IN TI-E HIGH COURT OF JUDICATURE AT BEASPUR (CHHATT ISGARH) Egg PEjrxTION No 21106 OF 2001 i LV State of Chhattisgarh thr ough Secre tary Departme nt or Commerce 8: Industries, Mantrlaya, D. K. S. Bhawan Ra ipur Raipur (C- G) Commissioner Industries of Chhattisgarh D.K.S.Bhaw'an, Raipur Raipur (C-G) .0 H5) , E: V ESPONDENES x-«j E x L IFEE: m R € " o indian Petro Coal Products x M An Industrial Unit and a IFEEJ: W A g’ g P;Oprietory Concern thrOugh x its sole Proprietor Shri. ‘. .v i \ W .\ _ 'E‘ \a'B.L.Porwal son of Lalchand ’ : ‘ : : Porwal, aged 50 years, -$é§ ‘ ‘ do Hie—5, Padmanabhpur Distt. Durg (c.G) M/s. Ajay Chemicals An Industrial 3nit being a Partnership Firm registered under Partnership Act through its Partner Shri. In r Chand Dhadiwal s/oA ttam Chand Dhadiwal aged 56 years, r/o 45-4 $adar Bazar Raipur (C.G M/s .M. P. Tar Products An Industrial Unit and a Prggrisgiggrs‘gip COncern through its sole Proprietor Shri.Pankaj Kothari s/o Shri.Gyanchand KOthari ageé 26 years, r/o S.M. 34, Pama nabhpury Distt. Durg (C.G) M/s. Kusum knemikals Pvt,Ltd An Industrial Unit and a Private Limited Campany incor- porated under the COmpanies Act, its through its Managing -’ Director, Shri.Bikham Chand Jain, son 0f Late ShriaNemichand_ Jain, aged 56 years, r/o Malviya Nagar, Distt. burg (c.G) r w.V : “v a \. 1’ VERSUS X HGH COLRT OF JLDICATLRE CH-IATHGARH: BILASPLR (Division Bench) CORAM: mN'BLE S-Rl AK. PATNAIK, G} &HONBLE $-Rl V.K. SPRIVASTAVA, J. WRH' PETITDN BIO-2120 9F 1%? WRIT PETITION N0v24¢3 ¢F 1$$9 WR'T PETIT'9N NQ$053 OF 199g EMBH EETMOE N0.g4Q6 OF 2001 i AME WR'T PETlTl0N N¢.31$5 OF 2W3 0m FOR CONgDmATION /i ‘ S- cmei Justice -/ a’b’ fiV” POST FOR ORDES: iR/O/E035’A/m l \K Sdl- chief JuS‘iCe \ dl Hon’ bie Mr. Justice V.K. S1rivastava HIGH OOURT OF JUOICATURE .CHHATTIOARH: EILA'SPUR’M (Division Bench) CORAM: HON’BLE SHRI A.K. PATNAIK, OJ & WN'BLE SHRI V.K. SHRIVASTAVArJ. WRIT PETiTlON No.2120 OF 1989 M/s. Utkal Hydorc‘arbons, Bhiial‘ Versus State of Chhattisgarh & Others WRIT PETI‘nON NQ2403 OF 1989 Mls. Raysinet Kemika! Company & Others Versus State of Chhattisgam & Others WRIT PETITION No.3053 OF 19g: Mls. Deepa Industries Versus State of Chhatu‘sgarh & Others WRIT PETITION No.2406 OF 2091 Indian Petro Coal Products & Others Versus state of Chhattisgarh & Others WRIT PETITION NO.‘ T42 OF 2002 Mls. 3.8. Udyog Versus Steel Authority of lnda Limited &-Others WRIT PETITION NO. 894 OF 2002 Yash Chopda Versus Steel Authority of India Limited & Others AND WRIT PETITION No.3185 OFI 2W3 Pawan Mantri / Versus State of Chhettisgarh & Others rim”g, w v we« It semne e er s ; @ Hesent Mr. Rohit Arya, Sr. Adm, assisted by Mr. R.R. Sinha learned counsel for the petitioner in W.P. No.21 20 of 1989. Mr. Rajeev Shrivastava learned counsel for the petitioner in W.P. No.2403 of 1989. Mrs. Meena Shastri learned counsel for the petitioner in W.P. No.3053 of 1992. Mr. Manindra Shrlvastava. Sr. Adv., assisted by Mr. Amit Verma learned counsel for the petitioners in W.P. No.2406 of 2001. Mr. Kishore Bhaduri learned counsel for the petitioners in W.P. No.742 of 2002 & W.P. No.3185 of 2003. Mr. Satyawan Agrawal learned counsel for the petitioner in W.P. No.894 of 2002. Mr. S.C. Verma learned counsel for the intervenerf Kusum Kemikals (P) Ltd. Mr. V.V.S. Murthy, Dy. Advocate General, assisted by Mr. Somesh Baiaj, learned Dy. Govt. Adv., for the State of Chhattisgarh. Mr. Prashant Mishra, 8r. Adv., assisted by Mr. B.D. Guru learned counsel for the Bhllai Steel Plant. Mr. P. Diwakar, Sr. Adv., assisted by Mr. Saniay K. Agrawal. learned counsel for Mls. Ajay Chemicals and Indian Petro Coal Products and Steel Authority of lndia Ltd.. O D E R {Passed on Ill" My of 2006) The following order of the Court was passed lay AK. Patnaik, CJ: - This batch of writ petitions relates to allotment of bye products of Bhllai Steel Plant as raw materials to different lndustries located