Judgment Aftab Alam, J. 1. All the eighteen writ petitions in this batch, some filed by a single petitioner and others filed by several petitioners (twenty five in all), are at the instance of coal based small scale industrial units in different districts of the State. For a regular and smooth supply of coal each of the petitioner unit enjoyed Linkage Facility on the basis of the orders issued by the Coal India Limited in their favour. But the supply of coal to the petitioner unit is stopped under the Linkage Scheme since all these units were included in the list of 981 industrial units that were found suspect as bona fide consumers of coal in the status report, dated 25-7-2002 by the Industries Department, Government of Bihar. In regard to six units, petitioners in C.W.J.C. Nos. 13369, 4863 and 5503 of 2002 there is also the inspection report of the Vigilance Department of the Coal company. The stoppage of supply of coal under the Linkage Scheme has brought the petitioner units to this Court seeking direction(s) to the respondent coal companies to restore their supplies under the Linkage System. The validity of the status report/inspection report is assailed and in some cases it is even said that no team from the Industries Department or the Coal company ever visited the units in question and the findings/remarks in the reports were incorrect and unfounded. It is further submitted that the action of the respondent Coal company is stopping the supply of coal even though in most of the cases large sums of money were already deposited by the petitioner units for the supply of the next months quota, on the basis of unreliable reports and even without giving the petitioners an opportunity to show the incorrectness of the report(s), was quite unreasonable and arbitrary. 2.
2. After lengthy arguments were made at the bar, the parties seem to be more or less in agreement that each of the petitioner units to which the supply of coal under the Linkage Scheme was stopped on the basis of the status report of the Industries Department of the Government and/or the inspection report by the Coal Company Vigilance Department was entitled to an opportunity to satisfy the concerned authorities that the unit was in fact running and the quota of linkage coal received by it was not diverted to the black market but was consumed for bona fide industrial purpose. And in fact, in fairness to the Industries Department, it may be noted that after preparation of the status report, a general notice was issued in the news papers giving a list of 759 units all over the State. The notice directed the owners of all the units included in that list to file their show cause and produce materials in support of their claim of being genuine industrial establishments and bona fide consumers of linkage coal. Out of twenty five units, petitioners before this Court, sixteen are included in the list of 759 units put under show-cause. 3. But there is a great dispute as to what direction should be issued till the enquiry in case of each of the individual units is completed on the basis of the respective show cause filed by them. The stand of the respondent coal company is that the supply of coal under the Linkage Scheme can be made only subject to the final result of the enquiry. But the petitioners, insist that the stoppage of supply was quite arbitrary and illegal and, therefore, the monthly supply of coal must be restored immediately and without waiting for the final result of the enquiry. The controversy in this batch of cases is, thus, reduced to this narrow and limited issue. 4. This controversy between the parties is to be examined in the back ground of some brief and undisputed facts and in the light of certain orders passed by this Court from time to time on the issue of supply of coal to the coal based industrial units. 5.
4. This controversy between the parties is to be examined in the back ground of some brief and undisputed facts and in the light of certain orders passed by this Court from time to time on the issue of supply of coal to the coal based industrial units. 5. The petitioner units are small scale industrial establishments engaged in the manufacture of smokeless fuel and other similar articles using coal as the main raw material, Each of the petitioner unit is registered as a small scale industrial unit at the respective District Industries Centres. The registration is made under a scheme of the Central Government and it is subject to certain conditions. In iterms of one of the conditions of registration, any misutilisation of raw material(s) allocated to the unit would make its registration liable to cancellation. The registration as a small scale industrial unit also brings to the establishment certain benefits and facilities, relevant for the present purposes, being supply of coal under the Linkage System. 6. Under the Linkage System a fixed monthly quota of coal is supplied to units qualifying under the scheme. These units are called linked units and to them supply of coal is made out of turn and for a lower price. In course of hearing of these cases, it was reported to the Court that the benefit of lower price was no longer available under the Linkage Scheme and now the price of coal under the Linkage Scheme and in open sale was equalised. But an out of turn supply of the fixed monthly quota is in itself a great advantage and ensures a regular and smooth supply of coal to these units. 7. In the counter-affidavit filed on behalf of the respondent coal company, it is stated that though coal was no longer a controlled commodity, having regard to its vital importance in the life of the nation, the company was still obliged to regulate its supplies. The supply of coal depended upon some basic factors, such as, the amount of production and the need of the core sector in the country. It was only after meeting the need to the core sector that coal could be made available for supply to the non-core sector linkage consumers.
