n ' m N G L E B E N c t 5 . ; ” I V E / 2 0 0 5 M / ‘ s . R . K . o r g a n i c C h e m i c a l s ‘ u ‘ o u g h : - P a r t n g r , S h a n k a r N a c h r a n i A g e d a b o u t 2 9 , e a r s S / O - S h r ‘ i R . . a c h r a n i U n i t - 1 0 ( p a r t ) G o n d w a r a , U r l a I n d u s t r i a l C o m p l e x R / O - P a n c h s i l N a g a r C i v i l l i n e R a i p u r ( C . G . ) E B . . N 0 . . . » ‘ — l 3 é 9 / _ 0 ) h . . . . . . . . . . . . . . . . . . . . . . . . . . . . P r e s e m m y m i n i / ” m J m Q ‘ m g / ‘ d a t e d " . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . : . . . . . . ' . . . . . . . 5 l 5 % l v 6 8 F C ’ g 1 ) C o a l I n d i a L i m i t e d , t h r o u g h : - I t s C h a i r m a n , 1 0 , N e t a j i S u b h a s h R a o d K o l k a t a ; ( W e s t B e n g a l ) 2 ) C h a i r m a n c u m m a n a g i n g D i r e c t o r , S o u t h E a s t e r n C o a l F i e l d L i m i t e d . 1 0 S e e p a t R o a d , B i l a s p u r , T a h s i l a n d D i s t r i c t — B i l a s p u r ( C . G . ) T h e G e n e r a } M a n a g e r ( S a l e s ) , 1 0 S e e p a t R o a d , B i l a s p u r , ' T a h s i l a n d D i s t r i c t — B i l a s p u r ( C . G . ) S t a t e o f C h h a t t i s g a r h T h r o u g h : - S e c r e t a r y M i n i s t r y o f I n d u s t r i a l D e v e l O p m e n t / D K S B i n a w a u ; , Q a i P w t C c . q . ) U n i o n o f I n d i a T h r o u g h : - S e c r e t a r y M i n i s t r y o f I n d u s t r i a l D e v e l o p m e n t , N e w D e l h i C 4 3 4 a i m ) W R I T P E T I T I O N U N D E R A R T I C L E 2 2 6 [ 2 2 7 O F T H E C O N S T I T U T I O N O F I N D I A r l l C o n , . 2 . . g ( } L HIOH COURTCTF CHHATriSGARH AT BILA8PUR WRIT PBTITIOM N0.1082/2003 RI8HI MINBRAL8 V8. COAL INDIA LIMITBD 8»OTHERS WRIT PBTITION N0.1083/2005 M/8 ANKIT STBBL8 V8. COAL INDIA LIMITED & OTHERB WRIT PBTITION N0.1084/2005 AGRAWAL OIL EXTRA.CTION LIMITBD V8. COAL IHDIA LIMITBD & OTHBRS WRrrpBTinoM No.ioss/aoos RI8HI INDU8TRIES vs. COAL INDI& LIMITBD & OTHBRB WRIT PBTITIOM N0.1086/2005 AORA.WAL INDUSTraBS vs. COAL INDIA LIMITED & OTHBRS WRIT PBTITION N0.1087/2005 M/8 C.P. COAL COMPAWY vs. COAL IHDIA UMITBD & OTHER8 WRIT PBTI-nON N0.1088/200S BAGBIAR BAUXITB INDUSTRIEa V8. COAL INDIA UMITBD & OTOtBRS WRITPBTITION N0.1089/2006 AKA8H FUBL8 vs. COAL INDIA. UMITBD »OTHBR8 WRIT PBTITION M0.1090/200S MMOHAL BBTBWRISBB vs. COAL IMDIA UBUTOiD &OTHBRS WRITPBnTIOIIM0.1177/aOOS OAMBSH BNTBRFKI8B8 V8. COAL INDIA LUUTBD * OTHBR8 WRIT PBTITION N0.1178/200S 8HRIKANT INDU8TRIBS V8. COAL IBDIA UMITBD & OTHBRB WRIT PBTITION N0.1179/2008 8HOLAY COKB BRIQUBTE8 V8. COAL IWDIA UMITED »OTHBRB WRIT PETITIOH N0.1216/2005 OBBROI GLAS8 INDU8TRIB8 vs. COAL INDIA. UMITBD fc oniBRS WRIT PBSTITION N0.1217/2008 M/S AORAWAL UMB INDU8TMB8 V8. COAL INDIA LIMITBD te OTHBRS WRIT PBTITION HO.1225/2005 M/8 AGRAWAL 8TRUCTURAL MILL8 PVT. LTD. vs. COAL INDIA UMITED ds OTHBR8 WRIT PBTITIOH N0.1226/2005 M/S AORAWAL 8TBBL RB-ROLUWO V8. COAL INDIA LIMITBD fc OTHERS WRJT PBTITION N0.1227/2008 M/S H.S.R. RB-ROLUNG V8. COAL INDIA LIMITBD te OTHBRS WRIT PEiTITION N0.1228/2008 M/S R.K. ORCyUIIC CHEMICALS V8. COAL USDIA LIBUTBD fc OTHBRS WRIT PBTITION N0.1260/2005 USHA OLAS8 WORK8 V8. COAL INDIA LIMITBD to OTHBRB Shri Y.C. Sharma, Advocate and Shri Vinod Lalchandani, counsel for the petitioners. Shri P.S. Koshy, Advocate aad Shri Vinod Deshmukh, counscl for the respondents. Thakur Vijsy Singh, Assistant Solicitor Oeaeral for fhe Unfon of India. Shri Yashwant Singh, Govt. Advocate for fhe State of Clthattisgarh. ORDBR Heard the kamed counsel for the parties. 