in the State of Chhattisgarh and were heard analogously and are being disposed of by this common judgment and order. (2) The facts briefly are that Mls. Raysinet Kemical Co. and others filed a writ petition Misc. Petition No.462 of 1981 in the High Court of Madhya Pradesh at Jabalpur before the State of Chhattisgarh was constituted by the Madhya Pradesh Reorganisation Act, 2000‘complaining i : @ of arbitrary distribution of by praducts of the Bhiiai $teel Plant as raw materials to different industries and by judgment and order dated 11/1 0/1984 the said batch of writ petitions were disposed of by the Madhya Pradesh High Court with the direction that the Director of Industries, Madhya Pradesh, in the light of the discussion in the order, will evolve a reasonable formula and allot the raw materials available in the light of the formula to the 13 industrial Units. (3) Pursuant to the said directions of the Madhya Pradesh High Court in the judgment and order dated 11/10/1984 passed in Misc Petition No 462 of 1981 the industries Commissioner Government of Madhya Pradesh by order dated 30/11/1984 constituted a Four-Members Committee (hereinafter referred to as (he “First Committee”) headed by Additional Director of industries Durg and after considering the factors mentioned in the Judgment and order dated 11/10/1984 of the Madhya Pradesh High Court and after discussing with the representatives of the different industrial Units recommended in para 5.7 of the report that the following minimum quantities be distributed to the thirteen industrial Units: (a) Raysinet Kemikal - 20 M.T. (b) Utkal Hydrocarbons - 12.5 M.T. (c) 11 otherlndustrialUnits - 10 M.T. The First Committee further recommended that the balance of the material after distribution of the minimum quantities will be distributed on prorata basis as per the assessed capacities of the Units as on 31/08/1982 as specified in para 5.4.1 of the report. ln accordance with the aforesaid formula as evolved by the First Committee, the bye products of the Bhilai Steel Plant were distributed as raw materials to the industries by order dated 31/01/1986 with effect from February, 1986. (4) Thereafter by an order dated 12/08/1988 the industries Commissioner, Government of Madhya Pradesh constituted a four members Committee (here/hatter referred to as “the Second Committee”) to decide the case of M/s. Deepa industries for allotment of the chemical bye products and on the basis of the report of the Second Committee the industries Commissioner issued the order dated 19-07-1988 allotting to M/s Deepa industries a minimum quantity of 6 M.T per month and a prorata allotment on the basis or its assessed maximum capacity of 8.5 MJ‘. out of the balance of the materials attsr the minimum quantities were distributed. (5) Thereafter. the Chhattisgarh Chemical industries Association moved the authorities to redistribute the raw materials on the ground that the production and avaiiaioility of the bye products of the Bhilai Steel Plant has increased and by order dated 12/08/1988 the Industries Commissioner, Government of Madhya Pradesh. constituted yet another four members Committee (hereinai‘ter referred to as “the Third Committee") headed by the industrial Advisor (Chem), Directorate of industries, Bhopal to assess the capacities of chemicals unit set up at Bhiial and Raipur based on chemical bye products of Bhiiai Steei Plant and to suggest norms of distribution of chemical bye products, keeping in view the recommendations of the first Committee and the Committee submitted its report and on the basis of the said report of the Third Committee, the industries Commissioner, Government of Madhya Pradesh issued an order dated 23/O2I1989 redistributing the bye products ofthe Bhilai Steel Plant as follows: (A) Mrs Resinet Chemicals — 75 MT. per mend}. (B) M/s Utkai Hydrocarbons - 46 M.T. per month. (C) other eleven units - 34 