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2017 Supreme(Cal) 474

IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
I.P. MUKERJI, MOUSHUMI BHATTACHARYA, JJ.
Shivam Coke Private Limited - Appellant
Versus
Eastern Coalfield Limited & Ors. - Respondents
APO 405 of 2015, WP 1058 of 2012
Decided On : 17-11-2017

Advocates Appeared:
For the Appellant :Ms. Vineeta Mehera, Mrs. Paripurna Dasgupta, …Advocates
For the Respondents:Mr. Pradip Kumar Dutta, Senior Adv. Mr. Nikhil Kumar Roy Advocates.

Headnote:

Interest - E-Auction Scheme - Ashoka Smokeless Case, Nifty Chemicals Case, S.J. Coke Industries Case - 12% per annum - The court directed the respondents to pay interest to the petitioner at 12% per annum on the amounts refunded from the date of payment by the petitioner to the respondent No.1 at the enhanced price for and until three years from such date.

Fact of the Case:

The respondents were directed to refund excess amounts collected by them pursuant to an e-auction Scheme introduced by them for the sale of coal, but without allowing the interest on the said amount. The appellant, a hard coke manufacturing unit, sought refund and interest at 12% per annum.

Finding of the Court:

The court found that the Supreme Court's decision in Ashoka Smokeless Case applied to all coal consumers in similar circumstances, entitling them to interest at 12% per annum. The court also noted the petitioner's delay in approaching the court and allowed interest for a period of three years from the date of payment.

Issues: The issues included whether the petitioner was entitled to interest at 12% per annum on the refunded amounts and whether the delay in approaching the court affected the entitlement to interest.

Ratio Decidendi: The court held that the entitlement to interest was not restricted to the petitioners before the Supreme Court in Ashoka Smokeless and that the petitioner's delay in approaching the court did not warrant interest for the entire period. The court allowed interest for a period of three years from the date of payment.

Final Decision: The court directed the respondents to pay interest to the petitioner at 12% per annum on the amounts refunded from the date of payment by the petitioner to the respondent No.1 at the enhanced price for and until three years from such date. The appeal was disposed of in favor of the petitioner.

JUDGMENT :

I.P. MUKERJI, J.

1. I have had the privilege of going through the draft judgment prepared by my learned sister. I entirely agree with her ladyship. However, I would like to make a few observations of my own.

2. In about October 2004, the respondents decided to sell coal by e-auction to a certain section of consumers described as “non-core sector consumers” including “linked customers”. The result of this e-auction was that coal was sold at a higher price than notified.

3. This e-auction decision or scheme was challenged by various entities in the High Courts. Thereafter, the matters went up to the Supreme Court and were finally decided by it on 1st December, 2006, Ashoka Smokeless Coal India (P) Ltd. & Ors Vs. Union of India and Ors. reported in (2007) 2SCC 640. Now, in that case the Supreme Court had directed return of the excess amount paid by the consumer together with interest @12% per annum from the date of payment till the date of refund of the sum to the petitioner. In granting this interest the Court had opined the following in an order dated 12th December, 2005 passed at the interim stage which was affirmed in the final order “to protect the interest of the petitioners and to ensure that no permanent harm is caused to them we also think it proper to record the undertaking given on behalf of Coal India Ltd. and its subsidiaries that in case this Court upholds the challenge made by the petitioners and allows the writ petitions filed by them, the enhanced price of 33-1/3% now to be paid by the petitioners will be refunded to the petitioners within 6 weeks of the judgment of this Court with interest thereon at 12% per annum from the date of payment till the date of return to the petitioner concerned.” (See Ashoka Smokeless Coal India (P) Ltd. & Ors Vs. Union of India and Ors. (2006) 9 SCC 228).

4. One thing is clear. It was not a plain and simple grant of interest at a particular rate. Reasons had been advanced by the Court for granting this interest. The bone of contention after this judgment was whether the respondents were to follow this decision, even in cases which that Court had no occasion to decide.

5. According to Mr. Dutta, learned Senior Advocate appearing for the respondents it was in the Ashoka Smokeless case that the Supreme Court had granted interest. It did not mean that interest had to be granted as a matter of course by the respondents in all cases when it was making refund of the e-auction amount to the consumers.

6. Basing their cause of action on the Ashoka Smokeless case, the appellant/petitioner moved the writ application before this Court, where it specifically claimed refund as well as interest @12% per annum (see Paragraph 1 of the impugned Judgment). For whatever reason this Court in the impugned order and judgment dated 1st April, 2014 allowed the claim for refund. The judgment was silent with regard to the grant of interest. It neither granted it nor refused it.

7. Ms. Meheria for the appellant submits that the Court was bound to grant interest in view of the above Supreme Court decision.

8. In my view Ms. Meheria is correct. It plainly appears from the portion of the judgment extracted above in the Ashoka Smokeless Case that the Supreme Court had granted interest on the amount to be refunded with interest @12% per annum together with reasons for grant of such interest. The respondents were bound by such judgment. They were enjoined with the duty to follow the ratio of that judgment in each and every case of refund.

9. The case of the Appellant/petitioner is in no way different from Ashoka Smokeless Case. Therefore, we only take it that the non-grant of interest by the learned Single Judge may have been an in advertant omission on his lordship’s part.

10. However, one point raised by Mr. Dutta has to be overcome. He says that the appellant/petitioner had been sleeping over its rights for a long period of time. The writ on which the impugned order was passed was filed only in 2012. Now taking a

























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