Calcutta High Court
Shivam Coke Private Limited vs Eastern Coalfield Limited & Ors on 17 November, 2017
Author: I.P. Mukerji
Bench: I.P. Mukerji, Moushumi Bhattacharya
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Original Side
Present:-
The Hon'ble Justice I.P. MUKERJI,
The Hon'ble Justice MOUSHUMI BHATTACHARYA
APO 405 of 2015
WP 1058 of 2012
Shivam Coke Private Limited
v.
Eastern Coalfield Limited & Ors.
For the appellant :- Ms. Vineeta Mehera,
Mrs. Paripurna Dasgupta,
...Advocates
For the Respondents :- Mr. Pradip Kumar Dutta, Senior Adv.
Mr. Nikhil Kumar Roy
...Advocates
Heard On :- 26.10.2017
Judgement On :- 17.11.2017
I.P. MUKERJI, J.
I have had the privilege of going through the draft judgment prepared by my learned sister. I entirely agree with her ladyship. However, I would like to make a few observations of my own.
In about October 2004, the respondents decided to sell coal by e-auction to a certain section of consumers described as "non-core sector consumers" including "linked customers". The result of this e-auction was that coal was sold at a higher price than notified.
This e-auction decision or scheme was challenged by various entities in the High Courts. Thereafter, the matters went up to the Supreme Court and were finally decided by it on 1st December, 2006, Ashoka Smokeless Coal India (P) Ltd. & Ors Vs. Union of India and Ors. reported in (2007) 2SCC 640. Now, in that case the Supreme Court had directed return of the excess amount paid by the consumer together with interest @12% per annum from the date of payment till the date of refund of the sum to the petitioner. In granting this interest the Court had opined the following in an order dated 12th December, 2005 passed at the interim stage which was affirmed in the final order "to protect the interest of the petitioners and to ensure that no permanent harm is caused to them we also think it proper to record the undertaking given on behalf of Coal India Ltd. and its subsidiaries that in case this Court upholds the challenge made by the petitioners and allows the writ petitions filed by them, the enhanced price of 33-1/3% now to be paid by the petitioners will be refunded to the petitioners within 6 weeks of the judgment of this Court with interest thereon at 12% per annum from the date of payment till the date of return to the petitioner concerned." (See Ashoka Smokeless Coal India (P) Ltd. & Ors Vs. Union of India and Ors. (2006) 9 SCC 228).
One thing is clear. It was not a plain and simple grant of interest at a particular rate. Reasons had been advanced by the Court for granting this interest. The bone of contention after this judgment was whether the respondents were to follow this decision, even in cases which that Court had no occasion to decide.
According to Mr. Dutta, learned Senior Advocate appearing for the respondents it was in the Ashoka Smokeless case that the Supreme Court had granted interest. It did not mean that interest had to be granted as a matter of course by the respondents in all cases when it was making refund of the e-auction amount to the consumers.
Basing their cause of action on the Ashoka Smokeless case, the appellant/petitioner moved the writ application before this Court, where it specifically claimed refund as well as interest @12% per annum (see Paragraph 1 of the impugned Judgment). For whatever reason this Court in the impugned order and judgment dated 1st April, 2014 allowed the claim for refund. The judgment was silent with regard to the grant of interest. It neither granted it nor refused it.
Ms. Meheria for the appellant submits that the Court was bound to grant interest in view of the above Supreme Court decision.
In my view Ms. Meheria is correct. It plainly appears from the portion of the judgment extracted above in the Ashoka Smokeless Case that the Supreme Court had granted interest on the amount to be refunded with interest @12% per annum together with reasons for grant of such interest. The respondents were bound by such judgment. They were enjoined with the duty to follow the ratio of that judgment in each and every case of refund.
The case of the Appellant/petitioner is in no way different from Ashoka Smokeless Case. Therefore, we only take it that the non-grant of interest by the learned Single Judge may have been an in advertant omission on his lordship's part.
However, one point raised by Mr. Dutta has to be overcome. He says that the appellant/petitioner had been sleeping over its rights for a long period of time. The writ on which the impugned order was passed was filed only in 2012. Now taking advantage of its own delay, the writ petitioner /appellant cannot claim interest.
In my opinion, the writ had not been dismissed on the ground of delay. The point of delay was specifically taken during the hearing of the writ. In spite of this, the impugned order of refund was made. The respondents have not even filed a cross objection to the effect that the writ ought to have been dismissed on the ground of delay. If the writ has been allowed partly, directing the respondents to refund the excess sum collected by e-auction, then it follows that in spite of the delay the Court had entertained and allowed a substantive part of the writ. Now, having allowed the substantive part of the writ, the Court could not have denied the consequential part i.e. interest which follows from the above dictum of the Supreme Court. Similarly, the delay in filing the appeal has been condoned by the Court.