M.T. per month. Allotment to M/s Deepa industries was to remain as made by the order dated 1W07i1 Q88. (6) At the hearing. Mrs. Meena Shastri learned counsel for the petitioner in Misc. Petition 3053 of 1992 submitted that Mls Deepa industries had moved Madhya Pradesh High Court in Misc. Petition No.2403 of 1989 and by order dated 20/02/1990 a Division Bench of the Madhya Pradesh High Court while rejecting the application for stay directed that the petitioner shaii have continued suppiy in accordance with the report of the Expert Committee in Annexure-RIViii. She pointed out that by a communication dated 10/03i1992 by the Directorate of industries. Madhya Pradesh to the petitioner in Annexure—Pi30 annexed to the writ petition the petitioner has also been informed that as per order dated 20102.4 990 of the Madhya Pradesh High Court passed in Misc. Petition No.2403 of 1989 the distribution of raw material had been adjusted accordingly. But M/s. Deeps industries have not been given raw materials as per the requirements of the industrial Unit. She submitted that originally the requirement of the Industrial 4 Unit of Mls. Deepa Industries was 116 M.T. of raw material per annum. but subsequently the capacity was increased and the rsquirement of the Unit is now 22D M.T. per annum. She submitted that the Development Commissioner, Smaii Scale industries. Ministry of industries in his letter dated 13108/1990 to the industries Commissioner, Government of Madhya Pradesh has recommended for higher allotment of raw material as per requirement of the industrial Unit as per revised capacity of 220 M.T. per a'nnum. She submitted that taking the revised eapacity of 220 M.T. per annum, the requirement of M/s. Deepe industries works out to 18 M.T. per month but the petitioner is being allotted only 6-M.T. per month. She cited the decision of the Supreme Court in Om Prekash and others Vs. aae of JSK and others reported in AIR 1981 SC 1001 in support of her contention that the distribution of raw material ‘for industries must satisfy the equality clause of Article i4 of the Constitution of india. (7) Mr. Rajiv Shrivastava, learned counsel appearing for the petitioners in Writ Petition 2403 of 1989 Mls. Raysinet Kemikal Company and others submitted that while industrial Unit of the petitioners is a medium industry, the other industrial Units are ail‘small scale Units. He further submitted that it would be clear from the report of the First Committee that the annual installed capacity of Mls. Raysinet Kemikel Company is the highest and it is for this reason that the First Committee recommended that Mls. Raysinet Kemikal Company will-be allotted a minimum quantity of 20 M.T., Utkai Hydrocarbons will be allotted a minimum quantity of 12.5 M.T. and all other Units will be allotted 10 M.T. every month and the rest of the materials wril be distributed on prorata basis as perthe assessed capacities of the Units as on 31l08/1982 as has been given in paragraph 5 4 1 of the report He argued that this formula recommended by the First Committee was a reasonable formula and had taken Into consideration the installed capacity of the different industrial Units and was in accord with the directions of the Madhya Pradesh High Court in the judgment and order dated 11/10/1984 in Misc. Petition No.462 of 1982. He submitted that the second Committee in its report also recommended the same norms of distribution to be followed as were recommended by the First Committee, but unfortunately by the order dated 23/0211989 in Annexure-Dl7 to the writ petition the industries Commissloner fixed the monthly quota of 75 M T for Mls Raysinet Kemikal Company and the result was that in the months in 4 @ which more raw materials are available with h Bhllal Steel Plant for disribution the pitioner does not get any further material on prorata basis as per the assessed capacities f the nits as on 31108/1 