Nifty Chemicals Pvt.
Ltd. Vs. Union of India & Ors.  INSC 441 (27 February 2009)
JURISDICTION I.A. No. .....with I.A. Nos. 1-2 in T.C.(Civil) No. 113 of 2005
Versus WITH I.A. No.. ........ and I.A. No. 1 in T.C.(C) No. 115 of 2005 I.A.
Nos.1-3 & 4 in T.C.(C) No. 117 of 2005 I.A. No......... and I.A. No. 1 in
T.C.(C) No. 118 of 2005 I.A. Nos. 1 & 2 and I.A. No. ....... in T.C.(C) No.
119 of 2005 I.A. No........and I.A. Nos. 1 & 2 IN T.C.(C) No. 120 of 2005
I.A. No.......and I.A. Nos. 1 & 2 in T.C.(C) No. 121 of 2005 I.A. NO. 1 in
T.C.(C) No. 122 of 2005 CONTEMPT PETITION (C) NO. 47 OF 2008 in T.C.(C) No. 116
of 2005 CONTEMPT PETITION (C) NO. 49 OF 2008 in T.C.(C) No. 112 of 2005 ORDER
Dr. Mukundakam Sharma, J.
this order we propose to dispose of the above mentioned interlocutory
applications arising out of Transfer Case Nos. 113, 115, 117, 118, 119, 120,
121, 122 of 2005 and contempt petition No. 47 of 2008 in T.C. (C) 116/2005 and
contempt petition No. 49 of 2008 in T.C. (C) 112/2005.
basic facts in all these applications are similar. Therefore, the facts in I.A.
No. .....with I.A. Nos. 1-2 in T.C. (Civil) No. 113 of 2005 are taken as
illustrative for the purpose of our decision.
present application is filed on behalf of the four applicants, namely, M/s.
Trimurti Moulds Pvt. Ltd., Coventry Stonewares Pvt. Ltd., Vidharbha Ceramics
Pvt. Ltd. and Ceramics Industries (I) Pvt. Ltd. through their respective Directors
praying for issuance of directions to the M/s. Western Coalfields Ltd. (a
subsidiary of Coal India Ltd) being respondent herein for implementation and
execution of the direction given by this Court in its order dated 30.10.2007 in
T.P. (C) No. 100 of 2006.
The prayer was to the
following effect : - (i) Direct the respondent Coal Company i.e. M/s. Western
Coalfields Ltd. to implement and obey their own undertaking given before this
Court and as recorded by this Court in it's order dated 12.12.2005 and
30.10.2007 in Transfer Petition (Civil) No. 100 of 2006 and analogous matters
and refund excess money deposited by the Petitioners/Applicants herein over and
above the Notified Price since the introduction of E-auction along with interest
at the rate of 12% per annum, and/or (ii) Direct the Respondent M/s. Western
Coalfields Ltd. to pay Bank interest on the amount already refunded to
applicants (on 25.07.2008) not only up to 30.4.2008 but till the date of
applicants are non-core linked consumers of coal of M/s. Western Coalfields
Ltd. It is stated in the application that the applicants and other similarly
situated non-core linked consumers were being supplied coal by M/s. Western
Coalfields Ltd. at fixed price which is stated to be Notified Price, which was
used to be fixed once in a year by the respondent coal company. The Coal India
Ltd. and its subsidiary coal company like the respondent herein introduced a
new Scheme in the year 2004 for sale of coal and the said scheme was made
applicable to even non-core linked consumers like the applicants herein. The
aforesaid Scheme was called as "E- auction Scheme" in which price of
coal was to be determined by market forces in place of fixed price, i.e. the
The validity and
legality of the aforesaid scheme of E-auction was challenged by the various
companies like and including the applicants herein by way of writ petitions
before the Bombay High Court, Nagpur Bench. The writ petition of the applicants
was registered as Writ Petition (Civil) No. 2421 of 2005. In the said writ
petition the High Court passed an interim order on 21.06.2005, whereby and
whereunder Coal India Ltd. and M/s.
