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2018 Supreme(Pat) 955
IN THE HIGH COURT OF JUDICATURE AT PATNA
NILU AGRAWAL, J.
Bhagwati Coke Industries Pvt. Ltd. - Appellant
Versus
State of Bihar - Respondent
Civil Writ Jurisdiction Case No. 11858 of 2016
Decided On : 08-08-2018
P.K. Shahi, Adv., Alok Kumar Agrawal, Adv., Priya Gupta, Adv., Mohit Agarwal, Adv., Vishwa Mohan Kr Sinha, Adv.
The main legal point established is the significance of an exclusive jurisdiction clause in an agreement, which can render certain legal actions non-maintainable in other jurisdictions.
Headnote:
termination - Coal Supply Agreement - Companies Act, 1956 - Central Mines Planning and Design Institute Limited (CMPDI) - Central Fuel Research Institute (CFRI) - Coal Distribution Policy, 2007 - Clause 18.4 - Jharkhand High Court at Ranchi
Fact of the Case:
The petitioner, a private limited company, sought relief to quash the termination of a Coal Supply Agreement and to resume coal supply, alleging illegal termination and malafide reasons for discontinuation of supply.
Finding of the Court:
The court found that the agreement stipulated exclusive jurisdiction of the Jharkhand High Court at Ranchi in all matters, leading to the dismissal of the writ applications on grounds of maintainability.
Issues: The issues involved included the legality of termination of the Coal Supply Agreement, jurisdiction of the court, and the applicability of the new Coal Distribution Policy.
Ratio Decidendi: The court held that the agreement's Clause 18.4 established exclusive jurisdiction of the Jharkhand High Court at Ranchi, thereby rendering the writ applications non-maintainable.
Final Decision: The writ applications were dismissed due to the exclusive jurisdiction clause in the agreement, leading to the Jharkhand High Court at Ranchi having jurisdiction over the matter.
NILU AGRAWAL, J.
1. Heard Mr. P.K. Shahi, learned Senior Advocate along with Mr. Alok Kumar Agrawal for the petitioners, Mr. Vishwa Mohan Kumar Sinha for the respondent nos. 2 and 3 and learned counsel appearing for the State of Bihar.
2. The issues involved in both the writ applications are the same, hence, for the sake of convenience C.W.J.C. No. 11858 of 2016 is being taken up.
3. Petitioner in C.W.J.C. No. 11858 of 2016 has prayed for following reliefs :
(i) For quashing the order of termination of Coal Supply Agreement vide Memo No. 5227-34 dt. 23.05.2016 communicated to the petitioner at its address at Aurangabad by which the petitioner has been informed that its Coal Supply Agreement to the unit of the petitioner has been terminated, as being wholly illegal and without any authority of law;
(ii) For restraining the Respondents from invoking/en-cashing the Bank Guarantee consequent upon termination of the Coal Supply Agreement, as intimated vide the impugned letter dt. 23.5.2016;
(iii) For a direction to the Respondents to resume the supply of coal to the unit of petitioner as the same has been discontinued for malafide reasons and/or for any other reliefs for which the Petitioner may legally be found entitled to in the facts & circumstances of the present case.
4. However, during pendency of the writ application petitioner by way of I.A. No. 3419 of 2017 has prayed to add the following reliefs :
(iv) For a direction to the Respondent No. 2, Central Coalfields Ltd., which had stopped the coal supply on the letter of the District Magistrate now to restore the supply of coal, in view of the letter dt. 29.7.2016 as also the present Enquiry Report vide Letter No. 794 dt. 30.03.2017;
(v) For a direction to the Respondent Superintendent of Police to act, in view of the direction contained in letter No. 1140 dt. 2.4.2017 and to take a decision with respect to the pending criminal case of the petitioner.
5. Since the prayer of the petitioner is relevant for adjudication, I.A. No. 3419 of 2017 is allowed to be treated as part of the writ application.
6. Petitioners are Private Limited Companies incorporated under the Companies Act, 1956 and are engaged in production of smokeless fuel under the Technology Development by the Central Mines Planning and Design Institute Limited (CMPDI) and Central Fuel Research Institute (CFRI).
7. Petitioner applied to the Central Coalfields Limited (hereinafter referred to as the CCL) and was granted linkage of allocation of coal to the petitioner on 23.07.1998, as for production of smokeless fuel, coal is the raw material. A new Coal Distribution Policy, 2007 having been framed, an agreement for supply of coal between the petitioner and the CCL was entered into on 30.04.2008. Initially agreement was for five years, which was further renewed for a further period of five years up to 30.04.2018. Petitioner made huge investments from his own capital and after seeking loans from the Bank and financial institutions, set up the unit by acquiring land, construction of building, purchase of machinery and employment of employees.
8. During subsistence of the agreement between the petitioner and the CCL the respondent-Collector constituted a team for inspection of different industrial units and the unit of the petitioner was inspected on 14.02.2016 and 17.02.2016. All the documents were produced before the inspecting team by the unit. However, the District Magistrate sealed the unit without preparing any inspection report or inventory and on the same day an F.I.R. was lodged being Aurangabad Muffasil P.S. Case No. 42/2016 dated 18.02.2016 making certain allegations with regard to shortage or misuse of coal and functioning of the unit.
The District Magistrate vide letter no. 983 dated 29.02.2016, Annexure-5 also wrote to the General Manager (S & M), CCL of 43.77 metric tones of coal along with copy of the F.I.R. directing the CCL to discontinue the supply of coal to the petitioner levelling allegation of black-ma