982 as has been given in paragraph 5.4l1 of the report. He submitted that the impugned order dated 25/02/1989 is violative of the princlpies of the natural justice Inasmuch as no hearing was granted to the petitioner before the said order was passed. in support of this submission M Shrivastava cited the decision of the upreme Court in Sn. Maneka Gandhi Vs. Lhion of indie and another reported in AIR 1978 SC 597 wherein it has been held that for the test f applicaility of the doctrine of natural justie, there can be no distinction bween a quasi-juicial function and an administrative function inasmuch as te aim of both administrative inquiry as well as quasi-judicial inquiry is to arrive at a just decision. He further submitted that the industries Commissioner had no power to review the earlier distribution of raw materiais made on the basis of the report of the first Committee and on this ground also the impugned order dated 23/02/1989 was liable‘to be quashed. (8) Mr. Rohit Arya. Sr. Advocate. assisted by Mr. R.R. Sinha learned counsel fo the petitioner in Writ Petition 21 20 of 1989 Mls. Utkal Hyo Carbons similarly submitted that it would be clear from paragraphs 22 and 23 of he judgment and order dated 11/10/1984 of the High Court in Misc. Petition 462 of 1982 that the reasonable formula was to be worked out considering the instalied capacity of he industrial Units and pursuant to the irections in the said judgment and order the First Committee after considering the assessed capacity of the petitiner had recommended an allotment of mium quantity of 12. M.T. of raw materiais to the petitioner and had aiso recommended that the excess materials over and above the allotment of minimum quantities to the industriai units be distributed on prorata basis as per the assessed capacits of the lndustriai units as on 31/08/1982. He submitted that the Third Committee also endorsed the aforesaid norms recommended by the First Committee and yet by the impugned order dated 23/02/1989 the indusries Commissioner has disregarded the recommendations of the First Committee and the Third Committee and has hxed a monthly quota of 46 M.T. of raw materials for /s. Utkal Hydrocarbons. r. Arya and Mr. Sinha submitted that since the eariier allotment of rw materials on the bsis of the recommendation of the 4 te t et o U r. S o b c et d h r dr t t d o nim 5 ie t M M a a @ First Committee was pursuant to the directions ofthe Madhya Pradesh High ourt in the judent and order dated 11/10/1984 in Misc. Petition 462 of 1982, the earlier allotment could not have been reopened without the permission of the High Court. He submitted that it will also be clear from the impugned order dated 23i02/959 that it is based on the assumption that the production of the bye products of the Bhllai Steel Plant has increased to 500 M.T. and was likely to further increase to 600 M.T. per month. But actually the production of the Bhllai Steel Plant is much IOWer tan 500 M.T. per month and is not likely to inerease to 600 M.T. per month and hence the impugned order is erroneous and is liable to be quashed. ln this context, he referred to the letter dated 27/04/1989 in Annexure-A/S of the General Marketing Manager of he Steel Authority of lndia Ltd. as well as the afhdavit and chart of production and supply of the bye products tiled on behalf of the Bhilai Steel Plant. (9) Mr. Kisore Bhaduri learned counsel appearing for the petitioner ln Writ Petition No.742 of 2002 M/s. 8.5. Udyog and the petitioner in Writ Petition No.315 of 2003 Shri Pawan Mantri, a partner of M/s. S.S. Udyog at Bhilai, submitted that the petitioner M/s. 8.8. Udyog is also an industrial Unit at Bhilai requiring Heavy Benzol (H.B.), a bye product of Bhilai Steel Plant, as its raw material and pursuant to the order passed by this Court in Writ Petition N.2637 of 2001 on 15/01/2002 to consider the representation of the petitioner, the