Furthermore, Mr. Dutta submitted that in another similar matter (WP 1279 of 2005. M/s. Tetulia Coke Plant (P) Ltd. & Ors. Vs. Coal India Ltd. & Ors.), the Supreme Court on 10 August, 2011 affirmed the judgment and order of the learned Single Judge and of the Division Bench of the Court directing refund without payment of any interest.
I find that in the Supreme Court decision the point of interest was not argued. The appeal was argued on a different point. However, in the case of S.J. Coke Industries Private Limited & Ors. Vs. Central Coalfields Limited & Ors. reported in (2015) 8SCC 72 the Supreme Court had directed refund of the amount with interest @6%. Since reasons for the grant of interest has been given in the Ashoka Smokeless case, I am minded to follow the ratio in that decision. In the case of Nifty Chemicals Private Limited Vs. Union of India reported in (2009) 15SCC 314 the Supreme Court has directed refund of the excess sum with 12% interest.
After the impugned decision the principal has been refunded to the appellant/petitioner. In view of my above reasons I am minded to direct that the respondents should pay to the appellant interest @12% per annum simple interest on the said amount from the date the amount was paid by the appellant/petitioner for a period of three years. This is so, because after three years the claim of the Appellant would have been barred by limitation, in a Civil Court. In its writ jurisdiction, this Court cannot enlarge the period of limitation. Therefore, I direct that interest is to be paid for three years from the date of making payment of the excess sum by the petitioner. The Appellant could not found a cause of action on Ashoka Smokeless case but ought to have perused its remedy independently and in proper time. Hence it cannot claim interest for a longer period than that permitted by law. The calculation and disbursement of refund shall be made according to the judgment and order of Bhattacharya, J.
The Appeal is partly allowed.
(I.P. MUKERJI, J.) Moushumi Bhattacharya, J. : The appellant/writ petitioner is aggrieved by a Judgment and order dated 1st April 2014 passed by this Court whereby the respondents were directed to refund excess amounts collected by them pursuant to an e-auction Scheme introduced by the respondents for sale of coal, but without allowing the interest on the said amount. The appellant is in the business of operating hard coke manufacturing units, the raw material for which is coking coal. The respondent No.1 is a coal producing company and is a wholly owned subsidiary of the respondent No.3, Coal India Limited.
At this stage, a brief factual background would be useful in understanding the rival contentions of the parties.
Coal India Limited and its subsidiary companies introduced a Scheme in 2004 for the sale of coal. This Scheme was called an "e-auction Scheme" in which the price of coal was to be determined by market forces instead of a fixed price, namely, the notified price. The validity of the e-auction Scheme was challenged by various coal traders/consumers by way of writ petitions before different High Courts. The orders passed by the High Courts were challenged before the Hon'ble Supreme Court and the Coal Companies subsequently filed applications for transfer of all the writ petitions pending before the various High Courts to the Hon'ble Supreme Court. Under an order dated 12th December 2005, the Supreme Court allowed the transfer petitions and thought it fit to record the undertaking of Coal India Limited and its subsidiaries that in the event, the challenge to the e-auction Scheme succeeds, the excess amounts collected by the Coal Companies would be refunded to the petitioners with interest at 12% per annum.
By its judgment and final order in Ashoka Smokeless Coal Industries Private Limited Vs. Union of India reported in (2007) 2 SCC 640, the Supreme Court upheld the challenge to the e-auction Scheme and declared the Scheme to be ultra-vires Article 14 of the Constitution of India. By reason of its final Judgment and order, the respondents were required to refund the entire price paid by the applicant Coal Consumers over and above the notified price in accordance with the undertaking given by Coal India Limited and recorded in the interim orders passed by the Supreme Court.
The decision given in Ashoka Smokeless resulted in filing of several writ petitions by coal consumers in different High Courts including this Court, seeking refund of the excess amounts with interest. We have been shown decisions passed by this Court in Eastern Coalfields Limited Vs. Tetulia Coke Plant Private Limited passed on 4th October, 2010 and a more recent decision in Maharaja Vs. Eastern Coal Fields & Ors. of 25th March, 2014 where the grant of refund of the excess amount was allowed by this Court following the Judgment and dicta laid down by the Supreme Court in Ashoka Smokeless.
