The
State of Bihar Vs. The TATA Iron Steel Co. Ltd.
[1995] INSC 136 (17
February 1995)
Kuldip
Singh (J) Kuldip Singh (J) Hansaria B.L. (J) Majmudar S.B. (J) Kuldip Singh,
J.:
CITATION:
1995 AIR 1170 1995 SCC Supl. (2) 4 JT 1995 (3) 479 1995 SCALE (1)792
ACT:
HEAD NOTE:
1. The
TATA Iron and Steel Company Limited (the Company), respondent in the appeal
herein, is primarily engaged in the manufacture of iron and steel/iron and
steel materials.
According
to the Company, it owns captive "coking coal mines"- has also
installed "coke ovenplants" within the factory premises and as such
it comes within the definition of 'colliery' under the Colliery Control Order,
1945 (the Order) promulgated by the Government of India. The State of Bihar,
with the prior concurrence of the Central Government, and in exercise of the
powers conferred by Section 3 of the Essential Commodities Act, 1955, has
issued an order called the Bihar Trade Articles (Licenses Unification) Order,
1984 (the Unification Order). The question for consideration in this appeal is
whether the Company is a 'dealer' within the Unification Order, and as such is
governed by the provisions thereunder. A Division Bench of the Patna High Court
has answered the question in the negative and in favour of the Company. This
appeal by the State of Bihar is against the judgment of the Patna
High Court dated April
14, 1988.
2.The
Company has its registered office at Bombay and its integrated steel plant at Jamshedpur. The captive coking coal mines of the Company arc in the Jharia Coal
Fields and at West Bokaro in the State of Bihar. The coking coal extracted and
raised from the mines is beneficiated in the coal washing plants, sterilised at
Jamaduba and West Bokaro and thereafter the entire
production is transferred to the Company's coke oven plants at Jamshedpur for converting the same into Hard
Coke meant for use in the blast furnaces.
According
to the Company about 85 per cent of its coal requirement is received from the
captive coal mines and the remaining 15 per cent is procured indigenously or by
import from abroad. It is asserted by the Company that for the purpose of steel
manufacturing only metallurgical quality of coke is used and for that purpose
the coking coal, whether received from the captive coal mines or otherwise, is
converted into metallurgical coke through the process of coke ovenplants.
483
According to the Company inferior quality of coke such as middlings, and coal
rejects produced at the Company's collieries and some of the coke fractions
such as coke breeze, pearl coke, etc. produced at its oven plants which are not
of metallurgical quality and not capable of being used in its steel plant that
arc sold and disposed of by the Company. It is stated that the disposal of such
unwanted and unusable material arising in the continuous process of the
integrated manufacturing operation becomes a necessity for preventing
congestion in the steel plant.
3.The
Supply Inspector of the State of Bihar seized six truck,% loaded with coke breeze which were sold by the
company without obtaining licence as envisaged under the Unification Order.
Criminal proceedings under Section 7 of the Essential Commodities Act, 1955 for
violation of the Unification Order were also initiate against the Company,
which was challenged by way of a writ petition before the Patna High Court. The
primary contention of the Company before the High Co was that it being a
colliery under the Order which was Central Government promulgation, the
Unification Order issued the State Government was not applicable The High Court
by the judgment dated November 12, 1986 dismissed the writ petition. The
Company challenged the judgment of the High Court by way of special leave
petition before this Court. This Court in Civil Appeal 576 of 1986 decided on December
3, 1987 set aside the judgment of the High Court and remanded the matter for
fresh decision. The operative part of the order is as under:
"We
are of the view that very contentious issues were involved in the matter. The
aspects that required examination could not have been disposed of in the matter
in which the Division Bench has dealt with it. The question as to whether the
appellants are dealers, has to be examined as without the appellants being a
dealer within the meaning of the 1984 Order, no liability to comply with the
impugned requirements of the Order, would arise. Even Mr. Jai Narain found it
difficult to ask for sustaining the impugned order as relevant aspects have not
been examined.
