M/S. Maruti Clean Coal & Power Ltd vs B.L. Wadhera & Ors

washery of 10 M.T.Y. capacity on Khasra Nos.850/30, 850/24, 2

850/31, 850/28, 850/27 and 850/32 of Village Ratija, District

Korba leased by the State of Chhattisgarh through

Chhattisgarh State Industrial Development Corporation

(`CSIDC' for short), has prayed to direct M/s. South Eastern

Coal Field Limited (`SECL' for short) to start supply of coal

immediately and issue Transit Passes/Delivery Orders through

the washery of the petitioner on behalf of linked and other

customers on instructions/requests from all such

customers/purchasers of coal.

2. In order to understand the scope and ambit of the prayer

made by the petitioner, it would be relevant to notice certain

facts. M/s. Maruti Clean Coal & Power Limited is a company

registered under the provisions of the Companies Act. It

applied for the allotment of about 15 hectares (37.91 acres) of

land of village Nawagaon Khurd (now Ratija), District Korba,

(`the land' for short) for setting up a Coal Beneficiation Plant

with a capacity to wash 10 million tons of coal per annum.

The land demanded was adjacent to already existing two coal

washeries one of which was set up by ST-CLI in which one 3

Aryan Coal Beneficiation Pvt. Ltd. has 26% holdings and

another Coal Washery set up belongs to Aryan itself. The

officials of the Revenue, Forest and Industry Departments of

the State conducted a thorough inspection of the land

demanded by the petitioner. After being satisfied that the land

demanded was not forest land and requirements of

environmental laws were complied with by the petitioner, the

officials recommended to the State to allot the land to the

petitioner. Pursuant to the said recommendation, a lease deed

dated December 5, 2002 for a period of 99 years was executed

in favour of the petitioner by the State of Chhattisgarh

through CSIDC. The purpose for which the lease deed was

executed was to enable the petitioner to set up a coal washery.

Pursuant to the said lease deed, the petitioner was put in

possession of the land. However, subsequently, SECL claimed

title to the land and alleged that the land did not belong to the

State Government and, therefore, could not have been leased

by the State to the petitioner.

4

In March/April 2003, one Mr. B.L. Wadhera, a public

spirited citizen instituted WP (C) No.1264/2003 before the

High Court of Chhattisgarh at Bilaspur to prevent the

petitioner from setting up its coal washery on the land allotted

to it by the State Government on the ground that the land

allotted were forest land. The High Court, by an ex parte order

dated April 24, 2003, directed the petitioner to maintain

status quo regarding the land allotted to it and not to cut trees

standing on the land till further orders. In view of the dispute

pertaining to the title of the land between SECL and the State

Government, the Union of India, vide letter dated May 7, 2003

sent through the Ministry of Coal, gave the petitioner two

options (1) to wait until title issue is decided; or (2) to proceed

on the assumption that the title vests in SECL and on that

basis, to request the SECL to allot the land to the petitioner.

