendra Kumar Singh.
2. Snowtemp Commercial (P) Limited, a private limited company
registered under the Companies Act, 1956 represented by its Director
Sujay Bhowal, Son of Late N.C. Bhowal, aged about 51 years resident
of 66 Booty Road, P.O. and P.S. Bariatu, Ranchi, District Ranchi
having its works at Garahani, Bhojpur, Bihar and office at 3'O', Gopal
Complex, Court Road, P.O.-G.P.O., P.S. Kotwali Ranchi-834001.
3. Pearl Industries represented by its partner Praveen Kumar Agarwal,
Son of Late Om Prakash Agarwal aged about 60 years, resident of Flat
No. D25, Rudraksha Green, Lalpur, Ranchi-834001, having its works
at Udaipur, Sanjhauli, Rohtas, Bihar and office at office at 3'O',
Gopal Complex, Court Road, P.O.-G.P.O., P.S. Kotwali Ranchi-
834001.
4. M/s. Salasar Fuel Industries represented by its proprietor Kailash
Chandra Kejriwal, son of Late Murlidharji Kejriwal, aged about 59
years resident of West Market Road, Upper Bazar, P.O.-G.P.O., P.S.
Kotwali, Ranchi, District Ranchi, having its works at Kurari, G.T.
Road, Karmnasha, Bhabhua, Bihar and office at West Market Road,
Upper Bazar, P.O.-G.P.O., P.S. Kotwali, Ranchi 834001, District
Ranchi.
5. Sinclair Industries represented by its proprietor Sinclair Trade Link
Pvt. Ltd. a private limited company registered under the Companies
Act, 1956 represented by its Director Praveen Kumar Agarwal, son of
Late Om Prakash Agarwal, aged about 60 years resident of Flat No.
D25, Rudraksha Green, Lalpur, Ranchi-834001, having its works at
Achitpur, Chota Mirzapur, Mirzapur, U.P., and office at 3'O', Gopal
Complex, Court Road, P.O.-G.P.O., P.S. Kotwali Ranchi-834001.
6. M/s. Shrey (India) Enterprises represented by its proprietor Bijay
Kumar Dhanuka, Son of Late Ram Gopal Dhanuka, aged about 64
years, resident of Saket Nagar, Kanke Road, P.O. Ranchi University,
P.S. Gonda, Ranchi, District Ranchi having its works at Garhani, Dist-
Bhojpur, Bihar and office at 401, M.R. Tower, behind Gopal
Complex, Court Road, P.O.-G.P.O., P.S. Kotwali, Ranchi 834001,
District Ranchi.
7. Snowtemp Commercial (P) Limited (SSF Division), a private
limited company registered under the Companies Act, 1956
represented by its Director Sujay Bhowal, Son of Late N.C. Bhowal,
aged about 51 years resident of 66 Booty Road, P.O. and P.S. Bariatu,
Ranchi, District Ranchi, having its works at Garahani, Bhojpur, Bihar
and office at 3'O', Gopal Complex, Court Road, P.O.-G.P.O., P.S.
Kotwali Ranchi-834001.
8. Salasar Coal Services represented by its proprietor Birj Mohan
Poddar, son of Late Motilal Poddar, aged about 82 years resident of
Uppar Bazar, P.O.-G.P.O., P.S. Kotwali Ranchi-834001, District
Ranchi, having its works at Kurari, G.T. Road, Karmnasha, Bihar and
office at East Market Road, Upper Bazar, P.O.-G.P.O., P.S. Kotwali,
Ranchi 834001, District Ranchi.
9. Shree Balaji Fuel Product, represented by its proprietor Gyarsi Lal
Goyal, son of Late Sita Ram Goyal, aged about 61 years resident of
Shree Balaji Niketan, Gyan Ranjan Path, Bardwan Compound, P.O.
and P.S. Lalpur, Ranchi, District Ranchi having its units at Vill.
Jiwadhipur, P.O. Basant Nagar P.S. Ramnagar, District Chandauli,
U.P. and Officet at F-18, Amravati Complex, Circular Road, P.O.-and
P.S. Lalpur, Ranchi, District Ranchi.