Taking
all these aspects into consideration, we set aside the order of the High Court
and remit the matter to it for fresh disposal on merits after hearing the
parties. Ful l opportunity should be given to the parties to place their
arguments and the case should be disposed of in accordance with law. We did not
intend to express any opinion on merit and if anything has been said it should
be taken by way of justification for the remit."
4. On
remand, the High Court heard the parties afresh and by the impugned judgment
dated April 14, 1988 allowed the writ petition. The High
Court came to the conclusion that the Company was a colliery and as such was
governed by the provisions of the Order. The High Court reached the said
conclusion on the following reasoning:
"8.
As noticed above, the Company is the owner of coal mines as well as coke oven
plant.
Colliery
within the meaning of die definition of the Central Order not only any mine or
open working where the getting of coal is the principal object of the mining,
quarrying or other operations earned on therein but includes a plant for the
production of coke or for the washing of coal. In view of the inclusive
definition, coke oven plant and coal washeries are also collieries within the
meaning of that Order.
9.
Learned Standing Counsel sub- 484 mitted that the word 'include' in the context
mean only such coke oven plant which is near the vicinity of a coal mine and
shall be a colliery. This submission cannot be accepted.
The
word 'include' is generally used as a word of extension and when this word is
used it adds to the word or phrase a meaning which does not naturally belong to
it. The word 'colliery' ordinarily will signify a coal mine, but because of the
use of the word 'include' in the definition of colliery, it must be construed
as comprehending not only such things as it signify according to its natural
import, but also those things which the interpretation clause declares that
they shall include. Thus where 'includes' has an extending force, it adds to
the word or phrase a meaning which does not belong to it.
Reference
may be made to the South Gujarat Roofing Tiles Manufacturers Association and
another vs. The State of Gujarat and another 1976 (4) SCC 601.
10.
The word 'colliery' as defined in the Central Order does not envisage that coke
oven plant must be near about or in the vicinity of coal mine. We may mention
that coal mines and coke oven plant belonging to the Company have not been nationalised
under the Coking Coal Mines (Nationalisation) Act, 1972 or the Coal Mines (Nationalisation)
Act, 1973. It must, therefore, be held that the coke oven plant at Jamshedpur
belonging to the Company is a 'colliery' within the meaning of the Central
Order-" The High Court further followed its earlier judgment in Black
Diamond Industries Others v. Coal Controller and others, 198 B.L.T. (Reports)
127, and held as under:
"For
the reasons given in Black Diamond case, it must be held that to the coke oven
plant at Jamshedpur the Central Order applies and the
Unification Order shall have no application."
5. In
Black Diamond's case, a Division Bench of the High Court examined the
provisions of the Order and also the Unification Order, and came to the
conclusion that the two operated in different fields. The Bench further came to
the conclusion that the Order dealt with producers of coking coal where as the
Unification Order was only applicable to those who were not the producers of
coal. It would be useful to reproduce the High Court reasoning in Black
Diamond's case, which is as under:
"A
comparison of the different provisions of the Orders noticed above, brings out
this picture. Colliery Control order is applicable throughout India and deals with coal including coke.
The provisions which are found in the Coal Control Order, Unification Order and
Display Order with regard to sale, purchase, storage price, inspection,
compliance of order given by different authorities under those orders and
filing of returns are also provided in the Colliery Control Order. Colliery
Control Order further provides for regulating production of coal which is not
there in any of the Bihar Orders. Colliery Control Order is a special statute
which deals with colliery which means a mine or open working where the heating
of coal is the principal object of the mining, quarrying or other operations earned
on therein and includes a plant for the production of coke. None of the Bihar
Orders deal in colliery. The very significant difference between Colliery
Control Order on one hand and the Bihar Orders on the other is that whereas the
former Order specific-ally deals with colliery and producers of coal the latter
Orders, i.e., Bihar Orders do not specifically include them but purport to deal
with all dealers of coal.
Respondents
want us to include within the ambit of 'dealer' in Bihar Orders producers of coal
also. This cannot be done.
