PRAKASH INDUSTRIES LIMITED CHAMPA Vs. UNION OF INDIA

JUDGEMENT

(1.) CHALLENGE in this petition is to the order dated 09.11.2011 (Annexure P/1) where by the Coal Supply Agreement (FSAs) dated 31.07.2008 and further transactions between the South Eastern Coalfields Ltd / respondent No. 2 & 3 (for short 'the SECL), and the petitioner company has been kept in abeyance till further advice with immediate effect. Further, the petitioner seeks a direction to the SECL to resume coal supply to the petitioner and continue with further transactions with the petitioner.

(2.) THE facts, in brief, as projected by the petitioner are that the petitioner is a company registered under the provisions of the Companies Act, 1956 carrying on business of manufacture of sponge iron. THE petitioner has also set up a captive power plant (for short 'the CPP') for use in the sponge iron plant. THE petitioner, in order to expand its business, is taking continuous steps for expansion of its power generation units and for the said purpose, the petitioner entered into a Memorandum of Understanding (for short 'the MOU') with the Government of Chhattisgarh on 07.01.2005 and another on 18.06.2007. On 06.11.2006 (Annexure P/3), the Government of India, through respondent No. 1, advertised a list of 38 coal blocks for captive coal mining for allocation to companies engaged in generation of power, production of iron and steel and production of cements. Pursuant thereto, the petitioner made two applications for allocation for captive coal block in Hasdeo Arand Coal Field in Chhattisgarh, namely Kesla North Captive Coal Block and Vijay Central Captive Coal Block for meeting its requirement for the integrated steel plant, situated at Champa. In order to meet the coal requirement for its 50 MW and 15 MW CPP, the petitioner had entered into two fuel supply agreements (for short ?the FSAs') with the SECL on 31.07.2008 (Annexure P/4 colly.). Under the terms of the agreement, the SECL was required to supply coal to the petitioner without any interruptions to be consumed at the aforestated CPPs, situated at Champa. THE coal supplied by the SECL was being used by the petitioner-company purely for the above two CPPs.

(3.) SHRI Hansaria would next contend that the impugned order dated 09.11.2011 is without authority of law as the order is passed under the FSAs and there is no provision of suspension of coal supply under any other condition, except as aforestated in the agreement. Thus, the impugned order dated 09.11.2011 deserves to be quashed.