10. Rajiv Fuel Product, represented by its partner, Ramesh Kumar
Goyal, Son of Late Sita Ram Goyal aged about 57 years, resident of
Shree Balaji Niketan, Gyan Ranjan Path, Bardwan Compound, P.O.
and P.S. Lalpur, Ranchi, District Ranchi having its unit at Vill. Kakori,
P.O. Trilochan Mahadeo P.S. Jalalpur, District Jaunpur U.P. and office
at C/o Shree Bala Ji Trading Company, Kart Sarai Road, Upper Bazar,
P.O.-G.P.O., P.S. Kotwali, Ranchi, District Ranchi.
.... ... Petitioners
Versus
1. Union of India, through the Secretary, Ministry of Coal, Shastri
Bhawan, P.O. & P.S. Shastri Bhawan, New Delhi-1.
2. Coal India Limited, through its Chairman, Coal Bhawan, Premier
No.-04 MAR, Plot No.-AF-III, Action Area-1-A, Newton, Rajarhat,
P.O.: New Town & P.S. Rajarhat, Kolkata-700156.
2 W.P.(C) No. 7068 of 2016
3. The Director (Marketing), Coal India Limited, Coal Bhawan
Premier No.-04 MAR, Plot No.-AF-III, Action Area-1-A, Newton,
Rajarhat, P.O.: New Town & P.S. Rajarhat, Kolkata-700156.
4. M/s. Central Coalfields Ltd., through its Chairman-cum-Managing
Director, Situated at Darbhanga House, P.O.: Darbhanga House & P.S.
Kotwali, Ranchi (Jharkhand)
5. The Chief General Manager (S&M) Central Coalfields Limited,
Darbhanga House, P.O.: Darbhanga House & P.S. Kotwali, Ranchi
(Jharkhand).
6. The Director (Finance), Central Coalfields Limited, Darbhanga
House, P.O.: Darbhanga House & P.S. Kotwali, Ranchi.
7. The General Manager Finance, Central Coalfields Limited,
Darbhanga House, P.O: Darbhanga House & P.S. Kotwali, Ranchi
(Jharkhand). ... ... Respondents
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CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
HON'BLE MR. JUSTICE NAVNEET KUMAR
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For the Petitioners : Mr. Nitin Kumar Pasari, Advocate
Ms. Sidhi Jalan, Advocate
Ms. Samiksha Kumari, Advocate
For the Respondents : Mr. Amit Kumar Das, Advocate
Mr. Shivam Utkarsh Sahay, Advocate
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Order No. 08 / Dated: 27th September, 2024
Per Sujit Narayan Prasad, J.
Prayer
1. This writ petition is under Article 226 of the Constitution of India, whereby and whereunder, petitioners have sought for quashing the order bearing No. CCL/HQ/Sales/2014/Price Notification/11070- 184 dated 05.11.2014 as contained in Annexure-5 to the writ application, by which the respondent Central Coalfields Limited has sought to impose Washery Recovery Charge to the tune of Rs.960/- per Metric tonne over and above the notified price to be paid by the 3 W.P.(C) No. 7068 of 2016 applicant for coal purchased from the respondents on supply of raw/unwashed coking coal to the petitioner and other similar situated purchaser. Further, petitioners have also sought quashing of the order bearing No. CCL/C-4/S&M/6490-6529 dated 04.06.2015, as contained in Annexure-6 to the writ application, by which the respondents CCL has renamed the above mentioned 'Washery Recovery Charges' as 'Commitment charges', and reduced the quantum of the same From Rs. 960/- to Rs. 753 per tonne. Factual Matrix
2. The brief facts, as per the pleading made in the writ petition, required to be enumerated, which reads as under: -
Petitioners are consumers of coal and have entered into independent and separate Fuel Supply Agreements with the coal companies/respondents for supply of coal to be used as raw material for their Special Smokeless Fuel / soft coke units. Petitioners are Special Smokeless Fuel Units / Soft Coke Units, established consequent to the promises made by the Respondent No. 2, Coal India Ltd., through advertisements inviting businesses to establish Smokeless Fuel units based on technology developed by either Coal India Ltd or its other subsidiaries such as Central Mines Planning and Design Institute or by the Central Fuel Research Institute. 2(i) Subsequently, the Government of India, in its executive power under Article 162 of the Constitution of India, introduced the New Coal Distribution Policy, dated 18.10.2007 to streamline the supply of coal to different sectors and classes of purchasers. As per the aforesaid policy, the linkage system that held sway till then was replaced by a system of bilateral fuel supply agreements. The policy required that all existing linked consumers enter into Fuel Supply Agreements in substitution of the linkage agreements with Coal India Ltd. or its 4 W.P.