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2001 DIGILAW 1038 (PAT)

Shiv Domestic Coke v. Chairman-cum-managing Director, Bharat Coking Coal Ltd. , Calcutta

2001-11-19

S.K.KATRIAR

body2001
Judgment S.K.Katriar, J. 1. This writ petition has been preferred with the prayer to quash the notice dated 25.6.2001 (Annexure-1), issued under the signature of the Deputy Chief Sales Manager of the Bharat Coking Coal Ltd., Calcutta (respondent no. 3), whereby the mode and manner for booking coal by the SSF unit like the petitioners has been changed w.e.f. July 2001, and for the consequential relief of releasing their quota of soft coal for the quarter July to September 2001. 2. The Government of India noticed that production of soft coke was going down sharply all over the country and it is not possible to continue with the traditional means of production of soft coke in view of the pollution and environmental regulations. It was, therefore, decided that alternate medium of domestic fuel such as cil-coke, SSF, and Briquettes are made available so as to ensure availability of alternate fuel for domestic use. SSF plants were, therefore, conceived to be set up in various States with the technology patented by the Central Mines Planning and Design Institute, (C.M.P.D.I. for short), a sister organisation of Coal India Ltd. to do research work and provide technology to produce soft coal in a uniformly benign manner. With that end in view, the Coal India Ltd. advertised the scheme for setting up small scale units to manufacture special smokeless fuel on liberal terms and conditions which, inter alia, stated that Coal India Ltd. shall provide both raw coal and manufacturing technology on liberal terms and conditions, which was published in the issue of 7.5.86 in the "Statesman", marked Annexure-18 to the writ petition. The letters dated 27.3.97 (Annexure-16) and dated 31.3.97 (Annexure-17), are letters exchanged between the Ministry of Coal & the Chairman of Coal India Ltd., consolidate the policy and indicate the intention of the authorities to step up production. 3. The two petitioners also submitted their applications for setting up such plants to manufacture smokeless fuel which were allowed. Petitioner no. 1 set up its plant at Fatuah, (district Patna), and petitioner no. 2 set up its plant at Sugauna-Basauli, district Madhubani. The plants were inspected by joint inspecting team comprising of the representative officers of CMPDl, Ranchi, and BCCL, Dhanbad, which submitted their reports certifying proper commissioning of the plants. The report dated 23.12.96 by way of sample with respect to petitioner no. 2 set up its plant at Sugauna-Basauli, district Madhubani. The plants were inspected by joint inspecting team comprising of the representative officers of CMPDl, Ranchi, and BCCL, Dhanbad, which submitted their reports certifying proper commissioning of the plants. The report dated 23.12.96 by way of sample with respect to petitioner no. 2 is marked Annexure-23, and is set out hereinbelow for the facility of quick reference : COMMISSIONING/TRIAL RUN OF SOME PLANT OF M/s. SWARNAREKHA COKES & COALS PRIVATE LIMITED, SUGOUNA, BASAUALLY, MADHUBANI. CMPDI team along with BCCL officer commissioned the above plant on 21st December 96. The commissioning/trial run is attached herewith. For regualar operation of the plant 5000 M.T. steam coal per month may be released to the M/s. Swarnrekha Cokes & Coals Pvt. Ltd. (S. K. Tandon) (Y. K. Arun) Supt. C. T. Sr. Sales Officer CMPDI, Ranchi BCCL, Dhanbad 4 In other words, the petitioners are registered small scale industries for manufacturing Special Smokeless Fuel (Soft Coke) for domestic need which were established under the technology, project, designed, patent and know-how of Central Mines Planning & Design Institute (C.M.P.D.I.) Ltd. which is subsidiary of Coal India Ltd. and the petitioners have paid the requisite fee for the project and know-how about rupees one lac to C.M.RD.I. It is thus manifest that the coal companies had undertaken upon themselves the duty of providing the technology to set up the plant and to provide 5000 M. T. of required variety of coal per month to run the plant. It appears from the pleadings of the parties that the petitioners have invested large sums of money, a good deal of which was borrowed from the financial institutions which entail heavy payment of interest. 5. Both the units were properly and satisfactorily commissioned and started production which went on up to June 2001. It is the mode and manner of booking the coal with BCCL and the manner of payment for the same which has given rise to the present writ petition. The method and procedure up to June 2001 was that the booking programme by the units like the petitioners were being accepted by the respondent-coal company against 100% financial coverage in the form of bank guarantee. The method and procedure up to June 2001 was that the booking programme by the units like the petitioners were being accepted by the respondent-coal company against 100% financial coverage in the form of bank guarantee. As soon as the loading of coal was completed, the Bill/invoice were prepared by the respective loading area of the coal company and were sent to Calcutta for realisation of payment which were honoured and paid within 24 hours of its presentation to the service Agent of the petitioners. According to the petitioners, there have been no complaints against the petitioners. In other words, coal was supplied to units like the petitioners entirely on credit, covered by bank guarantees, and the units made payment as per the norms fixed by the respondents after the supplies were made. This method was changed by the impugned notice dated 25.6.2001 (Annexure-1) w.e.f. July 2001, a copy of which was pasted on the notice board of the office of the BCCL at Calcutta. The substance of this notice is that for the quarter July 2001 to September 2001, the SSI units like the petitioners were required to submit their applications from 4.7.2001 to 5.7.2001 and were required to deposit advance payment of rupees ten lacs for each rake from 10.7.2001 to 11.7.2001. It appears from the affidavits of the respondents that advance payment is now being insisted by the coal companies to tide over their own financial position. 