IMPORTANT POINTS
Decision by Supreme Court by passing a reasoned order is law of the land. Ratio decidendi of such decision binding on all Courts in the country.
When Supreme Court declares that the decision is not confined to the parties to the case, but applies to all, other Courts in the country have no choice.
State should not rely on technicalities to defeat just and legitimate claims of citizens. It should act as an honest person.

Headnote:(a) Administration of Justice – Binding precedent – Issues of e-auction of coal and refund of excess amount paid by companies to CCL decided by Supreme Court – Supreme Court declaring e-auction ultra vires Article 14 of the Constitution – Directing refund of excess amount paid by companies to CCL – Subsequent writ petitions on same issues and appeals arising therefrom ought to be decided in the light of law laid down by the Supreme Court – Single Judge and Division Bench of the High Court not even referring to the decisions of Supreme Court in their decisions – Unfortunate. (Para 33, 34)
       (2007) 2 SCC 640; CWJC 7753/2008 (Patna); (2011) 14 SCC 624 – Relied upon
       (2006) 9 SCC 228 – Referred
       (b) Constitution of India – Article 141 – Decision by Supreme Court – By passing a reasoned order – Is law of the land – Ratio decidendi of such decision binding on all Courts in the country. (Para 35)
       (c) Constitution of India – Article 141 – Supreme Court making it clear that decision rendered in Ashoka Smokeless Coal India not confined to the parties to that case – It was to apply to all similarly situated parties even if they were not parties to that case – Every company including the present petitioners entitled to refund of excess amount – Similarly, issue of unjust enrichment having been repelled in Eastern Coalfields, is not available to the respondents now. (Para 37, 38, 39, 40, 41)
       (2007) 2 SCC 640; (2011) 14 SCC 624 – Relied upon
       (d) Constitution of India – Article 226 – Delay and latches – Claim pertaining to April, July and October, 2005 against e-auction scheme – Scheme declared ultra vires in 2009 and again in 2011 – Present companies filing writ petitions in 2011 – Division Bench of the High Court erred in dismissing writ petition on ground of delay and latches. (Para 43)
       (2011) 14 SCC 624 – Relied upon
       (e) Constitution of India – Article 226 – Technical grounds – State should not rely on technicalities to defeat just and legitimate claims of citizens – State must act as an honest person – CCL contesting claims of writ petitioners at every stage despite law laid down by Supreme Court – Raising untenable pleas – Deprecated. (Para 46, 47)
       AIR 1954 Bombay 50 – Cited with approval
       Facts of the case:
       The e-auction scheme of CCL was declared ultra vires by Ashoka Smokeless Coal Industries (P) Ltd. and Eastern Coalfields Ltd. The Companies purchasing coal who had paid extra amount under the scheme were held entitled to refund.
       Based on these decisions the present writ petitioners claimed refund from CCL.
       The High Court held the petitions not maintainable on ground of delays and latches and that the petitioners were not parties to the cited decisions.
       Finding of the Court:
       The decisions in Ashoka Smokeless Coal Industries (P) Ltd. and Eastern Coalfields Ltd. are law of the land – binding on all Courts.
       Result: Appeals by writ petitioners allowed. Appeals by CCL dismissed.

Judgement Key Points

The advocates' arguments in this case primarily focus on the following points:

Legality of the Scheme: The appellants argue that the e-auction scheme implemented by the Coal India Ltd and its subsidiaries, including the CCL, was declared ultra vires the constitutional provisions, specifically Article 14, by the higher courts. They contend that the scheme was fundamentally unlawful and that any transactions conducted under it are void, thereby entitling the companies to refunds for excess payments made pursuant to an illegal scheme (!) .
Binding Nature of Supreme Court Decisions: The petitioners emphasize that the decisions and directions issued by the Supreme Court, especially those declaring the scheme ultra vires and ordering refunds, are law of the land and are binding on all courts and authorities. They argue that subsequent courts and authorities are obliged to follow these decisions and that failure to do so constitutes a breach of constitutional duty (!) (!) .
Maintenance of Writ Petitions: The advocates contend that the companies' claims are based on their contractual rights arising from transactions under the unlawful scheme, which are directly affected by the Court’s declaration of the scheme’s illegality. They assert that the writ petitions are maintainable because they involve the enforcement of fundamental rights and legal obligations, and are not barred by delay or latches, especially since the cause of action arose after the Supreme Court’s final judgment (!) (!) .
Principles of Equity and Fairness: They argue that the State and its instrumentalities should not rely on technicalities to deny legitimate claims of citizens, especially when those claims are supported by the law and judicial directions. The advocates emphasize that the State must act honestly and in good faith, and that technical defenses such as delay or disputed facts should not prevent the grant of just relief in cases involving public interest and fairness (!) (!) .
Parity and Equality: The petitioners maintain that once the law and directions of the Supreme Court are clear, all similarly situated parties should be treated equally. They argue that denying refunds based on procedural or technical grounds violates the constitutional guarantee of equality under Article 14, and that all companies in similar circumstances should be granted the same relief (!) (!) .
Rejection of Unjust Enrichment Defense: The advocates assert that the principle of unjust enrichment does not apply in these cases because the transactions are commercial and not statutory dues. They contend that the companies paid excess amounts under an unlawful scheme, and therefore, they are entitled to refunds without the defense of unjust enrichment being applicable (!) (!) .
Proper Court Jurisdiction and Decision-Making: They argue that the courts below failed to follow the binding legal principles laid down by the higher courts, particularly in not considering the Supreme Court’s final judgments. This oversight led to incorrect dismissals of the claims, and the appellate courts should have adhered to the law as established by the Supreme Court (!) (!) .
Technicalities and Good Faith: The advocates emphasize that the State and its agencies should not rely on procedural technicalities such as delay or dispute of facts to defeat legitimate claims. Instead, they should act in an honest and fair manner, especially when judicial decisions have clearly established the illegality of the scheme and the entitlement of the companies to refunds (!) .

