PRAKASH INDUSTRIES LIMITED Vs. SOUTH EASTERN COALFIELDS LIMITED A COMPANY REGISTERED UNDER COMPANIES ACT, 1956

JUDGEMENT

(1.) The petitioner, who is engaged in diverse business activities including the manufacturing of Sponge Iron, has filed these two writ petitions. In WPC No.1657/2016, the petitioner has sought quashment of the communication dated 03.05.2014 of the respondent/SECL offering supply of coal to the petitioner at the current price under the tapering linkage as per the tapering policy. The petitioner would further pray for a direction to the respondent to renew the Fuel Supply Agreements (FSAs) with the petitioner as per the normal linkage policy with further prayer to resume coal supply on the basis of normal linkage in compliance with the reasoned order dated 24.03.2011 passed by the Director (Marketing), Coal India Limited (CIL) under the orders of the High Court of Calcutta.

(2.) In the second writ petition i.e. WPC No.254/2018, the petitioner has sought quashment of the Final Order dated 31.07.2017 of the Ministry of Coal, Government of India together with other reliefs which are the same as prayed in the first writ petition.

(3.) Facts of the case, as projected in the writ petitions, are that the respondent/SECL is a subsidiary of CIL, who has been delegated the power to allocate coal supplies to various users depending on the nature of use of coal (fuel) either on long term linkage, popularly known as normal linkage or short term linkage i.e. tapering linkage. To decide the nature of linkage to a user for supply of coal, Linkage Committees have been formed by the Government of India (GOI). Under the National Coal Distribution Policy, 2007 the GOI decided to supply coal through FSAs at the notified price fixed by the CIL. According to the petitioner, it was granted linkage categorized as normal linkage at all relevant times for which the orders dated 21.06.2002 and 07.10.2003 (Annexure P-7) were passed by the GOI. Pursuant to the said order FSA/Coal Supply Agreement was executed between the SECL and the petitioner on 31.07.2008 (Annexure P-8). On 26.02.2010 (Annexure P-9) the GOI issued Guidelines/Policy relating to issuance of Letter of Assurance (LOA)/allocation of coal on "tapering basis" to various consumers of Power, Cement and Sponge Iron. This is popularly known as tapering policy. By Notice dated 09.03.2010 (Annexure P-10) the SECL informed that pursuant to the tapering policy released by the GOI, for the period subsequent to normative date of commencement of production from coal block, supplies would be on tapering basis and Coal Controller shall be responsible for quantification and regularization of tapering linkage in consultation with CIL.