1. Petitioner is a registered company under the provisions of the Indian Companies Act 1956 and is engaged in manufacture of special smokeless fuel. The Company was provided technology for production of smokeless fuel by subsidiary of Coal India Limited such as Central Mines Planning & Design Institute limited (CMPDI) or the Central Fuel Research Institute (CFRI).The decision to set up such an industry was an advertisement issued by Coal India Limited with the object of producing pollution free alternative fuel for use as domestic fuel with the larger object of protecting the environment.

2. The unit was set up, inspected by all concerned authorities and it was decided in principle to supply coal as per the requirement and capacity of the unit. A linkage was provided for supply of coal after an agreement was entered in this regard by the petitioner and the respondents. Initially the linkage was granted on an ad hoc basis for six months and thereafter on a joint inspection carried out by a team constituted by Coal India Ltd., recommendation for 4692 M.T. per month allocation of coal was decided in favour of the petitioner. The earliest letter granting linkage is dated 10.5.1999 and is annexure- 1 to the writ application.

3. It is the stand of the petitioner that the smokeless fuel manufacturing unit was set up upon the assurance and promise of the Coal India Ltd. to supply coal and large scale investment was made on that assurance. Coal India Ltd. is the main source of supply and the survival of the unit is dependent upon regular supply of coal to the petitioner from time to time.

4. Earlier the distribution and regulation of coal and its price was controlled by what is known as Colliery Control Order 1945 but subsequently the same was replaced by Colliery Control Order 2000 which was duly notified in the Gazette on 1.1.2000. Coal India Ltd. in order to regulate the distribution of coal categorized the consumers into Core Sector Consumers, Non-Core Sector (linked) Consumers, traders and non-linked consumers. Core sector consumers consisted of big Power Plant, Steel Plant, Railway, Fertilizer, Cement Factory etc. the non-core sector consumers consists of industries like Textile, Rayon, Chemical, Re-rolling Mills etc. etc. Non-core sector consumers (non-linked) have not been granted any linkage by the coal company. In otherwords they have no assured supply of coal from any of the companies of Coal India Limited.

5. The company was being run well on the basis of the coal released in their favour by the respondents till a kind of change in allocation policy was brought about. The Coal company decided to allocate coal by a methodology known as E-auction scheme. After the E-auction scheme was brought into effect the linkage scheme was given a go-by.

6. E-auction policy or scheme became subject matter of challenge in different High Courts. The matter finally travelled to the Honble Supreme and a decision came to be rendered by the Apex Court declaring the E-auction policy to be ultravires or unconstitutional. The decision of the Honble Apex Court is the case of Ashoka Smokeless Coal India Private Limited & others V/s. Union of India and others reported in (2007) 2 SCC 640.

7. There were many observations which the Honble Supreme Court had to make in the said decision. One of those observations has reflection on the present dispute. Observation that the smokeless coal operators have set up their units at the behest of the Coal India Ltd. and those who have set up their units in the erstwhile State of Bihar and West Bengal evidently did so at the behest of the company having been encouraged therefor. It was done to share the burden of the coal companies to supply soft coal to the small consumers and doctrine of promissory estoppel would therefore be applicable. It was also observed by the Apex Court that the coal companies having regard to the provisions of Nationalisation Act are not profit earning concerns but an extended arm