Nifty Chemicals Pvt. Ltd vs Union Of India & Ors

I.A. No. .....with I.A. Nos. 1-2 in T.C.(Civil) No. 113 of 2005

NIFTY CHEMICALS PVT. LTD. ...PETITIONER

Versus

UNION OF INDIA ... RESPONDENT

WITH

I.A. No.. ........ and I.A. No. 1 in T.C.(C) No. 115 of 2005 I.A. Nos.1-3 & 4 in T.C.(C) No. 117 of 2005 I.A. No......... and I.A. No. 1 in T.C.(C) No. 118 of 2005 I.A. Nos. 1 & 2 and I.A. No. ....... in T.C.(C) No. 119 of 2005 I.A. No........and I.A. Nos. 1 & 2 IN T.C.(C) No. 120 of 2005 I.A. No.......and I.A. Nos. 1 & 2 in T.C.(C) No. 121 of 2005 I.A. NO. 1 in T.C.(C) No. 122 of 2005 CONTEMPT PETITION (C) NO. 47 OF 2008 in T.C.(C) No. 116 of 2005 CONTEMPT PETITION (C) NO. 49 OF 2008 in T.C.(C) No. 112 of 2005

ORDER

Dr. Mukundakam Sharma, J.

1. By this order we propose to dispose of the above mentioned

interlocutory applications arising out of Transfer Case Nos. 113, 115, 117, 118, 119, 120, 121, 122 of 2005 and contempt

petition No. 47 of 2008 in T.C. (C) 116/2005 and contempt

petition No. 49 of 2008 in T.C. (C) 112/2005.

2. The basic facts in all these applications are similar. Therefore,

the facts in I.A. No. .....with I.A. Nos. 1-2 in T.C. (Civil) No. 113

of 2005 are taken as illustrative for the purpose of our decision.

3. The present application is filed on behalf of the four applicants,

namely, M/s. Trimurti Moulds Pvt. Ltd., Coventry Stonewares

Pvt. Ltd., Vidharbha Ceramics Pvt. Ltd. and Ceramics

Industries (I) Pvt. Ltd. through their respective Directors praying

for issuance of directions to the M/s. Western Coalfields Ltd. (a

subsidiary of Coal India Ltd) being respondent herein for

implementation and execution of the direction given by this

Court in its order dated 30.10.2007 in T.P. (C) No. 100 of 2006.

The prayer was to the following effect : -

(i) Direct the respondent Coal Company i.e. M/s. Western Coalfields

Ltd. to implement and obey their own undertaking given before

Page 2 of 16 this Court and as recorded by this Court in it's order dated

12.12.2005 and 30.10.2007 in Transfer Petition (Civil) No. 100 of

2006 and analogous matters and refund excess money deposited

by the Petitioners/Applicants herein over and above the Notified

Price since the introduction of E-auction along with interest at the

rate of 12% per annum, and/or

(ii) Direct the Respondent M/s. Western Coalfields Ltd. to pay Bank

interest on the amount already refunded to applicants (on

25.07.2008) not only up to 30.4.2008 but till the date of payment.

4. The applicants are non-core linked consumers of coal of M/s.

Western Coalfields Ltd. It is stated in the application that the

applicants and other similarly situated non-core linked

consumers were being supplied coal by M/s. Western

Coalfields Ltd. at fixed price which is stated to be Notified Price,

which was used to be fixed once in a year by the respondent

coal company. The Coal India Ltd. and its subsidiary coal

company like the respondent herein introduced a new Scheme

in the year 2004 for sale of coal and the said scheme was

made applicable to even non-core linked consumers like the

Page 3 of 16 applicants herein. The aforesaid Scheme was called as "E-

auction Scheme" in which price of coal was to be determined

by market forces in place of fixed price, i.e. the Notified Price.

The validity and legality of the aforesaid scheme of E-auction

was challenged by the various companies like and including the

applicants herein by way of writ petitions before the Bombay

High Court, Nagpur Bench. The writ petition of the applicants

was registered as Writ Petition (Civil) No. 2421 of 2005. In the

said writ petition the High Court passed an interim order on

21.06.2005, whereby and whereunder Coal India Ltd. and M/s.