It was also mentioned in the said letter that in the event the

petitioner chose the second option, Coal India Limited and

SECL would be requested by the Ministry to initiate action for

leasing the land to the petitioner. The record shows that by

letter dated May 9, 2003, the petitioner elected the second 5

option. The petitioner filed an application for vacation of the

stay order. The High Court, by order dated May 9, 2003,

modified its earlier order and allowed the petitioner to

continue with the construction of the main building but

restrained it from installing the machineries. Meanwhile, the

SECL wrote a letter dated June 27, 2003 to the Ministry of

Coal stating that it had no objection in leasing the land to the

petitioner subject to certain conditions including the condition

that the fact that the land belonged and belongs to SECL is

acceptable to the petitioner. Feeling aggrieved by order dated

May 9, 2003, Mr. B.L. Wadhera filed SLP (C) No.22531 of

2003. This Court, by order dated November 24, 2003 stayed

further construction on the land. Subsequently, the said SLP

was tagged with IA No.857-858 of 2003 filed by Mr. Wadhera

and one Mr. Deepak Aggarwal respectively. This Court, by

judgment dated April 10, 2006 in case of T.N. Godavarman

Thirumulpad vs. Union of India & Ors. (2006) 5 SCC 28,

dismissed the application of Mr. Deepak Aggarwal observing

that it was filed with mala fide intention. The interim order

passed staying further construction was vacated. On the 6

pronouncement of judgment by this Court, the petitioner filed

an application in the writ petition pending before the High

Court of Chhattisgarh with a prayer to dismiss the writ

petition. The record shows that the said application was

heard with two other connected petitions and judgment was

reserved. However, the judgment could not be pronounced by

the High Court. Therefore, the petitioner filed an application

for vacating the interim orders dated April 23, 2003 and May

9, 2003. Listing of the said application was refused by the

Registry on the ground that in the main matter, judgment was

reserved. Meanwhile, the petitioner completed construction of

the main building. The order for purchase of machineries to

be installed was already placed.

3. On December 9, 2004, SECL filed Civil Suit No.90-A of

2004 against the State of Chhattisgarh and the petitioner

contending, inter alia, that the land allotted to the petitioner

company by the State of Chhattisgarh through CSIDC had

vested in SECL and that SECL is the owner and in possession

of the land in question. Various other litigations and 7

proceedings were initiated by several parties pertaining to the

land allotted to the petitioner company. The Ministry of Coal,

by letter dated December 30, 2005 advised SECL to implement

the instructions dated May 7, 2003 mentioned in para (b).

The petitioner thereupon addressed a letter dated June 14,

2006 to SECL to inform the petitioner about the lease

premium/rent to be deposited. The record of the case further

shows that in spite of instructions issued by the Ministry of

Coal and request made by the petitioner, SECL did not initiate

steps for leasing the land to the petitioner. Therefore, the

petitioner has filed Special Leave Petition No.20238 of 2006

challenging validity of order dated April 24, 2003 as modified

by order dated May 9, 2003 in WP No.1264 of 2003 pending

before the High Court of Chhattisgarh. In the abovereferred

special leave petition, the Court has issued notice and the said

SLP is pending for final disposal. Thereupon, the petitioner

company filed Transfer Petition No.53 of 2007 in this Court to

direct that all the connected matters including the suit, writ

petitions and/or appeals be heard together and transferred to

the High Court of Chhattisgarh at Bilaspur. The said Transfer 8

Petition was allowed. Pursuant to the directions given by this

Court, the number of Civil Suit was changed from 90-A of

2004 to Civil Suit No.1-A of 2008. The said suit and all other

connected writ petitions, appeals etc. are pending adjudication

before the High Court of Chhattisgarh at Bilaspur.

4. During the pendency of proceedings before the High

Court of Chhattisgarh, the Prime Minister's Office vide letter

dated June 26, 2007 to the Secretary, Ministry of Coal

approved and recommended SECL to move an appropriate

application before the High Court of Chhattisgarh seeking

permission of the Court for leasing the land to the petitioner

company for establishment of a coal washery. Having regard

to these directions, the Ministry of Coal issued a letter dated

July 4, 2007 to M/s. Coal India Ltd. which is parent company

of SECL, stating that in view of the decision by the competent

authority, SECL should take appropriate action to lease the

land to the petitioner company. Therefore, M/s. Coal India

Ltd. addressed a letter dated July 5, 2007 to SECL directing it

to take all necessary actions for execution of lease deed in 9

favour of the petitioner company. On July 9, 2007, SECL

issued a letter to the Chairman-cum-Managing Director of

CMPDI requesting to make assessment of the land required to

be leased out. In view of the directions contained in letter

dated July 5, 2007 of Coal India Limited, SECL filed an

application on July 16, 2007 before the High Court of

Chhattisgarh at Bilaspur in WP No.3094 of 2007 seeking

permission to execute a lease deed in favour of petitioner's

company. It was also mentioned in the said application that

the petitioner company had agreed to take the land on lease

for establishment of a coal washery and agreed to pay the

lease money to SECL. Subsequently, on August 9, 2007, an

additional affidavit was filed enumerating three conditions

precedent to the execution of lease deed in favour of petitioner-

company. The record shows that the petitioner-company

showed willingness to abide by those conditions but no lease

deed is executed between the petitioner-company and SECL.