These arguments collectively aim to establish that the companies are entitled to refunds for payments made under an unlawful scheme, that the courts failed to apply the binding directions of the Supreme Court, and that technical defenses should not bar the enforcement of lawful and judicially recognized rights.

Judgment

Abhay Manohar Sapre, J.

1. Leave granted.

2. These appeals are filed against the common judgment and order dated 14.12.2012 passed by the High Court of Judicature at Patna in L.P.A. Nos. 1574, 1581, 1504, 1571, 1597 and 1591 of 2012 and judgment/order dated 18.01.2013 in L.P.A. No. 85 of 2013 whereby the High Court allowed the appeals filed by the Central Coalfields Ltd. (hereinafter referred to as “the CCL”) and while setting aside the judgment and order of the Single Judge dismissed the writ petitions filed by the S.J. Coke Industries Pvt. Ltd. Etc. Etc. (hereinafter referred to as “the Companies”).

3. In order to appreciate the issues involved in these appeals, it is necessary to state the background of the facts, which led to filing of the writ petitions by the Companies, which have given rise to these appeals.

4. These Companies are private limited companies registered under the Companies Act, 1956. They are engaged in the business of sale and purchase of various grades of Coal. The CCL is a Public Sector Undertaking of the Government of India engaged in the business of producing various grades of Coal. The CCL sells coal to several bulk coal consumers including the present Companies, who are linked consumer of the Coal. The Coal being an essential commodity, its prices and mode of disposal are governed by the Acts/Regulations/Control Orders and the Policies made by the Central Government/Coal Companies from time to time.

5. With a view to further streamline the sale and distribution of the Coal to its consumers all over the Country, the Union of India enacted a Scheme in the year 2004-2005 for sale of Coal by electronic auction (e-auction). The Scheme inter alia provided the manner and the mode relating to sale, distribution and pricing of various grades of coal. The Coal India Ltd and its several subsidiary companies including the CCL adopted the Scheme for its implementation.

6. The legality and validity of the Scheme was challenged by filing writ petitions in various High Courts by the traders, and several companies dealing with coal. So far as the present Companies were concerned, they filed writ petitions before the Jharkhand High Court. During the pendency of the writ petitions, different High Courts passed interim orders directing the writ petitioners to furnish indemnity bonds/Bank Guarantees for the amount of difference between the notified price and e-auction weighted average price of the Coal fixed in the Scheme.

7. Some High Courts decided the writ petitions finally on merits and while allowing the writ petitions declared the Scheme as ultra vires whereas some High Courts dismissed the writ petitions and upheld the Scheme as being legal and proper. In some High Courts, the writ petitions remained pending. The appeals were filed in this Court arising out of the disposed of matters by both parties. This Court then passed an order directing transfer of all pending writ petitions in various High Courts to this Court and tagged them with a bunch of the writ petitions/appeals pending in this Court and made Ashoka Smokeless Coal Industries (P) Ltd. & Ors. vs. Union of India & Ors. as the main matter for disposal.

8. Accordingly, Ashoka Smokeless Coal India (P) Ltd. was taken up for consideration along with other connected matters to decide the main question as to whether e-auction Scheme framed by the Union of India was legal or not. In other words, the question was which view of the High Court was correct -the one that held the Scheme as legal or the other that held the Scheme as bad in law?

9. This Court passed one common interim order on 12.12.2005 in Ashoka Smokeless Coal Industries (P) Ltd. & Ors. Vs. Union of India & Ors. (2006) 9 SCC 228 by modifying several interim orders, directed the writ petitioners to go on paying the price in addition to the notified price of the coal 33-1/3% of the enhanced price each time they claimed supply of coal and to furnish security for the balance 66-2/3% of the enhanced price

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2015 Supreme(SC) 306

Cases Referred (3)