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1987 DIGILAW 495 (ALL)

Hindustan Enterprises v. State Of U. P.

1987-04-23

D.S.BAJPAI, U.C.SRIVASTAVA

body1987
JUDGMENT U. C. Srivastava, J. 1. In this bunch of writ petitions, the petitioners have challenged the vires of U. P. Coal Control Order, 1977 on the ground that the same is inconsistent and repugnant to the Central Government Notifications dated 12-6-1964, 17-6-64, 24-7-69, 30-7-74 and 12-9-84 in respect of the business of slack coal, steam coal, hard coke, soft coke ROM and all the derivatives of non-cooking coal which are free commodities and not items of essential commodities for the purpose of the said Essential Commodities Act. They have also prayed for quashing of the orders of various dates passed by the respective District Supply Officers cancelling their licences. They have also prayed for issue of mandamus commanding the opposite parties to sponsor coal to them every month in view of Government Order dated 30th April, 1984 and not to apply or enforce the U. P. Coal Control Orders, 1977 or to take any action under the said Order and require them to procure a licence for the said purposes under the provisions of the said U. P. Coal Control Order, 1977. 2. When the writ petition came up for hearing the learned counsel for the State Government raised a preliminary objection that in view of alternative remedy available to the petitioners, these petitions would not lie and has also made reference to a Division Bench decision of this Court by which some writ petitions were dismissed at Allahabad on the ground of availability of alternative remedy. The learned counsel for the petitioners contended that in those cases vires of the Act was not challenged and the petition were dismissed as appeals lie against the order cancelling the licence In the instant cases apart from challenging the order of cancellation of licence or show cause notice issued prior to it, the vires of the U. P. Coal Control Order have been challenged. If the said order is ultra-vires, obviously the petitioner can approach State Government against cancellation order by way of appeal which can pass any order in the matter. 3. The petitioners on their applications were granted licence in form B by the licencing authority under the Coal Control Order in respect of slack coal, steam coal, hard coke, soft coke, ROM and all the derivatives of non-cooking coal. 3. The petitioners on their applications were granted licence in form B by the licencing authority under the Coal Control Order in respect of slack coal, steam coal, hard coke, soft coke, ROM and all the derivatives of non-cooking coal. A licence is to abide by the terms and conditions of licence and that of Coal Control Order failing which it is liable to be cancelled. The licence has been cancelled on the ground that the petitioner was sponsored slack coal meant for road movement by the sponsoring authority under clause 2 (k) (a) of the Control Order and the list of the import of such slack coal and its distribution was not submitted to the licencing authority inspite of show cause notice As such there has been contravention of the provisions of the Control Order. To some of the petitioners only a notice has been given and they have come before this Court even before the cancellation order could be passed. 4. The U. P. Coal Control Order, 1977 was issued under the Essential Commodities Act, 1955 as the coal is an Essential Commodity within the meaning of the said Act. The regulation of power of production, control, supply and distribution of essential commodities is vested in the Central Government. Section 3 of the Essential Commodities Act provides that if the Central Government is of the opinion that it is necessary or expedient so to do, for maintaining distribution and supply of any commodity, may by an order provide for regular supply and distribution in the matters specified under the said Act. The powers which are exercisable by the Central Government are also exercisable by the State Government or its authority if the same are delegated by the Central Government under section 5 of the said Act by publication of the same in the official Gazette. 5. It is not in dispute that the Central Government by Notification dated 30-11-1974 delegated its power to the State Government to issue control orders in respect of essential commodities mentioned therein. The said notification further provided that no order shall be issued in pursuance of the powers delegated to the State Government if it is inconsistent with any order issued by the Central Government under the said Act. 6. The said notification further provided that no order shall be issued in pursuance of the powers delegated to the State Government if it is inconsistent with any order issued by the Central Government under the said Act. 6. The vires of the U. P. Coal Control Order has been challenged mainly on the ground that the same is inconsistent with the provisions of Collieries Control Order, 1945, and Central Government's order dated 30-11-1974 issued under the Essential Commodities Act referred to above delegating powers to State Government with certain conditions. The Collieries Control Order, 1945 was issued under sub-rule (2) of Rule 8 of Defence of India Rules after superceding the order of 1944 and the same is still continuing in view of Section 15 of Essential