1. Coal supply suspension dispute following allocation of coal blocks and alleged diversion of mineral resources—Request for compensation or restoration of supply linkage as per prior judicial orders. (Para 5 , 6 , 7 )
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2026 Supreme(SC) 272
SUPREME COURT OF INDIA
PANKAJ MITHAL, S.V.N. BHATTI, JJ.
Union of India – Petitioner
Versus
Prakash Industries Limited And Another – Respondents
Miscellaneous Application Nos. 1806-1807 of 2025 In Special Leave Petition (Civil) No. 3529-3530 of 2020 With Miscellaneous Application Nos. 2111-2112 of 2025 In Special Leave Petition (Civil) No. 3529-3530 of 2020
Decided On : 17-03-2026
Important Points
Parties must comply with court orders regarding coal supply agreements, with confirmed entitlements based on established judicial mandates rather than disputed interpretations.
Subject
Administrative Law - Judicial Compliance
Headnote
(A) Special Leave Petition (Civil) No. 3529-3530 of 2020 - Coal Supply Agreement - The court addressed compliance with previous orders regarding coal supply to a company, determining entitlement and terms for coal supply, including choices for current price dates. (Paras 11, 12, 15)
(B) Compliance with Court Orders - The obligation of government bodies to comply with judicial directives was emphasized, rejecting inconsistent interpretations of previous rulings, validating the entitlement of the company to coal supply during a suspended agreement period as per past orders. (Paras 8, 12, 15)
Facts of the case:
The petitioner (Union of India) challenged previous judicial orders mandating coal supply to Prakash Industries Limited (Respondent), which had faced supply disruptions. The Respondent sought clarification of price and terms based on earlier judicial directives dated 09.04.2014 and 17.05.2019.
Findings of Court:
The respondents were confirmed entitled to coal supply at current rates as per specific dates, rejecting their applications for further modifications.
Issues: The core issue was the enforcement of prior orders regarding coal supply and the reframing of compensation claims.
Ratio Decidendi: The court clarified compliance obligations based on the interpretation of prior orders regarding coal supply, emphasizing the precedence of established judicial mandates over arbitrary modifications by the parties involved.
Result: Miscellaneous Applications rejected, entitlement confirmed.
(B) Compliance with Court Orders - The obligation of government bodies to comply with judicial directives was emphasized, rejecting inconsistent interpretations of previous rulings, validating the entitlement of the company to coal supply during a suspended agreement period as per past orders. (Paras 8, 12, 15)
Facts of the case:
The petitioner (Union of India) challenged previous judicial orders mandating coal supply to Prakash Industries Limited (Respondent), which had faced supply disruptions. The Respondent sought clarification of price and terms based on earlier judicial directives dated 09.04.2014 and 17.05.2019.
Findings of Court:
The respondents were confirmed entitled to coal supply at current rates as per specific dates, rejecting their applications for further modifications.
Issues: The core issue was the enforcement of prior orders regarding coal supply and the reframing of compensation claims.
Ratio Decidendi: The court clarified compliance obligations based on the interpretation of prior orders regarding coal supply, emphasizing the precedence of established judicial mandates over arbitrary modifications by the parties involved.
Result: Miscellaneous Applications rejected, entitlement confirmed.
Judgement Key Points
Key Points: - The Respondent is entitled to coal supply for the suspended period at the current rate and in accordance with the prevalent policy, rejecting claims for monetary compensation (!) (!) . - The Supreme Court clarified that the "current price" refers to the rates applicable as of the dates of the relevant orders, specifically 09.04.2014 or 17.05.2019 (!) (!) . - The Court rejected the Petitioner's offer to supply coal on a tapering basis or to pay compensation, mandating a full Fuel Supply Agreement for the suspended period instead (!) (!) . - The Respondent is granted the choice to select either the 09.04.2014 or 17.05.2019 date to determine the current price and policy for the new agreement (!) . - The Union of India and SECL are obligated to supply coal as a normal linkage (not tapering) within four weeks after the Respondent chooses the applicable date (!) . - The Court dismissed the Miscellaneous Applications seeking immediate payment of Rs. 106 Crore or credit against existing agreements, ruling them unavailable (!) (!) . - Previous orders from 2013 and 2014 were upheld, confirming the shift from compensation to coal supply for the disputed period (!) (!) . - The Court emphasized that established judicial mandates take precedence over arbitrary modifications or inconsistent interpretations by the parties (!) . - The specific period for supply restoration covers the suspension from October 2011 until July 2013, not a reduced period offered by the Petitioner (!) (!) . - The Fuel Supply Agreement must be entered into within four weeks of the Respondent's choice of date, with supply commencing within two weeks thereafter (!) .
