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PETITIONER: COAL INDIA LTD. & ANR.

       Vs.

RESPONDENT: M/S CONTINENTAL TRANSPORT ANDCONSTRUCTION CORPORATION & ORS.

DATE OF JUDGMENT:       18/03/1997

BENCH: S.C. AGRAWAL, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:             [WITH CIVIL APPEAL NO. 2005 OF 1997             @ S.L.P. (Civil) No. 26366 of 1995)]                       J U D G M E N T S.C. AGRAWAL, J. :-      Special leave granted.      These appeals  are directed against the judgment of the Calcutta High  Court  dated  October  31,  1995  in  appeals arising out  matters Nos. 940 and 941 of 1994 decided by the learned single  Judge of the High Court by order dated April 6, 1995.  Since they  raise common questions, they are being disposed of together.      In exercise  of the  power conferred  on it by sub-rule (2) of  Rule 81  of the  Defence of  India Rules,  1939  the Central Government has made the Colliery Control Order, 1945 (hereinafter referred to as ‘the Colliery Control Order’) which has been continued in force and is now in operation by virtue of Section 16 of the Essential Commodities Act, 1955, since coal  is an essential commodity under Section 2(a)(ii) of the said Act. The Colliery Control Order makes provisions for regulating  the production,  supply and  distribution of coal. The  Colliery Control Order postulates that coal shall be supplied by the colliery owner to a person engaged in the business of  production, supply and distribution of or trade or commerce  in coal  on the  basis of an order of allotment issued by  the Coal  Controller. By  Notification dated July 24, 1967,  the Central  Government authorised  a  person  to acquire or purchase or to despatch or to divert or transfer, without any  order of  allotment or  written authority, non- coking coal  of all  grades produced  in all coal fields and coking coal  not required  for metallurgical  consumers  and coal produced  in Assam  subject to  the condition that such coal shall  be consumed  within India. By Notification dated June 4,  1992 the  earlier Notification  dated July 24, 1967 was amended and the authorisation to acquire or purchase, or to despatch  or to  divert or transfer, without any order of allotment or  written authority, was given in respect of (i) non-coking coal  of all  grades produced  in the  States  of Assam and Meghalaya, (ii) coking coal produced in the States of  Assam   and  Meghalaya   which  is   not  required   for metallurgical consumers provided that such coking/non-coking

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coal was  not produced  in the  coal mines of the Coal India Limited or  any of its subsidiaries, and (iii) the coal sold under any Liberalised Sales Scheme, framed by the Government of India  in the Ministry of Coal, by the Coal India Limited or any  of its  subsidiaries, and  the Singareni  Collieries Company Limited,  if such  sale was  not  dependent  on  the condition  that  such  coal  would  be  used  by  the  first purchaser only  and was  not meant  for trading  or sale. By Notification  dated   August  25,  1993  there  was  further amendment in  the  Notification  dated  July  24,  1967,  as amended by  Notification dated  June  4,  1992,  whereby  in respect of coal sold by Coal India Limited (for short ‘CIL’) or any of its subsidiaries under any liberalised sale scheme framed by the Government of India it was prescribed that the collieries for  which the  coal is to be sold should be duly approved for the purpose by the Government of India and that the coal  so sold  would not,  except in  the case of actual user, be  subject  to  the  injunction  against  trading  or resale. In  accordance with  said notification,  Liberalised Sales Scheme has been framed from time to time.      These  appeals  relate  to  sale  of  coal  by  Central Coalfields Limited  (for short  ‘CCL’), a subsidiary of CIL, the appellant in the appeals.      In Civil  Appeal arising  out of Special Leave Petition No. 25983  of 1995  we are  concerned with  the sale of coal under the  Liberalised Sales  Scheme-II (for  short "LSS-II) framed by  CIL in  August 1992 in pursuance of Notifications dated July  24, 1967 and June 4, 1992. In September 1992 CIL published  an  advertisement  in  the  ‘Statement’  inviting offers for  purchase in  respect of  coal offered  for  sale under LSS-II.  In the  said advertisement  the quantity  and quality of  coal that  was  being  offered  in  the  various collieries  belonging   to  the  subsidiaries  of  CIL  were specified.   Among   the   collieries   mentioned   in   the advertisement were Urimari and Jarangdih collieries of CCL. In respect  of Urimari  Colliery 1.35  lac tonnes of Grade-6 Steam Coal  was offered and in respect of Jarangdih Colliery 1.75 lac  tonnes of  Grade W-III  Steam Coal was offered. In response to the said advertisement m/s Continental Transport and Construction  Corporation, respondent No. 1 In both  the appeals (hereinafter referred to as ‘the petitioners’). Sent a letter  dated September  16, 1992  to the  General Manager (Sales), CCL, offering to purchase 1.35 lac tonnes of Grade- B Steam  Coal from  Urimari Colliery  and 1.75 lac tonnes of Grade W-III Steam Coal from Jarangdih Colliery. By allotment letter dated  April 7, 1993, CCL allotted to the petitioners 32,400 MT  Grade-B Steam Coal from Urimari Colliery in Sayal area in  response to  the offer  made by  the petitioners on September 16.  1992. By another allotment letter dated April 20/21, 1993  CCL allotted to the petitioners 50,750 MT Grade W-III Steam  Coal from  Jarangdih Colliery.  The validity of the said allotments was up to March 31, 1994, but the period of the  said  allotments  was  extended.  The  case  of  the petitioners is  that Steam  Coal at  Urimari  and  Jarangdih Collieries was  not matching to the declared Grades-B and W- III respectively  and was  of lower  grades. Sirka  Colliery falling in Argada area also belongs to CCL. The petitioners, having come  to know that sufficient stocks of Grade-B Steam Coal was  available for  disposal at Sirka Colliery, wrote a letter dated  April 7,  1994 to  the General Manager (Argada area) of  CCL, wherein  it was  mentioned that  32,400 MT of Grade-B Steam  Coal from  Urimari Colliery  and 50,750 MT of Grade W-III  Steam Coal from Jarangdih Colliery was allotted to them  vide allotment letters dated April 7,1993 and April 20/21,  1993  respectively  and  that  on  account  of  non-

