Patna High Court
Black Diamond Industries And Anr. vs Coal Controllers And Ors. on 11 July, 1986
Equivalent citations: AIR1988PAT239, AIR 1988 PATNA 239, (1986) EASTCRIC 532, (1986) EFR 500, 1986 BLT (REP) 127, (1986) PAT LJR 1136
JUDGMENT Satyeshwar Roy, J.
1. All these seven writ applications have been filed by the owners of the hard coke plants who manufacture hard coke. They have challenged the validity of Bihar Trade Articles (Licences Unification) Order, 1984 (hereinafter called the Unification Order), the amendments made in Schedule III of Unification Order by GSR 47, dated 17th October, 1985 reviving certain clauses of Bihar Coal Control Order, 1956. (Coal Control Order for brevity) and Bihar Essential Articles (Display of Prices and Slock) Order, 1977 (Display Order for brevity). In the alternative, they have challenged the applicability of those three Bihar Orders to them as producers and dealers of hard coke and to the hard coke plants where hard coke is produced. The facts in all these cases are similar and the law applicable thereto being the same, they were heard together and are being disposed of by this judgment.
2. The petitioners are owners of hard coke oven/plants and carry on business of production and sale of hard coke. The hard coke ovens are registered under the Factories Act, 1948. the coke ovens/plants of the petitioners produce hard coke which is known as beehive hard coke. According to the petitioners the Colliery Control Order, 1945 shall apply to them and to their coke ovens/plants. It is their case that although they are dealers in coal within the meaning of the Unification Order, Display Order and Coal Control Order, but as their plants are 'Colliery' and they are colliery owners within the meaning of Colliery Control Order read with the Mines Act, 1952, that Order is applicable to them and not the Bihar Orders. As the Colliery Control Order specifically deals with producers of and plants for producing coke, that Order only shall apply. They also contend that the Display Order, the Unification Order and the Coal Control Order encroached on the field already covered by the Colliery Control Order; therefore, those orders must be held to be void to the extent it encroached on covered field. Further, the Display Order is invalid as it was issued without the previous concurrence of the Central Government. So far Coal Control Order is concerned, the petitioners also contend that the Order was repealed by Clause 32 of the Unification Order in 1984 and by amending the Unification Order in 1985 by passing another Order some clauses of Coal Control Order could not be revived.
No counter affdaivt has been filed either by the Union of India and its various departments or the Stale of Bihar and its various departments. Counter-affidavit has been filcdin C.W.J.C No. 550/85 (R) on behalf of respondent No. 2. the Deputy Commissioner of Dhanbad and respondent Nos. 7 to 11, different officers of the State Government in the district of Dhanbad. In the counter affidavit it has been stated that the Colliery Control Order and the Unification Order operate in two different fields and there is no conflict between the two. Both the orders are applicable to the petitioners. So far as the Display Order and Coal Control Order arc concerned, the counter-affidavit is silent. There is no dispute, therefore, that Colliery Control Order is applicable to the petitioners.
3. The short question that arises in these cases is; do Unification Order, Display Order and Coal Control Order also apply to petitioners who are admittedly governed by Colliery Control Order ? Other questions were also raised by the petitioners. But if the question formulated is answered by holding that the three Bihar Orders do not apply, it will not be necessary to decide other questions.
4. The Central Government made Colliery Control Order, 1945 by repealing the Colliery Control Order, 1944, 1945 Order was made by the Central Government under Rule 81(2) of the Defence of India Rules. 1945 and continued under Section 16 of the Essential Commodities Act, 1955 (the E.C. Act). In view of the definition of the word 'Colliery' in that Order, the petitioners contend that as their plants for production of coke is 'colliery' within the meaning of Colliery Control Order, neither the Unification Order nor the Coal Control Order nor the Display Order shall apply, whereas according to the respondents all the Orders shall apply.
5. Under Section 3 of the E.C. Act the power to make order for regulating or prohibiting the- production, supply, distribution and trade and commerce in any essential commodity is with the Central Government. However, the Central Government has been empowered to delegate its powers to the State Government in relation to such matters and subject to such conditions as may be specified in the direction. All the orders passed in Bihar by the State Government is as delegate and there is no doubt that the Order made by the Central Government under Section 3 with regard to any essential commodity which includes hard coke shall prevail over the Order made by the State Government. Although Colliery Control Order. Unification Order. Display Order and the Coal Control Order deal with coal, but colliery Control Order deals specifically with collierj including owners thereof.