Western Coalfields Ltd. were directed to supply coal to the

applicants at Notified Price subject to petitioner depositing with

M/s. Western Coalfields Ltd. the difference between the E-

auction price and the Notified Price.

5. In view of and in terms of the aforesaid interim order applicants

started lifting coal after depositing the amount in cash, with

respect to the difference between the average E-auction price

and the notified price. Similar writ petitions were filed

challenging the legality of the aforesaid Scheme of sale of coal

Page 4 of 16 through E-auction in various other High Courts. Interim orders

were passed by a number of High Courts also, and therefore,

special leave petitions came to be filed by the companies like

the applicants in this Court. The coal companies preferred a

number of transfer petitions in this Court seeking transfer of all

the writ petitions pending on the aforesaid subjects before the

various High Courts to this Court. The special leave petitions

filed by the various coal consumers in this Court and the

transfer petitions preferred by the coal companies were taken

up together and this Court under order dated 12.12.2005 finally

allowed all the transfer petitions preferred by different coal

companies by passing a detailed order. The operative portion

of paragraphs 8 and 9 of the aforesaid order is reproduced

hereinbelow :

"8.........Taking note of the circumstances as a whole we feel that it would be just and proper to direct the petitioner companies/firms, having coal linkage, to pay in addition to the notified price, 33 1/3 % of the enhanced price, each time they claim supply of coal to them based on the linkage and by furnishing security for the balance 66 2/3 % of the enhanced price with an undertaking filed in this Court that the said part of the price will also be paid within 6 weeks of the decision of this Court in the Writ Petitions in case the writ petitions are decided against the petitioners. To protect the interest of the petitioners and to ensure that no permanent harm is

Page 5 of 16 caused to them we also think it proper to record the undertaking given on behalf of the Coal India Ltd. and its subsidiaries that in case this Court upholds the challenge made by the petitioners and allows the writ petitions filed by them, the enhanced price of 33 1/3% now to be paid by the petitioners will be refunded to the petitioners within

6 weeks of the judgment of this Court with interest thereon at 12% per annum from the date of payment till the date of return to the concerned petitioner.

9..............All the same, we think it appropriate to direct that on the concerned petitioner paying the notified price plus 33 1/3% of the enhanced price as per the E-auction and furnishing security for the balance 66 2/3% of the enhanced E-auction price, and filing the undertaking in this Court within four weeks from today, the coal as per the linkage will be supplied to the concerned petitioner within a period of 3 weeks from the date of such payment. It is clarified that there will be no obligation on the part of the Coal India Ltd, and its subsidiaries to supply the coal as per this interim order in the case of those who have not complied with the order for payment of 33 1/3% of the difference in price in addition to the notified price and for furnishing of security for the balance 66 2/3% of the enhanced price, and filing the undertaking in this Court to pay the entire amount if they do not succeed in their challenge. It is directed that this interim order will enure until these writ petitions are finally heard and disposed of by this Court."

6. On 18.1.2006, the aforesaid order passed on 12.12.2005,

came to be clarified in the following manner :

".......We must note that assurance has been given by the learned Solicitor General appearing on behalf of Coal India Ltd. and other subsidiary Companies that the interim order of this Court date December 12, 2005 shall be implemented in letter and spirit.

Page 6 of 16 We would clarify that so far as furnishing of security for the balance 66 2/3% of the enhanced price is concerned, the Coal Companies shall not insist on furnishing bank guarantees and shall supply Coal on their furnishing undertaking by the Managing Director or Managing Partner of the Company/Firm, as the case may be, apart from indemnity bonds or other types of securities subject of course to the compliance of other directions."

The applicants have stated in the application that pursuant to the

aforesaid orders passed by this Court they submitted entire detail in a chart

showing the amount which the respondent M/s. Western Coalfields Ltd.

was liable to refund to the applicants.