6. The writ petition was placed before a learned single Judge on 28.9.2001 on which date, inter alia, the following order was passed : ".....In case, the petitioner pays the amount as required under the impugned notice dated 25th June, 2001 (Annexure- 1) within a week from today, the respondents shall consider the case of the petitioner in terms of the said notice...." 7. While assailing the validity of the impugned order, learned counsel for the petitioners submits that the same is ultra vires, and goes against the spirit of the scheme envisaged by the aforesaid Annexures 18, 23, 16 and 17. He further submits that drastic change of the procedure and insistence on advance payment of rupees ten lacs for each rake was unreasonable. He further submits that drastic change of the procedure and insistence on advance payment of rupees ten lacs for each rake was unreasonable. He lastly submits that in any event the petitioners did not have adequate notice which was pasted on the notice board of the office of the BCCL at Calcutta and the time given for deposit of the money was very short. A prayer has, therefore, been made to make available their quota for the months of July and August 2001. They have already lifted the quota for the month of September 2001. 8. Learned counsel for the respondents submits in opposition that the change in the mode and manner of booking and insistence of advance payment is reasonable and does not go against the spirit of the scheme. He further submits that the coal companies in general, and BCCL in particular, are passing through a critical phase and insistence on the advance payment is to tide over their own financial position. Advance payment covers about 33% of the entire bill. He lastly submitted that adequate time was given to the petitioners to do the booking and deposit the advance payment. 9. I would first of all like to deal with the first contention advanced on behalf of the petitioners, namely, the issue relating to validity of the impugned notice. On a consideration of the entire materials on record and the submissions made in support thereof, I am of the view that the same is a commercial decision with which the courts are reluctant to interfere. The coal companies would always be entitled to change the mode and manner of booking and payment, which discretion is normally complete. I feel that the impugned notice is not unjust and unreasonable, nor has the effect of driving the petitioners out of business. The coal company has changed the procedure for a valid reason, namely, to tide over its difficult financial condition. The advance payment being insisted upon covers 33% of the bill amount. In the facts and circumstances of the present case, therefore, I am of the view that the impugned notice cannot on the ground of its validity or reasonableness be faulted. 10. This takes me on to the second aspect of the matter raised by the petitioners. They are right in their submission that adequate notice was not given to the petitioners while changing the system. 10. This takes me on to the second aspect of the matter raised by the petitioners. They are right in their submission that adequate notice was not given to the petitioners while changing the system. A copy of the impugned notice was pasted on the notice board of the BCCL at Calcutta on 25.6.2001, and the period of deposit of the advance sum was 10.7.2001 to 11.7.2001. In view of the previous system, particularly when it was entirely on the basis of deferred payment and the supply was covered by bank guarantee, the sudden departure and insistence on advance payment to the extent of 33%, and the time given for the same was not adequate to the petitioners and that too on the basis of notice pasted on the notice board in Calcutta. The respondents should have notified the same much in advance and should have been circulated and/or advertised. BCCL ought to have realised that the petitioners, being financially in similar position as BCCL, would find it difficult to arrange it at the notice of 17 days on the first occasion, particularly when the petitioners are operating at a distant places. The petitioners statement made in paragraph 15 of the Petitioners reply to the counter affidavit, is relevant in the present context and is set out hereinbelow for the facility of quick reference : "15. That at any way the petitioners have to pay about Rs. 18,00,000/- yearly interest upon the Bank loan and at another way the Respondents Coal Company are not supplying their quota of Coal on regular basis and in such circumstances the petitioners are suffering an irreparable substantial injury as their factory are sitting idle due to non-supply of Coal by the Respondents Coal Company. 