485
Firstly, Colliery Control Order deals with producers of coal and the definition
of 'dealer' in Bihar Orders do not include producers of coal. Secondly,
Colliery Control Order is an exhaustive Code in respect o f Colliery. If Bihar
Orders are made applicable to Colliery, then these Orders will come in conflict
with Colliery Control Order. But this conflict can be avoided if it is held
that Bihar Orders do not apply to Colliery.
Thirdly,
according to the respondents, when Colliery Control Order and Bihar Orders
operate in different fields, there is no scope for holding that Bihar Orders
will operate also in the field covered by Colliery Control Order.
It was
urged on behalf of the respondents that in the Colliery Control Order, there is
no provision for obtaining a licence. This appears to be true, but the issuance
of licence under the Unification Order is meant for controlling the sale,
purchase, and storage and contravention of terms and conditions of the licence
has been made penal.
If
Colliery owners, who are the petitioners, are required to obtain licence under
the Unification Order, that must be for the purpose that production sale,
purchase and storage of coke may be regulated within the terms and conditions
of the licence. Since the State Government cannot regulate the production,
sale, purchase and storage of coke colliery owner, no licence is required to be
taken by the colliery owners under the Unification Order." 6.Learned
counsel for the State of Bihar has vehemently contended that the coke oven
plants of the Company having been constructed within the factory premises at Jamshedpur,
it cannot be considered to be a part of the coal mine and as such cannot come
within the definition of 'colliery' under the Order. To appreciate the
argument, it would be useful to examine the definition of 'colliery' given
under clause 2(2) of the Order which is as under:- "`colliery' means any
mine or open working where the getting of coal is the principal object of the
mining, quarrying or other operations carried on therein and includes a plant
for the production of coke or for the washing of coal."
7. A
plain reading of the above quoted definition makes it clear that it
specifically includes 'a plant for the production of coke or for the washing of
coal'. The inclusive definition has been given with a purpose.
Ordinarily,
the coke oven plant is at a place where coking coal is converted into Hard Coke
for the purposes of using the same in the industry. Coke oven plants are,
therefore, set up at various places where Hard Coke is needed for the industry,
Since hard coke also comes within the definition of 'coal' under die Order and
is subject to control by the Central Government authorities, the coke oven
plants which produce hard coke have been rightly included in the definition of
'colliery'. We agree with the above quoted reasoning given by the High Court in
reaching the conclusion that the Company is a colliery under the Order.
8. The
crucial question to be considered is whether a colliery which is governed by
the Order can, in addition, be made to follow the provisions of the Unification
Order issued by the State Government. We may, therefore, briefly examine the
provisions of the Order and the Unification Or- der.
9.
Clause 4 of the Order provides that the Central Government may fix the price at
which or the maximum or the minimum price, or both, subject to which coal may
be sold by colliery owners. Under Clause 486 5 no colliery owner or his agent
can sell and no person can purchase, coal at a price which is in excess of the
price or the maximum price or below the price or the minimum price fixed under
clause 4. Clause 7 lays down that every colliery owner or an allottee of coal
under the Order shall, on being requested to do so, submit returns and other
information in such form and within such time as may be specified in the notice
or direction. Clause 8 provides that the Central Government may from time to
time issue such directions as it thinks fit to any colliery owner regulating
the disposal of his stocks of coal or of the expected output of coal in the
colliery, during any period. Under clause 10A the Coal Controller may by order
direct that any coal despatched by any colliery owner which is in transit shall
subject to such terms and conditions, if any, as the Coal Controller deems fit,
be diverted and delivered to another person specified in the order. Clause 11
provides that the Central Government may issue such directions as it thinks fit
to any colliery owner prohibiting or limiting the mining or production of any
grade of coal. Clause 28 prohibits any person from using coal so allotted
otherwise than in accordance with the conditions contained or incorporated in
the order of allotment. Clause 12E provides that no person shall acquire or
purchase any coal from a colliery and no colliery owner or his agent shall despatch
coal from the colliery except under the authority and in accordance with the
conditions contained in a general or special authority from the Central Government.
