M/S. Ocl India Ltd.Sundergarh And vs Union Of India And Others
2022 Latest Caselaw 3224 Ori

                  IN THE HIGH COURT OF ORISSA AT CUTTACK
                                   W.P.(C) No. 2482 of 2009


            M/s. OCL India Ltd.Sundergarh and ....                Petitioners
            another
                                        Mr. Venugopal Mohapatra, Advocate
                                        -versus-
            Union of India and Others                ....    Opposite Parties
            Mr. P. K. Parhi, ASGI along with Mr. B. Dash, CGC for the Union
               and Mr. N.C. Sahoo, Advocate for Opposite Party No. 3 (MCL)


                      CORAM:
                      THE CHIEF JUSTICE
                      JUSTICE R. K. PATTANAIK


                                        ORDER

Order No.                              12.07.2022

            Dr. S. Muralidhar, CJ.

46. 1. The present petition has been filed for a direction to the Mahanadi Coalfields Limited (MCL)-Opposite Party No.3 to refund to the Petitioner No.1-Company a sum of Rs.4,07,30,509/- together with interest accrued thereon, which according to the Petitioner No.1 was collected from it by MCL towards sale of coal at prices determined by the process of 'e-auction'.

2. The Petitioner No.1 carries on the business of manufacture of cement, refractory and sponge iron. It is stated that the Refractory division being in a non-core sector is entitled to purchase coal from MCL through its Open Sales Scheme (OSS) at prices notified by it from time to time.

3. On 15th June 2004, MCL notified a price list for different grades of Non-Cocking Coal with effect from 00:00 hours of 16th June, 2004. It is stated that till 2005, Petitioner No.1 was purchasing Non-Cocking Coal at the prices notified until the introduction of an e-auction scheme. On 9th May 2005, when Petitioner No.1 sought to purchase 4000 metric tons of 250 mm E Grade Non- Cocking Coal for its Refractory division at the notified price, MCL charged it Rs.88,65,376 on account of introduction of e- auction scheme for determination of the sale price of Non-Cocking Coal. Likewise, excess amount had to be paid by the Petitioners for the purchases made in the months of May, July and October, 2005 for its Refractory division. Purchases were also made for its Sponge Iron division likewise. According to Petitioner No.1, the aggregate excess amount paid to MCL for purchase of Non- Cocking Coal by the process of e-auction worked out to Rs.4,07,30,509/-. This has been indicated in a tabular form in the present petition at Annexure-9.

4. On 1st December 2006, the Supreme Court of India invalidated the entire e-auction process by its judgment in Ashoka Smokeless Coal India (P) Ltd. v. Union of India, (2007) 2 SCC 640. Among the set of Appellants before the Supreme Court, were traders like the present Petitioners, who were to purchase coal under the OSS the agreement with the respective coal manufacturing companies being compelled to purchase at e-auction rates. This is plain from para 72 of the judgment of the Supreme Court which sets out four categories of consumers and the fourth category is 'traders' which would include Petitioner No.1 herein.

5. Specific to the issue of the traders like the present Petitioner No.1, the following submissions were noted in para 81 of the said judgment of the Supreme Court:

"81. Mr. Altaf Ahmed, the learned Senior Counsel appearing on behalf of the traders, drew our attention to various clauses of the e-auction scheme and submitted that whereas under the Open Sales Scheme (OSS) rights of the traders were safeguarded and in particular having regard to the fact that from each colliery not more than 33% per cent could be purchased by one trader, now all lots having been made open to all consumers irrespective of the fact as to whether they belong to the linked core sector or linked non-core sector or others have been allowed to bid in e-auction along with traders, as a result whereof traders are put to a great disadvantage. In this behalf our attention has been drawn to the fact that both manufactures of core sector and non-core sectors have been offering their bid in the auctions which is against the concept of fair distribution of an essential commodity. According to the learned counsel participation of all categories of consumers would be unlawful, being contrary to the professed policy of the coal companies in view of OSS."

