Calcutta High Court
Shreegopal Govind Sponge Private Ltd. ... vs Union Of India (Uoi) And Ors. on 13 February, 2004
Equivalent citations: (2004)1CALLT407(HC)
Author: Maharaja Sinha
Bench: Maharaja Sinha
JUDGMENT Maharaja Sinha, J.
1. In this writ application, the writ petitioners have sought for mandatory orders in the form of writ or writs directing the concerned respondent or respondents to grant linkage in favour of the petitioners for their two industrial units on the basis of the recommendations of the 6th and the 7th respondents herein, treating the units of the petitioners as priority units on the basis of the policy of the Government of India and also as the units of the petitioners are core sector units, in terms of the provisions of Colliery Control Order, 1945.
2. A mandatory order in the form of a writ directing the concerned respondents to supply the graded coal from the sources of Eastern Coalfields Limited for the said two units of the petitioners, at G-4 Mongalpur Industrial Estate, at Raniganj, in the District of Burdwan, West Bengal.
3. A declaration has also been sought for the said two units of the petitioners at Mongalpur Industrial Estate, at Raniganj, in the District of Burdwan, are entitled to get the supply of coal from specific sources of the Eastern Coalfield Limited in terms of the policy of the Government of India. An interim order has also been sought for upon the concerned respondents for immediate supply of the graded coal as per specification to the said two units of the petitioners from the collieries or sources of the Eastern Coalfields Limited.
4. In order to appreciate as to whether the petitioners are entitled to the reliefs as sought for or at all the short facts of this case as appeared from the writ petition and as established during the course of hearing are set out in brief:--
The petitioners herein, in the month of June 2001, had set up two Sponge Iron Units, at Mongalpur Industrial Estate, at Raniganj, in the District of Burdwan, West Bengal. The said two units were set up for the purpose of manufacturing sponge iron. For manufacturing sponge iron the petitioners required and require B/C/D Grade Coal.
5. Since the said two units of the petitioners were set up at Raniganj, the graded coal required for manufacturing sponge iron could not conveniently be supplied by CCL, at Raniganj, it was submitted.
6. The petitioners, therefore, applied to the Ministry of Coal, the first respondent herein, in the month of August 2001, to be precise on 6 August 2001, for obtaining a proper linkage for supply of coal namely, B/C/D grade coal to the said two units of the petitioners, at Raniganj, in the District of Burdwan, West Bengal.
7. Having been advised by the Ministry of Coal to approach the Ministry of Steel at the first instance for obtaining coal linkage, the petitioners by a letter dated, 4 September 2001, requested the 7th respondent herein, the Ministry of Steel, to grant linkage in favour of the petitioners for supply of the specific grade coal for their said two units, at Raniganj.
8. The Ministry of Steel, however, informed the Ministry of Coal to ascertain the availability of coal for supply to the said two units of the petitioners, at Raniganj. No reply, however, came from the Ministry of Coal.
9. A meeting was, however, held by the Linkage Committee on 21 November 2001. Eventually the Joint Industrial Advisor of the Ministry of Steel by his letter dated 28 December 2001, informed the petitioners herein that "the Linkage Committee for sponge iron units in its meeting held on 21 November 2001, has rejected your request for B/C/D grade coal from Eastern Coalfields Limited sources". The said letter is annexure-P/9, to the writ application, appearing at page '43' thereof.
10. There is no doubt, however, that the industry of the petitioners is in the core sector. It was pointed out, however, during the course of hearing that the policy of supply and distribution of coal of various grades of non-coking coal is framed by the Central Government by and under the provisions of Colliery Control Order 1945. The policy of the Government is to supply coal to core sector as well as non-core sector. However, priority is given in favour of the industries in core sector including the power industry and the said two units of the petitioners, being in the core sector. The petitioners are also entitled to have the supply of the graded coal on priority basis.
11. During the course of hearing, however, it was also pointed out by the learned senior counsel appearing on behalf of the writ petitioners that at the time when the Linkage Committee rejected the said application of the petitioners for supply of coal there was lack of availability of coal in the Eastern Coalfields Limited.
