MALLIKARJIMA CHEMICALS Vs. SINGARENI COLLIERIES

JUDGEMENT

(1.) The wobbling in judicial dicta of the power to issue writ or order under Article 226 of the Constitution relating to contractual area has given occasion to the petitioners to press home that the ratio in N.T.P.C. Ltd., vs. Bhanu Constructions Co, (P) Ltd., (for short, "Bhanu Construction Case) has been knocked off its bottom by Shri Anadi Mukta Sadguru S.M.V.S. J.M.S. Trust vs. V.R. Rudani (for short, Rudani case) and Dwarakadas Morfatia & Sons vs. Bombay Port Trust (for short, "Bombay Port Trust case"), necessistating to have an indepth investigation and deep look into the common questions of fact and law arise for adjudication in this bunch of writ petitions. Hence they are disposed of by a common judgment. It is agreed that the facts in W.P. No. 1039/89 are sufficient for disposal of the points arise in these cases. The facts lie in a short compass. The petitioner Company is a Small Scale Industry registered as such with the Government of Andhra Pradesh. It has established a lime kiln at Piduguralla in Guntur District to burn lime. Coal is its raw material. The petitioner's unit was established on securing loans from public financial institutions. The Singa-reni Collieries (first respondent) is a public sector undertaking, admittedly an instrumentality within the meaning of Article 12 of the Constitution. It has monopoly to exploit coal and to supply it to various public and private undertakings, industries, etc. The Joint Commissioner of industries made recommendation to the first respondent of the petitioner's requirement at 230 metric tonnes per month. The first respondent had agreed to supply the coal (there is a dispute as regards the quantum of coal required or supplied which is not material for decision in this case to resolve the dispute). During the year 1986, the petitioner was supplied with coal for seven months and thereafter it was stopped for five months even at the reduced rates. It is the case of the petitioner that in the month of January 1989, dispute the petitioner approaching the first respondent for supply of the coal it has not been supplied and its repeated attempts proved futile. Due to failure to supply the coal, it had to close down the factory and threw 50 workers out of employment. The petitioner cannot have coal from anywhere. Even if the petitioner is permitted to import coal from outside State, it would be at a prohibitive cost which it cannot afford to have. The petitioner when approached repeatedly, it received a reply dated July 30, 1988 that "the petitioner unit is a non-existent one". The 3rd respondent - District Manager (Joint Director) of Industries Department through his letter dated September 21, 1988, informed the first respondent that the petitioner-unit is still existing with fire brick kiln" and requested to supply coal every month with an intimation to the said office and yet, the petitioner has not been supplied with coal. Thus, it is seeking a writ or direction to the first respondent to supply coal at the agreed quantity of 230 metric tonnes per month.

(2.) In the counter-affidavit filed by the first respondent it is admitted that the petitioner is a Small Scale Industry to burn lime and it had agreed to supply coal as per the norms recommended by the Technical Advisory Committee constituted by the Government of Andhra Pradesh and also as per the terms and conditions of the sale note ; the coal supply subject to any industry including the petitioner is subject to sale note terms and conditions. It is agreed for supply of a maximum permissible limit of 230 M. Ts of coal every month provided it works at 100 per cent capacity. Their inspection studies revealed that the demand would work out at 70% of the maximum permissible quantity and it is adequate. They disputed supply of various quantities given at different times, the details of which are not material. It is admitted that the petitioner was supplied coal from April 1986 ; for some time in 1987 there is no demand for supply. An inspection was made of the petitioners' unit on September 30, 1987. In June 1988, the first respondent's officials inspected all the units in Piduguralla and found that the owners of the units intentionally removed the name boards. There are about 200 lime kilns in that town. The officials could not locate the kiln of the petitioner which was accordingly intimated. The petitioner had violated the terms and conditions of the sale note and mis-utilised the allotted coal. After obtaining undertaking from the petitioner to make it for proper use, it resumed supply of coal in October 1988 and yet, two of the coal lorries of the petitioner were diverted to Hyderabad to sell them in black market at higher rate. The coal is a scarce commodity to be used rationally and on scientific basis. The petitioner is not seeking for supply of coal as a bona fide consumer but only to sell it in black market. The petitioner has undertaken in his letter dated September 24, 1988 to suspend supply of coal provided the petitioner violates the terms and conditions of the sale note. Since the petitioner had diverted the coal to Hyderabad in violation of the terms and conditions the respondent suspended the supply of coal which is always subject to the contract. The writ petition is not maintainable to enforce contractual liability.

(3.) The petitioners also filed applications W.P.M.P. Nos. 1276/89 & batch for supply of coal pending the writ petition and a further application to call for a report from the Commercial Tax Officer in-charge of the check-post on Nagarjunasagar and on receipt of the report, by order dated January 31, 1989, my learned brother. M.N. Rao, J, found that the lorries loaded at the collieries of the respondent reached Nagarjunasagar check post (via) Hyderabad and thus directed to supply at 50% of the quantity to the petitioner every month. In Writ Appeals Nos. 176/89 and batch, by order dated February 22, 1989, the said order was confirmed. The undisputed facts thus emerge are that the petitioner is a small scale unit registered with the State of Andhra Pradesh. As a small scale unit, it had secured finances from national financial institutions. Burning of lime is their main business and the coal is the raw material. The first respondent being the sole-Company exploiting the coal, it agreed to supply coal to the petitioner ; though the quantum is in dispute, it supplied the coal for some time and thereafter it stopped supplying. The first reason was the non-existence of the unit but that was repelled by the Industries Department itself and directed to supply the coal under intimation to the State Government Industries Department. Thereafter it refused to supply on the allegation that the coal was mis-used by diverting it to Hyderabad for sale in Black-marketing obviously for illegal gain in violation of the terms and conditions of the sale note. But it is belied by the evidence submitted by the Commercial Tax Department viz., the stated lories passed Nagarjunasagar Check Post from Hyderabad. That would mean that the coal appears to have reached the petitioner-unit.