(C) No. 7068 of 2016 subsidiaries within six months from the date notified by Coal India Ltd. The Policy further provided that to the extent of 75% of the quantity that would be required by consumers was to be met through the above FSAs at a price to be fixed and declared by Coal India Ltd, while the remaining 25% would be sold through competitive e- auctions. Thus, by virtue of a Government policy, coal consumers were unilaterally forced to shift to a pricing regime in which the price to be paid was to be decided by the seller. However, a protection was given to the buyer by establishing a 'due process' through which the said price was to be determined and levied, viz., it was to be notified and fixed by Coal India Ltd. The role of the Central Coalfields Limited was to be limited to supplying the contracted coal as per the Fuel Supply agreement to the purchasers, including the Petitioner, at the price fixed and notified by the Respondent No. 2. 2(iii) Pursuant to the NCDP, the Petitioners have entered into Fuel Supply Agreement with Central Coalfields Ltd. on various dates and the same has been extended from time to time and is valid as on date. On 01.09.2014, the Central Coalfields Limited sent a letter No. CCL/HQ/2014/8598- 8602 asking for guidance regarding the levy of washery charges on unwashed/ unwashable coal that was being supplied by the company. Through its reply dated 15.09.2014, Coal India Ltd. washed its hands off the issue by saying that "the issue of imposing washery recovery charges and its applicable rate falls within the domain of subsidiary coal companies and their Boards according to the situations, status and justifications and it is felt that the same does not attract any uniform guidelines to be issued by CIL". 2(iv) On 09.10.2014, Coal India Ltd. sent another letter to the Central Coalfields Limited clarifying its earlier communication, and stating that its letter dated 15.09.2014 is to be construed merely as 5 W.P.(C) No. 7068 of 2016 observations and not as consent to levy charges by its subsidiary, the Central Coalfields Limited. The Coal India Limited, therefore, in no uncertain terms clarified and confirmed that it has not given any consent whatsoever to the Central Coalfields Limited to impose or recover washery recovery charges.
2(v) On 05.11.2014, the Central Coalfields Limited issued the impugned price Notification. This Notification imposed on consumers an Add-On Price under the name of 'Washery Recovery Charge' of Rs 960 on the coal supplied to the Petitioner by the Central Coalfields Limited.
2(vi) Petitioners filed Written Representations with Central Coalfields Limited on various dates in terms of the Fuel Supply Agreement to invoke the Settlement of Disputes clause of the Fuel Supply Agreements but no action was taken for approx more than a year by CCL.
2(vii) Central Coalfields Limited issued a further Notification on 04.06.2015, which is the second impugned Notification, by which the following changes were informed:
(a) The nomenclature of 'Washery Recovery Charge' would be changed to 'Commitment Charge', and,
(b) The washery recovery charge/commitment charge would be revised to Rs 753/- metric tonne from Rs 960/- per metric tonne.
Hence, the present writ petition has been filed. Arguments of the learned counsel for the writ petitioner.
3. It has been submitted on behalf of the petitioner that the decision, which has been taken by virtue of notification dated 05.11.2014 as annexed as Annexure-5 by which the Central Coalfields Limited (CCL) has sought to impose washery recovery charge to the tune of Rs. 960/- per metric tonne over and above the notified price to 6 W.P.(C) No. 7068 of 2016 be paid by the petitioner for coal purchased from the respondents on supply of raw/ unwashed coking coal to the petitioner and other similarly situated purchasers, has been assailed on the ground that the Central Coalfields Limited (CCL) is having no jurisdiction to take such decision rather the jurisdiction lies within the Coal India Limited (CIL) being the mother unit.