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availability of  Grade-B Steam  Coal at Urimari Colliery and Grade W-III  grade steam coal at Jarangdih Colliery it would not be  possible for  them to  lift the required quantity of coal. In  the said  letter  it  was  also  stated  that  the petitioners had  learnt that  Sirka Colliery had huge stocks of Grade-B  Steam Coal  to the tune of 4.16 lakh MT and that he (General  Manager) was willing to accept the diversion of orders of  other areas  booked under  LSS-II to  the tune of 2.00 lakhs  MT in  addition to other pending commitments and orders/proposed   deliveries   to   others   including   the petitioners. By  the said  letter the  petitioners expressed their willingness  to accept  the transfer  of allotment for Steam Coal  of Urimari and jarangdih Collieries. The General Manager was  requested  to  accept    the  proposal  of  the petitioners at his level and intimate to the General Manager (Sales)/CCL Headquarters  for obtaining  the formal approval in this  regard. After receiving the said letter the General Manager (A), Sirka, sent a communication dated April 8, 1994 to the General Manager (S&M), CCL wherein he enclosed a copy of the  aforementioned letter of the petitioners dated April 7, 1994,  he stated  that in  view of  the stock position of 4.16 lakhs  MT  of  coal  at  Sirka  Colliery  it  has  been confirmed that  in order  to liquidate stocks such orders of steam coal, if diverted from other areas, could be accepted. On April  9, 1994 the petitioners submitted a representation to the  Coal Controller  for transfer of allotments of steam coal from  Urimari  and  Jarangdih  Collieries  allotted  by CCL/Headquarters under LSS-II from these collieries to Sirka Colliery of  Argada area.  In the  said  representation  the petitioners mentioned that quality of coal being produced at Urimari Colliery  was equivalent  to  Grade-D  coal  and  at Jarangdih Colliery  also the  quality of coal being produced was equivalent  to Grade  W-IV. It  was stated that at Sirka Colliery of  Argada area  there huge stocks of Grade-B Steam Coal to  the tune  of 4.10  lakhs MT  and it was pointed out that the General Manager (Argada area) of CCL, in his letter dated April  8, 1994,  had recommended  the request  of  the petitioners for  diversion of  allotments to  Sirka Colliery for favourable  consideration and  approval of  the  General Manager (Sales)/CCL.  A copy  of  the  said  letter  of  the General Manager,  Argada Area,  Sirka dated April 8,1994 was also submitted  along with  the representation.  By the said representation the petitioners requested the Coal Controller to issue a direction to the coal company for transfer of allotments  of   Steam  Coal   from  Urimari  and  Jarangdih Collieries to  Sirka  Colliery  for  release  of  equivalent quantity of  Steam Coal  from Sirka  Colliery. On  the  said representation the  Coal Controller, on April 12, 1994, sent a communication  to the Chairman-cum-managing Director, CCL, Ranchi referring to the letter dated April 7, 1994 submitted by the  petitioners to the General Manager, Argada area well as letter  dated April  8, 1994  from the  General  Manager, Argada addressed  to the General manager (Sales)/CCL wherein he had  recommended for  acceptance of the transfer in order to liquidate  huge stocks  of coal at Sirka Colliery. In the said letter the Coal Controller has stated:-      "Having    noted     the     entire      circumstances and facts of the case      and the  availability of steam coal      at  Sirka   you  are   advised   to      forthwith  give   effect   to   the      transfer  of  these  allotments  of      steam coal  from  Urimari/Jarangdih      collieries of steam coal Grade B to      the party as requested area, at the