In the title suit filed by SECL, an order was passed by the High

Court directing the parties to appear before Mr. Gopal

Subramanium, the then learned Additional Solicitor General of 10

India, to explore the possibilities of a settlement. The record

does not indicate that any settlement had taken place between

the parties.

5. The grievance made by the petitioner in the instant

application is that it has expended almost Rs.100 crores to set

up a 10 million ton washery. It is averred in the application

that the buildings have been constructed and expensive state

of art machineries and equipments have also been purchased

and installed. The petitioner has mentioned that trial run was

also done in the wahsery nearly two years ago and the

petitioner is not able to operate the washery only due to

refusal by SECL to issue Transit Passes/Delivery Orders for

transport of coal purchased by the linked and other

consumers through the petitioner's wahsery before delivery to

such purchasers. According to the petitioner, the only

ostensible reason for SECL to refuse grant of Transit

Passes/Delivery Orders is the dispute as to the title of the land

between the State of Chhattisgarh and SECL. The claim

advanced by the petitioner is that washing of the coal before 11

consumption has significant environmental benefits and is

also in the public interest and as there is significant shortage

of coal washeries, the petitioner's washery should be permitted

to operate. Under the circumstances, the petitioner has filed

this application and claimed relief to which reference is made

earlier.

6. The respondents have filed affidavit in opposition.

7. This Court has heard the learned counsel for the parties

at great length and in detail. The Court has also considered

the documents forming part of the instant application as well

as SLP (C) No.20238 of 2006.

8. During the course of hearing of the application, it was

made clear by the learned counsel for the petitioner that the

petitioner company is ready to take the land on lease from

SECL and pay rent to the said company. The record shows

that several cases have been clubbed together and Civil Suit

No.1-A of 2008 relating to title of the land leased to the

petitioner company by the State Government is pending

disposal. The averments made by the petitioner that on the 12

leased land, the petitioner has expended almost Rs.100 crores

to set up a 10 million tons washery and has installed

expensive machineries could hardly be controverted by the

respondents. The petitioner company is neither claiming title

to the land nor asserts that the coal coming to its company for

wash belongs to it. By a scientific process, the petitioner

washes the coal brought to the factory by the purchasers.

Once SECL sells coal to the highest bidder and the bidder

pays the price, the property in coal would stand transferred to

the purchaser and the purchaser would be free to deal with

the quantity of coal purchased like any other prudent

purchaser. Here, the petitioner-company is not concerned at

all with the title of the coal in question. The building

constructed and machineries installed have remained unused

since long causing great financial loss to the petitioner-

company. It is relevant to notice that as on date, there is no

order subsisting which restrains the petitioner from operating

the washery in question. The assertion made by the petitioner

that it has received all necessary approvals for running the

washery including the approval from the Ministry of 13

Environment, Electricity Department, Commercial Tax

Department, licence under the Factories Act etc. is not

disputed by any of the respondents. Therefore, this Court is of

the opinion that the prayer made by the petitioner-company in

the instant application deserves to be granted, of course,

subject to certain conditions.

9. For the foregoing reasons, the application partly

succeeds. M/s South Eastern Coal Field Ltd. is hereby

directed to start supply of coal and issue Transit

Passes/Delivery Orders through the washery of the petitioner

on behalf of linked and other customers based on

instructions/requests from them. It is clarified that the grant

of this interim relief will be subject to the result of Civil Suit

No.1-A of 2008 pending in the High Court of Chhattisgarh at

Bilaspur. It is also clarified that if issue of title is held in

favour of M/s. South Eastern Coal Field Ltd., it would be open

to the said company to lease the land to the petitioner-

company or to take other steps with reference to the said land

in accordance with law. Subject to abovementioned 14

clarifications/observations, rule is made absolute. There shall

be no order as to costs.

...........................CJI

..............................J. [J.M. Panchal]

..............................J. [Dr. B.S. Chauhan]

New Delhi;

March 31, 2010.