12. On or about 14 September 2002, M/s. Tata Sponge Iron & Steel Co. Ltd. surrendered their linkage to the concerned authority. The linkage quantity in favour of the said Tata Sponge Iron & Steel Co. Ltd. was to the tune of 86,400 thousand tones of coal.
13. Inspite of the said surrender by M/s. Tata Sponge Iron & Steel Co. Ltd., the petitioners herein, were not granted any linkage or given any supply of coal but, one M/s. Satyam Iron & Steel Co. (Pvt.) Ltd., M/s. Purvanchal Maithan Steel & Power Limited and M/s. Dhanbad Fuels Pvt. Ltd. who applied for supply of coal much later than the petitioners, their cases were considered by the authority concerned especially, in view of the above surrender made by the said M/s. Tata Sponge Iron & Steel Co. Ltd.
14. These were, however, pointed out and emphasised at the time of hearing of this application by the learned senior counsel Dr. Debi Pal, appearing on behalf of the petitioners.
15. The said three Industries mentioned above namely, M/s. Satyam Iron & Steel Co. (Pvt.) Ltd., M/s. Purvanchal Maithan Steel & Power Ltd. and M/s. Dhanbad Fuels Pvt. Ltd. are all in non-core sector industries.
16. It was further emphasised during the course of hearing by the learned counsel on behalf of the petitioners that though the said M/s. Tata Sponge Iron & Steel Co. (Pvt.) Ltd. surrendered only 86.400 thousand tones of coal, the said three industries named above who are in non-core sector were allotted a total quantity of 5.644 lacs tones of coal in their favour though the said industries were not in the core sector.
17. It would, therefore, mean, submitted Dr. Pal, that unless Eastern Coalfields Limited had in its Store more than sufficient quantum of coal, it would not have been possible for the Eastern Coalfields Limited to allot 5.644 lacs tones of coal in favour of the said three companies who were in non-core sector, as mentioned above.
18. The Eastern Coalfields Limited, therefore, had more than sufficient coal in its store and that was why the said three industries mentioned above were allotted 5.644 lacs tones of coal per annum in their favour even before the said surrender was made by the said M/s. Tata Sponge Iron & Steel Co. Ltd. to the concerned respondents.
19. Dr. Pal further submitted that though the Eastern Coalfields Limited had sufficient quantity of coal at its disposal yet the petitioners herein were refused or rather their application was rejected on the ground of lack of coal or lack of availability of coal where at the same time the said three industries who were not in core sector were allotted huge quantum of coal though their applications for such supply were made much later than the petitioners.
20. The learned senior counsel on behalf of the petitioner Dr. Pal, however, had drawn my attention to the letter dated 14 September 2002, being R-1 to the Affidavit-in-Reply of the petitioners at page '20' and the list annexed to the said letter, appearing at page '21' of the writ application.
21. From the said letter it appears that the applicants namely, other sponge Iron Manufacturers namely M/s. Satyam Iron & Steel Co. (Pvt.) Ltd., M/s. Purvanchal Maithan Steel & Power Ltd. and M/s. Dhanbad Fuels Pvt. Ltd. were allotted coal in their favour though their applications were made much after the petitioners.
22. The recommendations in favour of the said three manufacturers were made in May 2002, whereas the petitioners herein made their applications in February 2002 and recommendation was also made in favour of the petitioners by the Ministry of Coal for grant of linkage when they made the application.
23. Apart from these said three manufacturers, from the said list it also appears that the other industries whose names are appearing in serial Nos. 6, 7, 8 and 9 in the said list, their cases were recommended much later than the recommendations made in favour of the petitioners herein and yet the said manufacturers were supplied with coal from the Eastern Coalfields Limited, the 3rd respondent herein.
24. Dr. Pal submitted on behalf of the petitioners that the application of the petitioners was made way back in August 2001, to be precise on 6 August 2001, for grant of linkage. The application for linkage was rejected on the ground that there was no availability of B/C/D grade coal, on the other hand, the other non-core sector industries, names of such industries are mentioned above, were allotted coal in their favour for manufacturing sponge iron though the said industries are in non-core sector.
