Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

INTERLOCUTORY APPLICATION NO. 3 OF 2009

IN

SPECIAL LEAVE PETITION (C) NO.20238 OF 2006

M/s. Maruti Clean Coal & Power Ltd.       … Petitioner

Versus

Alok Nigam & Anr.       … Respondents

J U D G M E N T

J.M. Panchal, J.

1. By  filing  this  Interlocutory  Application,  M/s.  Maruti  

Clean  Coal  &  Power  Limited  which  has  established  a  coal  

washery of 10 M.T.Y. capacity on Khasra Nos.850/30, 850/24,

850/31, 850/28, 850/27 and 850/32 of Village Ratija, District  

Korba  leased  by  the  State  of  Chhattisgarh  through  

Chhattisgarh  State  Industrial  Development  Corporation  

(‘CSIDC’ for short), has prayed to direct M/s. South Eastern  

Coal  Field  Limited  (‘SECL’  for  short)  to  start  supply  of  coal  

immediately and issue Transit Passes/Delivery Orders through  

the washery  of  the petitioner  on behalf  of  linked and other  

customers  on  instructions/requests  from  all  such  

customers/purchasers of coal.

2. In order to understand the scope and ambit of the prayer  

made by the petitioner, it would be relevant to notice certain  

facts.  M/s. Maruti Clean Coal & Power Limited is a company  

registered  under  the  provisions  of  the  Companies  Act.   It  

applied for the allotment of about 15 hectares (37.91 acres) of  

land of village Nawagaon Khurd (now Ratija), District Korba,  

(‘the land’ for short) for setting up a Coal Beneficiation Plant  

with a capacity to wash 10 million tons of coal per annum.  

The land demanded was adjacent to already existing two coal  

washeries one of which was set up by ST-CLI in which one  

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Aryan  Coal  Beneficiation  Pvt.  Ltd.  has  26%  holdings  and  

another  Coal  Washery  set  up  belongs  to  Aryan itself.   The  

officials of the Revenue, Forest and Industry Departments of  

the  State  conducted  a  thorough  inspection  of  the  land  

demanded by the petitioner.  After being satisfied that the land  

demanded  was  not  forest  land  and  requirements  of  

environmental laws were complied with by the petitioner, the  

officials  recommended to  the  State  to  allot  the  land  to  the  

petitioner.  Pursuant to the said recommendation, a lease deed  

dated December 5, 2002 for a period of 99 years was executed  

in  favour  of  the  petitioner  by  the  State  of  Chhattisgarh  

through CSIDC.   The purpose for which the lease deed was  

executed was to enable the petitioner to set up a coal washery.  

Pursuant  to  the  said  lease  deed,  the  petitioner  was  put  in  

possession of the land.  However, subsequently, SECL claimed  

title to the land and alleged that the land did not belong to the  

State Government and, therefore, could not have been leased  

by the State to the petitioner.

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In  March/April  2003,  one  Mr.  B.L.  Wadhera,  a  public  

spirited  citizen  instituted  WP  (C)  No.1264/2003  before  the  

High  Court  of  Chhattisgarh  at  Bilaspur  to  prevent  the  

petitioner from setting up its coal washery on the land allotted  

to it  by the State Government on the ground that the land  

allotted were forest land.  The High Court, by an ex parte order  

dated  April  24,  2003,  directed  the  petitioner  to  maintain  

status quo regarding the land allotted to it and not to cut trees  

standing on the land till further orders.  In view of the dispute  

pertaining to the title of the land between SECL and the State  

Government, the Union of India, vide letter dated May 7, 2003  

sent  through  the  Ministry  of  Coal,  gave  the  petitioner  two  

options (1) to wait until title issue is decided; or (2) to proceed  

on the assumption that the title vests in SECL and on that  

basis, to request the SECL to allot the land to the petitioner.  

It was also mentioned in the said letter that in the event the  

petitioner  chose  the  second  option,  Coal  India  Limited  and  

SECL would be requested by the Ministry to initiate action for  

leasing the land to the petitioner.  The record shows that by  

letter  dated May 9,  2003,  the  petitioner  elected the second  

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option.  The petitioner filed an application for vacation of the  

stay  order.   The  High  Court,  by  order  dated  May  9,  2003,  

modified  its  earlier  order  and  allowed  the  petitioner  to  

continue  with  the  construction  of  the  main  building  but  

restrained it from installing the machineries.  Meanwhile, the  

SECL wrote a letter dated June 27, 2003 to the Ministry of  

Coal stating that it had no objection in leasing the land to the  

petitioner subject to certain conditions including the condition  

that the fact that the land belonged and belongs to SECL is  

acceptable to the petitioner.  Feeling aggrieved by order dated  

May  9,  2003,  Mr.  B.L.  Wadhera  filed  SLP  (C)  No.22531  of  

2003.  This Court, by order dated November 24, 2003 stayed  

further construction on the land.  Subsequently, the said SLP  

was tagged with IA No.857-858 of 2003 filed by Mr. Wadhera  

and one Mr.  Deepak Aggarwal  respectively.   This  Court,  by  

judgment dated April  10, 2006 in case of  T.N.  Godavarman  

Thirumulpad vs.  Union  of  India  &  Ors. (2006)  5  SCC  28,  

dismissed the application of Mr. Deepak Aggarwal observing  

that it was filed with mala fide intention.  The interim order  

passed  staying  further  construction  was  vacated.   On  the  

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pronouncement of judgment by this Court, the petitioner filed  