6. It is necessary to summarise the provisions of the Colliery Control Order. Coal has been defined to include coke. Colliery includes a plant for production of coke. 'Owner' when used in relation to a colliery has the same meaning as in the Mines Act, 1952. 'Retention Price' means the price fixed by the Central Government in respect of each colliery owner per tonne of each class, grade or size of coal and coke produced and sold by such owner. Under this Or.der. Coal Controller appointed by the Central Government has been empowered to fix the grade of coal. Clause 4 provides that the Central Government may by notification in the official gazette fix the sale price at which or the maximum sale price or both, subject to which, coal may be sold by colliery owners. Clause 4A empowers the Central Government to fix retention price in respect of each class, grade or size of coal and coke produced and sold by such colliery owners. Clause 5 provides that no colliery owner or his agent shall sell, agree to sell or offer to sell, and no person shall purchase, agree to purchase or offer to purchase, directly or through a broker or a del credere agent, coal from a colliery owner at a price which is in excess of the price or the maximum price or below the price or the minimum price fixed under Clause 4. Clause 6 fixes the commission that a broker or middle man or del credere agent shall be entitled to receive. Clause 7 provides (hat every colliery owner, every allottee of coal under the Order shall on being requested to do so either by a notice served on him or by a special or general direction issued by the Coal Controller. Govt. of India, subject to that officer such returns and other informations in such form and within such time, as may be specified in the notice or direction. Clause 8 provides that the Central Government may from time to time issue such direction as ft thinks fit to any colliery owner regulating the disposal of his stock of the expected output of coal in the colliery during the period, includingdirections as to the class, grade, size and quality of coal which may be disposed of and any person or class or description of persons to whom coal shall or shall not be disposed of, and the stacking of coal on Government Account. Under Clause 9 all colliery owners shall dispose of coal in accordance with the direction given in Clause 8 and shall not dispose of coal in contravention thereof. Clause 10 provides that where a colliery owner has coal available for disposal not covered by the directions issued under Clause 8 or where wagons are not available for despatch in accordance with those directions, the colliery owner may with the general or special permission of the Central Government stack such coal on the Government Account and when coal is stacked on Government Account there shall be paid to the colliery owner in addition to the price payable for the coal a sum for stacking at such rates as may be determined by the general or special order of the Central Government. Under Clause 10A the Coal Controller of the Government of India may by order in writing direct that any coal despatched by any colliery owner, or a person acting on behalf of a colliery owner, which is in transit, shall subject to such terms and conditions, if any, as the said Coal Controller deems fit, be diverted and delivered to another person specified in the Order. The Coal Controller has power to modify or cancel any such order. Under Clause 11, the Central Government may issue such directions as it thinks fit to any colliery owner prohibiting or limiting the mining or production of any grade of coal and the colliery owner shall comply with the directions. Under Clause 12A, the Central Government may by notification in the official gazette specify the authorities competent to allot quotas of coal to any person or class of persons and every such authority shall allot such quotas subject to such instructions as the Central Government may issue from time to time. Clause 12B prohibits any person from using coal so allotted otherwise than in accordance with the conditions contained or incorporated in the Order of allotment and shall not divert or transfer any coal to any other person except under a written authority from the Central Government and at such price as may be fixed by that Government. Clause 12E provides that no person shall acquire or purchase or agree to acquire or purchase any coal from a colliery and no colliery owner or his agent shall despatch or agree to despatch or transport any coal from the colliery except under the authority and in accordance with the conditions contained in a general or special authority of the Central Government. Clause 12-F makes provision for securing compliance of the provisions of Clause 12-E. Clause 12-G provides that notwithstanding anything contained in Clauses 12-A, 12-B, and 12-E of this Order, and from the 15th day of September, 1975, any person may, without any order of allotment or authority acquire or purchase or agree to acquire or purchase or despatch or agree to despatch or transport or divert or transfer hard coke produced from the Beehive ovens, country ovens, and By-product ovens, provided that nothing of this Clause shall apply to hard coke in respect of which direction or order is issued by the Central Government under CL 8. Clause 13 provides that any officer authorised by the Central Government in this behalf may. with a view to securing compliance with this Order :
(i) require any colliery owner or his agent or manager to give any information in his possession relating to the production of coal in the colliery including the working plans of the coal mine or seam or section of a seam showing full boundaries of the leasehold areas and plans for abandoned area, flooded areas and areas which have been or are on fire;
(ii) inspect or cause to be inspected any mine plants in the possession of any colliery owner or manager;
(iii) enter and inspect any colliery;
(iv) require any consumer or his agent or any owner or other person in charge of a conveyance or boat in which coal is transported to give any information in his possession;
(v) inspect, measure or weigh coal at the colliery or in transit or at the premises of consumer and take sample thereof;
(vi) carry out such tests on the furnaces, boilers and other installations of consumers of coal as may be necessary for determining the quality and quantity thereof required by them and on the basis of such tests, issue necessary instructions to consumers regarding the economic and efficient use of coal.
