Case: Pallavi Refractories &amp; Ors.Etc.Etc Vs. M/S.Singareni Colleries Co.Ltd.Etc.Etc

3. Appellants are proprietors of various coal based small-scale industries who draw C and D grade coal from the respondent. Respondent is a state owned company in which 51% shares are held by the State of Andhra Pradesh and 49% shares are held by the Government of India4. Government of India has identified 7 crore / priority sector industries . They are: 1. Exports. 2. Power Utilities, 3. Defence, 4. Railways (Loco), 5. Fertilizers, 6. Steel including Sponge Iron and Pig Iron and 7. Other metallurgical industries who use coal / coke for their own use. Core/ priority sector industries alone consume about 90-95% of the coal produced and left over 5% plus are supplied to the non-core / unlinked sector industries to which the appellants belong5. The Government of India has been fixing the grades and prices of the coal produced in India in pursuance of clauses 3 and 4 of the Colliery Control Order, 1945 as continued in force by Section 16 of the Essential Commodities Act, 1955. It appears that the company had accumulated heavy losses and was reeling under financial problems. The Government of India by its notification dated 22.3.1996 issued under clause 3(2) of the Colliery Controller Order, 1945 deregulated the price and distribution of non-coking coal of grades A, B & C. By a further notification dated 12.3.1997, decontrol was extended to some other grades of coal as well. By a communication dated 13.3.1997 addressed by the Government of India (Ministry of Coal), it was clarified that the Board of the respondent company will henceforth determine the economic price to be charged for the coal produced from time to time." Soon thereafter, the respondent issued the Price Notification No. 3/96-97 dated 14.3.1997. Clause 10 of the Price Notification provided that non-core / unlinked sector industries are required to pay 20% additional price over and above the notified prices. Clause 10 reads as follows:"Any linked customers who are drawing B, C and D grades of coal are required to pay 20% additional price over and above the notified prices."

Court's reasoning:
20. Keeping in view the law laid down by this Court in Union of India vs. Cynamide India Ltd. (supra) and M/s. Shri Sita Ram Sugar Co. Ltd. vs. Union of India (supra), in our opinion, the High Court did not fall into an error in upholding Clause 10 of the Price Notification dated 14.3.1997. The High Court rightly came to the conclusion that Clause 10 of the Price Notification did not violate the equality clause of Article 14 of the Constitution of India. By evolving the dual price policy and charging lesser price from the core-sector industries the respondent has not treated equals as unequals or that the classification made was not rational.