7. This Court by the judgment and final order dated 01.12.2006 in

Civil Appeal No. 5302 of 2006 titled as Ashoka Smokeless

Coal India (P) Ltd. v. Union of India, reported in (2007) 2

SCC 640 upheld the challenge of the applicants to the scheme

of E-auction. While allowing the writ petitions this Court held

that the aforesaid scheme of E-auction was invalid and

declared the same as ultravires of Article 14 of the Constitution

of India and quashed the said E-auction Scheme.

Consequence of the said judgment and order is that the coal

companies like the Respondent were required to refund the

Page 7 of 16 entire price paid by the applicants over and above the Notified

Price as per their undertaking before this Court and as

recorded in the order dated 12.12.2005 and 30.10.2007.

8. Alleging violation of the aforesaid orders passed by this Court

contempt petitions were filed in which the following order came

to be passed by this Court on 30.10.2007 :

"i) The Petitioners shall furnish all documents to the learned Advocates-on-Record of the respondents, showing the actual payments made to any of the subsidiaries of the Coal India Ltd. and the difference between the amount paid and the amount notified by 12th November, 2007.

ii) The documents furnished by the Petitioners shall be verified by the officers of the concerned Coal companies within four weeks thereafter.

iii) In case of any difference, the learned counsel, would deliberate upon the matter so as to enable them to come out with an accepted solution.

iv) The Bank guarantee furnished by the Petitioners shall stand discharged"

9. Despite representation filed in that regard by the aforesaid four

applicants and no effective steps having been taken by the

Respondent for redressal of their grievances, the present

application was filed in which an affidavit also came to be filed

on behalf of the M/s. Western Coalfields Ltd., the respondent

Page 8 of 16 herein. In the said affidavit the respondent coal company has

stated on oath that after verification of all records and after

considering the report of the Committee constituted under the

order of this Court and on their recommendation the

respondent herein released the refund payments to 118 parties

out of 122 parties, as the remaining 4 parties were directed to

submit documents, namely, money receipt and PAN so as to

enable the company to release their amount. The company

has further stated in their affidavit in the following manner :

"....Further the parties who have deposited the additional amount due to increase in the e-auction price at the time of delivery are also entitled to refund alongwith interest."

10. In the light of the aforesaid pleadings of the parties we have

heard the learned counsel appearing for the parties.

11. Mr. M.L. Verma, the learned senior advocate primarily made

following threefold submissions before us. His first submission

was that the interest which was payable pursuant to the orders

of this Court on the extra amount taken and received by the

respondent in terms of the interim orders of this Court is

Page 9 of 16 payable till the date when extra money taken by the respondent

was refunded but instead the respondent coal company has

computed the said interest only till 30.4.2008 and not till

28.6.2008, when the aforesaid extra money taken by them was

actually refunded. His second submission was that the

respondent-Company has also not paid to the applicants the

entire interest that actually accrued on the fixed deposit receipt

which was deposited on the account of the applicants. It is

next submitted by him that the writ petition of the applicants

registered as Writ Petition (Civil) No. 6629 of 2005 is still

pending disposal in the High Court of Judicature Bombay,

Nagpur Bench and the said High Court did not take up the writ

petition for final disposal as the issue with regard to excess

amount over and above Notified Price paid prior to passing of

the order dated 4.7.2005, i.e. from the date on which E-auction

Scheme came to the existence is pending consideration before

this Court. He further submitted that since now this Court has

disposed of the said issue, there should be a direction to the

concerned High Court to dispose of the aforesaid writ petition

as expeditiously as possible.

Page 10 of 16

12. Mr. Anip Sachthey, the learned counsel appearing for the coal

company during the course of his submission submitted that

they have paid the amount which became refundable to all the

claimants who are entitled to receive it inclusive of interest in

fixed deposit calculated up to 30.4.2008 as the fixed deposit

receipts were time bound and, therefore, a fixed date was

taken for calculation of the interest which was 30.4.2008. He

also submitted that whatever interest is due and payable to the

applicants have already been paid while refunding the amount

due and payable to the applicants. He further submitted that

the coal company has no objection if a direction is issued to the

Bombay High Court, Nagpur Bench for early disposal of the

aforesaid writ petition for according to him the issues raised in

the said writ petition would now be governed and covered by

the decision of this Court.