Clause 12G provides that notwithstanding anything contained in Clause 12A, 12B
and 12E, any person may from September 15, 1975 without any order of allotment
or authority acquire or purchase despatch or transfer hard coke produced from
beehive ovens, country ovens and bye-product ovens, provided that nothing in
this clause shall apply to hard coke in respect of which direction is issued by
the Central Government under Clause 8 of the Order. It may be mentioned that by
the notification dated July 24, 1967 the Central Government has authorized any
person to acquire despatch or transfer without any order of allotment or
written authority non coking coals of all grades produced in all coal fields,
coking coals not required for metallurgical consumers and coal produced in
Assam provided that such coal shall be consumed within India.
10.It
is obvious from the provisions of the Order that it tends to regulate coal from
the stage of production to the stage of consumption including price control and
inspection.
Under
the scheme of the Order, the coking coal from various coal mines is allotted to
various persons, The provisions of the Order give wide powers to the Central
Government to ensure that the coal extracted from the mines is properly utilised
for the benefit of the industry and other purposes.
Apart
from that, the provisions of the Order give wide powers to the Central
Government to keep a track on the allotted coal so that the same is not misutilised.
11.
The Unification order defines the coal to mean coal, coke and other derivatives
including soft and hard cokes of various grades. 'Dealer' has been defined
under Clause 2(e). 'Retail dealer' has been defined to mean a person engaged in
the business of purchase, sale, or storage of any article specified in Schedule
1 for the purpose other than personal consumption within the storage limit
fixed by the Gov- 487 ernment from time to time. 'Wholesale dealer' has been
defined to mean a person engaged in business of purchase, sale or storage of
any article specified in Schedule 1 for the purpose other than personal
consumption within the storage limit fixed by the Government from time to time.
'Coal
dump holder' means a person or firm appointed by or on behalf of the Government
as such who is engaged in the busi- ness of storing coal from collieries on the
basis of allocation made by the Government or by any authority empowered by the
State Government for sale to retail deal- ers. Part 11 of the Unification Order
provides for issuance of licence and prohibits dealer to carry on business of
purchase, sale or storage for sale of any of the trade articles mentioned in
Schedule. 1, without a licence issued under the Order. Part 11 of the
Unification Order imposes restrictions relating to price, stock, etc. It provides
that the retail price of any trade article displayed in compliance with the
provisions of the Display Order shall not exceed the retail price fixed or
recommended by the Central Government or the State Government or manufacturer
or distributor from time to time for that trade article. It further provides
that no dealer shall sell to any person any trade article at a price higher
than that specified in respect of such article in the list of prices and stocks
and no dealer shall refuse to sell such article to any person at the price
specified. No dealer shall sell any trade article to any person without issuing
a cash memo or bill and without keeping a duplicate copy of such memo or bill.
Clause
19 of the Unification Order requires every person holding stock of trade
articles mentioned in Schedule 1 and Schedule 11 to sell to the State
Government or to any person or class of persons the whole or specified part of
the stock at such price and in such manner as may be specified in the order.
Clause 20 provides that every dealer shall furnish a return to the prescribed
authority from time to time as notified. It is laid down in Clause 21 that the
licensing authority may by general or special order in writing require a dealer
holding stock of trade article to sell article on permits issued by the
licensing authority. In Part IV there are usual powers to call for information
and issue directions to the dealers.
12.
The various provisions of the Unification Order show that the purpose of the
said order is to make available scheduled articles to the public at fair price
and without any holding of stock by the dealers The object of the Unification
Order in a nutshell is to make available the essential commodities to the
public at large.
13.
Having minutely examined the provisions of the Order and the Unification Order,
we have no hesitation in concurring with the finding of the Patna High Court in
Black Diamond's case that the two operate in different fields.