In the present case however, the issue to be decided is on the limited question of grant of interest. In the impugned Judgment, although the petitioner has been given the benefit of Ashoka Smokeless in terms of getting refund of the excess amount, the Judgment is silent on the question of payment of interest at the rate claimed by the petitioner. Ms. Meharia, counsel for the petitioner, has relied on Ashoka Smokeless Coal Industries Private Limited Vs. Union of India reported in (2007) 2 SCC 640, Nifty Chemicals Private Limited Vs. Union of India reported in (2009) 15 SCC 314, S.J. Coke Industries Private Limited and others Vs. Central Coal Fields Limited and Others reported in (2015) 8 Supreme Court Cases 72, Maharaja Vs. Eastern Coal Fields & Ors in W.P. No. 1057 of 2012, in support of the petitioner's claim for grant of interest at 12% per annum from the date of payment till the date of refund to the petitioner. The aforesaid Judgments have been shown on the point of the petitioner automatically being entitled to payment of interest following the Judgment of the Supreme Court in Ashoka Smokeless which had allowed the claim of refund. In Nifty Chemicals, the issue of interest was specifically addressed where the Supreme Court held that the petitioner was entitled to receiving interest till the date of payment of the refunded amount. The decision of this Court in Maharaja was shown as yet another instance where the respondents were directed to pay interest together with the amount refunded at the rate of 8% till the actual date of payment of the amount due to the refunded to the petitioner.
Mr. Pradip Kumar Dutta, Senior Advocate appearing for the respondent companies, has strongly disputed the petitioner's claim of interest. According to Mr. Dutta, the field of operation of the Judgment delivered by the Supreme Court in Ashoka Smokeless was restricted only to those petitioners who were before the Supreme Court in December 2006. Mr. Dutta relies on the interim order passed by the Hon'ble Supreme Court on 12th December 2005 (reported in (2006) 9 SCC 228), particularly paragraph 8 therein, to show that the grant of interest at 12% per annum was meant for the petitioners who had challenged the e-auction Scheme in the Supreme Court in the various transfer petitions and were parties to the said interim order. The next point urged by him is that the grant of interest is discretionary and cannot be treated as an automatic entitlement of a party before a Court of law. He has also urged that no argument was made before the Trial Court on the issue of interest which would be evident from a reading of the impugned Judgment itself. The last point urged by learned Counsel is the conduct of the appellant/petitioner before us. Mr. Dutta has urged that this petitioner should not be given the benefit of any discretionary order in view of the delay and laches which would be evident from the conduct of the petitioner. According to him, the Judgment in Ashoka Smokeless was delivered on 1st December, 2006, pursuant to which several writ petitions were filed in this Hon'ble Court claiming refund of excess price paid to coal companies. All the orders and Judgments passed in these writ petitions from 2010 onwards have specifically mentioned and relied on the ratio in Ashoka Smokeless. He points out that the knowledge of the present petitioner of the ratio of Ashoka Smokeless can be seen from the orders produced and relied upon by the petitioner. Although the petitioner was aware of the Scheme being declared invalid in 2006 and the consequent claim of refund and interest being allowed by the Supreme Court, the petitioner had chosen to come before this Court only in December, 2012.
We have considered the submissions of Counsel representing the parties before us. The issue to be decided is restricted only to the award of interest at 12% per annum to the petitioner from the date of payment of the excess amount till the date of refund of the said amount to the petitioner. To that extent, the decision of the Supreme Court in Ashoka Smokeless or the other decisions cited by the petitioner on the question of refund of enhanced amounts pursuant to the e-auction Scheme being declared invalid, do not require a detailed consideration. The decisions cited are relevant only for the limited question of payment of interest.
With regard to Mr. Dutta's first submission, we do not agree that the entitlement to interest was restricted only to the petitioners who were before the Supreme Court in Ashoka Smokeless. It is clear from the interim order passed in that matter that the Supreme Court intended to protect the interest of the petitioning Coal consumers before it by recording the undertaking of Coal India Limited and its subsidiaries that the enhanced price would be refunded to the petitioners within a specific time frame with interest at 12% per annum, in the event the challenge to the e-auction Scheme was ultimately upheld. The spirit of the aforesaid order can be understood to affect all coal consumers placed in similar circumstances and standing in the same shoes as the petitioners before the Supreme Court in December, 2005. This position was in fact clarified in a later decision of the Supreme Court in Eastern Coalfields (supra) which held that the benefit of the decision in Ashoka Smokeless is not confined only to those who were parties before the Supreme Court but would apply to all irrespective of whether they were parties in that particular case or not.
