SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2021 Supreme(Cal) 205

IN THE HIGH COURT OF CALCUTTA
Sabyasachi Bhattacharyya, J.
Mahabali Techno Engineers - Appellant
Versus
Eastern Coalfields Limited & Ors. - Respondents
W.P.O. No. 502 of 2019, 503 of 2019
Decided On : 12-01-2021

Advocates Appeared:
Subrata Dey, Advocate, Subrata Mukherjee, Advocate, Saptansu Basu, Advocate

The main legal point established in the judgment is that the right to claim refund arises under the Constitutional mandate of Articles 14 and 141 of the Constitution and is unfettered by the statute of limitation.

Headnote:

E-Auction - Refund of Excess Amount - Article 14, 141 of the Constitution of India - [Ashoka Smokeless Coal India (P) Ltd. and others vs. Union of India and others, (2007) 2 SCC 640, Eastern Coalfields Limited vs. Tetulia Coke Plant Private Limited and others, (2011) 14 SCC 624]

Fact of the Case:

The petitioners sought refund of the excess amount paid in e-auction sales by Coal India Limited, following the Supreme Court's declaration of the e-auction scheme as ultra vires Article 14 of the Constitution of India.

Finding of the Court:

The court found that the petitioners were entitled to the refund as the e-auction scheme was declared illegal and null and void by the Supreme Court, making the coal company liable to refund the entire money collected in excess of the notified price.

Issues: The issues included entitlement to refund, unjust enrichment, and limitation.

Ratio Decidendi: The court held that the petitioners were entitled to the refund as a necessary consequence of the e-auction scheme being declared ultra vires and set aside. The court also ruled that the right to claim refund arises under the Constitutional mandate of Articles 14 and 141 of the Constitution and is unfettered by the statute of limitation.

Final Decision: The court allowed the writ petitions, directing the respondents to refund the excess amount of e-auction sale proceeds over the notified price to the respective petitioners.

JUDGMENT

Sabyasachi Bhattacharyya, J. - The Court:

1. The two writ petitions are taken up for hearing, since the respective challenges pertain to the same action on the part of the respondents and are governed by the same judgments of the Supreme Court.

2. The respective petitioners contend that the Supreme Court, in Ashoka Smokeless Coal India (P) Ltd. and others vs. Union of India and others, (2007) 2 SCC 640 , had declared the scheme of e-auction introduced by the Coal India Limited, governing its subsidiaries including the Eastern Coalfields Limited (respondent no.1) as well, was scrapped as ultra vires Article 14 of the Constitution of India.

3. Subsequently, by its judgment in Eastern Coalfields Limited vs. Tetulia Coke Plant Private Limited and others, (2011) 14 SCC 624 , the Supreme Court, based on the judgment in Ashoka Smokeless (supra), had affirmed the order of a Division Bench of this court, confirming an order of a Single Judge directing refund of the excess amount, received by the respondent no.1 pursuant to auction sale under the e-auction scheme, to the bidder.

4. It is argued that, since the e-auction scheme itself was struck down as ultra vires the Constitution, the sales made thereunder were rendered illegal and thus, refund of the excess amount over the notified amount to the participants in the tender had to follow as a necessary corollary. In the present cases, such refund was not given to the petitioners by respondent no.1, leading to the present writ petitions.

5. Learned senior counsel appearing for the respondent-authorities argues that the present petitioners were not parties to the proceedings before the Supreme Court in either of the cases, as referred to above, and/or before this court in the previous proceeding. Thus, the petitioners are not entitled to derive benefit under the said judgments.

6. It is contended that the refund of such excess amount to the petitioners would lead to unjust enrichment, since the petitioners had already shifted the price burden to the petitioners' buyers and ultimate users.

7. That apart, it is argued, the present claims are hit by limitation, since there was inordinate delay in filing the writ petitions even after the eauction scheme was declared ultra vires.

8. Learned senior counsel appearing for the respondent-authorities further submits that the present petitioners never quantified their claim of refund. Such claim, having been made for the first time in the writ petitions, ought not to be allowed.

9. Ashoka Smokeless (supra) dealt with validity and/or legality of a scheme framed by Coal India Limited for sale of coal by electronic auction (eauction). It was held in paragraph no. 161 thereof that the effect of discrimination between the two categories of consumers was differential treatment without rational classification and stood ultra vires. The Supreme Court held that, whereas consumers of coal/coke in the core sector would not only be entitled to allotment of coal at a price fixed by the coal companies but would also be entitled to take part in e-auction, the non-core sector consumers, although as linked consumers formed a separate and distinct class vis- -vis the traders, would not be entitled to the benefit of obtaining coal at a fixed price, thus, creating a discrimination between the two categories of consumers. On such premise, the e-auction was set aside.

10. The effect of such ultra vires declaration was discussed in Eastern Coalfields Limited (supra), wherein the Supreme Court held, by relying on Ashoka Smokeless (supra), that any action taken pursuant to the said scheme, which had been declared ultra vires, is also illegal and null and void. Since the entire scheme was set at naught by the Supreme Court, whatever action was taken following the said e-auction by the coal company had also been declared to be illegal and, therefore, the coal company had become liable to refund the entire money which was collected in excess of the notified price. This

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top