There
is hardly any overlapping between the two. The learned counsel for the Company
has however invited our attention to clause 15 (display of price), clause 20
(furnishing of returns) clause 21 (sale on permits) and clause 25 (power to
issue directions to the dealer) of the Unification Order which according to the
learned counsel are covered by the provisions of the Order. We do not agree
with the learned counsel. As mentioned above, the provisions of the Order
issued by the Central Government are directed for the protection of the
allotted/ allocated coal.
The
Order operates from the stage when the coal is extracted from the mines and
continues to regulate its jour- 488 ney till it leaves the colliery and is
brought in the open market for sale. The Unification Order, on the other hand,
starts operating at a stage when the coal is exposed for open sale in the
market. The two operates in entirely different fields. The display of prices,
furnishing of returns, sale on permits, power to issue directions to dealers,
under the two Control Orders are for entirely different purposes and they
operate in different fields.
We,
therefore, do not agree with the judgment of the Patna High Court in Black
Diamond's case that the two Control Orders are likely to conflict with each
other in their operation. Examined from another angle, the Central Government
by the Notification dated July 27, 1967 has permitted free sale of non
metallurgical coal provided it is consumed in India. When the said coal is sold
in open market in the State of Bihar the provisions of the Unification Order,
which are meant to protect the interest of the consumers, are squarely
attracted and are to be followed even by a colliery which falls within the
definition of 'Dealer' under the said Order.
14.We
may mention that the Control Orders emanate from the same source. The Order has
been issued by the Central
Gov- ernment, whereas
the Unification Order has been issued by the State Government of Bihar as a
delegate of the Central Government under the Essential Commodities Act, 1955
and further, the Unification Order has been issued with the prior approval of
the Central Government.
15.
We, therefore, see no justification for the respondent- Company for not
complying with the provisions of the Unification Order. The respondent-Company
despite being a colliery is bound by the provisions of the Unification Order if
it is found to be a dealer under the said Order.
16.The
expression 'dealer' has been defined under clause 2(e) of the Unification Order
which is as under:- "'dealer' means a person, a firm, an as- sociation of
persons or a co-operative society other than a National and State level Co-
operative Society, engage in the business of purchase, sale or storage for sale
of any trade article whether or not in conjunction with any other business and
includes his representative or agent but does not include- (i)a person who
holds or is in possession of agriculture land under any tenure or any capacity
and on which he raises or has raised crop of foodgrains. oilseeds or whole
pulses;
(ii) a
manufacturer of sugar;
(iii) a
producer of pulses and edible oil. " Patna High Court in Black Diamond's
case came to the conclusion that the colliery being a producer of coal cannot
come within the definition of 'dealer' under the Unification Order. We do not
agree with the conclusion of the High Court which is based on no reasoning. It
is the admitted case of the Company that they sell coal in the open market
which has no metallurgical quality. In the written sub- missions filed on
behalf of the Company by M/s. J.B. Dadachanji & Co., in paragraph 18 the
percentage of clean coal and non metallurgical coal has been given as under:
489
"% of the product to the total input Jamadoba West Bokaro Clean Coal
62/65% 38/40% Middlings 19/13% 38/40% Rejects 12/14% 8/10% Slurry 7/8% 10/12% Tailings
Clean coal, the only prime quality product of metallurgical quality is meant
for manufacture of BP hard coke, All the remaining three are secondary products
of the Washeries which are non-metallurgical quality." There is thus no
doubt that the quantity of non- metallurgical coal sold by the Company is not
negligible.
In any
case,the Company is regularly selling non-metal- lurgical coal in the open
market and as such it cannot be said that it is not engaged in the business of
sale or storage for sale of non metallurgical coal. We have no hesitation in
holding that the Company is a dealer under the Unification Order.
17.We,
therefore, allow the appeal, set aside the impugned judgment of the Patna High
Court and dismiss the writ petition filed by the Company before the High Court.
We further hold that the Division Bench Judgment of the Patna High Court in
Black Diamond's case does not lay down correct law to the extent indicated by
us above. The appellant shall be entitled to its costs, which we quantity as
Rs.20,000/-.
Back