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    earliest."      Civil Appeal arising out of S.L.P. (Civil) No. 26366 of 1995 relates to sale of washery products on the basis of the Notification  dated   July  245,   1967,  before   amendment introduced therein  by Notification  dated June  4, 1992. On January 17,  1991 an  advertisement  was  published  in  the ‘Statesman’ inviting  offers for  bulk purchase  of rejects, Middlings, Slurry  and Dirty  Slurry in various washeries of CCL including  the Gidi  washery. In  response to  the  said advertisement, the  petitioners, on March 2, 1991, submitted offers  for  purchase  of  1,79,000  MT  Slurry,  90,000  MT Middlings and  90,000 MT  Dirty Slurry. By letters dated May 11/14, 1991  CIL accepted  the offer  of the petitioners and agreed to  supply to  the  petitioners  1,79,000  MT  Slurry Grade-D, 90,000  MT Middlings  Grade-F and  45,000 MT  Dirty Slurry Grade-F  from Gidi  washery. Subsequently  by  letter dated May 28, 1992 CCL approved the transfer of 88,500 MT of Grade-F Middlings  allotted to the petitioners to equivalent quantity of  Grade-F Dirty  Slurry to be delivered from Gidi washery. By  letter dated  September 18,  1993, the  General Manager (Argada  area) of  CCL  refused  to  accede  to  the request of  the petitioners  to allow  delivery  of  Grade-D Slurry also with Grade-F Dirty Slurry and reiterated that in order to  avoid  possible  malpractices of lifting of Slurry against orders  of Dirty  Slurry, lifting  both the products concurrently was  not possible.  On September  20, 1993, the petitioners  submitted   a  representation   to   the   Coal Controller requesting  him to  direct CCL  to transfer their allotment of  1,65,724 MT  of Slurry  Grade-D to  equivalent quantity  of  Dirty  Slurry  Grade-F  which  was  abundantly available at  the Gidi washery, On January 31, 1994 the Coal Controller gave  a direction  to  the  Chairman-cum-managing Director, CCL  Ranchi, to  transfer 1,65,724  MT of  Grade-D Slurry to  equivalent quantity  of Grade-F  Slurry  in  Gidi washery. Since  the direction of the Coal Controller was not implemented by  CCL, the petitioners moved the Calcutta High Court by filing a writ Petition and the High Court, by order dated February  10, 1994,  directed the appellants to act in terms of  Coal Controller’s  letter dated  January 31, 1994. Thereupon by  letter dated  February 28, 1994, CCL confirmed the transfer  of 1,65,724  MT of  Grade-D Slurry  to Grade-F Slurry of  Gidi washery. The case of the petitioners is that with effect  from April  1, 1994,  CCL changed  the grade of Dirty Slurry of Gidi washery from Grade-F to Grade-E for the year 1994-95  and increased  its price by about Rs. 85/- per MT. The  petitioners submitted  a representation to the Coal Controller on  April 2,  1994 in  that regard.  On April  7, 1994, the  petitioners wrote a letter to the General Manager (Argada area)  of CCL,  wherein they  stated that in view of the difficulties  mentioned in the said letter, it would not be possible  for them  to lift  the Dirty Slurry allotted to them from  Gidi washery  and they  sought transfer  of their allotments of  Dirty Slurry  to Steam  Coal from Sirka/Gidi- C/Religara collieries.  By his  letter dated  April 8,  1994 addressed to  the General  Manager (S&M),  CCL, the  General Manager (Argada  area), forwarded  the said  letter  of  the petitioners for favourable consideration. On April 9, 1994 the petitioners  submitted  a  representation  to  the  Coal Controller requesting  him to  transfer  of  their  allotted quantity of  Dirty Slurry  remaining to be booked and lifted against of Steam Coal by road from Sirka/Gidi-C/Religara collieries. The  Coal Controller, sent a communication dated April 12,  1994 to  the Chairman-cum-Managing Director, CCL, wherein, after taking note of the representation dated April 7, 1994  submitted by the petitioners to the General Manager