Bhilai Steel Plant allotted raw materials and the petitioner paid an advance of Rs.38,569/- for the sameto the Bhilai Steel Plant. but b a subsequent communication dated 05/04/2002 of the Bhila Steel Plant to the petitioner in Annexure-P/2 annexed to the writ petition the advance wa refunded on the ground that the Director of industries has informed the Bhilai Steel Plant that it will not be possible to allot any raw material to the petitioner. He further submitted that just because the petitioner is a new industry and was not one of the thirteen industrial Units which were allotted raw materials from the Bhilai Steel Plant pursuan to the udgment and order dated 11/10/1984 of the Madhya Pradesh High Court in Misc. Petition No.462 of 1981. the petitioner cannot be denied raw materials and any such denial will be violative of the right to equality under Article 14 of the Constitution. He submitted that even if the petitioner has given any .undertaking at the time of setting up the new ¢ C gm 1 h t h 8 y i s t j @ industry that win not claim any raw materials uc undertakin shoul not snd in the way cf allotment of the aw materials t the etitloner. (10) Mr. Satyawan Agrawal learne counsel apaaring for the petitioner in Writ Petitio No.894 of 200 submitted that he etitioner has also set up w small scale indstry tyled Mls. Kusha Chemicals and applied to the Bhilai Steei Plant to allot raw materials, but by a communication dted 14/02/2002 the Biai Sel lant has refused t suppiy the raw materiais He bmitte that the aforesaid communication dated 14/02f2002 of th Bhllai teel Pnt refusing to upply raw materia to the petitioner is violativs to the rt of the petioner uer Articles 14. 19 (1 )(g) and 21 ofthe onstitutio o li l D Gne h ry d o b rhs Mi n 1 he F d ar a the o d he Un d 11 6. e unit ui b a (11) in repiy to the aforesaid contentions of the earned counsel appearing for the petitioners, Mr. V.V.S. Murthy leamed y. Advocate eral for the State of Chattisgarh, relying on the epl die n ahatl‘ of the rendents and 2 ubmitted tht pursuant to the directions i paragap 22 and 23 of the judgment andorder dated 1m 011984 of the spo 1 s a n Madhya Pradesh High Court in sc. Petitio No.462 of 198 t irst Committee was constitute which fte due consideration submitted its report nd on basis f the recommendations in the sai report allotments were made to t industrial its by the order ated 3011‘1 98 Thereaiter the Chhattisgarh Chemical industries Association submitted a representation contnding that the quota of the industrial s shod e increased in View of the increased availability of raw materials and the Association also represented that no new unit should be registered and the existing units should not be permitted to increase their capacity. He submitted that in view of the said representations made by the Association s and considering the fact that the avaiiable quantity of the raw materiais at Bhilai Steel Plant had increased from approximately 300 M.T. per month to 500 M.T. per month, the industries Commissioner constituted the Third Committee to assess the capacity of the existing units and on the basis of i the report submitted by the Third Committee the industries Commissioner passed the order dated 23i0211969 aiter thoroughly examining the matter in i i i the light ofthe new industrial policy of the Govemment of Madhya Pradesh ‘ declared in October 1988. He further submitted‘that the revised aiiotments made under the said order dated 23/02/1989 is based on the actual availability of bye products with the Bhiiai Steel Plant and guarantees 34 . .. ... . he sh g d ta r o p d p n 2 t p a ne u s l a hi te P o sud e S la s l ih it nd Cn f nda. M.T. per month to each unit because 30 M.T. per month is required for an economically viabie industriai unit. He further suhmitted that no aliotment can be made to new industries out of the scarce raw materials producod'by