The supply of coal depended upon some basic factors, such as, the amount of production and the need of the core sector in the country. It was only after meeting the need to the core sector that coal could be made available for supply to the non-core sector linkage consumers. In this regard, it is stated in the counter-affidavit that the total demand of coal for the non-core sector linkage consumers was about 41 million metric tonnes whereas after meeting the requirements of the core sector, only 4 million metric tonnes (approx.) of coal was available and, therefore, it was imperative that it should be supplied only to genuine and bona fide consumers. 8. It was further stated that the supply of coal under the Linkage Scheme did not amount to any contract or agreement between the coal company and the linked unit, but the terms and conditions of Linkage would make it clear that the supply of coal was for actual consumption of the linked consumer and the supply could not be diverted and/or used for any purpose other than the one for which the allotment of coal was made. The attention of the Court was specially invited to condition No. 4 of the Linkage Order issued by the company. The condition in question reads as follows: "4. Coal issued against this linkage is for actual consumption in the linked unit and cannot be diverted or sold to other except with prior written consent of Coal India or Officers dominated by Coal India Limited for the purpose." 9. In the counter-affidavit it is further stated that the number of coal based units was very large and those were scattered all over the country. The coal company had no means to keep all the linked units under its own watch and to check and verify perodicaly as to whether the linkage coal supplied to them was being consumed for the professed purpose or it was being misutilised and/or diverted to the black market. In this regard, it had to depend to a very large extent upon the co-operation and assistance by the Industries Department of the Government.
In this regard, it had to depend to a very large extent upon the co-operation and assistance by the Industries Department of the Government. It is further stated that in a high level meeting held between the officials of the coal company and the Industries Department on 25-4-2000 a decision was taken for a re-verification of the linkage consumers so that the genuine consumers of the non-core sector may get the benefit of supply of coal. (A copy of the minutes of the meeting held on 25-4-2000 is at Annexure A to the counter-affidavit). In pursuance of the decision taken in the meeting, and in the light of the instructions received from the Ministry of Coal, Government of India, a request was made to the State Government for re-verification of the status of the linked units A re-verification of all the units was thus made at the district level and a consolidated status report was sent to the respondent coal company by the Additional Director Industries. Patna under his letter No 1/42, dated 25-7-2002. (Copy at Annexure R/4) 10. In the counter affidavit filed on behalf of the State Government it is stated that following a request from the Central Government, the State Government decided to constitute a committee to examine the status of the coal based industrial units in Bihar. The State Government sent the status report in regard to 981 industrial units of Bihar to the Coal India Limited in July, 2002. The status report was based on records made available by the units and physical inspection of the site by the task-force committee. In case of the 981 units it was found that the consumption of coal for the specified purpose was suspect. It is further stated in the States affidavit that "out of 981 units, 913 were found either not in existence or their existence was doubtful because out of the 981 unit, only 154 units submitted relevant papers for verification and rest 759 units did not submit required paper for verification to justify their operation. Hence, the State Government decided to give one more opportunity to those 759 units to submit required information and relevant papers in proper format within fifteen days from the date of publication of the notice and name of the units in the news paper.
Hence, the State Government decided to give one more opportunity to those 759 units to submit required information and relevant papers in proper format within fifteen days from the date of publication of the notice and name of the units in the news paper. This notice along with a list of 759 coal based units was published on 10-3-2002 in Hindustan Times, Patna." 11. For the sake of convenience a summary in a tabular form is given below indicating the remarks given to each of the petitioner units in the status report of July, 2002 submitted by the Industries Department and the respective serial numbers of the petitioner units in the news paper advertisement published on 10-3-2003 asking each of them to file show cause and materials in support of their case: Sl. No.Case No.Name of PetitionerDistrictSl. No. in Status ReportRemarks in Status ReportSr. No. in News paper Advt. 1234567 II. M/s Mithlla Briquet Gool Udyog (P-3) -Do-650 III. M/s Economic Gool Udyog (P-2) jkai ke liye nirdharit masik chhamta, adhik pratit hota hai. Koyle ke apurti zila Udyog Kendra dwara upyogita praman patra preshit hone ke bad hi kiya jana chahiye tatha avantan evam uthao ki soochna samay per milna chahiye jo koyla company evam ikai dwara hi sambhav hai.644 IV. M/s Kifayati. Gool Udyog (P-4)Sitamarhi at Sr. No. 9 Koyle ke avantan hetu ikai dwara, Manniye Uchcha Nyayalaya mein writ yachika dayar hai. Atah yeh mamla subjudiced hai. Aisi isthiti mein manmya Uchcha Nyayalaya ke adesh ke pratikchha ki ja salto hai.749 V. M/s Shubham Enterprises (P-5)Saharsa at Sr. No. 2 Koyle ke avantan evam uthao ke soochna coal cornpay evam udyami dwara samay per Zila Udyog Kendra ko diye jane se iska anushrawan kiya ja sakta hai tatha Zila Udyog Kendra ke dwara upyogita praman patra ke adhar per hi koyla avantan kiya jai to shreskar hoqa.623 6CWJC No. 856/03M/s Shiv BriquettesMadhubani at Sr.