25. The two units of the petitioners, however, were in the core sector and as such according to the policy of the Government the core sector industries have to be supplied the coal first on priority basis and then the non-core sector industries should be supplied. Inspite of such policy, however, the authority concerned namely, Ministry of Coal was entering into agreements with the non-core sector industries for supply of coal, submitted Dr. Pal.
26. It was further submitted that the Eastern Coalfields Limited was not in a position on the alleged plea that if it had supplied coal to the petitioners then it would not have been possible for the Eastern Coalfields Limited to keep its commitments of the targeted supply of coal to the non-core sector industries.
27. The units set up at Raniganj by the petitioners are In the core sector industry even then the industries of the petitioner or rather the units of the petitioners have not been supplied any coal and the application for grant of linkage was rejected while at the same time the Eastern Coalfields Limited or the concerned authority or authorities made recommendations for supply of coal to the non-core sector industries as well as they also entered into agreements with such manufacturers of non-core sector.
28. The said three industries named above who have already been supplied with coal, being in the non-core sector, though the plants or factories of the said companies have not yet been set up and the said companies or manufacturers had not started their productions, submitted Dr. Pal further, in support of the case of the petitioners herein. The petitioners, however, set up the said units at Raniganj and more than 700 workers were employed.
29. Those industries, submitted Dr. Pal, which were not and (are) not core sector industries were supplied with coal though their respective plants had not been set up or commissioned and no productions, therefore, had started at those plants. The units of the petitioners, in all fairness, were entitled to have the necessary supply of B/C/D grade coal from the Eastern Coalfields Limited, at least the petitioners were entitled to proportionate quantity of B/C/D grade coal so that the petitioners were in a position to at least operate the said units rather than making the said units completely paralysed by non-supply of fuel namely, B/C/D grade coal.
30. It was emphasised by Dr. Pal that though the said companies namely, M/s. Satyam Iron & Steel Co. (Pvt.) Ltd., M/s. Purvanchal Maithan Steel & Power Ltd. and M/s. Dhanbad Fuels Pvt. Ltd. were allotted a substantial quantum of coal in their favour after the said M/s. Tata Sponge Iron & Steel Co. Ltd. had surrendered their quantum of coal have not yet set up their plants or started their productions. On the other hand, the petitioners had already set up their plant or plants or units and started production, the production, however, had to be stopped because of non-supply of B/C/ D grade coal by our respondents concerned.
31. It was, thus, submitted by Dr. Pal that the petitioners were entitled to an order in their favour and that Eastern Coalfields Limited should be directed to give priority of supply of coal to the petitioners herein before it made any arrangements for supply of coal to the other industries including the said three industries named above who were not in core sector and who had not yet set up their units or plants and/or started their productions.
32. In this matter the following directions were given by this Court on 29 September 2003:--
"During the pendency of this writ application Ministry of Coal and/ or Proper Officer of the said Ministry is directed to consider the prayer of the petitioner for grant of linkage. The said decision, however, will be taken within a period of three weeks from the date of making an application for grant of linkage in favour of the petitioner. The concerned officer, who will consider the application for grant of linkage, shall give a reasonable opportunity of hearing to the writ petitioner before taking his decision or making his order on the said application."
33. This direction was given for the purpose of ascertaining the stand of the concerned respondents in the matter of supply of coal in favour of the petitioners herein. The concerned respondents were directed to make the necessary inquiry as to why the petitioners were not in a position to obtain coal, being the industry in the core sector even though the petitioners had approached the concerned respondents upon compliance of all the formalities for obtaining particular grade of coal required for the purpose of manufacturing sponge iron. What is meant by sponge iron and how the sponge iron is produced are mentioned briefly in the writ petition itself, in particular in paragraph '5' thereof.
34. Having heard the submissions on behalf of the petitioners it was felt that the concerned respondents should come out with their stand in relation to supply of coal to the petitioners.