Ltd. were directed to supply coal to the applicants at Notified Price subject
to petitioner depositing with M/s. Western Coalfields Ltd. the difference
between the E- auction price and the Notified Price.
view of and in terms of the aforesaid interim order applicants started lifting
coal after depositing the amount in cash, with respect to the difference
between the average E-auction price and the notified price. Similar writ
petitions were filed challenging the legality of the aforesaid Scheme of sale
of coal through E-auction in various other High Courts. Interim orders were
passed by a number of High Courts also, and therefore, special leave petitions
came to be filed by the companies like the applicants in this Court. The coal
companies preferred a number of transfer petitions in this Court seeking
transfer of all the writ petitions pending on the aforesaid subjects before the
various High Courts to this Court. The special leave petitions filed by the
various coal consumers in this Court and the transfer petitions preferred by the
coal companies were taken up together and this Court under order dated
12.12.2005 finally allowed all the transfer petitions preferred by different
coal companies by passing a detailed order. The operative portion of paragraphs
8 and 9 of the aforesaid order is reproduced hereinbelow :
note of the circumstances as a whole we feel that it would be just and proper
to direct the petitioner companies/firms, having coal linkage, to pay in
addition to the notified price, 33 1/3 % of the enhanced price, each time they
claim supply of coal to them based on the linkage and by furnishing security
for the balance 66 2/3 % of the enhanced price with an undertaking filed in
this Court that the said part of the price will also be paid within 6 weeks of the
decision of this Court in the Writ Petitions in case the writ petitions are
decided against the petitioners. To protect the interest of the petitioners and
to ensure that no permanent harm is Page 5 of 16 caused to them we also think
it proper to record the undertaking given on behalf of the Coal India Ltd. and
its subsidiaries that in case this Court upholds the challenge made by the
petitioners and allows the writ petitions filed by them, the enhanced price of
33 1/3% now to be paid by the petitioners will be refunded to the petitioners
within 6 weeks of the judgment of this Court with interest thereon at 12% per
annum from the date of payment till the date of return to the concerned
the same, we think it appropriate to direct that on the concerned petitioner
paying the notified price plus 33 1/3% of the enhanced price as per the
E-auction and furnishing security for the balance 66 2/3% of the enhanced
E-auction price, and filing the undertaking in this Court within four weeks
from today, the coal as per the linkage will be supplied to the concerned
petitioner within a period of 3 weeks from the date of such payment.
It is clarified that
there will be no obligation on the part of the Coal India Ltd, and its
subsidiaries to supply the coal as per this interim order in the case of those
who have not complied with the order for payment of 33 1/3% of the difference
in price in addition to the notified price and for furnishing of security for
the balance 66 2/3% of the enhanced price, and filing the undertaking in this
Court to pay the entire amount if they do not succeed in their challenge. It is
directed that this interim order will enure until these writ petitions are
finally heard and disposed of by this Court."
18.1.2006, the aforesaid order passed on 12.12.2005, came to be clarified in
the following manner :
note that assurance has been given by the learned Solicitor General appearing
on behalf of Coal India Ltd. and other subsidiary Companies that the interim
order of this Court date December 12, 2005 shall be implemented in letter and
We would clarify that
so far as furnishing of security for the balance 66 2/3% of the enhanced price
is concerned, the Coal Companies shall not insist on furnishing bank guarantees
and shall supply Coal on their furnishing undertaking by the Managing Director
or Managing Partner of the Company/Firm, as the case may be, apart from
indemnity bonds or other types of securities subject of course to the
compliance of other directions."
The applicants have
stated in the application that pursuant to the aforesaid orders passed by this
Court they submitted entire detail in a chart showing the amount which the
respondent M/s. Western Coalfields Ltd. was liable to refund to the applicants.