Arguments of learned counsel for the Respondents.
4. A serious objection has been made on behalf of the respondent- CCL by disposing the contentions as has been pleaded in the writ petition. The reason for such objection is:
(i) The issue is based upon the fuel supply agreement, which is prior to the decision taken by the Ministry of Coal wherein the supply of coal will be based upon the fuel supply agreement but after the matter has been considered by the Hon'ble Supreme Court in the case of Manohar Lal Sharma Vrs. The Principal Secretary & others reported in (2014) 9 SCC 516, the issue of supply of coal within their system has been done away with and instead thereof allotment is to be made by auction. The contention therefore has been raised that here the fuel supply agreement is prior to such decision having been taken by the Ministry of Coal and hence the writ petition is only to be render infructuous.
(ii) The second ground has been taken by making reference of the communication dated 15.09.2014 as annexed as Annexure-3 wherein the decision has been taken even taking the fuel supply agreement which was issued during the relevant period of time having a general decision with respect to imposing washery recovery charges and its applicable rates falls within the domain of subsidiary coal companies and their Boards according to the situations, status and jurisdiction and it is felt that same does not attract any uniform guidelines issued 7 W.P.(C) No. 7068 of 2016 to be by the CIL.
(iii) The third ground has been taken by making reference of the pleading of the writ petition under Para 1(a) where in, in addition to the cause shown on behalf of the petitioner a general direction has also been sought for in favour of other similarly situated persons.
(iv) A ground has also been taken that however the notification dated
05.11.2014 has been challenged, the decision so taken i.e., on 15.09.2014 based upon that the recovery charge has been decided to be imposed, is not under challenge.
Learned counsel for the CCL, based upon the aforesaid ground has submitted that the present writ petition is fit to be dismissed. Analysis
5. We have heard learned counsel for the parties and gone across the pleadings in the writ petition. The writ petition although has been filed in the year 2016 and the notices have been issued upon the respondents as would appear from the order dated 29.09.2021. Pursuant thereto Mr. A.K. Das, learned counsel has put his appearance to represent the respondent CCL. No counter affidavit has been filed by the respondent CCL, however, in view of Annexure-3, there is no need to file counter affidavit. Learned counsel for the CCL has argued by raising the grounds as referred herein above.
6. The question which has been raised on behalf of the petitioner in the present writ petition a decision taken by the CCL vide notification dated 05.11.2014 to impose washery recovery charge to the tune of Rs. 960/- per metric tonne over and above the notified price. A ground has been taken that such authority to impose such washery recovery charges is only upon the CIL and not the subsidiary unit i.e., CCL.
7. The learned counsel appearing for the respondent has referred 8 W.P.(C) No. 7068 of 2016 to the communication dated 15.09.2014 whereby the CIL has already clarified with respect to these sister subsidiary units are to be imposed such charges vide its communication to the General Manager (QM), CCL, Ranchi. The contents of the aforesaid communication is referred to herein below:
Date: 15/09/2014 To The General Manager (QM) Central Coalfields Limited Darbhanga House Ranchi-834029 Dear Sir, Sub: Washery recovery charges to be claimed over supply of raw coking coal Please refer to your letter No.CCL/HQ/2014/8598-8602 dated 01-09-2014, in the last six months several correspondences have been made by this office vide letters dated 07-05-2014, 27-05-2014, 16-07-2014 and 25-08-2014, clarifying the role of CIL on the above subject.