35. Pursuant to the said order the concerned respondents namely, the Joint Secretary to the Government of India, Ministry of Coal, had the occasion to consider the case and after having considered the case the Joint Secretary to the Government of India, Ministry of Coal, submitted his report. The said report is dated, 10 November 2003 and was submitted in Court in terms of its order dated, 28 November, 2003.
36. In my opinion, this report of the Joint Secretary, to the Government of India, Ministry of Coal, is of immense importance. From a perusal of the report, it appears that the case of the petitioners made in the writ applications are practically admitted by the concerned respondents.
37. From the said report it appears that the Linkage Committee rejected the claim of the petitioner for linkage though the rejection order itself did not assign any reason. The rejection took place on the ground that at that point of time there was no availability of coal in Eastern Coalfields Limited for the petitioners.
38. It is admitted in the said report that the said M/s. Tata Sponge Iron & Steel Co. Ltd., in fact, surrendered its linkage amounting to 86.400 thousand tones of coal and the applications of the said M/s. Satyam Iron & Steel Co. (Pvt.) Ltd., M/s. Purvanchal Maithan Steel & Power Ltd. and M/s. Dhanbad Fuels Pvt. Ltd. were considered because of the surrender made by the said M/s. Tata Sponge Iron & Steel Co. Ltd. and the Ministry of Steel sanctioned the linkage to these manufacturers though their applications were made later than the application of the petitioners.
39. Since, to my mind the said report of the Joint Secretary to the Government of India, Ministry of Coal, is of immense importance as far as the case of the petitioners is concerned. The following portions of the said report are set out:-
"The representative of ECL confirmed that at the present time availability of coal is not there for any units and as per the new policy of sale of coal to non-core sector the coal company has entered into FSAs with all existing linkage-holders. Under the terms of the FSA, the coal company will be penalised for short supply in the contracted quantities to the agreement holders and, therefore, ECL is not in a position to supply to the petitioner."
"Though the facts narrated above are accurate, it is clear that petitioner had suffered a disadvantage for no fault of his, as his case was not even waitlisted. Had his case been waitlisted, he would have certainly got a better priority over the three others who were subsequent applications."
"During the course of the personal hearing given it was informed by CIL that coal is available in CCL sources. In the circumstances. Ministry of Steel may be advised to grant linkage to the party for the 1st kiln from CCL immediately. Before parting with the case it may also be put on record that, should there be subsequent availability of coal in ECL on account of any reason, the party may be given option of coming back to ECL regarding supplies to the first kiln before any later or subsequent application is considered from this category."
40. To my mind, from a bare reading of the said report it appears that the case of the petitioners herein, are practically based on admitted facts and as such no further inquiry need be made as to the genuineness of the claim of the petitioners for obtaining a particular type of coal namely, B/ C/D grade coal for the said two units of the petitioners for the purpose of manufacture of sponge iron.
41. From the said report it also appears that the petitioners herein have been subjected to most unfair and arbitrary treatment in the hands of the concerned respondents herein. It is, however, extremely difficult to appreciate and understand as to how the applicants, who are not in core sector, could obtain coal for their manufacturing purpose when the applications of the petitioners for supply of coal for their two units, at Raniganj, were not even considered though the petitioners, from the facts and the circumstances of the case it is clear, complied with all the requisitions and formalities of the concerned respondents herein, for the purpose of obtaining the supply of coal from the respondents. This most important and vital question has not been answered or even attempted to be answered by the respondents either in their Affidavit-in-Opposition or in the report that was prepared and submitted under the order of this Court.
42. During the course of hearing it was submitted and from the report it appears that supply of coal required by the petitioners herein from the respondents in particular from Eastern Coalfields Limited, at present is not available and since the other non-core sector industries have already been granted linkage in their favour, the Eastern Coalfields Limited has to supply such coal to those manufacturers who are in non-core sector as the Coal Company would be penalised for short supply in the contracted quantities to those manufacturers in the absence of supply of coal to them.