With regard to the argument of the issue of interest not having been urged before the Trial Court, we find that the recording in the impugned Judgment has restricted the petitioner's grievance to the respondent's refusal to supply coking coal in terms of the Supreme Court order and the petitioner having to take delivery of the said coal from ECL at the enhanced price. It appears that the only point urged by Counsel before the Trial Court was ensuring the compliance of ECL in terms of the directions passed by the Supreme Court in Ashoka Smokeless. However, despite not having found any argument on the point of interest before the Trial Court, we are of the view that under ordinary circumstances, parties would seldom be called upon to argue on the point interest unless the same has been denied by the opposing party. As it does not appear that any such point had been taken by the respondents before the Trial Court, the question of arguing on the issue of interest did not arise.
We are, however, in agreement with Mr. Dutta on the conduct of the petitioner. There is no doubt that the petitioner knew about the effect of the decision in Ashoka Smokeless rendered in 2005/2006 or would at least have had the benefit of such knowledge from the date of the Judgment. The earliest writ petition filed in this Court, relying on the ratio of Ashoka Smokeless, was filed in 2005. Other writ petitions have followed asking for similar reliefs. Orders have been passed in these writ petitions granting relief to the petitioners in relation to refund of the excess amount together with the interest. There are no reasons disclosed or apparent from records as to the inexplicable gap of seven years before the writ petitioner decided to approach this Court relying on Ashoka Smokeless. From the Judgment and orders shown by the petitioner, it almost appears as if the petitioner was waiting for the outcome of the pending writ petitions challenging the e-auction Scheme and weighing the probability of success before deciding to file the instant writ petition in December, 2012. We have further been told that the petitioner even failed to file the appeal from the impugned Judgment dated 1st April, 2014 within the statutory time period which was admitted after an application for condoning the delay in preferring this appeal was allowed on 3rd September, 2015. Significantly the petitioner has not filed any cross-objection from the impugned Judgment on the point of interest or otherwise. Given the fact that the petitioner had the benefit of a number of Judgments and orders where interest was allowed together with the refund, it is indeed curious as to why the petitioner chose not to be sufficiently pro- active in approaching this Court particularly when identical issues were being agitated by other coal consumers.
In our understanding, the payment of interest is ordinarily to compensate a party who has been deprived of realising an amount of money for the period during which he was unable to utilise that amount of money. In the present facts, we see no reason why the petitioner should be deprived of the payment of interest which would compensate the petitioner to some extent for the period during which the petitioner could have utilised the money paid by it to the respondents over and above the notified price. Further argument has been advanced on behalf of the respondents that the entitlement to interest should be construed as being separate and distinct to a claim of refund. The decisions cited before us have also treated the claim of refund by the coal traders as automatically including the interest component.
However, in our view, the writ petitioner should not be permitted to take advantage of the inordinate delay in filing these proceedings, and certainly not by an order of Court. In our view, equity demands that the writ petitioner should be paid interest at the rate of 12% per annum computed from the date of excess payment made by the petitioner to the respondent No.1 for a period of three years from the date of such payment. We see no reason why the appellant/petitioner should be put in a better position than that of a claimant in a civil suit praying for the same relief. The petitioner cannot be permitted to get the benefit of obtaining interest at 12% per annum for coal purchased in 2005-2006 from the respondent No.1 relying on a Judgment delivered by the Apex Court in 2006, particularly when the petitioner stood by and waited till December, 2012; the date of filing of the present writ petition.
The decision of the Hon'ble Supreme Court to award interest on the principle amount till the actual date of payment of the said amount was made in cases where the writ petitioners have shown sufficient promptness in enforcing their rights for redressal of the grievances. The appellant/petitioner in the present case, has shown a singular lack of alacrity in addressing its grievance.
For these reasons, the respondent No.1 is directed to pay interest to the petitioner at 12% per annum on the amounts refunded from the date of payment by the petitioner to the respondent No.1 at the enhanced price for and until three years from such date. To facilitate an expeditious resolution of the matter, we request the Chairman, of the Respondent no.1 or his delegate, to compute the said quantum of interest payable within three months of communication of this order. The interest will be calculated on the basis of individual invoices raised on the petitioner and for the entire period during which the petitioner continued to pay in excess of the notified price. The said interest amount be paid to the petitioner within a further period of four weeks.
With the above direction, the appeal is disposed of.
Certified photocopy of this Judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(Moushumi Bhattacharya, J.)