The retention of excess statutory levies like royalty, DMF, and NMET collected on the basis of a higher grade of coal, which is later found to be of inferior grade, constitutes unjust enrichment and must be refunded or adjusted by the State as mandated by Rule 64B of the Mineral Concession Rules, 1960.

(Cause-title taken from Case Information System)

Order on Board

16.04.2026

1. By filing the present writ petition under Article 226 of the Constitution of India, the petitioner has assailed the legality, validity and propriety of Clause 10.5.2 introduced by way of amendment to the Fuel Supply Agreement (FSA) vide notice dated 18.02.2019 issued by the respondent authorities. The petitioner has prayed for following relief(s):-

(i) This Hon'ble Court may kindly be pleased to pass appropriate writ quashing the Clause 10.5.2 of notice no SECL/BSP/M&S/ FSA/NCDP/3544 dated 18th Feb 2019 of respondent no 03/ South Eastern Coalfield Limited (SECL) as being violative of Article 14 of the Constitution of India as being arbitrary and discriminatory.

(ii) This Hon'ble Court may kindly be pleased to pass appropriate writ directing the Respondents to reconcile the annual accounts of the Petitioner as per clause no 12.5.2 of the FSA on variation of supply grade of coal based upon third party/joint sampling / referee lab report at the earliest.

(iii) This Hon'ble Court may kindly be pleased to pass appropriate writ directing the Respondents to pay the sum due towards Royalty, DMF and NMET that have not been paid under Credit notes, along with interest to the petitioner, as per clause no 13.2 of the FSA

OR

This Hon'ble Court may kindly be pleased to pass appropriate writ directing the Respondents to refund/pay the sum collected towards Royalty, DMF and NMET through Debit notes, along with interest to the petitioner, as per clause no 13.2 of the FSA.

(iv) This Hon'ble Court may kindly be pleased to pass appropriate writ directing the Respondents to pay the sum due against the Goods and service Tax, which has not be refunded back to the Petitioner due to erroneous calculation on part of the Respondents, along with interest.

(v) This Hon'ble Court may kindly be pleased to pass appropriate writ directing the Respondents to pay the interest on the amount due in each credit note from 30 days from the deemed annual reconciliation date till the date of actual payment.

(vi) Award cost of proceedings in favour of petitioner;

(vii) This Hon'ble Court may kindly be pleased to pass such other and further orders in favour of petitioner as this Hon'ble Court deems fit and proper in the present facts and circumstances of the case.”

2. Learned counsel for the petitioner submitted that the petitioner has assailed the legality, validity and propriety of Clause 10.5.2 introduced by way of amendment to the Fuel Supply Agreement (FSA) vide notice dated 18.02.2019 issued by the respondent authorities. The said clause, to the extent it permits the respondents to indefinitely withhold refunds arising out of credit notes, is ex facie arbitrary, unfair and violative of Article 14 of the Constitution of India. It is contended that the impugned clause creates an unconscionable and one-sided mechanism whereby, in cases of supply of superior grade coal, the petitioner is mandatorily required to make immediate payment along with all statutory levies including royalty, DMF, NMET and GST; however, in cases of supply of inferior grade coal, the respondents do not refund the corresponding levies and instead restrict the refund only to the basic value and GST, that too without any stipulated timeline, thereby resulting in unjust enrichment at the cost of the petitioner.

3. It is further submitted that the impugned Clause 10.5.2 is contrary to and inconsistent with Clauses 9.2 and 12.5 of the FSA, which contemplate proper reconciliation of account