6. Ultimately, accepting the plea of the Appellants regarding the application of the principles of promissory estoppel and legitimate expectation, the Supreme Court invalidated the e-auction process and held as under:

"160. The original scheme of E-Auction was meant to be applied only to the linked non-core sector consumers and traders. Thus, thereby the policy that the linked consumers should form a class by themselves was sought to be given a go-bye. We have, however, noticed hereinbefore that having regard to the intervention of the Central Government, the coal companies deviated from the said scheme and considered even the non-core sector consumers to be a separate class; as they not only

became entitled to take part in the E- Auction along with traders but were also sought to be assured of supply of coal having regard to their own requirements as regards both quality and quantity subject, of course, to their paying the price at the average weighted price. The stand taken by the coal companies before the Calcutta High Court as also before this Court assumes significance only in that context. However, now it appears that the coal companies have given a complete go-bye to the original scheme of E-Auction inasmuch as not only the traders or the non-core sector consumers but also core sector consumers had also been allowed to participate therein. A consumer of coal falling in any category as also a person who intends to purchase coal for his personal use would, therefore, be entitled to take part in E-Auction. Whereas the consumers in the core sector would not only be entitled to allotment of coal at a price fixed by the coal companies but also would be entitled to take part in E-auction. The non-core sector consumers although as linked consumers form a separate and distinct class vis- a`-vis the traders, they would not be entitled to the benefit of obtaining coal at a fixed price. The question as regards the discrimination between two categories of consumer assumes some importance.

161. The effect is that today, while the core sector (92%) on its own and non-core non-linked SSI/Tiny units (through the NCCF/other agencies) (1%) are being supplied coal at a fixed price, on the other hand, the non- core linked SSI/Tiny units (4%) are being subjected to differential treatment, without any rational classification, by supplying the coal to the latter on the price to be ascertained by the trader-controlled process of E- Auction and thereby putting the petitioner-units on a par with the trader. The scheme of E- Auction is, therefore, ultra vires Article 14 of the Constitution of India."

7. By way of implementation of the above judgment, various petitions were filed in the High Courts by those compelled to purchase coal through e-auction process for refund of the excess

amount paid. One such case which landed up in Supreme Court at the instance of Eastern Coalfields Limited was the Eastern Coalfields Limited v. Tetulia Coke Plant Private Limited, (2011) 14 SCC 624 arising from directions issued by the Calcutta High Court. The Supreme Court in that case observed as under:

"10. It must be indicated herein that the present respondent also filed the writ petition in question in the Calcutta High Court before the aforesaid decision was rendered and in his case also an interim order was passed by the Calcutta High Court. After the disposal of Ashoka Smokeless Coal India (P) Ltd., (2007) 2 SCC 640, the writ petition filed by the respondent herein which was pending was also considered and the same was allowed following the decision of this Court in Ashoka Smokeless Coal India (P) Ltd. (2007) 2 SCC 640 as by that decision, this Court has declared the entire scheme to be invalid and ultra vires to the Constitution. Therefore, any action taken pursuant to the said scheme is also illegal and null and void. Following the ratio of the said decision this Court directed the coal companies to refund the price of the coal paid in excess of the notified price under the e-auction scheme. Certain guidelines were also laid down as to how such payments are to be made. The said decision of the learned Single Judge was upheld by the Division Bench of the High Court by affirming the conclusions and analysing all the issues that were raised before it."

8. In the present case, it is not in dispute that as a result of the invalidation of e-auction process by the Supreme Court in Ashoka Smokeless Coal India (P) Ltd.,(supra), the excess amount paid by the Petitioner No.1 would have to be refunded to it by MCL. However, learned counsel for the MCL states that the exercise of determining what is exact amount payable to Petitioner No.1 would require some time. Accordingly, a direction is issued to

MCL to examine the details provided by the Petitioners in Annexure-9 and after hearing the Petitioners pass appropriate orders within a period of six weeks from today and to make the payments as determined within a further period of four weeks thereafter.

9. The writ petition is disposed of in the above terms.

10. An urgent certified copy of this order be issued as per rules.

(Dr. S. Muralidhar) Chief Justice

(R. K. Pattanaik) Judge M. Panda