7. It will be noticed that under the Colliery Control Order, the Central Government or its Coal Controller, Deputy Coal Controller, i.e. officers exercising the powers of the Central Government have absolute right in relation to a colliery to regulate including prohibiting production of coal, regulating stock, sale and purchase, consumption, the price, requiring informations to be furnished etc. In sum, Colliery Control Order regulates coal from the stage of production to the stage of consumption including price control, inspection, filing of returns and maintaining registers. The case of Singareni Collieries Co. Ltd. v. Commr., CommercialTaxes, AIR 1966 SC 563 may be seen.
8. The Display Order applies to all articles mentiond in Schedules I and II to that Order and serial No. 17 of Schedule I is coal including soft coke. Dealer has been defined to mean a person who deals in the sale or storage for sale either wholesale or retail or any of the articles mentioned in schedules I and II and includes agent or representative or Arathis. The relevant portion of Clause 3 with which we are concerned, requires that every dealer shall before the commencement of his business or any day display on any conspicuous place, near the entrance of his business premises the list of price and stock of articles mentioned in Schedule I, in which he deals. Clause 4 provides that no dealer shall sell to any person any article mentioned in Schedules I and II at a price higher than that displayed in accordance with Clause 3 or refuse to sell such articles to any person at a price so specified or marked provided that no dealer, unless previously authorised by the State Government or any other officer authorised by the State Government in this behalf, shall withhold from sale any stock of articles displayed in accordance with Clause 3. In Clause 6 provisions have been made for entry, inspecting, search, seizure, etc. Clause 7 provides that every dealer shall maintain correct stock register in respect of the articles mentioned in Schedule I to the Order.
Under the Display Order, the display of list of articles is for the purpose of informing intending purchasers the articles available for sale and its price. It provides that no dealer shall refuse to sell article which is in stock and at the price shown. There is also provisions for inspection seizure, etc. and for maintenance of register.
9. In April, 1984, the State Government made the Unification Order. In this Order, 'Coal' has been defined to mean coal, coke and other derivatives including soft and hard coke of various grades. Dealer has been defined to mean the person, a firm, an association of persons or a Co-operative Society other than a National and State level co-operative society, engaged in the business of purchase, sale or storage for sale of any trade article whether or not in connection with any other business and includes his representative or agent. Retail dealer has been defined which means a person engaged in the business of purchase, sale or storage or any article specified in Schedule I for the purpose other than personal consumption within the storage limit fixed by the Government from time to time. Wholesale dealer has been defined to mean a person engaged in business of purchase, sale or storage of any article specified in Schedule I for the purpose other than personal consumption within the storage limit, fixed by the Government from time to time. Coal dump holder means a person or a firm appointed by or on behalf of the Government as such, who is engaged in the business of storing coal from collieries on the basis of the allocation made by the Government or by any authority empowered by the Central Government for sale to retail dealers. Coal agent means a person or a firm appointed by the Government as such who is engaged in business of storing and sale of coal through rail wagons/rakes on the basis of the allocations made by the Government. Part II of the Unification Order provides for issuance of licence and prohibits a dealer to carry on business of purchase, sale or storage for sale of any of the trade article mentioned in schedule I without a licence issued under this Order. Various clauses in part II deal with issue of licence, renewal of licence, fee chargeable for licence, deposit of security, power to refuse licence, addition and alteration of licence, consequence of contravention of condition of licence etc. Part III of the Order imposes restriction relating to price, stocks etc. In this part, it has been provided that retail price of any trade article displayed in compliance of the provisions of the Display Order shall not exceed the retail price, fixed or recommended by the Central Government or the State Government or manufacturer or distributor from time to time for that trade article. It further provides that no dealer shall sell to any person any trade article at a price higher than that specified in respect of such article in the list of prices and stocks and no dealer shall refuse to sell such articles to any person at the price specified It also provides that no person shall either by himself or by any person on his behalf store, or have in his possession at any time any trade article mentioned in Schedule I and Schedule