On principle, CIL is in view that raw coking coal is to be washed through departmental washery and sold as washed coking coal. Only middlings rejects etc., may be supplied to the Power Houses. The washeries are to be properly maintained and up-graded. Due to non installation of new washery there may be shortage of washing capacity. However, Price Notifications issued by CIL on time to time have made a provision to supply of raw coking coal to regulated sector and also to the non-regulated sector at higher price band. The reasons and justification for supply of coking coal to different sectors without washing the same entirely with the concerned subsidiary. It may be reiterated that washery recovery charges is not a price element declared by CIL through Price Notification and as such subsidiaries are taking approval in their Board for claiming the same for supply of Raw Coking Coal. it is true that for supply of raw coking coal no beneficiation facility is provide by coal companies but imposition of washery recovery charges with the approval of subsidiary coal company's Board may be aimed at compensating the revenue of washed coal to some extent. As confirmed by CCL vide letter No. CCL/C-4/S&M/F/5600-15601 dated 18.11.2013 washery recovery charges are being claimed by CCL for the coking coal being offered under e-Auction to integrated Steel plants and accordingly reasons for not charging the same to other e-Auction consumers are best known to the concerned subsidiary.
It may be pointed out that Clause 12 of the Price Notification does not in any way relate to the subject of washery recovery charges as there is no special sizing or beneficiation of coal. The loss of revenue of Rs.339.46 crores for not charging washery recovery charges in certain cases as pointed out by Commercial Audit is for the period 2008-09 to 2011-12 i.e. long beck before the case is referred to CIL in February 2014. In this regard your attention may be drawn to the Clause 15 of 9 W.P.(C) No. 7068 of 2016 the Price Notification which states that any other charges as are being levied by the subsidiary coal companies over and above those being notified by CIL shall continue to be levied.
It may thus be concluded that issue of imposing washery recovery charges and its applicable rate falls within the domain of subsidiary coal companies and their Boards according to the situations status and justifications and it is felt that the same does not attract any uniform guidelines to be issued by CIL Yours faithfully, General Manager(S&M) CIL
8. However, subsequent to the communication dated 15.09.2014, the CIL has clarified by issuing a communication on 09.10.2014 that the content of the decision taken on 15.09.2014 is an observation on the part of the CIL not to be construed as consent. For ready reference the letter dated 09.10.2014 is quoted hereunder:
"संदर्भ-सीआईएल/S&M/47252(New Pol)/678 ददन ं क 09 October 2014 To The General Manager (QM) Central Coalfields Limited Darbhanga House Ranchi-834029 Sub: Washery Recovery Charges in respect of raw coking coal. Dear Sir, Please refer to your letter no. CCL/Hqr/S&M/2014/9247-52 dated 19.09.2014 on the above subject.
It may be re-iterated that on principle, CIL is in view that raw coking coal is to be washed through departmental washery and sold as washed coking coal. The washeries are to be property maintained and upgraded. All these require proper planning on part of the subsidiary company. The washery recovery charges is not a price element declared by CIL through price notifications. It may be pointed out that the Principal Director, Commercial Audit, in the Draft Para dt. 27.8.13 to CCL, has observed that washery recovery charges are being imposed to compensate the reventie on washed coal to some extent. However, waiver of 5% rebate for supply of washer grade coking coal to power houses other than captive ones, as pointed out in your letter, falls within the jurisdiction of CIL board and will be dealt with at appropriate time.
Further, it is to mention that contents in this office letter no. CIL/S&M/4752(new pol)/639 dt/15.09.14 are mere observations on part of CIL and not to be construed as consent.
Yours Faithfully,"10 W.P.(C) No. 7068 of 2016
9. This Court after going through the communication dated 15.09.2014 as also 09.10.2014 is of the view that although the communication dated 15.09.2014 has been issued with respect to the subject i.e., washery recovery charges to be claimed over supply of raw coking coal, and the power to impose such charges is upon the subsidiary unit. However, the CIL vide its communication dated 09.10.2014 has clarified that whatever the contents is available in the communication dated 15.09.2014, that is to be construed as an observation and not consent.
10. The fact is not in dispute that the CIL being the mother unit under which altogether 7 subsidiary units are there. The CIL although is a mother industry but all the coal companies said to be the subsidiary is to run on the basis of their own policy decision depending upon the issue.