2. This comnion ordcr shall govera the disposal of the aforesaid cases. Writ Petition No. 1082/2005 shall be the leading case. 3. By fhis petition under Article 226/ 227 of the Constitatton of India, fhe chaUenge is made to the order dated 14/3/2005 stopping fhe suppty ofcoal to fhc pctitioners. 4. It is contended fhat the petitioner is a non-core sector luiit. It was accorded coal liakage aad was drawiag coal suppUes as a tratlitional Unkcd consuincr. Learaed counsel for the petitioaers poiated out that certain coinplaints were received fbat some of the industries are not iu existence aad fhe coal is being sold ia black market. On such complaints being reccivcd, certaia directions were issued by tfae Ministty of Coal and information was caUed for. Proforma known as chcck-Ust was suppUed and the petitioneis were requited to fiU up and supply information according to the check-list. 5. Learaed coiuisel for the petitioners submitted that the petitioners conipanies submitted the mfonnation. Thcy have flled flie documents suppUed and the infonnation subinitted withia the stipulated period to fhe authontics, copics of the same have also been. filed iu the Court record. 6. Leamed couasel for fbe petitioner furfher poiated out fhat though fhc petitwners coinpauics have submitted tfac m&nnation, but soine of the coinpanies did not funush thc uiforaaation as rcquired by notkse dated 16-12-2004 aad they challenged fhe same ,^ before the High Coiu-t of Madhya Pradesh. The High Court of Madhya Pradesh passed the order on 7/2/2005 vide Annexuxe - P/4 that if fhe petititMiere are getting supply <rf coal as per Unk^c coDjditions, it shaU contiaue tiU thc next date of hearitig as per existing liak^e coaditions. It is submitted that the petitioneis uiiits are not doing aay pilfcrage, ffaey are not doing aay black- marketiag. 7. Leamed coiiasel for the petitioner submitted that so far as petitioners are conceraed, if there is any deficiency it may be poiated out and the petitioners companies would do their best to satisfy the requirement. It is contended that stoppage of coal supply pursuant to the order dated 14-3-2005 has becn made arbitraiy aud is fflegal. It is furthcr contendcd that even the notice dated 16-12-2004 does not pcrmit the Departmcnt to do so. 8. The relevant portion of thc notlce dated 16-12-2004 (ABuexure-P/3) is quoted below ; "You are requested to send afresh ihe oopies of documenfs duly rwtarized in the office of ihe undersigned as per the checfc-fei endosed as Arwiexure-1. In case, any ofihe documente is rmt relevcmt to your unit, the reasons thereof need to be indioated vrith docwnentary evidence of competent autharity. You ccre afeo requested to swear affidauii as per the endosed pmforma before the notcay stating fhcct coal received by you in the past has beenfully consumed by your unit and the information/documenfs relevant to yaur unit as per tke endoaed dwdc-list is oorrect. You ca-e requested to kirutty ensure (hcrf <he documenfe are recewed by the offwe of the undersigned latest by 27th Januan/, 2005. You are ateo infarmed that in oase o/ non-reoeipt of the dbove documente withm the stipulated fi'me, i'( shaff fce conchtded thal yau hcwe nothing to produoe and SECL shall be at Hberty to take further cours®of achon vnthout anyjurfher noffce indudi'ng stoppage of coal supply to your unit as z/ per ihe ferms and condftfons of Knfcage and supply of coal." 9, Leamed counsel for thc petftioners submittcd that if the documents would not have been suppUed withia the stipulated time, then accoiduig to tbc notk»it could be concluded tbat the uait has nothing to produce aad SECL is at Uberty to take furtfaer coursc of action. wifhout any ftu-ther notice includtng stoppage of coal supply. It is furfhcr submitted tfaat if the pctitioners have suppUed the documents within tbe stipulated period, the supply should not be stopped till tfae respondents coxne to the conclusion fhat the petitioncrs are doing fhe pilferage and blaclc-marketu^. It is also submittEd fhat wben fhe documents have been supplied ftien they shoiild be scrutinized and deficiencies, ifany, be pointed out in writing. 