the Bhilal Steel Plant and affldavlts have been taken from such new Industries that they will not claim any raw materials from the ‘Bhilai Steel Plant. He argued that since there is a shortage of raw materials comprised of bye products of the Bhiiai Steel Plant any allotment of raw materials to the new industries will adversely effect the existing industrial units. (12) Mr. Prashant Mishra, Sr. Advocate, assisted by Mr. Vivek Ranjan Tiwari ieamed counsel appearing for the Bhliai Steel Plant submitted that in paragraph 22 of the judgment of the Madhya Pradesh High Court dated 1111011 984 passed in Misc. Petlton No.462 of 1981it has been made clear that the “avahable” raw material is to be aiiottod as per reasonable formula and the chart tiled by the Bhiiai Steel Plant along with its retum in Writ Petition No.2120 of 1989 would show the production ofthe bye products of the Bhitai Steel Plant namely Heavy Benzol Oi! (HBO), Drained Neptheiene Oil (DNO) and De-phenoilsed Oil (DPO) for the period from 1984-85 to April 2004105 and from the said chart it is clear that the availability of the raw materials would be far less than 500 M.T. per month and hence it is not possible for the Bhiiai Steel Plant to suppiy 506 M.T. every month to the industrial units as per the order dated 2310211989 ofthe industries Commissioner. Government of Madhya Pradesh. (13) Mr. P. Diwakar, Sr. Advocate, assisted by Mr. Sanjay K. Agrawal learned counsel appearing for respondents 15 & 16 in Writ Petition No.2403 of 1989 and forthe respondents 9 & 13 in Writ Petition No.2120 of 1989 submitted that the report of the First Committee clearly stated that the minimum quantity of the raw material required for an industrial Unit for making the industrial Unit viable was 30 M.T. and yet the eariier allotment order dated 31IO1I1 986 the industrial Units were not given 30 M.T. and it is for this reason that when the production of bye products of Bhiiai Steel Plant increased and more quantity of raw materials became available the Chhattisgarh Chemical industries Association approached the authorities to review the allotments and accordingly the matter was reviewed by the Third Committed and a fresh order was passed on 2310211989 redistributing the bye products so as to ensure a‘minimum of 3O M.T. to every lndustriat unit. He further submitted that by the said order dated‘23IO2I1 989 Mls. Raysinet @ 10 Kemikal Company which was getting 20 M.T. by the earlier allotment order dated 31lO1/1986 has been aitotted 75 M.T. per month and similarly Mls. Utkal Hydrocarbons which was earlier getting 12.5 M.T. as per the ailotment order dated 31I01/1986 has been allotted 46 M.T. per month and hence Mls. Raysinet Kemikal Company and Mls. Utkal Hydrocarbons have been allotted more raw materials than what they were allotted earlier and they cannot possibly have any grievance against the order dated 23l02/1989. He further submitted that M/s. Deepa Industries has an assessed instalted capacity of 8.5 M.T. per month which works out to 118 M.T. per annum whereas Mls. Deepa lndustrleshave been anotted 102 M.T. per annum by the order dated 23!G.2/1989 as before whereas the other industrial units are getting much less compared to their assessed installed capacities. He accordingly argued that this is not a fit case in which redistribution order dated 2310211989 should be interfered with by the Court. (14) Mr. S.C. Verma learned counsel appearing for the interveners in Writ Petition No.3053 of 1992 submitted that any additional allotment in favour of Mls. Deepa industries over and above what has been allated by the order dated 19I07I1988 would reduce the quantities of raw materials allotted to the aforesaid interveners and therefore no direction should be given by the Court for increasing the allotment made to Mls. Deepa industries. L (16) Considering the aforesaid contentions raised by the leamed counsel