11. It needs to refer herein that the Coking Coal Mines (Emergency Provisions) Ordinance was promulgated by the Government of India on 16.10.1971 under which except the captive mines of TISCO and IISCO, the management of all coking coal mines had been taken over by the Government. These mines were subsequently nationalized w.e.f. 1.5.1972. Later on the management of 711 coal mines was also taken over by the Government with effect from 31.1.1973 and they were nationalized w.e.f. 1.5.1973 and a new Government Company namely, Coal Mines Authority Limited (CMAL) was set up by the Government in May, 1973 to manage non-coking coal mines. In September, 1975 CIL was formed as a Holding Company with five subsidiaries namely Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), Eastern Coalfields Limited (ECL), Western Coalfields Limited (WCL) and Central Mine Planning and Design 11 W.P.(C) No. 7068 of 2016 Institute (CMPDI). Further, the CIL is issue advisory to the subsidiary unit, as the same would be inferred from objective behind its formation.
12. Further the communication has been made by the authority at the status of General Manager (S&M) CIL on 15.09.2014 wherein by making reference of the content conclusion has been arrived that the issue to imposing washery recovery charges at its applicable rates falls within the demand of subsidiary coal companies and their Boards according to the situations, status and justification and as such it has been felt by the CIL that the same does not attract any uniform guidelines to be issued to the CCL.
13. Further the CIL having the nodal unit and as such there cannot be any direct control upon all the coal companies having its operational fields in different part of the country. That is the reason the CIL has clarified that the imposing washery recovery charges and its applicable rates is to be decided by the subsidiary companies as per the situations, status and justifications.
14. The CIL, in view of the aforesaid has clarified by virtue of communication dated 09.10.2014 wherein in the last paragraph, it has been referred that the content of the communication dated 15.09.2014 is only an observation.
15. The observation as referred in the communication dated 09.10.2014 is to be taken into consideration in view of the observations made in the communication dated 15.09.2014 wherein the CIL has clarified the position with respect to the authority to impose washery recovery charges, which is to be decided by the one or the other coal companies depending upon the situation, status and justification and in view there of there cannot be uniform guidelines to be issued by the CIL.
12 W.P.(C) No. 7068 of 201616. The communication dated 15.09.2014 and 09.10.2014 are to be read together and according to our considered view there is no difference in the contents as contained in both the documents.
17. The basis for filing this writ petition is that the CCL is having no jurisdiction but no such pleadings or no authority negating the authority of the CCL has been pleaded or no document has been annexed save and except the communication dated 09.10.2014.
18. The question of authority is only to be considered by the Court of law if any decision to that effect is taken barring the authority of the authority. Law is well settled that an authority cannot be allowed to take any decision beyond the jurisdiction conferred but the issue of jurisdiction is only to be assessed if the relevant document or policy decision is brought on record questioning the decision of the authority. But herein no such document has been annexed.
19. This Court has also taken into consideration that after the case was filed at the time when the linkage supply of coal through the linkage system was prevalent based upon the fuel supply agreement.
20. But the Hon'ble Supreme Court by taking note of the fact regarding misappropriation of the coal by the different allottees has considered that aspect of the matter in the case of Mahohar Lal Sharma (supra). A direction was issued by the Hon'ble Apex Court in the said case upon the Central Government to go for auction for settlement /allotment of the coal blocks. This Court, therefore, is of the view that after the judgment of the Hon'ble Apex Court rendered in the case of Manohar Lal Sharma (Supra), the grievance of the writ petitioner as agitated in the instant writ petition cannot be said to be surviving, since after the aforesaid judgment, the earlier system (known as Linkage System), on the day when impugned order had been issued, substituted by new system of allotment based upon 13 W.P.(C) No. 7068 of 2016 auction.
21. This Court, in view of the above, is of the view that no positive direction is to be issued upon the respondent.
22. Accordingly, the writ petition, being devoid of merit, is dismissed.
(Sujit Narayan Prasad, J.) (Navneet Kumar, J.) A. Mohanty A.F.R 14 W.P.(C) No. 7068 of 2016