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(Argada area)  and the  letter  from  the  General  Manager, Argada area  to the  General Manager (Sales)/CCL dated April 8, 1994, he stated:-      "Having    noted     the     entire      circumstances  and  facts  and  the      availability   of   the   coal   at      Sirka/Religara/Gidi-C desired to be      lifted  by   the  party,   you  are      advised to  forthwith effect to the      transfer  of  allotments  of  Dirty      Slurry  and  in  the  party  letter      dated 2.4.94 and 9.4.94 for release      of  equivalent  quantity  of  steam      coal   from   Sirka/Religara/Gidi-C      collieries as requested for by them      and recommended  by  the  concerned      area, at the earliest,"      Since   the    directions   contained   in   both   the communications of  the Coal  Controller dated April 12, 1994 addressed to  the Chairman-cum-Managing Director of CCL were not being  implemented by  CCL, the petitioners on April 18, 1994, filed two writ petitions (Matters Nos 940-941 of 1994) in the  Calcutta High  Court. Both  the writ  Petitions were disposed of  by a  learned single  Judge (Mitra  J) by order dated  April  18,  1994  whereby  the  Chairman-cum-Managing Director of  CCL  was  directed  to  act  in  terms  of  the communications  dated  April  12,  1994  sent  by  the  Coal Controller within  a fortnight from the date. This order was passed by the learned single Judge without issuing notice to the appellants  and by  directing that  a copy  of the  Writ Petition be  served upon  Mrs. A.  Quraishi, Advocate as she generally appears  on behalf  of  the  Chairman-Cum-Managing Director of  CCL and  the Chairman-cum-Managing  Director of CCL was  directed  to  regularise  her  appointment  in  the matter. The  said order  of the  learned single  Judge  was, however, set  aide in  appeal by  the Division  Bench of the High Court by order June 6, 1994 and the matter was remitted for reconsideration  on merits.  Thereafter, the  matter was considered by Samaresh Banerjee J. who, after issuing notice to the parties, by his judgment dated April 6, 1995, allowed both  the  writ  petitions  filed  by  the  petitioners  and directed the  appellants herein, who were respondents in the Writ  Petitions,   to  implement  the  orders  of  the  Coal Controller dated  April 12,  1994 forthwith.  Letters Patent Appeals filed by the appellants against the said judgment of the learned single Judge have been dismissed by the Division Bench  of  the  High  Court  (K.C.  Agarwal  CJ.  and  Tarun Chatterjee J.)  by the  impugned judgment  dated October 31, 1995. Hence these appeals.      We have  heard Shri  Dushyant A.  Dave and  Shri Harish Salve, the  learned senior  counsel for  the  appellants  in these appeals,  and Shri  Shanti Bhushan, the learned senior counsel appearing  for the  petitioners in both the matters. During the  pendency of  these matters  in this  Court,  the Union of  India was impleaded as a party. We have heard Shri P.P. Malhotra,  the learned senior counsel appearing for the Union of India.      We will  first take  up the  submissions urged  by Shri Dave in Civil Appeal arising out of S.L.P. (Civil) No. 25983 of 1995  which relates  to the  contract for supply of Steam Coal from  Urimari and  Jarangdih Collieries. The submission of Shri  Dave is  that  under  the  said  contract  CCL  had undertaken  to   supply  Grade-B  Steam  Coal  from  Urimari Colliery and  Grade W-III Steam Coal from Jarangdih Colliery under LSS-II  and that  under the provisions of the Colliery