No. 2 Koyle ke avantan evam uthao ke soochna coal cornpay evam udyami dwara samay per Zila Udyog Kendra ko diye jane se iska anushrawan kiya ja sakta hai tatha Zila Udyog Kendra ke dwara upyogita praman patra ke adhar per hi koyla avantan kiya jai to shreskar hoqa.623 6CWJC No. 856/03M/s Shiv BriquettesMadhubani at Sr. No. 4857Ikai ke liye nirdharit chhamta adhik pratit hota hai koyle ke apurti Zila Udyog Kendra dwara upyogita praman patra preshit hone ke bad hi kiya jana chahiye tatha avantan evam uthao ki soochna samay per milna chahiye jo koyla company evam ikai dwara hi sambhav hai.645 7CWJC No. 1432/03M/s Maa Bindhyawashint Bartan UdyogMadhubani at Sr.No. 18871Ikai dwara likhit roop se soochna diya gaya hai ki koyla per se sarkari niyantran hata liya gaya hai, atah koyla uthao evam upyog ka lekha nahin rakha gaya hai aur na hi panji ka sandharan kiya gaya hai. Kyonki, koyla apurti ka mamla sirf coal comapny aur ikai se sambandhit hai. Ikai dwara koyle ka durupyog kiya gaya hai to iske liye nischit roop se coal company hi jimmevar mani ja sakti hai. Iski chhamta bahut adhik nir-dharit hui pratit hoti hai. Ise koyla linkage ke avashyakta nahin hai.654 8CWJC No 155/03M/s Janta Chuna UdyogMadhubani at Sr No. 12865Upyogita janch karne hetu coal company ko samay per koyla uthao ki soochna Zila Udyog Kendra ko dena chahiye.648 9CWJC No. 936/03M/s Bihar Good UdyogSitahiarhi at Sr. No. 19981Koyle ke avantan ke sambandh mein Manniye Uchcha Nyayalaya, Patna mein writ yachika dayar hai. Atah yeh mamla subjudiced hai. Aisi isthiti mein Manniye Uchcha Nyayalaya ke adesh ki partikcha ki ja sakti hai.759 10CWJC No. 6/2003M/s Nisha Briquette IndustrySitamarhi at Sr. No. 6968Zila Udyog Kendra ke Pralinidhi ne bataya ki koyle ki avantan ke sambandh mein Manniye Uchcha Nyayalaya, Patna mein writ yachika dayai hai. Atah yeh mamla sub-judiced hai. Aisi isthiti mein Manniye Uchcha Nayayalaya ke adesh ki pratikcha ki ja sakti hai.746 11CWJC No. 45/03M/s Tathagat Gool Udyog,Sitamarhi at Sr. No. 5967 834-Do-745 12CWJC No.647/03M/s Shiv ShaKti EnterprisesSaharsa at Sr. No. 3 Koyle ka avantan evam uthao ki soochna coal company evam uddyami dwara samay per Zila Udyog Kendra ko diye jane se iska anushravan kiya ja sakta hai tatha zila udyog Kendra ke dwara upyogitapraman patra ke adhar per hi koyla avantan kiya jai to shareskar hoga.624 13CWJC No. 13251/02M/s Chapdan Glass and Silicate WorksBhojpur at Sr.
No. 3 Koyle ka avantan evam uthao ki soochna coal company evam uddyami dwara samay per Zila Udyog Kendra ko diye jane se iska anushravan kiya ja sakta hai tatha zila udyog Kendra ke dwara upyogitapraman patra ke adhar per hi koyla avantan kiya jai to shareskar hoga.624 13CWJC No. 13251/02M/s Chapdan Glass and Silicate WorksBhojpur at Sr. No. 120Sl. no. not supplied by the State CounselChoonki ikai dwara koi panji nahin dikhaya gaya Atah koyle ki upyogita sandigdha hai.No material before the Court that this unit was listed among the 759 units in the show cause notice. 14CWJC No. 13394/02M/s Bindhwashin Gool Briquettes IndustriesAurangabad at Sr. No. X- do -No material before the Court that the unit was listed among the 981 units in the status report.-do- 15CWJC No. 13311/02M/s Mahavir Chemical IndustriesAurangabad at Sr. No. 14-do-(1) Ikai dwara jo koyla lift kiya jata hai uski soochna coal company zila udyog Kendra ko nahin deti hai jo uchit anushravan ke liye avashyak hat. (2) Ikai band hai (unit is closed)- do - Status as per E.C.L Vigilance 16CWJC No, 13369/02(1) M/s Pandey SilicateWorks (P-1)Bhojpur atSf. No. 39do -Ikai dwara utpadansarrtbandhi koi kaghzat tiahin dikhaya gaya evam ikai ko prapt koyta ki upyogita sandigdha pratit hoti hai.Notincluded in the list of 759 units in the show cause notice.Furnace under firing. Some coal raw materials and (2) M/s. Baba Chemicals (P-2)Bhojpuf at o Sr. No. 40 -do- finished products found at the premises 17CWJC No.4863/02M/s Maa Durga Iron Equipment WorksAurgangabadat Sr. No. 2-do-(1) Soochnanusarcoal company dwara coal lifting ki soochna Zila Udyog Kendra ko nahin diya jate hai, jo unchi anushravan ke liye avashyak hai. (2) Ikai karyarat hai.-do-Could notbe traced despite the fact that Local Post Master was also co-operated during the search 18CWJC No 5503/02(1) M/s Gayatri Enterprises (P-1)Kaimur at Sr. No. 41-do-tkai dwara avashyak panji evam kaghzat uplabdh nahin karaya gaya. Coal company dwara koyla uthao ki soochna zila utpadan Kendra ko nahi karaya gaya hai. Purva mein prapt kolye ki upyogita sandigdha hai.-do-No person was present during visit The construction is rectan-gular shape (size 10 x 4x 3 approx). There are four such structures following by sign board namely Maa Enterpr-ises, Maa Gayatri Enterpri-ses, Maa Tara Enterpri-ses and. (illegible) and all are within one premises fenced by barbed wire having no gate at the entrance (illegible) (2) M/s Mas Tara Enterprises (P-3)Kaimur at Sr.
