COAL INDIA LIMITED Vs. COAL CONSUMERS ASSOCIATION

JUDGEMENT

(1.) These Special Leave Petitions are directed against the interim orders dated 26.07.2010 passed by a Division Bench of the Allahabad High Court in Writ Petition C-Nos. 42231, 42760, 42229 and 42708 of 2010 by which the orders dated 01.07.2010 of Bharat Coking Coal Limited (BCCL), the petitioner No. 2, suspending supply of coal to 45 industrial consumers for their industrial units had been stayed till the matters were to be taken up for admission/orders by the High Court.

(2.) The relevant facts very briefly are that prior to 2007 industrial consumers were granted coal linkages for utilization in their small scale industries. On 18.10.2007, the Government of India, Ministry of Coal, formulated a New Coal Distribution Policy by which coal linkages were discontinued and instead coal was to be supplied to various consumers including small scale industries under the terms and conditions of Fuel Supply Agreement (for short Rs. FSA). Accordingly, petitioner No. 2 entered into FSA with different industrial consumers of coal. Clause 4.4 of FSA stipulated that the total quantity of coal supplied pursuant to the agreement is meant for use in the industry of the purchaser and the purchaser shall not sell/divert and/or transfer the coal for any purpose whatsoever and the same shall be treated as material breach of the agreement and in the event that the purchaser engages or plans to engage into any such resale or trade, the seller shall terminate the agreement forthwith without any liabilities or damages whatsoever payable to the purchaser. Clause 15.1.5 of FSA further provided that in the event that the purchaser resells or diverts the coal purchased pursuant to the agreement, the seller shall have the right to terminate the agreement forthwith. On 07.06.2009, however, the Central Bureau of Investigation (for short Rs. CBI), on receipt of credible information, registered an FIR under Section 120B read with 420, 467 and 471 of the Indian Penal Code together with Section 3(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 against Shri Udayan Bhattacharya, the then General Manager (S &M), BCCL, Dhanbad, and ten industrial consumers alleging that the coal sold by BCCL to the ten industrial consumers have been sold in the open market and not utilized in their respective plants. On the basis of the allegations in the FIR, supplies of coal to the ten industrial consumers were suspended on 13.06.2009, some of whom challenged the suspension of supply of coal in writ petitions before the different High Courts. After investigation, the CBI filed charge sheet on 28.06.2008 against Shri Bhattacharya and the ten industrial consumers in respect of whom the FIR had been lodged. Soon thereafter, on 01.07.2010 the petitioner No. 2 issued orders suspending supply of coal to 45 industrial consumers against whom no FIR had been lodged by the CBI.

(3.) Aggrieved, the respondents filed the Writ Petitions in the Allahabad High Court in July, 2010 praying inter alia for quashing the order dated 01.07.2010 suspending supplies of the coal to the members of the respondent- association in Special Leave Petition (C) Nos. 21972 of 2010 and to the respondents in Special Leave Petitions (C) Nos. 21973 and 21974 of 2010 and by the interim orders dated 26.07.2010 the Division Bench of the High Court stayed the operation of the order dated 01.07.2010 suspending supplies of coal.