an application  in  the  writ  petition  pending before  the  High  

Court  of  Chhattisgarh  with  a  prayer  to  dismiss  the  writ  

petition.   The  record  shows  that  the  said  application  was  

heard with two other connected petitions and judgment was  

reserved.  However, the judgment could not be pronounced by  

the High Court.  Therefore, the petitioner filed an application  

for vacating the interim orders dated April 23, 2003 and May  

9, 2003.  Listing of the said application was refused by the  

Registry on the ground that in the main matter, judgment was  

reserved.  Meanwhile, the petitioner completed construction of  

the main building.  The order for purchase of machineries to  

be installed was already placed.   

3. On December 9, 2004, SECL filed Civil Suit No.90-A of  

2004  against  the  State  of  Chhattisgarh  and  the  petitioner  

contending, inter alia, that the land allotted to the petitioner  

company  by  the  State  of  Chhattisgarh  through  CSIDC had  

vested in SECL and that SECL is the owner and in possession  

of  the  land  in  question.   Various  other  litigations  and  

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proceedings were initiated by several parties pertaining to the  

land allotted to the petitioner company.  The Ministry of Coal,  

by letter dated December 30, 2005 advised SECL to implement  

the  instructions  dated  May 7,  2003  mentioned  in  para  (b).  

The petitioner  thereupon addressed a letter  dated June 14,  

2006  to  SECL  to  inform  the  petitioner  about  the  lease  

premium/rent to be deposited.  The record of the case further  

shows that in spite of instructions issued by the Ministry of  

Coal and request made by the petitioner, SECL did not initiate  

steps  for  leasing  the  land to  the  petitioner.   Therefore,  the  

petitioner has filed Special  Leave Petition No.20238 of 2006  

challenging validity of order dated April 24, 2003 as modified  

by order dated May 9, 2003 in WP No.1264 of 2003 pending  

before the High Court of Chhattisgarh.  In the abovereferred  

special leave petition, the Court has issued notice and the said  

SLP is pending for final disposal.  Thereupon, the petitioner  

company filed Transfer Petition No.53 of 2007 in this Court to  

direct that all the connected matters including the suit, writ  

petitions and/or appeals be heard together and transferred to  

the High Court of Chhattisgarh at Bilaspur.  The said Transfer  

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Petition was allowed.  Pursuant to the directions given by this  

Court,  the  number  of  Civil  Suit  was changed  from 90-A of  

2004 to Civil Suit No.1-A of 2008.  The said suit and all other  

connected writ petitions, appeals etc. are pending adjudication  

before the High Court of Chhattisgarh at Bilaspur.  

4. During  the  pendency  of  proceedings  before  the  High  

Court of Chhattisgarh, the Prime Minister’s Office vide letter  

dated  June  26,  2007  to  the  Secretary,  Ministry  of  Coal  

approved  and  recommended  SECL  to  move  an  appropriate  

application  before  the  High  Court  of  Chhattisgarh  seeking  

permission of the Court for leasing the land to the petitioner  

company for establishment of a coal washery.  Having regard  

to these directions, the Ministry of Coal issued a letter dated  

July 4, 2007 to M/s. Coal India Ltd. which is parent company  

of SECL, stating that in view of the decision by the competent  

authority,  SECL should take appropriate action to lease the  

land to the petitioner company.  Therefore,  M/s. Coal India  

Ltd. addressed a letter dated July 5, 2007 to SECL directing it  

to  take  all  necessary  actions  for  execution of  lease deed in  

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favour  of  the  petitioner  company.   On July  9,  2007,  SECL  

issued  a  letter  to  the  Chairman-cum-Managing  Director  of  

CMPDI requesting to make assessment of the land required to  

be leased out.   In view of  the directions contained in letter  

dated  July  5,  2007  of  Coal  India  Limited,  SECL  filed  an  

application  on  July  16,  2007  before  the  High  Court  of  

Chhattisgarh  at  Bilaspur  in  WP  No.3094  of  2007  seeking  

permission to  execute  a  lease  deed in  favour of  petitioner’s  

company.  It was also mentioned in the said application that  

the petitioner company had agreed to take the land on lease  

for  establishment  of  a  coal  washery  and agreed to  pay  the  

lease money to SECL.  Subsequently, on August 9, 2007, an  

additional  affidavit  was  filed  enumerating  three  conditions  

precedent to the execution of lease deed in favour of petitioner-

company.   The  record  shows  that  the  petitioner-company  

showed willingness to abide by those conditions but no lease  

deed is executed between the petitioner-company and SECL.  