There are four such structures following by sign board namely Maa Enterpr-ises, Maa Gayatri Enterpri-ses, Maa Tara Enterpri-ses and. (illegible) and all are within one premises fenced by barbed wire having no gate at the entrance (illegible) (2) M/s Mas Tara Enterprises (P-3)Kaimur at Sr. No. 39-do--do-As in Sl. No. 13-do- (3) M/s Maa Enterprises (P-2)Kaimur at Sr. No. 40-do-Ikal dwara avashyak panji evam kaghzat ka sandharan kiyajata hat. Coal company dwara koyla uthao ki soochna zila udyog Kendra ko nahin di gai hai flasvardop vastavik isthiti ki jankari sambhav nahin hai.-do--do- 12. Apart from the status report on the basis of the enquiry made by the Industries Department, Government of Bihar in the case of six units, petitioners in C.W.J.C. No. 13369, 4863 and 5503 of 2002 there also appears to be inspection reports by the Vigilance Department of Eastern Coalfield Limited. Copies of the enquiry reports are enclosed with the counter-affidavit(s) filed by the respondent Coal Company in C.W.J.C. Nos. 4863 and 5503 of 2002. In so far as petitioners in these two writ petitions are concerned the inspection report is adverse. The same report(s) also covers M/s Pandey Silicate Works and M/s Baba Chemicals, the two petitioners in C.W.J.C. No. 13369 of 2002. The inspection report by the Vigilance Department is in favour of these two petitioners but strangely enough copies of the report were not enclosed in the counter-affidavit filed by the Coal Company in C.W.J.C. No. 13369 of 2002. It appears that the Coal Company deemed it fit to produce materials before this Court in a selective way to suit its case. This Court deprecates adopted by the Coal Company. 13. On a closer examination of the status report and on its comparison with the inspection report by the Coal Company Vigilance Department there appears to be some inconsistencies in certain individual cases and it further appears that neither of the two reports is completely free from mistakes or errors. 14. The findings in the status report, atleast in a few cases, do not appear to be conclusive because five other cases (C.W.J.C, No. 1343 of 2002 and C.W.J.C. Nos.
14. The findings in the status report, atleast in a few cases, do not appear to be conclusive because five other cases (C.W.J.C, No. 1343 of 2002 and C.W.J.C. Nos. 1068, 1398, 1127 and 1065 of 2003) which were being heard along with the 18 cases of this batch were withdrawn by the respective petitioners in the midst of hearing since the supply of coal to the units in those cases was restored on the basis of a later enquiry made by the Vigilance Department of the respondent Coal Company, even though the units in those cases were also included, like the petitioners in the remaining cases, in the list of 981 suspect units. 15. In regard to M/s. Bindhyabasini Gool Briquette Industries, the sole petitioner in C.W.J.C. No. 13394 of 20002, it was not shown either by the respondent coal company or by the State that this unit too was in the list of 981 establishments found suspect in the status report or in the list of 759 establishments put under show cause by the public notice dated 10-3-2002. There is, therefore, nothing to indicate that the supply of coal to this unit was stopped on the basis of the status report by the Industries Department. 16. It further appears that certain establishments were included in the list of 981 units in the status report and later on also in the list of 759 units in the show cause notice even though there was no adverse remarks against those establishments. In case of M/s Kifayati Gool Udyog (petitioner No. 4 in C.W.J.C. No. 14505 of 2002). M/s Bihar Gool Udyog (petitioner in C.W.J.C. No. 936 of 2003). M/s Nisha Briquette Industry (petitioner in C.W.J.C. No. 6 of 2003) and M/s Tathagat Gool Udyog (petitioner in C.W.J.C. No. 45 of 2003), what is stated in the status report is as follows: "Manniye Uchcha Nyayalaya mein writ yachika dayar hai. Atah yeh mamla subjudiced hai. Aisi isthitiai mein manniye Uchcha Nyayalaya ke adesh ke pratikchha ki ja sakti hai." 17. The above quoted remarks cannot be construed as casting any suspicion on the units in question being bona fide consumer of coal and those remarks, in my considered opinion, cannot reasonably form the basis for stopping the supply of coal to those units. 18.
