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2015 Supreme(All) 600

ALLAHABAD HIGH COURT
BEFORE : VIKRAM NATH AND SHASHI KANT, JJ.
PAVAN COAL COMPANY L.L.P. .....Petitioner
Versus
STATE OF U.P. AND OTHERS ....Respondents
(Civil Misc. Writ Petition Nos. 21028, 12680 of 2015 and 58843 of 2014, decided on 15th May, 2015)

Advocates:
Counsel :
Shanti Bhushan, Rahul Agarwal, Rohan Gupta, Chhotey Lal Pandey and Ms. Kamini Jaiswal for the Petitioner; Ravi Kant, C.S.C., Anurag Khanna, Nipun Singh, Mohit Singh, Ram Gopal Tripathi and Ajay Bhanot for the Respondents.

Headnote:Constitution of India, 1950—Articl 21—Limited Liability Partnership Act, 2008—Sections 58 (4) (b), 3(3), 14, 21, 22, 28 and 4—(Indian) Partnership Act, 1932—Section 47—Coal Distribution—Appointment—Coal Handler for UPPCF—An agreement pursuant to said appointment was executed on 10.10.2014—Quashing of appointment of petitioner as coal coordinator sought—Alleged diversion and black marketing of coal—Import of Clause 12 of the EOI cannot be extended—Finding as recorded by the Managing Director that the affidavit contained being incorrect statements with regard to reputation of petitioner firm, found unacceptable—Conversion of partnership firm into a limited liability partnership having not been communicated to the UPPCF, a fraud has been committed by petitioner—As such by playing fraud and concealment, partnership firm which was non-existent entity on 10.10.2014 executed the agreement which would not be a valid agreement and would be void ab initio order accordingly. [Paras 25 to 84]

       Result; Petitions Dismissed.

JUDGMENT

Hon’ble Vikram Nath, J.—The Ministry of Coal, Government of India issued an Office Memorandum dated 18.10.2007 laying down the New Coal Distribution Policy with regard to the consumers in Small and Middle Sectors as contained in Paragraph 3 of the Coal Policy filed as Annexure-2 to the Writ Petition No. 12680 of 2015 which directed that the earmarked quantity of coal for companies/consumers would be distributed through the agencies notified by the State Governments. It also provided that these agencies could be State Government Agencies, Central Government Agencies [National Cooperative Consumer Federation (NCCF)/National Small Industries Corporation (NSIC) etc.] or industries associations as the State Government may deem appropriate. The agency so notified will continue to distribute coal until the State Government chooses to denotify it. There was further incorporation made that the agency/association so notified by the State Government would be required to enter into Fuel Supply Agreement (FSA) with coal company to be designated by the Coal India Limited and such agreement would continue to remain in force till either the State Government denotifies the agency/association or Coal India Limited shifts the obligation to some other coal company.

2. With regard to the State of U.P., the Government vide the Government Order dated 1.4.2008 (Annexure-3 to the Writ Petition No. 12680 of 2015) appointed the U.P. Small Industries Corporation Limited, Kanpur (a Government of India Undertaking) (hereinafter referred to as the UPSIC) as the nodal agency for distribution of coal in the entire State of U.P. An agreement was executed on 19.4.2011 which is the fuel supply agreement in between the Central Coalfields Limited and the UPSIC (Annexure-4 to the Writ Petition No. 12680 of 2015). The UPSIC in turn as per the National Coal Policy advertised for appointment of a coal coordinator/handler to take care of lifting of the coal from the site and deliver it to the consumers as per the allotment made by the UPSIC. Pursuant to the said advertisement, the UPSIC appointed one M/s. A.K.A. Logistics Private Limited as its handler (petitioner in Writ Petition No. 12680 of 2015).

3. This arrangement continued till July 2014 when the State Government took a decision on 16.7.2014 to bifurcate the distribution of coal given to the UPSIC by appointing another nodal agency i.e. U.P. Pradeshik Cooperative Federation Limited (hereinafter referred to as the UPPCF). 40% of the distribution remained with UPSIC and 60% of the distribution was given to the UPPCF (Annexure-10 to the Writ Petition No. 12680 of 2015).

4. The newly appointed nodal agency UPPCF thereafter advertised for appointing its’ handler and accordingly notice was published on 30.8.2014 in different newspapers having State/National circulations, inviting the Expression of Interest (EOI) from different firms/companies. The applications could be purchased up to 23.9.2014 and submitted on or before 27.9.2014. In all 9 applications were received by the UPPCF. A pre-bid meeting is said to have taken place on 24.9.2014 in which the Committee constituted by the UPPCF and the applicants participated. On 27.9.2014 the technical bids were opened and as per the terms and conditions laid down by the UPPCF, marks were allotted to all the applicants under 7 different heads. The terms and conditions of the EOI also provided that the highest 2 scorers would then be considered for opening of their financial bids. The financial bids are said to have been opened on 4.10.2014 in which 2 highest scorers were namely M/s. Pavan Coal Company (respondent in Writ Petition No. 58843 of 2014 and Writ Petition No. 12680 of 2015 and petitioner of Writ Petition No. 21028 of 2015) alongwith M/s. Swastik Coal Suppliers. It would be relevant to mention here that M/s. Pavan Coal Company scored 70 out of 70 marks whereas M/s. Swastik Coal Suppliers scored 58 marks. M/s. Sendoz Impex Limited (petitioner in Writ Petition















































































































































































































































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