Baidyanath Chemical and Carbonisation Co. Pvt. Ltd. vs Central Coalfields Ltd.

D.G.R. Patnaik, J.—Heard Mr. Ajit Kumar, learned Counsel for the petitioner and Mr. Anoop Kr. Mehta, learned Counsel for the Respondents.

With the consent of the parties, this writ application is disposed of at the stage of admission.

The petitioner being a private Special Smokeless Fuel (S.S.F.) Unit, has prayed for a direction upon the Respondents to release full quota of 5000 M.T. per month of Coal as originally promised by the Respondents, for enabling smooth functioning of the petitioner''s unit. Prayer has also been made for directing the Respondents to restore the original fixed quantity of 5000 M.T./-per month and secondly for the purposes of computing the maximum permissible quantity (MPQ) to take and calculate the period of 5 years of valid booking from November, 2006, in accordance with the judgment of the Supreme Court in SLP (C) No. 20471 of 2005.

The case of the petitioner in brief is that consequent upon a decision taken by the Coal Ministry, Government of India to make available coal to the private entrepreneurs for the production of Special Smokeless Fuel (SSF) on the basis of the technology developed by the Central Mine Planning and Design Institute Ltd. (C.M.P.D.I.L.), an Advertisement was issued inviting persons interested in establishment of Special Smokeless Fuel for the purposes of manufacturing of Special Smokeless Fuel. The petitioner had offered its interest and had submitted its Project Report. On being satisfied with the Project of the petitioner''s proposed SSF plant, the Respondents-Coal India Ltd. granted coal linkage vide letter dated-20.10.1987 to the petitioner''s unit on temporary basis. After the petitioner''s plant was finally completed, the same was inspected by the Joint Inspecting Team of the C.M.P.D.I.L. and on the recommendations of the Team, a Registration Certificate was granted by the Directorate of Industries of the then Govt. of Bihar to the petitioner''s unit on 15.05.1991. Upon the recommendations being accepted, the Respondents had approved and fixed the quantity of coal linkage to the petitioner''s unit at 5000 M.T. per month. On the basis of the supply of the linkage quantity of coal, the petitioner''s unit started functioning.

In course of time, though for the initial period, the Respondents had maintained the regular supply of the promised quantity of coal every moth, but later, the supply began to be reduced not only to the petitioner''s unit but also to the other units similarly situated.

The Association of the SSF Manufacturers units, thereupon filed a writ application before this Court vide C.W.J.C. No. 2750 of 1997 (R) and vide order dated-28.11.1997, this Court had directed the Coal Company to issue release order and dispatch the fixed/promised quantity of monthly quota of coal in favour of the SSF Manufacturers Units. The order of the Single Judge was upheld by the Division Bench and also by the Supreme Court in Civil Appeal No. 6317 of 1998.

The grievance of the petitioner is that in spite of the orders of this Court, the Respondents, instead of maintaining regular uninterrupted supply of coal to the tune of 5000 M.T. per month, had drastically reduced the supply of coal to 3754 M.T. per month, by computing the linkage quantity on the basis of a new methodology known as the MPQ method, which was introduced by the Coal India Ltd. vide its decision dated-27.03.2001. As a consequence, the petitioner was therefore, constrained to book and draw a lesser quantity of coal.

The further grievance of the petitioner is that the supply of linked quota of coal to the petitioner was suspended by the Respondents vide their wireless message dated-07.09.2002. Being aggrieved, the petitioner challenged the order of suspension before this Court vide W.P. (C) No. 5328 of 2002. The writ application was disposed of by order dated-12.12.2002 with certain directions to the Respondents. At the time of suspension of coal supply, the monthly quantity of coal fixed for supply to the petitioner was 3764 MT per month.

In compliance with the directions contained in the Court''s order in the aforementioned writ application, the petitioner had filed its representation before the C.V.O. of the Respondents-C.C.L. on 06.01.2003 followed by a reminder issued on 04.05.2003.