11. I must at this stage deal with the contention advanced by the learned counsel for BCCL in an effort to establish that the delay on the part of the petitioners could have been condoned up to a maximum period of one month, vide order dt. 17.1.1995 (Annexure-R/3) of BCCL. I am afraid, the contention is misplaced. The same, if at all would apply where the delay is attributable to the purchaser. The same cannot apply to the present situation where the delay is not attributable to the petitioners, but has occurred on account of the sudden and drastic departure from the existing system. 12. 17.1.1995 (Annexure-R/3) of BCCL. I am afraid, the contention is misplaced. The same, if at all would apply where the delay is attributable to the purchaser. The same cannot apply to the present situation where the delay is not attributable to the petitioners, but has occurred on account of the sudden and drastic departure from the existing system. 12. In such circumstances, I am of the view that the BCCL did not act reasonably by giving inadequate time to the petitioners to deposit the advance sum after introducing the new system. It has been equally unreasonable in refusing to extend time for deposit of the advance sum on this occasion, being the first occasion. They have also not acted properly in refusing to honour the observations of this Court recorded on 28.9.2001, and set out hereinabove. We reject the reasonings assigned by the BCCL as indicated in its letter dated 8.10.2001 (Annexure-2 to the I. A. No. 5110 of 2001), whereby the demand drafts for rupees forty lacs deposited by the petitioners pursuant to the said order dt. 28.9.2001 of this Court, have been returned to the petitioners on the ground that requirement of the core sector has first to be fulfilled. We do not wish to go into the rival claims of the core sector and the non-core sector, but the same appears to be unreasonable on more than one ground, namely, BCCL is bound by the terms and conditions of the scheme. Supply of coal to the units like the petitioners is an integral part of the scheme, particularly in view of the position that Coal India Ltd. has monopoly over the ownership and mining of coal in India. Secondly, it appears from a plain reading of the impugned notice that adequate amount of coal was segregated for allotment to the SSI units like the petitioners. Therefore, BCCL cannot plead paucity of coal for the quarter July 2001 to September 2001. Thirdly, the BCCL has no-where pleaded that the petitioners are misusing the benefit of allotment of coal. Secondly, it appears from a plain reading of the impugned notice that adequate amount of coal was segregated for allotment to the SSI units like the petitioners. Therefore, BCCL cannot plead paucity of coal for the quarter July 2001 to September 2001. Thirdly, the BCCL has no-where pleaded that the petitioners are misusing the benefit of allotment of coal. Fourthly, I am reminded of the observations of my judgment reported in 2001 (1) PLJR 242 (Shree Hanuman Sugar & Industries Ltd. V/s. Union of India), paragraph 11 of which is set out hereinbelow for the facility of quick reference : "11......Before I part with this judgment, I would like to record my feeling of uneasiness and displeasure on the consistently negative approach of the respondent authorities. They have at every stage set their faces against the petitioner, and it had to approach the court again and again. They had at the inception held that the petitioners case was hit by delay............. The Court does not appreciate this kind of unfriendly attitude towards the industries in the country which are really the centres of production, which generate the wealth and employment opportunities in the nation. It appears to this court that some force was working against the petitioner which harassed it at every stage...........Let copies of this judgment be forwarded to the Secretaries, Ministry of Industries, as well as Ministry of Food & Consumer Affairs, Department of Sugar & Edible Oils, Government of India, New Delhi, for a meaningful approach towards its industries." I would like to repeat for the sake of emphasis that the position would have been fundamentally different if the BCCL had the impression that the petitioners were misusing the benefit of allotment of coal. 13. The petitioners have filed I. A. No. 5110 of 2001 for initiation of contempt proceedings against BCCL and its functionaries. Learned counsel for the petitioners relied on the judgments of the Calcutta High Court reported in A.I.R. 1924 Calcutta 953 (Raj Rajeswari Jiu V/s. Gati Krishna Chakrabarti), A.I.R. 1929 Madras 672 (Palaniappa V/s. Raman), which are to the effect that the contemnor cannot be heard unless he has purged himself of the contempt. I do not wish to proceed against them for the time being. Suffice it to state that this Court felt unhappy on the conduct of the respondents, namely, the cavalier manner in which the order dt. I do not wish to proceed against them for the time being. Suffice it to state that this Court felt unhappy on the conduct of the respondents, namely, the cavalier manner in which the order dt. 28.9.2001 of this Court was treated. In the midst of the arguments, this Court had on 7.11.2001 adjourned the case to 12.11 2001 to enable them to reconsider the matter which they have refused to avail. We say no more. 14. In the result, this writ petition is allowed in part. BCCL is hereby directed to supply the promised quantity of coal to the petitioners as per the procedure prescribed by the impugned notice for the quarter July 2001 to September 2001 after deducting the supply already made for part of the period. In ihe facts and circumstances of the case there shall be no order as to costs.