II in quantity exceeding the limits fixed under any order issued by the Central Government or by the State Government with the prior concurrence of the Central Government. Provisions have been made that during emergency, war, famine, natural calamities etc. every person holding stocks of trade articles mentioned in schedule I and Schedule II shall sell to the State Government or to any person or class of persons the whole or specified part of His stock at such prices and in such manner as may be specified by the Collector. Dealers are required to furnish returns. It also provides that the licencing authority may order in writing any dealer holding stock of any trade article to sell articles on permits issued by the Licensing Authority or such other officer authorised in this behalf by the State Government. In Part IV, miscellaneous provisions have been made. It empowers the Licensing Authority to call for such particulars or information relating to any trade articles from any dealer. It also empowers the State Government or the Collector or the Licensing Authority to issue directions to any dealer with regard to purchase, sale, storage, disposal, exhibition of price etc. of any'of the trade articles. Provision is there for inspection, seizure, search maintaining registers etc. Coal is item No. 3 in Part E of the Schedule I. Colleiry owner being a dealer within the meaning of Unification Order shall have to take licence. He cannot refuse to sell coal to any person and must abide by the terms and conditions of licence which include filing of returns.
10. Although Coal Control Order, 1956 was repealed by the Unification Order in 3984, but by the subsequent order in 1985 amendment has been made in the Unification Order issued in 1984 and it has been provided that Clauses 2(b), 6(c), 9, 10, 11, 12 and 13 of the Coal Control Order have not been repealed. It is, therefore, necessary also to see the relevant provisions of the Coal Control Order.
11. Clause 2(b) of the Coal Control Order defines the Controller to mean the officer appointed by the State Government to be Coal Controller, Bihar and includes any officer appointed in this behalf by the State Government to perform all or any of the functions of the Controller under this Order. Clause 6(c) provides for cancellation of licence, if the licensee fails to lift the allotment of coal made by the Coal Controller. Clause 9 provides that the licensing authority may, by order, regulate the distribution, sale, use and consumption of coal within its jurisdiction, subject to any general or special order issued from time to time by the State Government. Clause 10 provides that no dealer shall sell or offer for sale or otherwise dispose of coal for a consideration which exceeds the amount represented by the addition allowed to the pit-head prices fixed from time to time by the Central Government such prices being increased by any charge incurred on account of transport, usual profit margin and such other incidental expenses as may from time to time be approved by the licensing authority. These charges shall be fixed by the licensing authority within his jurisdiction. Clause 11 prohibits transportation of coal except under permit granted by the Controller Bihar or by the Central Government or by any officer authorised in this behalf by the Central Government. Under Clause 12 prohibition has been imposed for importing coal into Bihar except under permit granted by the Controller Bihar, or by the Central Government or any officer authorised in this behalf by the Central Government. Clause 13 provides that no dealer shall unless previously authorised by the licensing authority, withhold from sale or refuse to sell either generally or to specified person or classes of persons, coal ordinarily kept for sale.
Coal Control Order, therefore, provides for appointment of Coal Controller for Bihar, for fixation of price of coal, consequences, i f order of Coal Controller Bihar is violated, regulating distribution, sale use and consumption of coal, prohibition to refuse to sell coal kept for sell etc.
12. From the different provisions of the Bihar Orders noticed above, it will appear that the petitioners who are the owners of plants for production of coke must be held to be dealers within the meaning of Unfication Order and Display Order and licensee under the Coal Control Order. Both under the Bihar Coal Control Order and the Colliery Control Order, there are Coal Controllers; under the former he is appointed by the State Government and under the latter by the Central Government. According to the respondents, the petitioners come under the jurisdiction of both the Controllers and shall have to abide by the directions issued by the Coal Controller Bihar and the Coal Controller appointed by the Central Government. The petitioners are dealers as well as manufacturer of coke.
13. According to the respondents, the Coal Control Order, Unification Order and Display Order operate in fields other than that covered by the Colliery Control Order, but at the same time they contend that the Bihar Orders shall also apply to the petitioners. There cannot be any dispute that the three Bihar Orders may be saved if they operate in field not covered by the Colliery Control Order.
