The Central Coalfields Ltd.&An vs M/S Bhagwati Coke Industries P on 17 February, 2010

[Cites 2, Cited by 0]

Patna High Court - Orders

The Central Coalfields Ltd.&An vs M/S Bhagwati Coke Industries P on 17 February, 2010

By the impugned order dated 1.7.2009 the writ application filed by the respondents- writ petitioners seeking direction for refund of the amount of difference between the notified price coal realized from them for the months of April, May and October, 2005 has been allowed by the learned Single Judge in the following terms:

" This Court is of the view that it is most unfair on the part of the respondent Coal Company to refuse to refund the amount in the face of the interim orders of this Court that no additional amount will be charged from the petitioners after filing the indemnity bond but despite furnishing of indemnity bond, the Coal Company has wrongly realized the entire price on the basis of average of e-auction price which was not permissible.

In the said circumstances, it was only fair on the part of the respondents that on the basis of the interim orders of this Court they ought to have refunded the excess amounts charged from the petitioners. Further the 3 charge of the average price on the basis of the scheme of e-auction price having been declared ultra vires under Article 14 of the Constitution by the Supreme Court, it is always open to the petitioners to approach the respondent- authorities for refund of any amount charged on the basis of such illegal action on their part. The petitioners also have the right for refund of such excess amount in terms of the interim orders passed in their favour.

In the facts and circumstances of the case, this Court directs that the respondents shall refund the excess amounts collected by them from the petitioners within a period of eight weeks from the date of receipt/ production of a copy of this order. Since the respondents have acted in violation of the interim orders of this Court and realized excess amounts, they are also liable to pay interest on the amount so realized at the rate of 12% per annum from the date of realization of the amounts to the date of actual payment. The writ application is, accordingly, allowed with cost quantified at Rs. 10,000/-."

Mr. V.M.K.Sinha, counsel for the appellants, has submitted that the aforesaid direction of the learned 4 Single Judge was wholly unsustainable, inasmuch as any interim order passed by this Court directing refund of the amount to the respondent- writ petitioners had merged with the order of the Supreme Court wherein there was no such direction for refund of the amount being the difference between the notified price coal on which it was supplied to the linked consumers like the petitioners and the E-weighted/ E-auction price realized from the petitioners for the months of April, 2005, May, 2005 and October, 2005. Counsel has also submitted that in any event award of interest at the rate of 12% per annum and the cost of Rs. 10,000/- was wholly uncalled for, inasmuch as the appellants being the Government of India Undertaking were awaiting decision of the Apex Court.

Mr. S.D.Sanjay, learned counsel for the respondent- writ petitioners, on the other hand, has submitted that the appellants being the monopoly holders of the coal supply to the industries having coal link including the respondent- writ petitioners, could not have exploited its monopolistic position by charging extra amount of coal price and therefore, once it was held that 5 such price of coal realized by the appellants was wholly impermissible, the appellants in all fairness ought to have refunded the same on their own at least after the judgment of the Apex Court in the case of Ashoka Smokeless Coal India Pvt. Ltd. & ors. vs. Union of India & ors., reported in (2007) 2 SCC 640. Mr. Sanjay in this context would submit that as a matter of fact such refund of extra price coal has not been made even till today and as such, this Court sitting in appeal should not interfere with the order of the learned Single Judge either in respect of refund of the amount or the interest and cost as directed in the order of the learned Single Judge.

This Court having given anxious consideration to the aforementioned submissions as also the materials on record would find that the respondent- writ petitioners were coal link units with linkage order issued by the appellants from time to time and had a right to get supply of coal on notified rates. Accordingly, if any excess amount was realized by them in the name of revised price under E-auction that was bound to be refunded to them once E-auction police once the price fixed therein was held to be ultra vires by the Apex 6 Court. In this context this Court would only note that as far back as on 3.3.2005 the Apex Court in an interim order of a general nature had directed that the coal should be supplied on the same rate to the linked consumers as was prevailing in the month of December, 2004 i.e. before commencement of E-auction policy subject to the condition that such coal link holders would file their indemnity bond for paying the difference in value in the event of failure of their claim before the court. As a matter of fact the interim order passed by the Apex Court on 3.3.2005 was also made applicable in the case of the respondent- writ petitioners in their writ applications, C.W.J.C.No. 6114/2005 and 6813/2005 by the orders dated 19.5.2005 and 11.7.2005 vide Annexures 2 and 2/1 to the connected writ application. Admittedly these interim orders were not followed by the appellants who had realized additional price of coal on the rate notified for E-weighted/ E-auction price for the months of April, 2005, May, 2005 and October, 2005. Thus, when the E-auction policy as a whole was found to be unsustainable and bad in the eye of law in the judgment of the Apex Court in Ashoka Smokeless 7 Coal India Pvt. Ltd. (supra), the appellants on their own in all fairness ought to have refunded the difference of price realized by them from the respondent- writ petitioners. In fact this aspect of the matter has also been examined at length by the learned Single Judge who has taken note that under such circumstances, the coal company on filing of the contempt application before the Supreme Court had deposited Rs. 1143 crores which was ultimately refunded to the parties on verification of the documents in terms of the direction of the Supreme Court. In this context the learned Single Judge has further held that so far as the interim orders are concerned, they were never modified for the period they remained in operation. The learned Single Judge has also dealt with that part of the submission of the learned counsel for the appellants that the order dated 12.12.2005 by the Supreme Court was only prospective in operation for supply of coal made by the coal companies after that date and it did not at all pertain to the previous transactions which were to be governed by the interim order of the Apex Court or of this Court. The learned Single Judge in our opinion had therefore rightly 8 held that there is no question of merger of the interim orders of this Court in any order of the Supreme Court for the period prior to 12.12.2005.

Thus, we do not find any error in the order of the learned Single Judge directing refund of the excess amount collected from the appellants from the respondent- writ petitioners.

We will, however, take note of the fact that the learned Single Judge has also awarded interest on the amount of refund at the rate of 12% per annum. In our opinion, in the background of the fact that there was some confusion as with regard to refund of the amount and the applicability of the period in terms of the order of the Apex Court dated 12.12.2005, the respondent- writ petitioners would be entitled for payment of interest at the rate of 6% in place of 12% as awarded by the learned Single Judge.

The bonafides of the appellant coal company on account of introduction of E-auction price enforced by way of a policy decision would also entitle them for waiving of the cost imposed by the learned Single Judge and we would accordingly direct that the cost of Rs. 9

10,000/- as directed to be paid by the learned Single Judge would not be required to be paid by the appellants to the respondent- writ petitioners.

This appeal, accordingly, is allowed in part only to the extent indicated above by slashing the interest of 12% to 6% per annum and waiving of the cost of Rs. 10,000/-.

It is, however, made clear that the amount of refund alongwith the reduced amount of interest at the rate of 6% per annum must be paid by the appellants to the respondent- writ petitioners within a period of two months from the date of receipt/ production of a copy of this order.

The appeal, accordingly, is allowed in part. There would be, however, no order as to costs.

(Dipak Misra,C.J.) (Mihir Kumar Jha,J.) Surendra/

Unlock Advanced Research with PRISMAI

Patna High Court - Orders