IN THE SUPREME COURT OF INDIA    CIVIL ORIGINAL JURISDICTION

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

O R D E R

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

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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

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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

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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

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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.

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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

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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

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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

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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.    

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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

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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

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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

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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.

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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.

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...........................................J. .            [S.B. Sinha]

          ........................................... J.

           [Dr. Mukundakam Sharma]

New Delhi February 27, 2009

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