Aisi isthitiai mein manniye Uchcha Nyayalaya ke adesh ke pratikchha ki ja sakti hai." 17. The above quoted remarks cannot be construed as casting any suspicion on the units in question being bona fide consumer of coal and those remarks, in my considered opinion, cannot reasonably form the basis for stopping the supply of coal to those units. 18. Four units namely M/s Pandey Silicate Works and M/s Baba Chemicals (petitioners in C.W.J.C. No. 13369 of 2002), M/s Maa Durga Iron Equipment Works (petitioner in C.W.J.C. No. 4863 of 2002) and M/s Maa Gayatri Enterprises (petitioner No. 1 in C.W.J.C. No. 5503 of 2002) are not included in the list of 759 units which are put under show cause notice by the public notice dated 10-3-2003. 19. In the case of four other units namely M/s Chandan Glass & Silicate Works (petitioner in C.W.J.C. No. 13251 of 2002), M/s Mahavir Chemical Industries (petitioner in C.W.J.C. No. 13311 of 2002), M/s Maa Tara Enterprises and M/s Maa Enterprises (petitioners in C.W.J.C. No. 5503 of 2002), though theses units were included in the list of 981 units in the status report, it was not clear whether those units werealso included in the list of 759 units in the public notice, dated 10-3-2003 and the State Counsel or the Counsel appearing for the Coal Company did not bring to the notice. of the Court any material to show that these four units were also included in the list of 759 units in the show cause notice, dated 10-3-2003. 20. Coming now to a comparison of the findings in the status report and the remarks in the inspection report by the Coal Company Vigilance Department there appears to be a glaring inconsistency in the case of M/s Maa Durga Iron Equipment Works (the sole petitioner in C.W.J.C. No. 4863 of 2002). In the inspection-report, dated 25-11-2002 by the Vigilance Department of the Coal Company (a copy of which is at Annexure-R/2 in C.W.J.C. Nos. 4863 and 5503 of 2002) in regard to M/s Maa Durga Iron Equipment Works it is stated as follows: "Could not be traced despite the fact that the local Post Master was also co-operated during the search." 21.
4863 and 5503 of 2002) in regard to M/s Maa Durga Iron Equipment Works it is stated as follows: "Could not be traced despite the fact that the local Post Master was also co-operated during the search." 21. But in the status report by the Industries department in regard to the same unit it is stated as follows: "(1) Soochnanusar coal company dwara coal lifting ki soochna Zila Udyog Kendra ko nahin diya jata hat, jo uchit anushravan ke liye avashyak hai. (2) Ikai karyarat hai". 22. It is thus evident that in so far as M/s Maa Durga Iron Equipment Works is concerned the inspection report by the Coal Company Vigilance Department is not correct and what is more significant is that the task force team of the Industries Department found the.unit operational. 23. Again in case of M/s Pandey Silicate Works and M/s Baba Chemicals (the two petitioners in C.W.J.C. No. 13369 of 2002) the Industries Department status report observed that no papers in connection with production was produced and hence the use of coal supplied to the two units appeared to be suspect. But in the inspection report dated 1-3-2002 by the Coal Company Vigilance Department (Annexure-R/2 in C.W.J.C. Nos. 4863 and 5503 of 2002) in regard to the two units it was observed as follows: "Furnace was found under firing..., Some finished products found adjacent to furnace, Certain amount of coal was also found near the furnace." 24. This also shows that the two units were operational and they were using the coal for production of Sodium Silicate even though no papers in connection with the production might have been produced before the Task Force of the Industries Department. 25.
This also shows that the two units were operational and they were using the coal for production of Sodium Silicate even though no papers in connection with the production might have been produced before the Task Force of the Industries Department. 25. On the basis of the discussions made above, I find and hold that in the cause of the following units the stoppage of coal is not justified on the basis of any objective findings in the status report by the Industries Department or the inspection report by the Coal Company Vigilance Department: (i) M/s Kifayati Gool Udyog (petitioner No. 4 in C.W.J.C. No. 14505/2002) (ii) M/s Bihar Gool Udyog (petitioner in C.W.J.C. No. 936 of 2003) (iii) M/s Nisha Briquette Industry (petitioner in C.W.J.C. No. 6 of 2003) (iv) M/s Tathagat Gool Udyog (petitioner in C.W.J.C. No. 45 of 2003) (v) M/s Bindhwashini Gool Briquettes Industries (Petitioner in O.W.J.C. No. 13394/02) (vi) M/s Pandey Silicate Works (Petitioner No. 1 in C.W.J.C. No. 13369/02) (vii) M/s Baba Chemicals (Petitioner No. 2 in C.W.J.C. No. 13369/02) (viii) M/s Maa Durga Iron Equipment Works (Petitioner in C.W.J.C. No. 4863/ 02) 26. In the case of rest of the units there are some materials to justify the stoppage of supply of linkage coal and I now proceed to consider the arguments advanced by the parties in regard to the units other than the eight units enumerated above. 27. Mr. Kameshwar Prasad Gupta, Advocate appearing for the petitioners in the 1st fifteen cases of the batch, Mr. Y.V. Giri, Senior Advocate appearing for the petitioners in C.W.J.C. No. 13.369 of 2002 (the two petitioners in which are among the list of eight units enumerated above) and Mr. Mihir Kumkar Jha, Advocate appearing in the remaining two cases strongly assailed the status report of the Industries Department and the action of the respondent coal companies in stopping the supply of coal to the petitioner units on that basis. But having regard to the limited controversy in these cases, it is not required to examine their submissions in detail. Suffice to note that all the three Counsel laid considerable stress on what was said to be violation of the rules of natural justice. It was stated that the respondents never gave any notice or opportunity to show cause to the petitioners before stopping the supply of coal to them. 28.
