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1985 Supreme(Cal) 81
IN THE HIGH COURT AT CALCUTTA
Ajit Kumar Sengupta, J.
Premium Fuels & Co.
Shree Shyam Industries & Anr.
Bajrangbali Coal Co. & Anr.
Shri Jagadamba Coke Manufacturing Enterprise & Anr.
Tetulia Coke Plant & Anr.
Industrial Engineering Co. - Petitioners
Versus
Bharat Coking Coal Limited - Respondent
C.R. Nos. 14809(W) to 14812(W) of 1983
Decided On : February 28, 1985
Advocate Appeared:
Mr. Somnath Chatterjee, P.K. Mallick, Jayanta Mitra, S.K. Kapur and Pratap Chatterjee for the Shree Shyam Industries & Anr.
Mr. Subrata Roychowdhury, S.C. Bose, Biswarup Gupta, Saktinath Mukherjee, Ajoy Mitter, Sundarananda Paul and Tapan Mukherjee for the Premium Fuels
Mr. Dipankar Gupta, S. Pal and Pronab Chatterjee for the Industrial Engineering Co.
Mr. B.N. Sen, Jamini Kumar Banerjee and Samar Banerjee for the B.C.C.L. and C.I.L.
Headnote:
The Calcutta High Court held that the Coal India Limited (CIL) and its subsidiaries must distribute coal to private cokeries on a pro rata basis, irrespective of any special agreements, orders, or directions regarding preferential allocation of coal. The court found that CIL and its subsidiaries had acted in a manner that was not expected of public undertakings having a monopoly of national wealth in the form of coal. The court also held that the respondents were not bound to supply coal to Premium Fuels from Damagoria Colliery and that the Arbitration Agreement could not curb the right of others to get coal for their coke oven plants.
Fact of the Case:
Various writ petitions were filed by private cokeries and other parties challenging the actions of CIL and its subsidiaries in distributing coal. The petitioners alleged that CIL and its subsidiaries had entered into special agreements with certain cokeries, giving them preferential treatment in the allocation of coal. The petitioners also alleged that CIL and its subsidiaries had failed to follow a fair and equitable policy in distributing coal.
Finding of the Court:
The court found that CIL and its subsidiaries had indeed entered into special agreements with certain cokeries, giving them preferential treatment in the allocation of coal. The court also found that CIL and its subsidiaries had failed to follow a fair and equitable policy in distributing coal. The court held that this was a violation of the petitioners' right to equality under Article 14 of the Indian Constitution.
Issues: 1. Whether CIL and its subsidiaries had entered into special agreements with certain cokeries, giving them preferential treatment in the allocation of coal? 2. Whether CIL and its subsidiaries had failed to follow a fair and equitable policy in distributing coal? 3. Whether the actions of CIL and its subsidiaries violated the petitioners' right to equality under Article 14 of the Indian Constitution?
Ratio Decidendi: The court held that CIL and its subsidiaries had indeed entered into special agreements with certain cokeries, giving them preferential treatment in the allocation of coal. The court also found that CIL and its subsidiaries had failed to follow a fair and equitable policy in distributing coal. The court held that this was a violation of the petitioners' right to equality under Article 14 of the Indian Constitution. The court ordered CIL and its subsidiaries to distribute coal to private cokeries on a pro rata basis, irrespective of any special agreements, orders, or directions regarding preferential allocation of coal.
Final Decision: The court ordered CIL and its subsidiaries to distribute coal to private cokeries on a pro rata basis, irrespective of any special agreements, orders, or directions regarding preferential allocation of coal. The court also held that the respondents were not bound to supply coal to Premium Fuels from Damagoria Colliery and that the Arbitration Agreement could not curb the right of others to get coal for their coke oven plants.
All the matters mentioned hereafter were heard together :
(A) Five writ applications;
(B) Three several applications of Premium Fuels for addition of party and for variation of interim order dated June 20, 1984 in C.R. No. 14809(W) of 1983; C.R. No. 14811(W) of 1983 and C.R. No. 14812(W) of 1983 filed on June, 6 1984;
(C) Interim applications filed by Shree Shyam Industries, Shree Jagadamba Coke Manufacturing Enterprises and Tetulia Coke Plant on June 18, 1984. Interim applications filed by Bajrangbali Coal Company and another on July 11, 1984 and August 24, 1984 ;
(D) Four applications filed by Industrial Engineering Company on January 25, 1985 for being added as party respondent and for vacation of the interim orders passed in C.R. Nos. 14809 (W) to 14812 (W) of 1983;
(E) Applications filed by Shree Shyam Industries Limited. Bajrangbali Coal Co., Shri Jagadamba Coke Manufacturing Enterprises and Tetulia Coke Plant on December 19, 1984 for further interim order.
All these matters involve a common issue, that is, supply of coal, inter alia, by Bharat Coking Coal Limited (hereinafter referred to as BCCL) and Coal India Limited (hereinafter referred to as CIL) to coke oven plants.
Background :
2. From the pleadings of the parties before me, certain facts emerge which are not in dispute. These facts are stated briefly hereafter.
2.1 There are over 100 coke oven plants in operation. Most of them are situated in the State of Bihar. Each coke oven plant has been set up with the permission of the State Government concerned. Only the coke oven plant of Premium Fuels is situated in West Bengal. The coke oven plants of other writ petitioners are situated in the State of Bihar. For manufacturing hard coke, these coke oven plants require coking coal. BCCL mainly owns the collieries from which such coking coal is available. BCCL and other subsidiaries of CIL distribute amongst coke oven plants diverse quantities of coal every month from various collieries. The total quantity from the collieries belonging to CIL and/or its subsidiaries constitutes the available coal for all coke ovens. Coking coal of all the collieries and of all grades are, however, not suitable for manufacturing hard coke. The quality of coal varies from colliery to colliery. Some collieries produce coal which is more suitable for manufacturing coke than others. The facts remains that the total quantity of suitable coal is not enough to meet the requirements of all the coke oven plants. BCCL and other subsidiaries of CIL also make supplies of less suitable coal. It is also claimed that sometimes totally unsuitable coal is supplied to the coke oven plants. It is the scarcity of the availability of suitable coking coal to meet the demands of all the coke oven plants which has given rise to the disputes in these proceedings.
2.2 The collieries which supply coking coal are nationalized collieries. The question is whether in distributing the available coal, the CIL and its subsidiaries should proceed equitably. This means that each coke oven plant should get a share of the suitable as well as less suitable and unsuitable coal. But from the records and proceedings of this Court, it appears to me that by reason of the various orders obtained from this Court, some of the writ petitioners are favourably treated than others as a result whereof equilibrium has been disturbed. It has to be seen whether this had been done by CIL and BCCL with a view to favour some of the writ petitioners or with a view to implement and policy decision resulting in some inequality.
3. Certain facts leasing to the initiation of various proceedings by the writ petitioners in this Court are required to be stated.
3.1 On November 12, 1977 and agreement was entered by and between Premium Fuels (who owns coke oven plants at Salanpur, District Burdwan) and BCCL for supply of 24,000 M.T. Gr.-II ROM from East Ramnagar Section of Damagoria Colliery. The said agreement, inter alia, provided as follows :-
(a) Premium F