What are the rights of the Respondent regarding coal supply entitlements and price determination based on prior judicial mandates?
How to determine the applicable "current price" and "prevalent policy" dates for compliance with Supreme Court orders regarding suspended coal supply?
What is the obligation of the Union of India and SECL to comply with judicial directives versus offering alternative compensation or modified supply terms?
Legal Category Hierarchy
Advocates appeared:
For the Petitioner(s): By Courts Motion Mr. Vikramjeet Bannerjee, A.S.G. Mr. Nachiketa Joshi, Sr. Adv. Mr. P V Yogeshwaran, Adv. Mr. Merusagar Samantrey, Adv. Mr. Saransh Kumar, Adv. Mr. Sudarshan Lamba, AOR
For the Respondent(s): Ms. Pallavi Langar, AOR Mr. Kapil Sibal, Sr. Adv. Mr. Siddharth Dave, Sr. Adv. Mr. Ankur Chawla, Adv. Mr. Aditya Samaddar, AOR Mr. R K Mohit Gupta, Adv. Mr. C B Bansal, Adv. Mr. Aamir Khan, Adv. Mr. Amit Kathuria, Adv. Mr. Himanshu Tyagi, Adv. Mr. Faiz Alam, Adv. Mr. S.D. Sanjay, ASG Mr. Rameshwar Prasad Goyal, AOR
For the Petitioner(s): By Courts Motion Mr. Vikramjeet Bannerjee, A.S.G. Mr. Nachiketa Joshi, Sr. Adv. Mr. P V Yogeshwaran, Adv. Mr. Merusagar Samantrey, Adv. Mr. Saransh Kumar, Adv. Mr. Sudarshan Lamba, AOR
For the Respondent(s): Ms. Pallavi Langar, AOR Mr. Kapil Sibal, Sr. Adv. Mr. Siddharth Dave, Sr. Adv. Mr. Ankur Chawla, Adv. Mr. Aditya Samaddar, AOR Mr. R K Mohit Gupta, Adv. Mr. C B Bansal, Adv. Mr. Aamir Khan, Adv. Mr. Amit Kathuria, Adv. Mr. Himanshu Tyagi, Adv. Mr. Faiz Alam, Adv. Mr. S.D. Sanjay, ASG Mr. Rameshwar Prasad Goyal, AOR
Table of Contents
2. Petitioner asserts compliance via offer of supply at current rates; Respondent seeks monetary compensation for price differentials during the period of wrongful suspension. (Para 9 , 10 )
3. Court held that both parties misinterpreted prior orders, clarifying that relief is limited to coal supply at current price and policy as specified in earlier judicial directions. (Para 11 , 12 , 13 , 14 )
4. Judicial orders for compensation in lieu of supply suspension are properly discharged by facilitating fresh procurement under existing policy rather than awarding arbitrary monetary damages. (Para 12 , 14 )
5. Applications for monetary compensation rejected; Respondents granted liberty to elect a pricing benchmark from previous orders for execution of a fresh coal supply agreement. (Para 15 , 16 )
6. Can a court-ordered remedy for wrongful suspension of coal supply be satisfied by monetary compensation for price differentials?
No. The court clarified that the established remedy is the restoration of coal supply according to current pricing and prevalent policy, not the payment of monetary compensation for price differences incurred during the suspension period. (Para 12 , 14 )
7. Does a party have the right to choose between contradictory interpretations of a prior court order regarding commercial remedies?