Suffice to note that all the three Counsel laid considerable stress on what was said to be violation of the rules of natural justice. It was stated that the respondents never gave any notice or opportunity to show cause to the petitioners before stopping the supply of coal to them. 28. The Counsel for the petitioners relied upon a number of orders and judgments passed by this Court earlier. Some of those are interim orders or brief orders following an earlier decision. But there are two single Judge decisions which are reasoned judgments and; therefore, need to be considered here. One is the judgment, dated 15-1-2002 by the Honble Mr. Justbe S.K. Katriar by which two writ petitioins, i.e. C.W.J.C. No. 10066 of 2002 Aman Lime Works V/s. State and C.W.J.C. No. 10124 of 2000 Laxmi Sodium Silicate Industries V/s. State, were disposed of. The supply of linkage coal to M/s. Aman Lime Works and M/s Laxmi Sodium Silicate Industries was stopped under similar circumstances. In that decision the Hon ble Mr. Justice Katriar, sitting singly, found and held that the State Government and the coal company were in error in stopping the supply of coal to the units even without taking a final decision, making a proper application of mind on the basis of the show cause that might have been filed by the consumers. The two writ petitions were accordingly allowed in the following terms: "In the result, this writ petition is allowed. The orders dated 26-6-2000 (Annexure 8), and 15-7-2000 (Annexure 9), are hereby quashed. The petitioners of C.W.J.C. No. 10066 of 2000 and C.W.J.C. No. 10124 of 2000 shall be entitled to supply of coal as per the linkage policy of the Coal Company till such time the State Government passes a final order. In view of the lapse of time in the meanwhile, it will be open to the State Government and its functionaries to issue a fresh show cause notice to the petitioners, if so advised. It goes without saying that the present judgment should not be taken to be a expression of the views of this Court on the merits of the matter." 29. In another batch of four writ petitions, Kalwar Chemicals V/s. State of Bihar, (C.W.J.C. No, 3789 of 2001) and others cases, the Hon ble Judge took the same view in cases arising from similar facts and circumstances.
In another batch of four writ petitions, Kalwar Chemicals V/s. State of Bihar, (C.W.J.C. No, 3789 of 2001) and others cases, the Hon ble Judge took the same view in cases arising from similar facts and circumstances. Paras 12 and 13, containing the operative portion of the judgment, dated 24-5-2002 is reproduced below: "12. Having considered the submissions, it appears that the impugned order is entirely provisional in nature, the supply of coal has been suspended/kept in abeyance pending final orders. In that view of the matter, respondent Nos. 3 to 5 are hereby directed to consider the matter and pass a final order after affording adequate opportunity to the petitioner to explain its position. "(13) In the result, C.W.J.C. No. 4335 of 2001 is hereby allowed. There is no need to set aside the impugned order dated 8-3-2001 (Annexure 13), being provisional in nature. The supply of coal as per the Linkage System shall as an interim measure continue to be made to the petitioner which shall abide the final order of respondent Nos. 3 to 5." 30. The respondent coal company preferred appeals against both the decisions of Justice Katriar. L.PA Nos. 847, 848, 852 and 857 of 2002 arising from the judgment in M/s. Kalwar Chemicals (C.W.J.C. No. 3789 of 2001 cases) came up for admission before a bench presided over by the Hon ble the Chief Justice and the appeals were dismissed by order, dated 7-8-2002. It seems that those appeals were dismissed mainly on the ground that the appellants were unable to satisfy the Court that the powers to keep a watch on the proper consumption and utilisation of the linkage coal by the linked consumer could be delegated by them (the Coal company) to any other authority or agency, e.g., the Industries Department of the Governmen. The order of the Division Bench dismissing the appeals, in so far as relevant, is quoted below: "What the appellants have failed to show to the Court are conditions of the Linkage Scheme on the reserve of this annexure which contains ten conditions. The Court reads Clauses 6 & 7 wherein certain obligations are put on the persons who hold a licence as also on Coal India Ltd. or any of its subsidiary company(s).