Commodities Act. Under the Collieries Control Order, 1964 the Central Government issued an order in 1964 under which the Central Government authorised every person to acquire, produce or agree to acquire or purchase or dispose of or agree to dispose of or divert or transfer without any order of allotment or without authority soft coke including non-coking coal provided the same is consumed in India. Thus notification dated 1-4-1965 decontrolled hard coke produced from the mines and country ovens if the said coke was consumed in India. By notification dated 24th July 1967 the Central Government authorised any person to acquire, purchase, despatch, transfer or divert and for transport of non-coking coal for metallurgical consumers and coal produced in Assam, provided such coal is consumed within India. The Central Government amended Colliery Control Order by notification dated 12-9-1975 inserting clause 12-G to it which provided that any person can acquire, direct, transfer and agree to the same without any order of allotment or without authority, soft coke, coking coal, coking coal of all grades produced in all coal fields, upgraded coal produced in Singrauli coal fields, coking coal not required for metallurgical consumers and hard coke. Under the Collieries Control Order clause 2 (1) defines 'coal' as follows :- "Coal includes anthracite, bituminacs coal, lignic, peat and any other form of corbon acces matter sold or marketed as coal and other coke." The U. P. Coal Control Order was issued in 1972, that is after amendment of Collieries Control Order in 1975. It is true that prior to the said order U. P. Coal Control Order 1975 was in force. It is true that prior to the said order U. P. Coal Control Order 1975 was in force. The Coal Control Order of 1977 only kept the orders or directions issued or deemed to have been issued under the Coal Control Order, 1975 as if the same was issued under the Coal Control Order of 1977 and not the entire Coal Control Order of 1975 itself as was contended on behalf of the petitioner. Clause 2 (c) of this Coal Control Order 1977 defines 'coal' and the same is as follows :- "Coal means coal, coke and other derivatives and includes slack coal, steam coal, soft coke, hard coke, or dust coal of various grades but does not include cinder and products and by products of coal." The U.P. Coal Control Order, 1977 provides that no person shall import coal and carry on business as a coal agent, as a coal depot holder or run a brick kiln with coal except under and in accordance with the terms of licence without which no such business can be carried on. It also provides that the licencee shall acquire fuel quota of coal allotted to him unless prevented by sufficient cause to the satisfaction of District Magistrate and rates of coal shall not be higher than that prescribed by the District Magistrate and allotment will be made only to the person holding licence. The depot-holder is also to sell coal in accordance with the instructions of District Magistrate and at a rate not higher than fixed by the District Magistrate. It also provides that delivery of consignment of coal is to submit receipts pertaining to consignment of coal for counter signatures of licencing authority. Clause 3 (a) of the said Control Order provides that the said Coal Control Order will apply to movement of coal under the authority of Coal Commissioner, Government of India or any other officer acting on his behalf. 7. Clause 3 (a) of the said Control Order provides that the said Coal Control Order will apply to movement of coal under the authority of Coal Commissioner, Government of India or any other officer acting on his behalf. 7. The petitioner's contention is that the Central Government having lifted control by issuing various order under Collieries Control Order and U. P. Order which includes most of the derivatives of coal as defined in it and by amending it in 1975 putting an end to its allotment order issued by State Government introducing licence and allotment and control is in conflict with the orders issued by the Central Government and also with the order of 1974 by which Central Government delegated powers to State Government under Essential Commodities Act which shows that it does not carry any weight. The preamble of the U. P. Coal Control Order runs as follows :- "Whereas, the State Government is of opinion that it is necessary and expedient so to do for securing the maintenance of supplies and services essential to the life of the community and for securing the equitable distribution and availability of coal at fair prices." 