In the title suit filed by SECL, an order was passed by the High  

Court  directing  the  parties  to  appear  before  Mr.  Gopal  

Subramanium, the then learned Additional Solicitor General of  

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India, to explore the possibilities of a settlement.  The record  

does not indicate that any settlement had taken place between  

the parties.

5. The  grievance  made  by  the  petitioner  in  the  instant  

application is that it has expended almost Rs.100 crores to set  

up a 10 million ton washery.  It is averred in the application  

that the buildings have been constructed and expensive state  

of art machineries and equipments have also been purchased  

and installed.  The petitioner has mentioned that trial run was  

also  done  in  the  wahsery  nearly  two  years  ago  and  the  

petitioner  is  not  able  to  operate  the  washery  only  due  to  

refusal by SECL to issue Transit Passes/Delivery Orders for  

transport  of  coal  purchased  by  the  linked  and  other  

consumers through the petitioner’s wahsery before delivery to  

such  purchasers.   According  to  the  petitioner,  the  only  

ostensible  reason  for  SECL  to  refuse  grant  of  Transit  

Passes/Delivery Orders is the dispute as to the title of the land  

between  the  State  of  Chhattisgarh  and  SECL.   The  claim  

advanced by the petitioner is that washing of the coal before  

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consumption  has  significant  environmental  benefits  and  is  

also in the public interest and as there is significant shortage  

of coal washeries, the petitioner’s washery should be permitted  

to operate.  Under the circumstances, the petitioner has filed  

this application and claimed relief to which reference is made  

earlier.

6. The respondents have filed affidavit in opposition.

7. This Court has heard the learned counsel for the parties  

at great length and in detail.  The Court has also considered  

the documents forming part of the instant application as well  

as SLP (C) No.20238 of 2006.

8. During the course of hearing of the application,  it  was  

made clear by the learned counsel for the petitioner that the  

petitioner  company is  ready to take the land on lease from  

SECL and pay rent to the said company.  The record shows  

that several cases have been clubbed together and Civil Suit  

No.1-A  of  2008  relating  to  title  of  the  land  leased  to  the  

petitioner  company  by  the  State  Government  is  pending  

disposal.  The averments made by the petitioner that on the  

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leased land, the petitioner has expended almost Rs.100 crores  

to  set  up  a  10  million  tons  washery  and  has  installed  

expensive  machineries  could  hardly  be  controverted  by  the  

respondents.  The petitioner company is neither claiming title  

to the land nor asserts that the coal coming to its company for  

wash  belongs  to  it.   By  a  scientific  process,  the  petitioner  

washes  the  coal  brought  to  the  factory  by  the  purchasers.  

Once SECL sells  coal  to  the  highest  bidder  and the  bidder  

pays the price, the property in coal would stand transferred to  

the purchaser and the purchaser would be free to deal with  

the  quantity  of  coal  purchased  like  any  other  prudent  

purchaser.  Here, the petitioner-company is not concerned at  

all  with  the  title  of  the  coal  in  question.   The  building  

constructed and machineries installed have remained unused  

since  long  causing  great  financial  loss  to  the  petitioner-

company.  It is relevant to notice that as on date, there is no  

order subsisting which restrains the petitioner from operating  

the washery in question.  The assertion made by the petitioner  

that it  has received all  necessary approvals  for running the  

washery  including  the  approval  from  the  Ministry  of  

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Environment,  Electricity  Department,  Commercial  Tax  

Department,  licence  under  the  Factories  Act  etc.  is  not  

disputed by any of the respondents. Therefore, this Court is of  

the opinion that the prayer made by the petitioner–company in  

the  instant  application  deserves  to  be  granted,  of  course,  

subject to certain conditions.  

9. For  the  foregoing  reasons,  the  application  partly  

succeeds.   M/s  South  Eastern  Coal  Field  Ltd.  is  hereby  

directed  to  start  supply  of  coal  and  issue  Transit  

Passes/Delivery Orders through the washery of the petitioner  

on  behalf  of  linked  and  other  customers  based  on  

instructions/requests from them.  It is clarified that the grant  

of this interim relief will be subject to the result of Civil Suit  

No.1-A of 2008 pending in the High Court of Chhattisgarh at  

Bilaspur.   It  is  also clarified that if  issue of  title  is  held in  

favour of M/s. South Eastern Coal Field Ltd., it would be open  

to  the  said  company  to  lease  the  land  to  the  petitioner-

company or to take other steps with reference to the said land  

in  accordance  with  law.   Subject  to  abovementioned  

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clarifications/observations, rule is made absolute.  There shall  

be no order as to costs.

………………………CJI

 …………………………J. [J.M. Panchal]

…………………………J. [Dr. B.S. Chauhan]

New Delhi; March 31, 2010.

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