Court by the judgment and final order dated 01.12.2006 in Civil Appeal No. 5302
of 2006 titled as Ashoka Smokeless Coal India (P) Ltd. v. Union of India,
reported in (2007) 2 SCC 640 upheld the challenge of the applicants to the
scheme of E-auction. While allowing the writ petitions this Court held that the
aforesaid scheme of E-auction was invalid and declared the same as ultravires
of Article 14 of the Constitution of India and quashed the said E-auction Scheme.
Consequence of the
said judgment and order is that the coal companies like the Respondent were
required to refund the Page 7 of 16 entire price paid by the applicants over
and above the Notified Price as per their undertaking before this Court and as
recorded in the order dated 12.12.2005 and 30.10.2007.
violation of the aforesaid orders passed by this Court contempt petitions were
filed in which the following order came to be passed by this Court on
Petitioners shall furnish all documents to the learned Advocates-on-Record of
the respondents, showing the actual payments made to any of the subsidiaries of
the Coal India Ltd. and the difference between the amount paid and the amount
notified by 12th November, 2007.
ii) The documents
furnished by the Petitioners shall be verified by the officers of the concerned
Coal companies within four weeks thereafter.
iii) In case of any
difference, the learned counsel, would deliberate upon the matter so as to
enable them to come out with an accepted solution.
iv) The Bank
guarantee furnished by the Petitioners shall stand discharged"
representation filed in that regard by the aforesaid four applicants and no
effective steps having been taken by the Respondent for redressal of their
grievances, the present application was filed in which an affidavit also came
to be filed on behalf of the M/s. Western Coalfields Ltd., the respondent Page
8 of 16 herein. In the said affidavit the respondent coal company has stated on
oath that after verification of all records and after considering the report of
the Committee constituted under the order of this Court and on their
recommendation the respondent herein released the refund payments to 118
parties out of 122 parties, as the remaining 4 parties were directed to submit
documents, namely, money receipt and PAN so as to enable the company to release
their amount. The company has further stated in their affidavit in the
following manner :
parties who have deposited the additional amount due to increase in the
e-auction price at the time of delivery are also entitled to refund alongwith
the light of the aforesaid pleadings of the parties we have heard the learned
counsel appearing for the parties.
M.L. Verma, the learned senior advocate primarily made following threefold
submissions before us. His first submission was that the interest which was
payable pursuant to the orders of this Court on the extra amount taken and
received by the respondent in terms of the interim orders of this Court is payable
till the date when extra money taken by the respondent was refunded but instead
the respondent coal company has computed the said interest only till 30.4.2008
and not till 28.6.2008, when the aforesaid extra money taken by them was
actually refunded. His second submission was that the respondent-Company has
also not paid to the applicants the entire interest that actually accrued on
the fixed deposit receipt which was deposited on the account of the applicants.
It is next submitted by him that the writ petition of the applicants registered
as Writ Petition (Civil) No. 6629 of 2005 is still pending disposal in the High
Court of Judicature Bombay, Nagpur Bench and the said High Court did not take
up the writ petition for final disposal as the issue with regard to excess
amount over and above Notified Price paid prior to passing of the order dated
4.7.2005, i.e. from the date on which E-auction Scheme came to the existence is
pending consideration before this Court. He further submitted that since now
this Court has disposed of the said issue, there should be a direction to the
concerned High Court to dispose of the aforesaid writ petition as expeditiously
Anip Sachthey, the learned counsel appearing for the coal company during the
course of his submission submitted that they have paid the amount which became
refundable to all the claimants who are entitled to receive it inclusive of
interest in fixed deposit calculated up to 30.4.2008 as the fixed deposit
receipts were time bound and, therefore, a fixed date was taken for calculation
of the interest which was 30.4.2008. He also submitted that whatever interest
is due and payable to the applicants have already been paid while refunding the
amount due and payable to the applicants. He further submitted that the coal
company has no objection if a direction is issued to the Bombay High Court,
Nagpur Bench for early disposal of the aforesaid writ petition for according to
him the issues raised in the said writ petition would now be governed and
covered by the decision of this Court.
