Calcutta High Court
Birla Corporation Ltd vs Coal India Ltd on 13 January, 2010
ORDER SHEET
A.P.O.No. 224 of 2001
A.P.O.No. 344 of 2001
W.P.No. 1062 of 2001
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Original Side
BIRLA CORPORATION LTD.
-Versus-
COAL INDIA LTD.
Before:
The Hon'ble Justice BANERJEE
-And-
The Hon'ble Justice KALIDAS MUKHERJEE
Date: 13th January, 2010.
In APO No.344/2001
Mr. P.C. Sen, Sr. Adv.
Mr. Kalimuddin Mondal, Adv.
...For the appellant
Mr. Ranjan Bachawat, Adv.
Mr. Sanjoy Ginodia, Adv.
Mr. Manoj Kumar Tiwari, Adv.
...For the respondents.
In APO No.224/2001
Mr. Ranjan Bachawat, Adv.
Mr. Sanjoy Ginodia, Adv.
Mr. Manoj Kumar Tiwari, Adv.
...For the Appellants.
Mr. P.C. Sen, Sr. Adv.
Mr. Kalimuddin Mondal, Adv.
...For the respondents.
The Court: Both the appeals arise out of the same judgment and order appearing at pages 183-191 of the paper book in APO No.344 of 2001. Hence, both the appeals are disposed of by this common judgment and order.
2
The moot question involved in these appeals relates to imposition of levy with regard to supply of coal by the Coal India Ltd. and its subsidiaries to M/s. Birla Corporation Ltd., the appellant in APO No.344 of 2001.
Identical question was gone into in another matter relating to M/s. Gujrat Ambuja Cement Ltd. (APOT No.672 of 1999; South Eastern Coal Fields Ltd. -Vs.- Gujrat Ambuja Cement Ltd. & Ors.) In the case of Gujrat Ambuja, a writ petition was disposed of by the learned Single Judge asking for a writ of mandamus directing the coal companies not to stop supply of coal under the programmes established on the basis of linkage. The matter went up to the Division Bench. The judgment and order passed by a Division Bench of our Court in the case of Gujrat Ambuja is appearing at pages 87-108 of the paper book. Perusal of the said judgment and order depicts that the controversy arose with regard to supply of coal by the coal companies to the cement factory at Ambujanagar (Gujrat). The cement factory required coal in bulk quantity. The coal companies decided to charge a premium at the rate of 10 per cent over and above the original price of coal as fixed. The cement company did not agree to such proposal. It filed a writ petition before the Madhya Pradesh High Court challenging imposition of such premium. An interim order was passed by the Madhya Pradesh High Court restraining recovery of 10 per cent premium. The writ petition was subsequently dismissed. 3 The cement company approached the Supreme Court. The Supreme Court passed an interim order restraining the coal companies from stopping supply of coal. Ultimately, the special leave petition was disposed of by the Apex Court directing fresh hearing of the writ petition by the High Court. The High Court again dismissed the writ petition and upheld the validity of the claim of the coal company levying 10 per cent premium. The cement company paid the premium amount. The coal companies, however, insisted on payment of interest on delayed payment. The cement company refused to pay interest. The coal companies invoked the bank guarantee to recover the amount of interest which gave rise to the second round of litigation. The Division Bench by the said judgment and order observed that coal companies were not entitled to invoke the bank guarantee and consequently the appropriation was bad and directed status quo ante to be restored. The coal companies filed special leave petition before the Apex Court. The Apex Court dismissed the said application. As a result, the coal companies had to pay back the amount covered under the bank guarantee to the cement company.
In the instant case also the coal companies invoked the bank guarantee for recovery of the interest amount. Birla Corporation, however, contended that they were entitled to get the benefit of the decision in the case of Gujrat Ambuja. Birla Corporation filed a writ petition before the learned Single Judge, 4 inter alia, praying for direction upon the coal company not to claim any interest on the premium amount, coupled with a direction upon the State Bank of India, Satneity Branch to refund to the petitioner the amount covered by the bank guarantee which was encashed by the coal companies.
The learned Single Judge vide judgment and order dated August 23, 2001 considered the rival contentions of the parties. Upon consideration of the rival contentions and considering the ratio decided in the cases cited before His Lordship, His Lordship observed as follows:
"By reason of the binding judgment of the Division Bench, cited supra, it would be inappropriate for me to take contra view in the matter on hand. Had I not been so hampered, perhaps, I would have been inclined to hold otherwise and in the light of the submissions made by Mr. Sakti Nath Mukherjee.
The benefit of the Division Bench judgment, in my view, shall have to be granted to all persons similarly situated as the petitioner therein. The Court having determined the controversy in relation to the bank guarantee and having held that the invocation for realization of the interest component was illegal, it is impermissible for the respondent to contend that the said decision would be applicable only to the petitioners in that case and not in respect of the others though they are similarly situated.
The petitioners, however, cannot be granted any other or further relief than that was granted by Court in the aforesaid judgment."5
On perusal of the paragraphs quoted above, it would appear that His Lordship, although not satisfied with the contentions raised by the writ petitioners on factual matrix, gave the benefit of the Division Bench decision in the case of Gujrat Ambuja by observing that such decision was binding upon His Lordship.