Where prior orders allow for a choice of supply, the court may permit the aggrieved party to select the specific baseline date for pricing and policy application to implement the directive, ensuring fairness in commercial compliance. (Para 15 )
JUDGMENT
S.V.N. BHATTI, J.
1. On 19.08.2025, the Special Leave Petition Nos. 3529-3530 of 2020 were dismissed by this Court. The Court observed as follows:
“11. The petitioner is directed to report compliance of the order dated 17.05.2019 passed by the High Court and the various orders referred to therein after taking into confidence the relevant parties including the respondents, The compliance affidavit in this regard be filed within a period of one month, failing which the Court may be constrained to take appropriate action against the erring officers, may be in the nature of contempt, if necessary.”
The parties to the present Judgment are referred to as arrayed in the said Special Leave Petitions.
2. On 17.09.2025, the Union of India filed an affidavit purporting to be a Compliance Affidavit in terms of the Order dated 19.08.2025 in S.L.P. Nos. 3529-3530 of 2020. On 27.09.2025, the Miscellaneous Application Nos. 2111- 2112 of 2025 were filed by the Respondent/Prakash Industries Limited (for short, “PIL”). The prayers in these applications are excerpted hereunder:
“PRAYER
That in the facts and circumstances enumerated hereinabove it is humbly prayed that this Hon’ble Court may be pleased to:-
a) direct SECL to pay the compensation immediately as per Annexure A-11 and within a period of 2 weeks from the date of order on the present application.
or in the alternative;
Direct SECL to give credit of the amount of compensation to M/s Prakash which may be adjusted against supply of coal in the existing FSA bearing Number A-1369 & A- 1370;
b) Pass any other order as may be deem fit and proper.”
3. We have heard Learned Senior Counsel, Mr. S.D. Sanjay, ASG, for Southern Eastern Coal Fields Limited/SECL and Mr. Kapil Sibal, for the Respondent/PIL.
4. To appreciate the Affidavits dated 17.09.2025 and 04.11.2025, on the one hand, and the availability of prayers in M.A. Nos. 2111-2112 of 2025, briefly, a few antecedent dates and events are adverted.
5. On 13.01.2006, the Ministry of Coal, Government of India, allocated the Madanpur (North) Coal Block to the Respondent, specifying the end use for the Sponge Iron Plant and a Captive Power Plant of the Respondent. On 14.10.2011, the Ministry of Coal issued an Order based on an Inter- Ministerial Committee’s finding that the Respondent had diverted the coal from its Chotia Block, meant for the Sponge Iron Plant, to its Captive Power Plants. Southern Eastern Coal Fields Limited/SECL, on 09.11.2011, referring to the alleged diversion of coal, suspended the coal supplies to the Respondent de hors the arrangement. To wit, the arrangement was for a period of five years. The first round of litigation between the parties commenced with the filing of Writ Petition No. 7413 of 2011 before the High Court of Chhattisgarh, challenging the suspension Order dated 09.11.2011. The Writ Petition was allowed on 13.02.2012, and the High Court quashed the suspension Order dated 09.11.2011 passed by SECL. The Union of India and SECL filed Writ Appeal No. 127 of 2012, and the Division Bench, vide order dated 31.01.2013, dismissed the Writ Appeal. The relevant portion of the order of the Division Bench reads thus:
“23. We are informed that the Prakash-Industry was not supplied coal from 1st of October, 2011 till today and contempt application No.420/2011 is pending for wilful disobedience of the order passed by the single judge.
24. The counsel for the Prakash-Industry informs that during the aforesaid period, the Prakash-Industry has purchased coal from E-auction from coal India Ltd. However, it was for the price higher than it had to pay under the Agreements. In view of same, we deem appropriate that the SECL be directed to restore the supply of coal from the January, 2013. So far as, claim relating to past period from October, 2011 to December, 2012 is concerned, it will not be necessary for the SECL to supply the coal, but it has to compensate the Prakash-Industry.
25. The compensation will be the difference in price betwe