8. The preamble indicates that it is with a view to regulate the distribution, the fair price and avoid misuse and non-availability to consumers despite its availability otherwise the State Government in exercise of its delegated power issued the Coal Control Order the purpose of this control order is rather in regard to the availability for consumption and use in the State at a fair price which could be done by introducing or continuing allotment of quota and licensing system. The U.P. Coal Control Order, 1977 was issued in 1977 and that too after obtaining the previous concurrence of the Central Government which would not have accorded its concurrence if it would have been of the view that the same is inconsistent with the orders issued by it in this behalf. The allotment in different district of various varities of coal is done by Director (Movement) Coal, U. P. who is empowered to do so. The Central Government by a notification itself allots quota of coal to every State known as sponsored coal of the year and it is thereafter that the Director of Movement allots the same to various districts in the State. The Central Government by a notification itself allots quota of coal to every State known as sponsored coal of the year and it is thereafter that the Director of Movement allots the same to various districts in the State. The District Supply Officer allots the coal to licencees known as sponsored coal to the licensee. The case relied on by the learned counsel for the petitioner decided by a Single Judge of the court in Vijay Narain Cube v. State of U. P., 1986 AWC 74 was in connection with a criminal prosecution. In the said case the petitioner who was running brick kiln was being prosecuted for contravention of Essential Commodities Act. It was held that the provisions of Coal Control Order relating to obtaining of a licence have been retained only on a consideration of revenue and not in order to regulate the supply and distribution of the coal or the bricks nor with a view to controlling their prices. The said case was a case in respect of brick kilns and the observations regarding coal could be said to be obiter only. The preamble of the Coal Control Order, 1977 and the subsequent notification more particularly dated 26th December, 1985 and 14th May, 1984 were not considered, so far as coal is concerned, the said case does not lay down any acceptable precedent in view of what has been said above. The field of Collieries Control Order is different and not the same as that of U. P. Coal Control Order. Before appreciating the same it would be appropriate to consider the scheme and some of the provisions of the Collieries Control Order. 9. The Colliery Control Order which was issued in the year 1945 after repealing the earlier order of 1884 governed the supply of coal from the collieries and not its use and consumption. Under Clause 4 of the said Order, the Central Government is empowered to fix the price at which, or the maximum or the minimum price, or both, subject to which coal may be sold by colliery owners which has to be done by means of publication in official gazette. Under Clause 4 of the said Order, the Central Government is empowered to fix the price at which, or the maximum or the minimum price, or both, subject to which coal may be sold by colliery owners which has to be done by means of publication in official gazette. Clause 5 of the said order provides that no colliery owner or his agent shall sell, agree to sell or offer to sell, and no person shall purchase, agree to purchase or offer to purchase, directly or through a broker or a del credere agent, coal from a colliery owner at a price which is in excess of the price or the maximum price fixed under clause 4 or below the price or the minimum price fixed by the Central Government. Under the said order coal is allotted and every colliery owner, every person to whom coal is allotted under this order and every other person engaged in the business of production, supply and distribution of, or trade and commerce in coal, shall, on being requested to do so, either by notice served on him or by special or general direction issued by the Coal Controller, Government of India, submit to that officer such returns and other information, in such form and within such time, as may be specified in the notice or direction. The Central Government can issue directions to the colliery owners regulating disposal and the stacking of coal in the colliery during any period, Clause 12-B provides that a person who has been allotted coal under this order shall not use it otherwise than in accordance with the conditions contained or incorporated in the document containing the order of allotment and shall not divert or transfer any such coal to any other person except under a written authority from the Central Government and Clause 17 provides that every colliery owner, every person to whom coal is allotted under this order and every other person engaged in the business of production, supply and distribution of, or trade and commerce in coal, to whom any order or direction is issued under any powers conferred by or under this order shall comply with such order or direction. 10. 10. A perusal of the Collieries Control Order, the gist of which has been mentioned above shows that it governs the supply of coal from collieries and not with its use or consumption and distribution in a State. The removal of control or allotment of coal from collieries is not relatable to its distribution, use or consumption by consumers in a State. The fields being different there appears to be no inconsistency between Collieries Control Order, 1945 and U. P. Coal Control Order, 1977. It was issued after obtaining prior approval of the Central Government. As such the plea that it is ultra vires or that beyond the jurisdiction of State Government has no legs to stand and the same is rejected. The single Judge decision of this court reported in Mathura District Bricks Manufacturing Association v. Collector, Mathura, 1971 AWR 829, in which provisions of U. P. Coal Control Order, 1959 as it stood then were declared ultra vires on the ground that the same was repugnant to the orders issued