considering the aforesaid submissions in the light of the pleadings of the
parties we find that the area of controversy and the dispute between the
parties, as highlighted in the Page 11 of 16 present application, lie in a
very narrow compass for during the course of arguments Mr. Sachthey, learned
counsel for the respondent coal company has fairly stated that the coal company
cannot have any objection to pay the interest accrued on the amount payable to
be computed up to 28.6.2008 when the amount came to be actually refunded to the
applicants. We also find justification in the claim of the applicants for the
respondent coal company had agreed to refund the amount, if later on found to
be due and payable with interest till the date when it is actually refunded. In
fact that was also the intention of the order passed by this Court when the
interim order to that effect was passed. We may point out that though the
applicant in the application stated that the amount was refunded on 25.7.2008
but however during the submissions it was agreed that the same was refunded on
to us, since the applicants were refunded the extra amount deposited by them
only on 28.6.2008 they are entitled to receive interest computed and calculated
up to 28.6.2008 and not till 30.4.2008, for which there is no basis at all.
Interest Page 12 of 16 is payable on the amount found due and payable on the
ground that the concerned person is deprived of the benefit of the aforesaid
amount which is otherwise due and payable to it.
The intention is to
compensate the concerned person for being deprived of utilizing the money for
the period during which he was unable to utilize the amount. Similarly, the
extra amount which was paid by the applicants was invested in the fixed deposit
receipt pursuant to the order of this Court.
is an apprehension in the mind of the applicants that the entire interest
accrued on the said FDR, is not paid to the applicants. In that view of the
matter, we are of the considered opinion that whatever interest was received by
the coal company as against the FDR made on the amount deposited by the applicants
towards extra amount charged, and not covered by the directions issued in the
preceding paragraph may be paid back to the applicants. The aforesaid aspect
could be settled between the parties if the coal company provides to the
representatives of the applicants the statement of the bank indicating the
interest that actually accrued and was Page 13 of 16 paid on the aforesaid FDR
to the Respondent - Company, which was made against the extra payment made by
are also of the considered opinion that since this Court has finally pronounced
the judgment and order on 1.12.2006 in respect of the challenge to the Scheme
of E-auction and passed consequential orders thereof, the writ petition filed
and registered as Writ Petition (Civil) No. 6629 of 2005 could now be disposed
of by the Bombay High Court, Nagpur Bench.
Consequently, we pass
the following directions in terms of the discussions and observations made
I. the respondent
coal company shall now pay interest at 12% per annum in terms of order of this
Court dated 12.12.05 on the extra amount which was refunded in terms of the
claim of the applicants calculating and computing the same till 28.6.2008 when
the said amount was actually refunded to the applicants and not till 30.4.2008
as has been done by the applicants.
respondent-Company shall make available to the representatives of the
applicants statement of the bank indicating interest accrued on the FDR created
as against the extra amount paid by the applicants and not covered by the
directions issued in the preceding paragraph.
III. We also issue a
direction to the Bombay High Court, Nagpur Bench now to take up the Writ
Petition (Civil) No. 6629 of 2005 for consideration and disposal as expeditiously
as possible. It is needless to say that all the contentions relating to the
issue of extra amount over and above the Notified Price, that is to say,
difference between average E-auction and Notified Price in cash and the issues
relating to validity of Scheme of E- auction shall be decided in terms of the
decision of this Court those are covered and governed by the said decision. If,
however, any other and additional contentions are raised in the writ petition
and pleadings of the parties which are not covered by the issues decided by
this Court, the same shall be decided by the High Court as expeditiously as
possible and according to law.
All the applications
and contempt petitions stand disposed of in terms of this order.