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Control Order  the Coal Controller was not competent to give a direction so as to modify the terms of the contract and to direct CCL  to supply the said quantity and quality of Steam Coal from  another colliery,  namely, Sirka  Colliery, which had not  been offered  for sale  under LSS-II.  In order  to appreciate the  aforesaid submission  of  Shri  Dave  it  is necessary to  briefly refer  to various   provisions  of the Colliery Control  Order and  the Notification dated July 24, 1967, as amended by Notification dated June 4, 1992 and August 25, 1993.      As indicated  earlier, the  Colliery Control  Order has been made with a view to regulate the production, supply and distribution of  coal which  is an essential commodity under the Essential  Commodities Act,  1955. The  expression "Coal Controller" is  defined in clause 2(1)(a) to mean the person appointed by the Central Government to hold the post of Coal Controller and includes the Joint Coal Controller and Deputy Coal Controller. Clause 3 empowers the Central Government to prescribe the  classes, grades,  process into which coal may be categorised  and the  specifications for each such class, grade or  size of  coal. The  sale price  at  which  or  the maximum or  the minimum sale price or both, subject to which coal may  be sold  by colliery  owners is to be fixed by the Central Government  by notification  in the official Gazette and such notification may fix different prices for different grades and  sizes  of  coal  and  for  different  collieries (clause 4). A colliery owner or his agent cannot sell, agree to sell  or offer  to sell and no person can purchase, agree to purchase,  of offer  to purchase,  directly of  through a broker or  a del-credere/agent coal from a colliery owner at a price which is in excess of the price of the maximum price fixed under sub-clause (1) of clause 4 or below the price or the minimum price fixed under clause 4 (clause 5). In clause 6 provision  has been  made for fixation of commission to be paid by  a colliery owner to a middle man employed by him as a broker  and by  the consumer to the middle man who acts as del-credere agent  for  him.  Every  colliery  owner,  every person to  whom coal  is allotted under the Colliery Control Order and  every other  person engaged  in the  business  of production,  supply   and  distribution  of,  or  trade  and commerce in  coal, on  being requested  to do  so, either by notice served  on him  or by  special or  general  direction issued by  the Coal Controller has to submit to that officer such returns  and other  information, in  such format within such time,  as may  be specified  in the notice of direction (clause 7).  The Central  Government is  empowered to issue, form time  to time,  such direction  as it thinks fit to any colliery owner regulating the disposal of his stocks of coal or of the expected output of coal in the colliery of coal or of the  expected output  of coal  in the colliery during any period. Such  direction can  be as to the class, grade, size and quantity  of coal which may be disposed or and person or class or  description of persons to whom coal shall or shall not be  disposed of, the order of priority to be observed in such disposal and the stacking of coal on Government account (clause  8).   Clause  9  gives  overriding  effect  to  the direction given  under clause  8. A  person to  whom such  a direction is  required to  dispose  of  coal  in  accordance therewith and  not  to  dispose  of  coal  in  contravention thereof. Power  has been  conferred under  Clause 10A on the Coal Controller  to direct by order in writing that any coal despatched by  any colliery  owner, or  a person  acting  on behalf of  a colliery  owner, to  any person,  which  is  in transit, shall subject to such terms and conditions, if any, as the  said Coal  Controller deems  fit,  be  diverted  and

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delivered to another person specified in the order, The said direction  can   be  modified   or  cancelled  by  the  Coal Controller who  may  direct  the  coal  to  be  diverted  or delivered to a person other than the person originally named therein. The  said clause  also makes  provision for payment of compensation  to the  person affected  by such direction. Clause 11  empowers the  Central Government  to  issue  such directions  as   it  thinks   fit  to   any  colliery  owner prohibiting or  limiting the  mining or  production  of  any grade of  coal and  the colliery  is required to comply with the said  directions. The  authorities  competent  to  allot quota of  coal to any or class of persons are required to be specified by the Central Government by a notification in the official Gazette  and such allotment of quota has to be made by the authority subject to such instructions as the Central Government may  issue from time to time (clause 12A). Clause 12B requires  that a person who has been allotted coal under the Colliery  Control Order  cannot use it otherwise than in accordance with  the conditions contained or incorporated in the document containing the order of allotment and he cannot divert or  transfer any such coal to any other person except under the  written authority from the Central Government. If a person  who has  been allotted  coal does  not require the whole quantity  of the  coal so allotted or any part thereof for the  purpose for  which it  was  allotted,  the  Central Government can  direct such  person  to  deliver  the  whole quantity of such coal or any part thereof to such person and at such price as may be specified in the order (clause 12C). Clause 12E  contains a  prohibition and  lays down  that  no person shall  acquire or  purchase or  agree to  acquire  or purchase any  coal from  a colliery and no colliery owner or his agent  shall despatch  or agree to despatch or transport any coal from the colliery except under the authority and in accordance with  the  conditions  contained  in  general  or special authority  of the  Central Government. By clause 12G the applicability  of clauses  12A, 12B  and  12E  has  been excluded from  September 15,  1975 so as to permit a person, without any  order of  allotment or authority, to acquire or purchase or  agree to  acquire or  purchase or  despatch  or agree to  despatch or  transport or divert or transfer, Hard coke produced  from Bee-hive  Ovens, Country  Ovens and  By- product Ovens. The functions of the Central Government under clauses 8,  10, 11, 12, 12A, 12B, 12C, 12D, 12E, 12F, 13 and 14 are  also exercisable  by the  Coal Controller  with  the Government of  India, Deputy Coal Controller (Distribution), the  Deputy  Coal  Controller  (Distribution)  [clause  15]. Clause 17 requires that every colliery owner, ever person to whom coal  is allotted  under the Colliery Control Order and every other  person engaged  in the  business of production, supply and  distribution or,  or trade and commerce in coal, to whom  any order  or direction  is issued under any powers conferred by  or under  the  Colliery  Control  Order  shall comply with such order or direction.      A perusal  of the  provisions of  the Colliery  Control Order shows  that the control of the Central Government over the various  activities  involving  production,  supply  and distribution of coal at various levels is all persuasive and certain powers  that are conferred on the Central Government can also be exercised by the Coal Controller.      In pursuance  of clauses  12B and  12E of  the Colliery Control  Order,   the  Central  Government  has  issued  the following Notification on July 24, 1967:-      "In pursuance  of Clauses  12B  and      12E of  the Colliery Control Order,      1945,  as  continued  in  force  by