10. Leamed coiinsel for the respondents contended that it had coine to the notice of Ministiy of Coal that tfaere was a laige scale black-niarkcting of coal which arose because of coal purchased by sinall scale iadustries tbrough alleged Vska^e. It u ftuther contendcd that the information havin^ been received that the black marketiug was beiag done, the State Govemment was to vcrify fhc genumeness of tfac Coiapany. It is slso contended fbat for verification various Jettere were written by the Coal India Ltd. and SECL to the State Govemmeiit The matter was taken by fhc Miaistry aad Hon. Minister for Coal wrote a tetter dated 9<h Octobcr, 2001 (Axmexure-R/1) addressmg to Hoa. Chief Mimster, which reads as undcr: 'Coal India Litmted (dL), a Public Sector Undertaking under tke Ministry ofCociI is a holding company, hcwing seuen prtiduction subsidicay company. C1L used (o grcmt linkages to ihe SSankunwar Sector Constuners, based on •y sponsorship from ihe canoemed Sfafe Goremmen( departments. In view of total deregulattan of pridng and distribution of ooal, andwith a view to remove urmeoessMy inlermedicvy levels between the producer and oonswner, CS, dedded in June, 2001 to deoentralize Ihe system of ooal sales by authoming its subsidiary oompanies to frame appropriate polides. As a result, each subsidicay ooa; compemy has been fmaUasmg ife awn sales policyfor the non-core aector. Needless to add, the Unkagefw the core sectar will oontinue through ihe present systein o/SI,Cs. One ofihe mcdn objectives ofthe new inWcetwe is to try and meet fhe genuine regui'remente of the ooal consumers and atso to provide a direct Wtsrface between the ooal compcuues and the consumers. Haweoer, it is h'fcety (ha( some linked oonsumers may rwt be physically ejdsting or actuaJhi operating on the ground as of now. You would agree that genuine consiuners ofcoal shauld not suffer due to manipulations of rwn-genuine custoniers. As such, i( beoomea essential to re-establish (he banafides of fhe oonsumers who have obtcdned cocd Unkages fn the paatfivm CIL baaed on slate sponsorship. In this exerdse, the Sfcite Gouermnertts have to play a nzos( crua'al rote. CoaJ compames wz. South Eastem Coalfielda Limited has ah'eady addressed yaur officers/apwvaaring auihorities, vnth the request to verify the fwals about Knked oonsumers tooated in your State. Copies of ihe letlers are erustoaed herewith for ready referenoe. In tMs oonnecft'on, I soh"ci< j/our personal intervention so that ihe conoemed officera are dfrected to get fhe verification oampleled wifhm. the stipulated time-frcane, so fhat i'( is possible to identify the genwne cansumers and meet their legitimate cocU requirements. I would afeo like to reiterccte ihat the coa? oompcaaes intend to dtsoontinue (he coa? suppHes to the tinked consumers m ocise no reply is received frwn the ooncemed State autharities before 3ffh Nawember, 2001. As such, I would request you to get tfie venfioation done vrithin the tiTne-frwne indfoated. You iwill appredcUe tha.t the new poUcy oannot be lefl uro'mptementeol pending State verification ad- infwatwn.' II. Leamed counsel for fhe respondents contended tbat verification was done aad through out fhe coimtiy, out of 4000 consiuners, coal supplies to 1 100 consumeis were suspeiided and c',: 2900 consumers wcrc beiag allowed to draw coal fi-om diffcrent companies of Coal India Limited. It is said fhat the tuatter regardiag rcverification of valid