When the directions of this Court, as contained in the order of the aforesaid case, was not complied with by the Respondents, the petitioner had filed a Contempt application vide Cont. Case (C) No. 769 of 2004 and it was during the pendency of the contempt application that the Respondents had resumed the supply of coal in favour of the petitioner vide their letter dated-09.02.2005.

However, the supply of coal was made at a reduced quantity of 3056 M.T. per month in stead of the earlier fixed quantity of 3764 M.T. per month. Yet again, after only two months of the date of resumption of coal supply, the Respondents re-fixed the monthly quota of coal and brought it down further to 1992 MT per month. Such reduction was made on the alleged ground that on the basis of the quantity of coal lifted by the petitioner during the previous five years, it was entitled to the supply of only 1992 M.T. of coal per month.

In spite of the petitioner''s protest and representation in this regard, submitted to the concerned authorities of the Respondents, a further reduction in the coal supply was made by fixing the monthly quota at 657 M.T. per month.

Assailing the decision of the Respondents to fix the coal linkage quota at a ridiculously reduced rate than what was initially promised, learned Counsel for the petitioner submits that the re-fixation of the quota has been done by the Respondents in a most arbitrary and whimsical manner and such a procedure is not even in consonance even with the MPQ Method. Learned Counsel explains that while computing the quantity of coal linkage during the previous five years prior to the date of resumption of coal supply, the Respondents have ignored the fact that for the period of more than two years the supply of coal was totally suspended to the petitioner''s unit. This period, ought to have been exempted from the date of computation made. Inviting attention to Annexure-A, which is a statement chart, prepared and annexed by the Respondents showing the consumer wise/area wise allotment, booking and lifting of coal made by the petitioner from January, 2000 to May, 2007, learned Counsel explains that the originally fixed quota of coal in the year January, 2000 was 5,000 M.T. per month. The quota began to be reduced after February and till May, 2002 the allotment was maintained at 3764 M.T. per month. The supply was further reduced and the allotted quantity was fixed at 1992 M.T. per month till January, 2006. Learned Counsel further explains that as shown in the chart, a drastic reduction in the allotted quantity was made to 657 M.T. per month in November, 2006. Learned Counsel argues that even by applying the MPQ method and taking the highest quantity of 3038 M.T. lifted by the petitioner in February, 2005, this quantity ought to have been fixed by the Respondents, even on the basis of the MPQ method.

Learned Counsel submits further, that by such drastic reduction in the coal supply, the petitioner''s unit has been made to suffer heavy financial loss and resulted embarrassment on account of the persistent demand for return of loan by the B.I.C.I.C.O. from whom the petitioner''s unit had to obtain loan for establishing its unit.

Learned Counsel adds further that in the case of two other similarly situated S.S.F. Manufacturer Units like the petitioner''s Unit, namely, M/s. Gautam Coal Works Pvt. Ltd. and another, M/s Maharani Fuels Pvt. Ltd., when similar arbitrary reduction of the original quota of coal supply was made by the Respondents, both the units had individually approached this Court by filing their separate writ applications and pursuant to the orders passed by this Court in the respective writ applications, the Respondents had restored the original quota of coal supply to both the units.

Learned Counsel for the Respondents, on the other hand while referring to the statements contained in the counter affidavit of the Respondents, would explain that the petitioner''s quota has been fixed on the basis of the MPQ method, which was decided on the basis of the average booking made by the petitioner. Referring to the statement chart of coal supply made to the petitioner''s unit (Annexure A), learned Counsel explains that the average booking made by the petitioner is much less than the allotted quantity. The petitioner, therefore, cannot raise any grievance on the fixing of the quantity, since the petitioner unit has itself not been able to book and lift the quantity allotted in the previous months of the last three years'' computation period. Learned Counsel explains further that recently the Ministry of Coal has changed its Sale Policy for linked consumers like the petitioner under which, the linked consumers have to sign the fuel supply Agreement for availing the benefits under the Policy. In compliance with the Policy Regulations, the petitioner has entered into the Agreement with the Respondents-C.C.L. agreeing therein to purchase the quantity of coal stipulated in the Agreement. As such, the petitioner cannot make any further grievance regarding the quantity fixed for supply to it earlier under the MPQ method.