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    Section   16   of   the   Essential      Commodities Act,  1955 (10 of 1955)      the   Central   Government   hereby      authorises a person -      (a) to acquire or purchase or agree      to acquire or purchase, or      (b)  to   despatch  or   agree   to      despatch or transport, or      (c) to divert or transfer,      without any  order of  allotment or      written authority,  non-coking coal      of all  grades produced in all coal      fields, coking  coals not  required      for  metallurgical   consumers  and      coal produced in Assam.      Provided that  such coal  shall  be      consumed within India."      The said Notification was amended by Notification dated July 24,  1967 and for the words beginning with "without any order of allotment", the following words were substituted :-      "without any  order of allotment or      written authority---      (A)  (i)  non-coking  coal  of  all      grades produced in the States         or Assam and Meghalaya.      (ii) coking  coal produced  in  the      States of Assam and Meghalya, which      is not  required for  metallurgical      consumers.      Provided  that   such   coking/non-      coking coal  is not produced in the      coal  mines   of  the   Coal  India      Limited or any of its subsidiaries;      and      (B)  the   coal  sold   under   any      Liberalised Sales Scheme, framed by      the  Government  of  India  in  the      Ministry of Coal, by the Coal India      Limited or any of its subsidiaries,      and   the    Singareni   Collieries      Company Ltd.,  if such  sale is not      dependent  on  the  condition  that      such coal  would  be  used  by  the      first purchaser  only  and  is  not      meant for trading or sale."      By Notification  dated August  25.  1992  there  was  a further amendment  in the  said notifications  and  for  the portion beginning  with "the coal sold under any Liberalised Sales Scheme"  and ending  with "for  trading or  sale", the following were substituted:-      "coal  sold   by  the   Coal  India      Limited or  any of its subsidiaries      or the Singareni Collieries Company      Limited under any Liberalised Sales      Scheme framed  by the Government of      India.      Provided that  the collieries  from      which coal  is to be sold under the      said Scheme  are duly  approved for      the purpose  by the  Government  of      India:      Provided further  than the  coal so      sold under  Liberalised Sale Scheme      would not,  except in  the case  of      actual users,  be  subject  to  the

