Zuari Cements Ltd.& Ors vs A.P.Power Generation Corp.Ltd.& Ors

2. Memoranda of Understandings (MOUs) were

executed between the first respondent - Andhra

Pradesh Power Generation Corporation Limited

and cement companies who are the appellants

herein for lifting of fly ash from its Thermal

Plants. Subsequently the first respondent

Corporation terminated the MOUs alleging breach

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on the the part of the appellants. However,

even after such termination, the first

respondent permitted the cement companies to

take 80% of the fly ash from two Thermal Units.

3. Subsequently the first respondent

Corporation invited tenders in regard to the

sale of fly ash and the cement companies

challenged the notice inviting tenders by

filing writ petitions. The said writ petitions

are pending. The learned Single Judge had

passed an interim order therein prohibiting

finalization of tenders, on the ground that the

appellants had been permitted to receive supply

of fly ash even after termination of MOUs. The

said interim order passed by the learned Single

Judge was challenged by the first respondent-

Corporation by filing writ appeals. A Division

Bench of the Andhra Pradesh High Court by the

impugned orders set aside the interim orders of

the learned Single Judge, with an observation

that pending finalisation of tenders, the first

respondent Corporation may consider supplying

fly ash to the writ petitioners for use in

their industry. The effect of the order of the

Division Bench is that the first respondent-

Corporation is not bound to supply fly ash to

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the appellants.

4. The appellants contend that tenders

could not be issued with respect to supply of

fly ash from the same units with respect to

which the appellants have subsisting

agreements.

5. When the special leave petitions were

filed by the appellants, this Court initially

on 27th August, 2010 made an ex-parte order

directing interim stay of the order of the

Division Bench for a period of one month,

subject to appellants making payment at the

rate of Rs.90/- per metric tonne of fly ash to

the first respondent. Subsequently in other

cases similar orders were passed.

6. The learned senior counsel appearing on

behalf of the respondent-Corporation submitted

that the appellants have themselves made an

offer of Rs.390/- per metric tonne or more in

response to the tender notice and, therefore,

they cannot get fly ash at any lesser rate.

7. Learned counsel for the appellants

submitted that their contracts for supply at

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lesser rates are subsisting; that higher offers

relate to other units; and that distance of the

thermal unit from their respective cement

factories plays an important role in the price

offered. Various other grounds are also urged

by the appellants.

8. It is not necessary to examine this

aspect at this stage as the writ petitions are

still pending. Interest of justice would be

served if a suitable interim arrangement is

made for supplies pending the decision in the

writ petitions.

9. We, therefore, dispose of the appeals

modifying the interim order already granted by

directing the continuation of the interim order

during the pendency of the writ petition,

subject to the condition that the appellants

shall make payment for the fly ash taken from

the respective dates of interim orders of this

Court and for future supplies during the

pendency of the writ petitions, at the

provisional rate of Rs.250/- per metric tonne

(instead of Rs.90/- per metric tonne) subject

to final accounting and final decision in the

pending writ petition.

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10. If the appellants fail in the writ

petitions, they shall be liable to pay the

difference in price based upon the highest

offer received in response to the tender

notice, in regard to the supplies received in

pursuance of the interim orders, to the first

respondent with interest on such difference at

10% per annum from the respective due dates.

11. Having regard to the facts and

circumstances and continuation of the interim

arrangement, we request the learned Single

Judge to dispose of the pending writ petitions

expeditiously, preferably within three months

from today.

................J. (R.V. RAVEENDRAN)

................J. (A.K. PATNAIK) New Delhi January 17, 2011