His Lordship ultimately allowed the writ petition in part and declared that the invocation of the bank guarantee was unlawful. His Lordship directed the coal companies to refund the amount recovered under the bank guarantee. On the other issues, His Lordship asked the Birla Corporation to avail efficacious remedy of suit or arbitration as may be open to them. His Lordship lastly observed that His Lordship did not go into the merits of the matter which were left open for being raised and adjudicated upon in an appropriate forum.
Being aggrieved by and dissatisfied with the said judgment and order dated August 23, 2001, both the parties preferred the above appeals. The coal companies preferred an appeal as they were dissatisfied on the declaration referred to above coupled with direction for refund. Birla Corporation filed the appeal as they were dissatisfied as the learned Single Judge did not grant interest on the amount covered by the bank guarantee so withheld by the coal companies.
6
We have heard Mr.P.C. Sen, learned senior Counsel appearing for the coal companies and Mr. Bachawat, learned Counsel for the Birla Corporation.
Mr.Sen has contended before us that the writ petition involved disputed questions of fact and law and the learned Single Judge should not have entertained the same. He has further contended that the invocation of the bank guarantee cannot be made a subject matter of challenge in a writ proceeding as such bank guarantee was furnished by Birla Corporation in a commercial transaction they had with the Coal Companies. Mr. Sen, to elaborate his submission, has contended that no public law element was involved which could entail the learned Judge to entertain the writ petition. He further contends that the decision in the case of Gujrat Ambuja has no application in the instant case.
Mr. Bachawat learned Counsel appearing for the Birla Corporation on the other hand has contended that once a Coordinate Bench held otherwise this Division Bench should follow the same. He has further contends that the learned Single Judge was bound by the Division Bench decision in the case of Gujrat Ambuja and very rightly allowed the writ petition. He is, however, dissatisfied as His Lordship did not grant interest and relegated the party to suit on that score.
We are in full agreement with Mr.Bachawat when he says that the learned Single Judge was bound by the Division Bench 7 decision in the case of Gujrat Ambuja. We are, however, joining issue when Mr. Bachawat says that the said judgement is also binding upon us. It is true that we are a Coordinate Bench, at the same time we are free to independently examine the issue and in case of disagreement we may refer the issue to a larger Bench.
However, our task has become easier as in course of hearing Mr. Bachawat, on instruction, has conceded that the entire dispute should be referred to the Civil Court. Mr. Bachawat, on instruction, submits that the Birla Corporation is ready to approach the Civil Court for redressal of their grievances including the issue of refund provided this Court protects them as against the plea of limitation that might be taken if a delayed suit is filed before the Civil Court. He also contends that appropriate protection should also be given for preservation of the amount covered under the bank guarantee. He prays for handing over of the said sum to his learned Advocate-on-record coupled with an undertaking that they would furnish a bank guarantee for the like amount.
Mr.Sen opposes the prayer for handing over the money to Mr. Bachawat's Advocate-on-record. He contends that in case Birla Corporation succeeds in the Civil Court, the Coal Companies would pay back the entire sum along with accrued interest, if any, awarded by the Civil Court.
8
Considering the above and by reason of concession made by Mr.Bachawat, We dispose of both the appeals by relegating the party to a civil suit not only on the issue of interest but also on the issue of refund of the amount covered under the bank guarantee. South Eastern Coalfield Ltd. a subsidiary to a Coal India Ltd. is directed to deposit the entire proceeds which they received from the bank in partial invocation of the bank guarantee furnished by the Biral Corporation, in a suitable interest bearing fixed deposit account in any nationalised bank of their choice at its branch at Kolkata. Such deposit must be made within a period of four weeks from date. As soon as the fixed deposit is made, the original fixed deposit receipt must be filed with the Registrar, Original Side with a xerox copy to be forwarded to the Advocate- on-record for Birla Corporation within the time so stipulated. In case suit is filed the fixed deposit would be kept renewed from time to time and would lie to the credit of the said suit.
In default of making of the fixed deposit this order would stand revoked and the appeal of the Coal Companies would stand dismissed.
Birla Corporation Ltd. is also granted liberty to file appropriate civil suit before the appropriate Civil Court for recovery of their claim on account of amount received by the South Eastern Coalfield Ltd. through partial invocation of the bank 9 guarantee as also interest payable thereon, within a period of eight weeks from date.
In case a suit is filed within the period stipulated above, Birla Corporation Ltd. would be entitled to the benefit of Section 14 of the Limitation Act as they were pursuing their remedy bona fide before this Court and pressing their claim in this appeal.
We also hope and trust the Coal Companies would not take the plea of limitation before the Civil Court in the case the suit is filed within the period stipulated above.
It is abundantly made clear that this order is made not only on the basis of concession made by Mr. Bachawat but also after having a deliberation from both sides on such workable solution.
The order under appeal stands modified accordingly. Both the appeals are disposed of accordingly without, however, any order as to costs.
Urgent certified photostat copy of this order, if applied for, shall be given to the parties subject to compliance with all requisite formalities.
(Banerjee, J.) ( Kalidas Mukherjee, J.) A/s. /NM