The Court reads Clauses 6 & 7 wherein certain obligations are put on the persons who hold a licence as also on Coal India Ltd. or any of its subsidiary company(s). The latter will have the right to visitation at any time to witness the trial or the operations of the plants of those who utilise the coal so supplied. This apparently is about a Linkage Scheme. Clause 10 refers to a competent authority. "When the Court made an inquiry that the power apparently is of Coal India Ltd. or its subsidiary company, the argument of learned Counsel was that this power has been delegated. "When the appellants were asked to show to the Court where be the powers by which this delegation has been made to the industries department as then the question would still arise whether a principal may delegate and abdicate his obligation to his agent and say he has nothing to do with the matter. The powers of the delegated agent could not be beyond the principal. Nothing was shown to the Court." 31. The other set of appeals being L.P.A. Nos. 701 of 2002 preferred by the coal company against the single Judge decision in M/s Aman Lime Works came up before a bench presided over by Hon ble Mr. Justice Nagendra Rai and those appeals were allowed by a long and reasoned decision, dated 5-7-2002. In that decision the Division Bench, significantly, took the view that the supply of coal under the Linkage Scheme was not a right but a concession, subject to certain conditions. In this regard, it was observed and held as follows: "Admitted position is that there is no restriction on the sale of coal and any unit can purchase the coal and as such the respondents/ writ petitioners are free to purchase the coal in the open market. It is also admitted position that the registered units are provided the benefit under the Linkage system under which they have conferred certain benefits in the shape of non-payment of premium as well as the supply of coal out of turn. To get this benefit certain conditions have been imposed under the aforesaid scheme as well as under the linkage system and they can take the said benefit only on the fulfilment of the conditions mentioned therein.
To get this benefit certain conditions have been imposed under the aforesaid scheme as well as under the linkage system and they can take the said benefit only on the fulfilment of the conditions mentioned therein. They cannot insist that the supply of the coal should be made to them under the linkage system even they do not fulfil the conditions mentioned under the aforesaid scheme as well as under the linkage system. Under the Scheme they have to send report about utilisation and to fulfil other conditions. It is not a right to claim supply of coal. It is a concession which has to be availed by them on fulfilment of terms and conditions mentioned in the scheme. The reports and the Minutes dated 15-4-2000 show that a large number of units have been found to be closed and still they have been availing the benefits of linkage system and seeing the aforesaid alarming situation, the authorities have decided to take action and in this connection show cause notices have been issued to the units including the units of the writ petitioners/respondents and they have filed their show cause and the matter is pending for final decision. The direction of the learned Single Judge, therefore, to consider the show cause and take a final decision with regard to registration/de-registration of the Units are concerned, in our view, that does not suffer from any infirmity and that matter has to be finally decided by the authority." 32. But the direction given by learned Single Judge for supply of Linkage coal till a final decision was taken interfered with and the appeals were allowed in the following terms: "The provision for supply of the coal during the pendency of the inquiry as stated above is a concession granted to the unit. Once prima facie it has been found that they have not fulfilled the conditions and the inquiry is pending with regard to de-registration matter, the direction to suspend the supply of coal, in our view, is reasonable one and serves the public purpose. It is in the public interest that supply of coal should be suspended till the matter is finally decided by the authority concerned. The said decision can neither be termed as unreasonable nor arbitrary.
It is in the public interest that supply of coal should be suspended till the matter is finally decided by the authority concerned. The said decision can neither be termed as unreasonable nor arbitrary. Accordingly, we do not find any infirmity in the orders contained in Annexures-8 and 9 to the writ applications being C.W.J.C. No. 10066 of 2000. The matter cannot be allowed to remain pending before the authorities concerned for the indefinite period. Accordingly, we direct the concerned authority to dispose of the matter within a period of two months from the date of receipt production of a copy of this order. It goes without saying that if the matter is finally decided in favour of the writ petitioners/respondents, then necessary communication should be made to the Coal India Limited and its subsidiary for the benefit in terms of the linkage system. In case the matter is decided against the writ petitioners in that case they are not entitled to take benefit under the linkage system. "With the aforesaid observations/directions, both the appeals are allowed." 33. The view taken by the Division Bench that the supply of coal under the linkage scheme was not a right but a concession, subject to conditions is significant for the present in as much as it completely repeals the submissions made on behalf of the petitioners, invoking the principles of natural justice, The Division Bench decision in L.P.A. Nos. 701 and 710 of 2002 fully covers the facts of this case and is binding upon me sitting singly. 34. It may here be noted that on behalf of the petitioners reliance was placed on another set of orders passed by this Court in regard to supply of linkage coal to SSI units. In this regard the petitioners relied upon, (i) the decision by the Ranchi Bench of this Court (this is now the Jharkhand High Court) in C.W.J.C. No. 2750 of 1997 (R) and the order passed by the Supreme Court in Civil Appeal No. 6317 of 1998 arising from the High Court decision; (ii) the order, dated 20-2-2002 passed by Hon ble Mr. Justice S.K. Katriar in C.W.J.C. No. 4337 and 4339 of 2001, following the aforesaid two decisions and (iii) a Division Bench decision in L.P.A. No. 86 of 2001.
Justice S.K. Katriar in C.W.J.C. No. 4337 and 4339 of 2001, following the aforesaid two decisions and (iii) a Division Bench decision in L.P.A. No. 86 of 2001. Though all these orders are in regard to supply of linkage coal by the respondent coal company, there is a fundamental difference between the cases in hand and the cases in which those orders were passed. In the decisions relied upon by the petitioners, the units were not suspect consumers of coal. The units were established in pursuance of an advertisement issued by Coal India Limited itself or by the Central Government. The units were set up by their respective owners in response to advertisement/invitation issued by the Coal India Limited or the Central Government and after taking large sums of money as loan from banks/financial institutions. The units enjoyed linkage facility but the supply of coal was interrupted and discontinued, not because the units were suspect consumers but owing to certain policy changes in the coal company. In some cases the grievance was that allotment orders were issued from collieries where there was no coal or from collieries which were at such great distance from the units that it was not possible to lift coal from there. It was in those circumstances that the Ranchi Bench had issued a number of directions which, however, were considerably toned down by a consent order passed by the Supreme Court and it was in those from collieries which were at such great distance from the units that it was not possible to lift coal from there.