14. A comparison of the different provisions of the Orders noticed above, brings out this picture; Colliery Control Order is applicable throughout India and deals with coal including coke. The provisions which are found in the Coal Control Order, Unification Order and Display Order with regard to sale, purchase, storage, price, inspection, compliance of order given by different authorities under those orders and filing of returns are also provided in the Colliery Control Order with regard to colliery owner and colliery within the meaning of Colliery Control Order. Colliery Control Order further provides for regulating production of coal which is not there in any of the Bihar Orders. Colliery Control Order. is a special statute which deals with colliery which means a mine or open working where getting of coal is the principal object of the mining, quarrying or other operations carried on therein and includes a plant for the production of coke. None of the Bihar Orders deals with colliery. The very significant difference between Colliery Control Order in one hand and the Bihar Orders on the other, is that whereas the former Order specifically deals with colliery and producers of coal, the latter Orders, i.e. the Bihar Orders do not specifically include them but purport to deal with all dealers of coal.
15. Respondents want us to include with the ambit of 'dealer' in Bihar Orders producers of coal also. This cannot be done. Firstly, Colliery Control Order deals with producers of coal and the definition of 'dealer' in Bihar Orders do not include producers of coal. Secondly, Colliery control Order is an exhaustive Code in respect of colliery. If Bihar Orders are made applicable to colliery, then these Orders will come in conflict with Colliery Control Order. But this conflict can be avoided if it is held that Bihar Orders do not apply to colliery. Thirdly, according to the respondents, when Colliery Control Order and Bihar Orders operate in different field. there is no scope for holding that Bihar Orders will operate also in the field covered by Colliery Control Order.
16. It was urged on behalf of the respondents that in the Colliery Control Order, there is no provision for obtaining a licence. This appears to be true, but the issuance of licence under the Unification Order is meant for controlling the sale, purchase and storage and distribution of coal and contravention of terms and conditions of the licence has been made penal. If Colliery owners, who are the petitioners, are required to obtain licence under the unification Order that must be for the purpose that production sale, purchase and storage of coke may be regulated within the terms and conditions of the licence. Since the State Government cannot regulate the production, sale, purchase and storage of coke of colliery owner, no licence is required to be taken by the colliery owners under the Unification Order.
17. It was also submitted that in the Colliery Control Order, there is no provision for display of price of coal and of stock, and Display Order will therefore apply. This submission has no substance. Display of price and stock is to facilitate an intending purchaser to know the price and if coal is available in stock he is entitled to purchase it. I have already noticed that sale of coal by producer is regulated under Colliery Control Order, so also purchase of such coal. Display Order, therefore, has no application to Colliery.
18. Another submission of the respondents to be noticed is that it was urged that from 15th September 1975. restrictions of clauses under 12 A, 12B and 12E of Colliery Control Order have been removed; therefore. to that extent Bihar Orders shall apply to colliery. Clause 12A provides for allotment of quotas of coal. Clause 12B provides that coal of allotted quota must be used in accordance with condition of allotment and must be sold at the price fixed by the Central Government and Clause 12E provides restriction of sale and purchase of coal from Colliery except under the authority and in accordance with the conditions laid down by the Central Government. These clauses are now inoperative. But under Clause 12G power has been retained to issue directions under Clause 8. As noticed above, since the subject matter, i.e. Colliery is entirely covered by the Central Order. Bihar Qrder cannot be made applicable to that subject.
19. In view of the aforesaid finding, it is not necessary to decide whether the Display Order was bad as prior concurrence of Central Government has not been obtained or that some clauses of Coal Control Order could not have been revived once the whole Order was repealed.
20. It is, therefore, held that :
(a) Unification Order. Display Order and Coal Control Order are not repugnant to Colliery Control Order as the last Order applies to dealers in coal who are themselves producers and Bihar Orders do not apply to them:
(b) Colliery Control Order is applicable to the petitioners as their plants for producing coke are collieries and the petitioners are owners of mine; and
(c) Unification Order. Display Order and Coal Control Order do not apply in the case of the petitioners.
21. In the result, the petitionsare allowed. Let a writ of prohibition be issued prohibiting the respondents, their men. agents, officers and servants from applying the provisions of Unification Order. Display Order and coal Control Order so far the business of the petitioners of production and sale of hard coke is concerned. There shall be no order as to costs.
S.S. Sandhawalia, C.J.
22. I agree.