industrial Unked units of non-core sector was considered fiuin tune to tune aad on 17/ 11/2004 it was conunuaicated as under: 'Based on the directives ofMaC, functioning ofindustrial Vnked consumers of varioiua States u>ere go( verified by the authorities ofrespective States cmdlntemal Vigilcuwe ofocMjl companies sometimes w.e.f. Ifovember, 2001 in respect of their (a) existence (b) status of curreni opercction cmd (<j actual consumption of ooal. On reoeipt of sucsh. verifioation report, further coal supplies to around 1100 consumers were suspended. As a resutt of this, only around 2900 cve currently being altowed fo drauu coalfrain different coal compcawes ofCIL. Si'nce a considerable time has elapsed thereafter, ihere fe a need to carry oui verification exerase afresh. During this exerdse, an emphasis needa to be given towccrds verifioation of their doaiinenis apart froni their physicat stcrfus. For the purpose of verifying documents, a checfcdsf needs to be prepared by the ooal campcaues themselves, so that their status in reapect of actua? iises of coal oould be got estcUflished. A spedmen chedcHsf u>as earlier provided by CS, for the purpose of enfering into FSAs whi<dt could be helpful for dTawmg final checfcdst. Suffident nuniber ofteams, may, therefore, kindly be got constituted so as to enable them fo compleie the exerdse, say wMnn aperiod ofihree months. Based on the above verification, appropriate acftbn/or regulating the coal suppties be taken after issuing a shaw oause to Stuft defaulter uni'te. * 12. It is stated fhat ffaereafter afler 17/11/2004 subsequent to this cominunication, a ineeting was taken at Kolkata on 24/11/2004 by Hon. Mmister with aU CMDs and CVOs of coal compaiues where Secretaiy (Coa^, Jt. Secretary (Coa^ and Chairman., CIL were also present Durmg the said mccting, a chcckUst consistiag of documents to be verified was placed before the Chair which could found fhe basis of reverification of the valid iadustrial Unked units of non-core sector as advised earlier by the .^'.^ Chairmnn, CIL. Wbilc seciag fhc docuincnts as Usted in fhe checklist, tbe consumers msy also be asked to fumish a swom aflBdavit swearing fherein fhat coal receivcd by fhem in the past has been fulty consuiacd by their uiiits and the inforxBation relevaat to their units iu response to fhe said checldist is correct to the bcst of tlieir knowledge aad record. 13. Leamed counscl for fhe respondents submitted that the co- operation of Central Govemmeat and the State Govenunent is necessaiy. These partics were joined during fh.e cozu-se of aiyunents. Thakur Vijay Siagh, Asstt. Solicitor General for the Union of India contended that fhe Central Govemmeiit would render aU co-operation. In fact, fbe representative of the Central Excise appeared during fhe course of hearmg and assured full co- operation. Shri Yashwant Singh, Govt. Advocate for the State of Chhattisgarh stated that ftie Secrctary, Industiy aad fhe Chief Labour Inspector would reuder due co-operation and the instructions wffl be issued. The stateincnts aic recordcd. 14. Learaed cozuisel for fhc rcspondents further poiiited out that the documents submitted have been exanuaed by fhe V^ilaace Department and the scrutiny of the docuiiients has beeu made. He however submitted fhat after scrutuusatioa, show cause could not be gjyen to flic petitioncrs. It is subnuttcd fhat tbc shcw cause will be given and ftie petitiDners companies woiiM be given opportunily, It is stated that the Man^ement has no prejudlce against aaybody and the onty object is fhat fhcre shoiild be no pilferage and no black marketmg aad the coal should be property utilized aad supplied to fhe units which are ia existence. 