It was in those circumstances that the Ranchi Bench had issued a number of directions which, however, were considerably toned down by a consent order passed by the Supreme Court and it was in those from collieries which were at such great distance from the units that it was not possible to lift coal from there. It was in those circumstances that the Ranchi Bench had issued a number of directions which, however, we e considerably toned down by a consent order passed by the Supreme Court and it was in those facts that the Division Bench in L.P.A No. 86 of 2002 passed the following order: "Accordingly, this appeal is allowed and the order passed by the learned Single Judge is set aside with this observation/direction that if the coal is available after meeting the demand of core sector then the writ petitioner-respondents are to be supplied 5000 M.T. of coal per month, but in case of non-availability of coal and railway wagons after meeting the demand of core sector, the supply of coal to the respondent-Company is to be made on pro-rata basis in terms of the policy decision taken by the appellants, on the basis of which, the notice, as contained in Annexure-5 to the writ application, has been issued." 35. It is, therefore, evident to me that the other set of decisions relied upon by the petitioners have no application to the facts of these cases and what covers this batch of cases is the Division Bench decision, dated 5-7-2002 in L.P.A. Nos. 701 and 710 of 2002. 36. In regard to the following eight units namely (i) M/s. Kifayati Gool Udyog (petitioner No. 2 in C.W.J.C. No. 14505/2002), (ii) M/s Bihar Gool Udyog (petitioner in C.W.J.C. No. 936 of 2003), (iii) M/s Nisha Briquette Industry (petitioner in C.W.J.C. No. 6 of 2003), (iv) M/s Tathagat Gool Udyog (petitioner in C.W.J.C. No. 45 of 2003), (v) M/s Bindhwashini Gool Briquettes Industries (petitioner in C.W.J.C. No. 13394/ 02), (vi) M/s Pandey Silicate Works (petitioner No. 1 in C.W.J.C. No. 13369/02, (vii) M/s Baba Chemicals (petitioner No. 2 in C.W.J.C. No. No. 13369/02) and (viii) M/s Maa Durga Iron Equipment Works (petitioner in C.W.J.C. No. No. 4863/02), it is already held that the stoppage of supply of linkage coal to them was without any reasonable basis.
In their case, therefore, the Coal Company is directed to restore the supply of linkage coal subject to the normal conditions. The resumption of supply of coal, however, shall not stand in the way of the Coal Company or the State Government to make a re-verification with regard to the bona fide of these units and any further decision may be taken in the light of the re-verification report. But till then the Coal Company must resume the supply of coal to these units. 37. As regards the other 17 units are concerned, in the light of the Division Bench decision dated 5-7-2002 in I.P.A. Nos. 701 and 710 of 2002 these writ petitions are disposed of with the following directions: (i) In response to the advertisement issued by the Industries Department on 10-3-2003, those writ petitions who have not filed their show cause may yet file their respective show cause and materials in support of their case within fifteen days from today. (ii) In cases where show cause is already filed, the Industries Department must take a final decision as to whether or not the units are bona-fide consumer of Linkage coal within two months from today. (iii) In cases in which the petitioners are yet to file their show cause, a final decision must be taken by the Industries Department within two months from the date of receipt of the show cause by the respective petitioner units. (iv) Before taking a final decision, adverse to the unit, the concerned petitioner will be afforded an opportunity of hearing and to produce all materials in support of its claim. (v) The registers and documents concerning payment of sales tax etc. are undoubtedly relevant for the purpose of the enquiry but the petitioners may satisfy the concerned authorities that the unit(s) are bona-fide consumer otherwise also and on the basis of other materials. (vi) The restoration of supply of linkage coal with regard to these 17 units would depend upon the final decision taken by the Industries Department in case of each of the writ petitioners. (vii) It will be open to the respondent company to hold its own independent enquiry and to take a decision on that basis.
(vi) The restoration of supply of linkage coal with regard to these 17 units would depend upon the final decision taken by the Industries Department in case of each of the writ petitioners. (vii) It will be open to the respondent company to hold its own independent enquiry and to take a decision on that basis. (viii) The cases of the eight petitioners named above is separate from the rest of the cases and, therefore, the supply of linkage coal to those units shall be restored without any delay but the supply would abide by a final decision on the basis of an enquiry made in regard to those units as well. (ix) In cases where on the basis of the final decision the linkage is to be discontinued, the deposits made by those units would be either refunded or adjusted against purchase of coal from open sale as desired by the concerned writ petitioners. 38. All these writ petitions stand disposed of with the aforesaid observations and directions.