43. In the said report, it is admitted in clear terms that the petitioners herein had suffered a disadvantage for no fault on their part at all. In other words, the petitioners suffered because of no fault on their part but because of the fault of the concerned respondents, that is how a reasonable man should read the report of the Joint Secretary to the Government of India, Ministry of Coal, dated 11 November 2003. It is the concerned respondents who are responsible for no considering the case of the petitioner for supply of coal or a particular grade of coal to the said two units of the petitioners since the petitioners are in the core sector.
44. It is admitted that "Had the case of the petitioners been waitlisted they would certainly have got a better priority over the three other who were subsequent applicants".
45. The above facts establish the utter arbitrary acts and conducts and discriminatory treatments of the concerned respondents against the petitioners herein.
46. Since the petitioners, in my opinion, are not in any way responsible or liable for non-supply of fuel or coal of the particular grade to their said two units, at Raniganj and since the concerned respondents, it appears, are entirely responsible for no considering the case of the petitioner for grant of linkage and/or for supply of coal of a particular grade to their said two units, at Raniganj, the concerned respondents should be held to be under a legal obligation to treat the petitioners herein reasonably and fairly and not arbitrarily and/or unreasonably or unfairly, the concerned respondents are under a legal duty not to discriminate the petitioners which the concerned responsible had/have done so far by rejecting the claim of the petitioner for grant of linkage and by not granting or supplying the graded coal to the petitioners' units at Raniganj though the petitioners had and have a better and prior claim than the others as admitted by the Joint Secretary to Government of India, Ministry of Coal in the said report.
47. From a plain and simple reading of the said report and on consideration of the entire facts and circumstances of this case, I have no hesitation, in my mind, that the petitioners are entitled to the relief or reliefs as sought for by them in the writ application. No explanation had/ has been given in the Affidavit-in-Opposition as to why the petitioner was discriminated against and why the petitioners were/are being subjected to such arbitrary and unfair and unreasonable treatment in the hands of the concerned responsible.
48. Mere denials of allegations made in the writ petition cannot possibly take the case of the respondents high enough so that the respondents can defend themselves successfully against the claim of the petitioners in the writ petition.
49. The authority concerned in its report has made things sufficiently clear that the petitioners had and have suffered not because of any fault on their part but because the fault of the others namely, the concerned respondents herein, at least that is how I venture to read and should read the report of the Joint Secretary to the Government of India, Ministry of Coal, which was made pursuant to the order of this Court made earlier in the writ application of the petitioners.
50. The learned senior counsel, Dr. Paul appearing on behalf of the petitioners, however, submitted that in the said report it was pointed out that the Ministry of Steel was advised to grant linkage in favour of the petitioners for the first kiln from Central Coalfields Limited immediately since the Central Coalfields Limited is located in Ranchi. The petitioners were likely to incur huge cost for transportation because the coal had to be carried from all the way from Ranchi to Raniganj involving a huge cost of transportation and labour and if the petitioners were compelled to receive such supply from Ranchi instead of the Eastern Coalfields Limited then and in that event the petitioners would suffer substantial loss and in that event the petitioners would be compelled to stop its business of manufacturing sponge iron altogether.
51. Dr. Paul further submitted that since the Eastern Coalfields Limited was not in a position to supply coal to the core sector industries like the petitioners' units, at Raniganj and at the same time entered into agreement subsequently with the said three parties named in the writ petition and in this judgment, there was no reason why the proportionate quality and quantity of coal could not be diverted or supplied in favour of the petitioners on prorata basis.
52. The productions at the units of the petitioners were stopped because of non-supply of B/C/D grade coal by the Ministry of Coal due to utter wrongful acts on the part of the concerned respondents herein, submitted Dr. Paul and as such this Court should direct the respondents especially the Eastern Coalfields Limited to supply coal to the petitioners' Units. Which were in core sector at least on prior pro rata basis until the full supply of coal as required by the Units of the petitioners could not be fulfilled upon granting linkage In favour of the petitioners herein as appreciated and recommended and as advised by the Joint Secretary in his said report dated 10 November 2003.