10 15. Haviag considered the rival contentions, it is bome out tbat certain complaints were received by Ministty of Coal that thcre was laige scale black markctu^ ofcoal. The vcrification was done and out of 4000 noa-core sectors, 2900 wcrc oaly found correct and 1100 weie suspended. Again tbc exercisc was iiiade on 9/10/2001 aad the matter was ayewa taken up. The spoasorii^; is being done by fhe concemed State and their co-operation is necessaiy, as such the co-operation was soiight by tbe Ministty on 9/10/2001, the vcrificatfon wifhin fhe time fiame was indicated aad then on 17/11/2004 fh.e mattcr was again exaauned. The meetmg was held, a checklist was prepared and on 29/11/2004 the checMist was approved and fiutbcr it was dirccted to swear affidavit sweanng fhereia that coal received by thexn ia the past bas been fully consumed by thcir unlts and the mforaiation relevant to ffae units in response to the said checkUst is coirect to the best of fheir knowledge aad record, Duriag the course of arguments, the petitioners submitted fhat they have complicd with fhe reqtiirements of checMist as appUcable to them. It is contended that some luikage consumcrs may not be physically existmg or actualty operating on the ground as of now. The genuine consiuncrs of coal should not suflfer due to manipulations of non-genume custoaieis. Tbe State Govenunents have to play most crucial role. The verification is to be done by thc authorities who are empowered and the V^ilance Dcpartment of the respondents has started fhe process. Due co-operation will be given by the Central Govenunent as assured by Thakur Vijay Sii^h, Asstt. Solicitor General for Union of India. Thc Chief Labour Inspcctor, Iiidustries Departincnt and the State Excise Departmcnt shaU also render due co-opcration as assiucd by ffaeir 11 respective couasel. It is further diiccted fbat tbe CoUector and thc Superiatendent of PoUcc offhe District concerucd shall also icnder due co-operation, since linkE^e is given based on sponsorship tcow. the State Govenunent's dcpartineQts. The docunacnts bave already been filed by fhe petitioners in this Court as weU, they may be vcrificd aad flie action may be taken as carty as possible preferably withia six wceks. Paper verification inay not scrvc tfae purpose, pbysical verification be made oa the spot. Needless to say fhat if required on spof veriBcation, photographs may be takeu and the videography may also be done so that there may be complete transparcncy. 16. At fhis stage, Shri Sharma, leamed counsd for flie pctitioners submits that fhe pctltioners have filed thc documents before fhe aufliority as required on 16/12/2004 as per checkUst. They have also subinitted the documents which are relevant for tfaeir units and reasons thereof have been mentioned with documentaiy evidencc. In fbat view of fhe inatter, the prayer is that fhose pctitioners who have filed the documeats before the authority as required on 16/12/2004 aad have also filed thc docTiments bcfort tfais Court, they may be aBowed to continue suppty of coal as per liakage conditions tiU verification. SItri Koshy, tearacd couascl for the responde&ts, subinits that pendu^ decision, the petitioners wfao have ffled tbe documents bcfore the aufhority and this Coxut may be allowed to contiaiie supply of coal as per link^e coiiditions. 17. Haviag ttius considered, it is diiected fbat pending decision the petitioners shaU be aUowed to contmuc suppty of coal as per linkage conditioas. 12 18. Subject to what has been stated abovc, these petitions stand disposed of. 19. Consequenfly, a]l the pending appUcations sball also stead disposed of. Copy ofthis order be placed ia tliecoiinected mattera. Parties are entifled to copy oftbjs^rdeE.^ ^^_ \ Fakhruddin Judge 1/4/2005 Hande/-