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    injunction   against   trading   or      resale."      As noticed  earlier, clause  12E contains a prohibition to the  effect that  no person  can acquire  or purchase  or agree to acquire or purchase any coal from a colliery and no colliery owner  or  his  agent  can  despatch  or  agree  to despatch or  transport any  coal from  the  colliery  except under the  authority and  in accordance  with the conditions contained in  general or  special authority  or the  Central Government. This  means  that  except  in  respect  of  coal specified in  clause 12G, To which the prohibition contained in clause  12E is not applicable, no transaction relating to sale of  coal can  take place without the general or special authority of  the Central  Government. The special authority referred to  clause 12E  is the direction that can be issued under clauses  8 and  12A of the Colliery Control Order. The general authority  of the  Central Government  envisaged  in clause 12E is contained in Notification dated July 24, 1967, as amended  by notifications  dated June  4, 1992 and August 25, 1993,  issued under  clauses 12B and 12E of the Colliery Control Order  whereby the Central Government has authorised that a person can acquire or purchase or agree to acquire or purchase or to despatch or agree to despatch or transport or to divert  or transfer  without any  order of  allotment  or written authority  certain  specified  categories  of  coal. Initially, as per the Notification dated July 24, 1967, such general authority  covered Non-Coking  Coal  of  all  grades produced in  all coal  fields, Coking Coals not required for metallurgical consumers  and Coal produced in Assam provided that such  coal had  to be  consumed within  India. The said general authority was modified by Notification dated June 4, 1992 and  it was  applicable to  (i) non-coking  coal of all coking coal  produced in  the State  of Assam and Meghalaya, (ii)  coking  coal  produced  in  the  State  of  Assam  and Meghalaya, which is not required for metallurgical consumers provided that  such coking/non-coking  coal was not produced in the  coal mines  of CIL  or any  of its subsidiaries, and (iii) the  coal sold  under  any  Liberalised  Sales  Scheme framed by  the Government  of India in the Ministry of Coal, by CIL  or  any  of  its  subsidiaries,  and  the  Singareni Collieries that  such  coal  would  be  used  by  the  first purchaser only  and was  not meant  for trading or sale. The said general  authority was further modified by Notification dated August  25, 1993 and in the place of category (iii) in the Notification dated June 4, 1992 it was provided that the general authority  will be available for coal sold by CIL or any of  its subsidiaries or the Singareni Collieries Company Limited under  any Liberalised  Sales Scheme  framed by  the Government or  India. This was subject to the condition that the collieries  from which  the coal is to be sold under the said Scheme  are duly approved for the purpose by Government of India  and coal  so sold  under Liberalised  Sales Scheme would not, except in the case of actual users, be subject to the injunction  against trade or resale. The effect of these notifications was that in respect of coal falling within the ambit of  these notifications, the colliery owners were free to  enter   into  transactions  for  sale  of  coal  without obtaining prior  approval of  the Central  Government or the Coal Controller.  This general  authority referred  to above that is  contained in  the Notification dated July 24, 1967, as modified  by Notifications  dated June 4, 1992 and August 25, 1993,  does not  affect the  power  conferred    on  the Central  Government  to  give  special  authority  regarding disposal of  coal to  a particular colliery owner in respect of a  specified quantity or quality of coal. Clause 8 of the

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Colliery Control  Order empowers  the Central  Government to issue, from time to time, such direction as it thinks fit to any colliery  owner regulating the disposal of his stocks of coal and  such direction can be as to the class, grade, size and quantity of which may be disposed of and person or class of description of persons to whom coal shall or shall not be disposed of,  the order  of priority  to be observed in such disposal. In  view of  clause 9  the direction  given  under clause 8 would prevail over contract to the contrary and the colliery owner  would be  required to  dispose  of  coal  in accordance with  such direction  and would be precluded from disposing of coal in contravention with such direction.      Having regard  to the  object underlying  the making of the  Colliery   Control   Order,   i.e.,   controlling   the production, supply  and distribution  of coal  and clauses 7 and 17  which expressly refer to persons engaged in trade or commerce in  coal, it must be held that the directions under clause 8  of the  Colliery Control Order can be given in the matter of  supply of  coal to traders engaged in purchase of coal for  the purpose  of sale  to the  small consumers  who cannot obtain direct of coal from collieries.      The Colliery Control Order assigns an important role to the Coal  Controller, as  defined in  clause 2(1)(a), in the matter of  enforcement of its various provisions. In certain clauses (clauses  3A, 7  and 10A) powers have been expressly conferred on  the Coal Controller and, in addition, there is clause 15  whereby the  functions of  the Central Government under clauses  8, 10,  11, 12, 12A, 12B, 12C, 12D, 12E, 12F, 13 and  14 can  also be exercised by the Coal Controller. It is, therefore,  open to  the Coal  Controller in exercise of the power  under clause  8 to give directions regulating the disposal of  stocks of  coal by  any colliery owner and such directions may  be as  to class, grade, size and quantity of coal which  may be  disposed  of  and  person  or  class  or description of  persons to  whom coal  shall or shall not be disposed. The  impugned directions dated April 12, 1994 that were given  by the  Coal Controller  were in the nature of a special direction  given by  the Coal Controller in exercise of power  under clause  8. In  view of  clause  9  the  said directions could  override the  contract entered into by CCL with  the  petitioners  regarding  supply  of  coal  from  a particular colliery or washery.      Shri  Dave   has,  however,  submitted  that  the  Coal Controller could  not give  a direction to supply Steam Coal from Sirka  Colliery in  the place  of Steam  Coal which was agreed to  be supplied from Urimari and Jarangdih Collieries especially when  the Steam  Coal of  Sirka Colliery  was not covered by  LSS-II and  had not been offered for sale in the advertisement published in September 1992. There is no force in this  contention. LSS-II  was framed  in pursuance of the Notification  dated   July  24,   1967,   as   modified   by notification dated  June 4, 1992. As indicated  earlier, the said notifications were in the nature of a general authority given to  the Central  Government under  clause 12E  of  the Colliery Control  Order. This  only means that in respect of coal covered  by LSS-II  it was permissible for the colliery owners to  dispose of  the coal  covered by  the said Scheme without  obtaining   prior  authority   from   the   Central Government. But  this does not mean that the Coal Controller is deprived  of his  powers under the Colliery Control Order to give  directions regarding the disposal of the coal which is dealt  with under LSS-II. The said coal also falls within the ambit  of the  Colliery Control  Order  and,  therefore, there was  nothing to  preclude  the  Coal  Controller  from giving directions  under clause  8 in relation to coal dealt