by Central Government on 1-7-64 and 11-3-65. In the said case repugnancy was with the Central Government notification which removed all controls in respect of coal used for burning bricks. The U. P. Order forbade it without obtaining licence and certain other conditions in this behalf. This continued despite Central Government notification issued subsequently to the issuance of U. P. Coal Control Order, 1959 and the fact that the brick was not an Essential Commodity within the meaning of Essential Commodities Act. The said case under the Coal Control Order of 1959 is quite distinguishable as the instant case is regarding provision of Coal Control Order, 1977 issued after Central Government Order and under which and subject to the condition mentioned therein licence was taken by the petitioners. The provisions of U. P. Coal Control Order are thus not ultra vires of or inconsistent with any order issued by the Central Government. 11. On behalf of the petitioner, it was further contended in support of their plea that the U. P. Coal Control Order, 1977 was issued without obtaining the prior concurrence of the Central Government and that is why the opposite parties in their affidavit have not stated any-where that such a concurrence in fact was obtained. 11. On behalf of the petitioner, it was further contended in support of their plea that the U. P. Coal Control Order, 1977 was issued without obtaining the prior concurrence of the Central Government and that is why the opposite parties in their affidavit have not stated any-where that such a concurrence in fact was obtained. The petitioners nowhere averred that concurrence of Central Government was not obtained as such there was no occasion for the opposite parties to state any thing in this behalf. The statement in this behalf in the U. P. Coal Control Order, 1977 that the same was being issued with the prior concurrence of the Central Government is conclusive of the matter and in this view there is presumption of correctness of the official act and the said presumption has not been rebutted by the petitioners. This argument is thus without any force. 12. On behalf of the petitioner in this connection it was further contended that the State Government issued a circular on 3-6-1982 addressed to all the District Magistrates that except clauses 4, 5, 6 and 7 of the U. P. Coal Control Order, 1977 all the other provisions of Coal Control Order will not be applied so far it relates to the business of slack coal brought by road either by any licensee or any type of business of coal and as such no action could be taken by licensing authority for cancellation of licence as relevant provisions under which the powers have been exercised or directions issued are under suspension. ON behalf of State it has been pleaded that the said notification was issued in order to stop the checking by authorities which was causing great harassment to the consumers. It has been further pleaded that in the said circular nothing was said regarding sponsored coal to be lifted by licensees hence the licensees are under an obligation to lift the quota of allotment as sponsored to him and from the colliery and thereafter to sell the same in accordance with the term and conditions of the licence in the district to which the same pertains. It has been also pointed out that as complaints were received that the licencees disposed of coal at the colliery itself after charging higher price after getting the allotment of sponsored coal with the result that supply of coal in the State was dwindling down. It has been also pointed out that as complaints were received that the licencees disposed of coal at the colliery itself after charging higher price after getting the allotment of sponsored coal with the result that supply of coal in the State was dwindling down. For maintaining the proper supply and for monitoring the lifting of allotted quota of coal, the State Government issued yet another circular on 26-12-1973 and to the same effect issued another circular on 5-5-1984 with warning to licensees lifting coal from collieries but not importing the same in the district concerned. It is thus evident that circular was not in respect of sponsored coal and further by issuing two circulars subsequently, the State Government modified the earlier circular if the same could have been read for sponsored coal and none of the provisions of Coal Control Order 1977 were put in abeyance for such coal. This contention of the learned counsel also fails. The provisions of U. P. Coal Control Order, 1977 thus being intra vires and not inconsistent with any order issued by the Central Government on this behalf. So far as reliefs claimed by the petitioner challenging the action or order of licensing authority on certain grounds including denial of opportunity can be looked into in appeal by the State Government. The petitioners can still approach the State Government by way of appeal, a statutory remedy provided under the Coal Control Order. 13. With the above observations regarding the appeal, the writ petitions are dismissed. There will be no order as to costs. 14. After the judgment was pronounced learned counsel for the petitioner prayed for a certificate for leave to appeal to Supreme Court. No substantial question of law of general importance is involved in this case. As such leave prayed for is refused. Petitions dismissed.