13. While considering the aforesaid submissions in the light of the

pleadings of the parties we find that the area of controversy

and the dispute between the parties, as highlighted in the

Page 11 of 16 present application, lie in a very narrow compass for during the

course of arguments Mr. Sachthey, learned counsel for the

respondent coal company has fairly stated that the coal

company cannot have any objection to pay the interest accrued

on the amount payable to be computed up to 28.6.2008 when

the amount came to be actually refunded to the applicants. We

also find justification in the claim of the applicants for the

respondent coal company had agreed to refund the amount, if

later on found to be due and payable with interest till the date

when it is actually refunded. In fact that was also the intention

of the order passed by this Court when the interim order to that

effect was passed. We may point out that though the applicant

in the application stated that the amount was refunded on

25.7.2008 but however during the submissions it was agreed

that the same was refunded on 28.6.2008

14. According to us, since the applicants were refunded the extra

amount deposited by them only on 28.6.2008 they are entitled

to receive interest computed and calculated up to 28.6.2008

and not till 30.4.2008, for which there is no basis at all. Interest

Page 12 of 16 is payable on the amount found due and payable on the ground

that the concerned person is deprived of the benefit of the

aforesaid amount which is otherwise due and payable to it.

The intention is to compensate the concerned person for being

deprived of utilizing the money for the period during which he

was unable to utilize the amount. Similarly, the extra amount

which was paid by the applicants was invested in the fixed

deposit receipt pursuant to the order of this Court.

15. There is an apprehension in the mind of the applicants that the

entire interest accrued on the said FDR, is not paid to the

applicants. In that view of the matter, we are of the considered

opinion that whatever interest was received by the coal

company as against the FDR made on the amount deposited

by the applicants towards extra amount charged, and not

covered by the directions issued in the preceding paragraph

may be paid back to the applicants. The aforesaid aspect

could be settled between the parties if the coal company

provides to the representatives of the applicants the statement

of the bank indicating the interest that actually accrued and was

Page 13 of 16 paid on the aforesaid FDR to the Respondent - Company,

which was made against the extra payment made by the

applicants.

16. We are also of the considered opinion that since this Court has

finally pronounced the judgment and order on 1.12.2006 in

respect of the challenge to the Scheme of E-auction and

passed consequential orders thereof, the writ petition filed and

registered as Writ Petition (Civil) No. 6629 of 2005 could now

be disposed of by the Bombay High Court, Nagpur Bench.

Consequently, we pass the following directions in terms of the

discussions and observations made hereinbefore :

I. the respondent coal company shall now pay interest at 12% per annum in

terms of order of this Court dated 12.12.05 on the extra amount which

was refunded in terms of the claim of the applicants calculating and

computing the same till 28.6.2008 when the said amount was actually

refunded to the applicants and not till 30.4.2008 as has been done by the

applicants.

Page 14 of 16 II. The respondent-Company shall make available to the representatives of

the applicants statement of the bank indicating interest accrued on the

FDR created as against the extra amount paid by the applicants and not

covered by the directions issued in the preceding paragraph.

III. We also issue a direction to the Bombay High Court, Nagpur Bench now

to take up the Writ Petition (Civil) No. 6629 of 2005 for consideration and

disposal as expeditiously as possible. It is needless to say that all the

contentions relating to the issue of extra amount over and above the

Notified Price, that is to say, difference between average E-auction and

Notified Price in cash and the issues relating to validity of Scheme of E-

auction shall be decided in terms of the decision of this Court those are

covered and governed by the said decision. If, however, any other and

additional contentions are raised in the writ petition and pleadings of the

parties which are not covered by the issues decided by this Court, the

same shall be decided by the High Court as expeditiously as possible and

according to law.

15. All the applications and contempt petitions stand disposed of in terms

of this order.

Page 15 of 16 ...........................................J. .

[S.B. Sinha]

........................................... J. [Dr. Mukundakam Sharma]

New Delhi February 27, 2009

Page 16 of 16