53. Having considered the entire facts and circumstances of the case the submissions on behalf of the writ petitioners and also for the concerned respondents and the merits of the defence contained in the Affidavit-in-Opposition of the concerned respondents and the further case made out in Affidavit-in-Reply and most importantly the report of the concerned authority namely, the Joint Secretary to the Government of India, Ministry of Coal dated 10 November 2003, I am of the opinion that the petitioners are entitled to a declaration in terms of prayer E of the writ petition.
54. Since the petitioners were/are in no way responsible and liable for stoppage of supply of coal for petitioners' Units and since the petitioners were/are not in any way responsible or liable for non-grant of linkage in their favour and since, in my opinion, Eastern Coalfields Limited was under a legal obligation to consider the case of the petitioners first since the petitioners were and are in the core sector industries and since the petitioners' applications were prior to the other applicants.
55. Thus, the concerned authorities namely, ECL is directed to grant linkage in favour of the petitioners' for their two Units, being the Units in the core sector, on the basis of the policy of the Government of India, Ministry of Coal and in accordance with law. Such linkage should be granted in favour of the petitioners within a reasonable time and in any event within a period of five weeks from the date of communication of this order.
56. The petitioners are, in my opinion, also entitled to immediate supply of coal for the purpose of operating their two Units, at Raniganj, until the above order is complied with within the time granted by the concerned respondents. The concerned respondents are directed to supply coal to the said two Units of the petitioners, at Raniganj, on pro rata basis. For this purpose, the petitioner is directed to apply to the Eastern Coalfields Limited giving the particulars of the coal required for the manufacturing purposes by the said two Units of the petitioners, at Raniganj and once the petitioners approach the concerned respondents with their application for such supply of the granted coal, the ECL, the 3rd respondent herein, is directed to supply the said graded coal to the said two Units of the petitioners, at Raniganj, on pro rata basis and by way of an ad-hoc arrangement in favour of the petitioners.
57. The quantum of coal or rather the graded coal required for the said two Units of the petitioners for their manufacturing purposes of sponge iron until the linkage is granted by the concerned respondents in favour of the petitioner, will however, be negotiated between the petitioners and the concerned respondents namely, Eastern Coalfields Limited Authority and the supply will be made by the ECL to the petitioners or rather the petitioners' said two Units on ad-hoc basis until the proper linkage is granted in favour of the petitioners in terms of the above order made herein.
58. This case is an example, to my mind, as to how the persons who are interested in setting up industries and are ready and willing to do all things necessary for the purpose of obtaining raw materials or fuel for their manufacturing units suffer in the hands of some utter irresponsible persons being public authorities, discharging their so called duties, in an utter arbitrary, unreasonable and unfair manner.
59. The petitioners have suffered not because of the fault on the part of the petitioners as fairly admitted in the said report dated 10 November 2003, of the Joint Secretary to the Government of India, Ministry of Coal and as evident from the facts and circumstances of the entire case.
60. The petitioners, in fact, have become the innocent victims so far in the hands of the respondents or rather the concerned respondents since the concerned respondents have not only acted arbitrarily or unfairly or unreasonably but they have so far simply abused their powers and deprived the petitioners of obtaining proper linkage though the industries of the petitioners are in the core sector.
61. The above order, however, is to be treated to be mandatory by the concerned respondents herein.
62. Thus, the writ application, is, disposed of in terms of the above order. There will be no order for costs.
A xerox certified copy of this judgment, if applied for, be given to the learned advocates for the petitioner and the respondents as soon as possible.
A xeroxed signed copy of the operative portion of the judgment be given to the learned advocates for the petitioner and the respondents on the usual undertakings.
The report of the Joint Secretary to the Government of India, Ministry of Coal dated November 11, 2003, prepared and filed under the order of this Court, be kept on record duly countersigned by the Assistant Registrar (Court).
13.02.2004 Formal stay of operation of the order is sought for by Mr. Raja Basu Chowdhury, learned advocate for the respondents, having considered the prayer, the same is refused.