M/S Ashoka Smokeless Coal Ind. P. Ltd. & ... vs Union Of India & Ors

J U D G M E N T [Arising out of S.L.P. (Civil) No. 20471 of 2005] WITH CIVIL APPEAL NOS. 5329, 5303,5304,5305,5324,5306,5307,5308,5309,5310,5311, 5312, 5313, 5314, 5317, 5315, 5318, 5319, 5320, 5321, 5322, 5323, 5316 OF 2006 [Arising out of S.L.P. (Civil) Nos. 4300, 20541-42, 21792, 22596, 23302, 23305, 23323-23327, 23345, 23374, 24403, 24034, 25059, 25131, 25140, 25149-50, 25192 OF 2005 & 899 OF 2006] WITH T.C. (CIVIL) NOS. 89-124, 126-136 OF 2005 AND T.C. (CIVIL) NOS. 4-5, 7-45, 75, 125, 137-139 OF 2006 WITH CIVIL APPEAL NOS. 5547 OF 2004 & 2972-2976 OF 2005 AND WRIT PETITION (CIVIL) NO. 67 OF 2005 S.B. SINHA, J :

3. The Committee should normally meet once in three months. The Department of Mines will provide the required Secretarial assistance to the committee."

The consumers drawing coal prior to introduction of non-core sector linkages from Coal India Ltd. were categorized as traditionally linked consumers and were allowed to draw coal from subsidiary companies thereof based on the past trend and treated at par with newly linked consumers in post 1978 period. However, conditions of linkages were made equally applicable to them. In 1982, non-core Linkage Committee was constituted by Coal India Ltd. as a part of the process of simplification of procedures for distribution of coal.

With a view to consider the matter afresh, a meeting of the Standing Committee on Coal and Steel (2004-2005) took place wherein it was resolved :

According to the coal companies approximately 26.5 million tonnes of coal were to be sold at E-Auction price as a result whereof the share of non- core sector in dispatches would be enhanced roughly to the extent of 8% against the present share of about 5.4%. No details in respect thereof, however, have been furnished.

The Central Government, thus, directed the coal companies to supply coal to NCCF and other agencies at 20% above of the notified price instead of weighted average E-Auction price; thereby taking them out of the purview of E-Auction. Similar benefit was extended to the agencies of the Central Government and the State Governments. By a letter dated 08.04.2005, the Ministry of Coal allocated supply of coal of 2 MT each to be supplied to NCCF and the State Governments nominated agencies for the financial year 2005-06. Yet again on 20.07.2005 the Ministry of Coal directed that the price to be charged for supply of coal to NCCF and the State Government nominated agencies to be at a floor price i.e. 20% above the fixed notified price of a particular grade instead of weighted average E- Auction price. The quantity of supply of coal to the State Government nominated agencies was further increased by one MT for 2005-06. This Court's attention has, however, been drawn to various cash memos. issued by the NCCF, from a perusal whereof it would appear that the NCCF instead of supplying coal only to a cross-section of tiny and small consumers e.g. potters, blacksmith, tea stall vendors, who require a very small quantity of coal for running their business, had been selling coal even to linked consumers. The Chairman of Coal India Ltd., however, vide letter dated 30.09.2005 addressed to the Chief Secretaries of various State Governments sought to define the tiny and small consumers stating that those whose consumption was less than 500 tonnes per year would come within the purview thereof. Admittedly, small consumers were to be charged not exceeding 105% of the base price at which coal had been received from Coal India Ltd and its subsidiaries. By the said letter, it was directed that the coal bill to the tiny/small consumers shall separately include base price and other charges like transportation, royalty, taxes, etc. Representations to set up smokeless fuel units :

The entrepreneurs some of whom are Appellants before us are small scale industries. They are registered with the Directorate of Industries of the respective States. They are also linked industries for the purpose of obtaining supply of coal from the coal companies herein. The entrepreneurs some of whom are Appellants before us having been so invited, pursuant to or in furtherance of the promises made by them allegedly set up plants for manufacturing smokeless coal.

In relation to fixation of price or other related matters, the Central Government, therefore, had no say. Under the Colliery Control Order 2000, the power of the Central Government is merely to regulate supply and not to regulate price, the price of coal, it will bear to state, having been deregulated.

Promissory Estoppel :

Legitimate Expectation :

Conclusion :