Learned Counsel for the petitioner would explain that the Agreement referred to by the learned Counsel for the Respondents has no relevance in the context of the grievance of the petitioner since the quantity stipulated in the Agreement is also subject to variation, if the supply of the quantity of coal, which was originally promised to the petitioner by way of linkage, is restored.

The dispute relating to reduction in the linkage quantity of coal was raised before this Court in several writ applications by the various SSF Manufacturer Units. In the case of M/s. Maya Fuel Pvt. Ltd.-versus-Bharat Coking Coal Ltd and Ors. reported in 2002 (3) J.C.R.196 (Jhr.), a similar grievance was raised by the writ petitioner, therein, that the Coal Company had arbitrarily reduced the supply quantity of coal under the MPQ method and after considering the entire aspects of the rival submissions of the parties, this Court had recorded its observations and directions as follows:

In view of the discussions and reasons, as made and given above, I come to the conclusion and hold:

(i) The "Linkage Quantity" and "Maximum Permissible Quota" (MPQ) are not different but same.

(ii) It can be revised on the request of a linked consumer for god ground and similarly the coal company can also revise the linkage quantity/MPQ, in cases, such as less availability of coal than the demand, lifting of less quantity than the linkage quantity for years together by the linked consumer etc.

(iii) The assessment of linkage quantity/ MPQ can be made by a subsidiary coal company with whom a consumer is linked.

(iv) The assessment based on the best booking of consumer during any of the three calendar year is reasonable and not arbitrary having nexus with the consumption of a consumer and availability of coal.

(v) In case of wrong assessment of linkage quantity/MPQ based on incorrect data etc., the linked consumer request the coal company for reassessment of linkage quota/MPQ.

In view of the fact that the MPQ system has been upheld by several judgments of this Court, the petitioner cannot now possibly argue against the application of the method in its case. However, considering the petitioner''s grievance that even the application of the MPQ method in the case of the petitioner has not been made properly, statements chart (Annexure-A) needs to be referred to again. As it appears, for the month of November, 2006, the quantity fixed for allotment to the petitioner was 657 MT per month. Applying the MPQ method, the period of three years prior to November, 2006 has to be taken into consideration and as per guidelines for assessment as laid down in the judgment in the case of M/s. Maya Fuels Pvt. Ltd. (Supra), the best booking made by the petitioner and the quantity lifted by the petitioner in that month of March, 2005 was 3038 M.T.

Learned Counsel for the Respondents has not been able to explain as to how in spite of the best booking quantity shown for the month of February and March, 2005, the allotted quantity has been reduced to 2750 M.T. in the very next month and further reduced continuously for the subsequent months. Under such circumstances, there appears a reasonable basis for the petitioner''s grievance that there has been a wrong assessment and fixation of the linkage quantity/MPQ method based on incorrect data and incorrect application of the MPQ method. Under such circumstances, the concerned authorities of the Respondents were bound to reconsider the assessment made for fixing the linkage quantity of Maximum Permissible Quantity (MPQ) to the petitioner.

Under the circumstances, this writ application is disposed of with liberty to the petitioner to file a fresh representation before the concerned authorities of the Respondents for reconsideration and re-assessment of the linkage quantity/MPQ and within three months from the date of receipt of the representation, the concerned authorities of the Respondents shall consider the same on the grounds raised by the petitioner and take an appropriate decision thereon. Upon re-fixation of the linkage quantity/MPQ, the same with mutual consent of the parties, shall be considered as the quantity stipulated in the terms of the Agreement between the petitioner and the Respondents. The decision so taken by the Respondents on the representation of the petitioner shall be effectively communicated to the petitioner.

Let a copy of this order be given to the learned Counsel for the Respondents.