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with under  the said  Scheme and  such directions when given would  take  effect  notwithstanding  any  contract  to  the contrary entered by the colliery owners. The fact that Steam Coal of  Sirka Colliery  was not  offered for sale by CCL in the advertisement  published in  September  1992  is  of  no consequence  in  so  far  as  the  competence  of  the  Coal Controller to  give directions regarding supply of that coal instead of  Steam Coal from Urimari and Jarangdih Collieries is concerned.  Steam Coal  at Sirka Colliery was not outside the ambit  of  the  Colliery  Control  Order  and  the  Coal Controller, in  exercise of his powers under clause 8, could give directions  in respect  of that coal. The power to give such directions  is not fettered by the contract between CCL and the  petitioners providing for supply of Steam Coal from Urimari and  Jarangdih Collieries, we are, therefore, unable to uphold  the contention urged by Shri Dave that in view of the contract  between the  petitioners and CCL for supply of coal in  accordance with  LSS-II from  Urimari and Jarangdih Collieries it  was not  open to  the Coal Controller to give direction to  CCL for  supply of  Coal from  Sirka  Colliery which coal was not covered under LSS-II.      Shri  Dave   has  next   contended  that  the  impugned direction dated  April  12,  1994  was  given  by  the  Coal Controller  without   affording  an   opportunity   to   the appellants to  make their  submissions in  that  regard.  In other words,  Shri Dave  has invoked  the principle of  audi alteram partem. we do not find any merit in this contention. we are  unable to  hold that  it was incumbent upon the Coal Controller to have afforded an opportunity to the appellants before giving  the impugned  direction in  exercise  of  him powers under  clause 8  of the  Colliery Control  Order. The power to  issue directions under clause 8 has been conferred with a view to enable the Central Government/Coal Controller to  effectively   regulate  the   production,   supply   and distribution of  and trade  and commerce  in coal. There may arise situations  where immediate  action may be called for. It cannot,  therefore, be  held that the said power can only be exercised after giving prior notice to the colliery owner or other  persons affected  by such  directions. In case the colliery owner  or any  person feels  that his interests are adversely affected  by such  a direction,  he may  place his case before  the Central  Government/Coal Controller who has given the  direction and  seek reversal  of the same and, in that  event,   the  concerned   authority  shall   give  due consideration to  such submissions.  In the present case the Coal Controller  had before  him  the  representation  dated April 7,  1994 submitted  by the  petitioners to the General Manager (Argada  area) Sirka  of CCL  and the  letter  dated April 8,  1994 sent  by the General Manager (Argada area) to the General  Manager (S&M),  CCL, Ranch which indicated that sufficient stocks  of Steam  Coal were  available  at  Sirka Colliery which  was required  to be disposed of. In case the appellants felt  aggrieved by  the impugned directions given by the  Coal Controller  on April 12, 1994, they should have moved the  Coal  Controller  forwarding  the  representation dated April  2, 1994  submitted by  the petitioners. We have gone through  the said letter. We are unable to hold that in the facts  of this  case it  can be  said that  the impugned direction dated  April 12, 1994 given by the Coal Controller was vitiated by any extraneous considerations.      Shri Harish  Salve has  urged an  additional point that the letter  from the  Coal Controller  to the  Chairman-cum- managing Director  of CCL  dated April  12, 1994  cannot  be treated as  a statutory  direction for  enforcement of which writ of  mandamus can  be issued. The submissions is that in

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the  said   letter  the  Coal  Controller  has  advised  the Chairman-cum-Managing Director  to give  forthwith effect to the transfer  of allotments.  There  is  no  force  in  this contention. Although the language used in the said letter is in the  nature of  an advice,  but  in  substance  it  is  a direction for  giving effect  to transfer  of allotments. In view of  clause 17  of the  Colliery Control  Order  such  a direction was  binding on  CCL. A  writ of  mandamus  could, therefore, be issued to implement the said direction.      Since none  of the  contentions urged  by  the  learned counsel for  the appellants  merit acceptance,  the  appeals fail   and   are,   therefore,   dismissed.   But   in   the circumstances, there will be no order as to costs.