JUDGMENT
1. By this Writ Petition, Petitioners have, Inter alia, prayed for quashing the impugned order dated 22.9.2000 being annexure–C issued by the Chief General Manager. Marketing, Coal India Ltd (hereinafter referred to as the said CIL) rejecting petitioners” representation for change of allotment/linkage of Coal from Bharat Coaking Coal Ltd. (herein after referred to as the said BCCL) to the Collieries of Eastern Coalfields Ltd. (hereinafter referred to as the said ECL) and for a writ of mandamus commanding CIL authorities to change the linkage/allotment of Coal granted in favour of the petitioners from BCCL Collieries to ECL Collieries.
2. Petitioner No. 1 Naba Bharat Udyog is a small scale Industrial unit and Petitioner No. 2 is a partner thereof. Petitioner No. 1 is a soft coke manufacturing unit /plant. Technology adopted in the said plant is the technology prescribed by the Council of Scientific and Industrial Research. Respondent No. 1 being the said CIL is the apex coal company and the BCCL and ECL are coal supplying companies being the subsidiaries of the said CIL.
3. Further case of the petitioners is that ECL collieries are situated in the vicinity of the plant of the petitioners. On the other hand BCCL collieries arc situated Quite far away from the said Plant .
4. By letter dated 18.6.99 being annexure to the Petition, CIL authorities granted allotment/linkage for 2415 Mts. Of Coal per month in favour of the petitioners on ad hoc basis for six months. In terms of the said allotment/linkage, BCCL collieries were required to supply Coal to the plant of the petitioners. It was further stipulated in the said allotment/linkage that on expiry of six months another inspection of the plant would be carried out by the Joint Inspecting team for continuation of Coal supplies subject to the status verification of the unit and completion of all relevant documents/papers.
5. As already pointed out above, petitioners would incur huge transport cost for bringing the Coal from BCCL Collieries on account of great distance at which BCCL Collieries are situated from the plant of the petitioners. That transport cost can be substantially avoided of if the said allotment/linkage granted in favour of the petitioners is tagged with ECL Collieries which are situated in the vicinity of the petitioners. For this reason, instead of lifting any coal from the BCCL Collieries in terms of the said ad hoc allotment/ linkage, petitioners made a representation before CIL authorities for transferring the said allotment/linkage from BCCL coalmines to ECL Collieries. It is further case of the petitioners that there is no shortage of Coal in ECL Collieries as coal is being sold from the said Collieries to ordinary traders under open Sale Scheme.
6. As the aforesaid representation of the petitioners could not elicit any response from the CIL authorities, a writ petition was filed by them in them in this Court for appropriate direction. Said writ petition was disposed of by an order dated 10.2.2000 directing the CIL Authority to consider and dispose of the said representation of the petitioners by a reasoned order.
7. In compliance with the said order dated 10.8.2000 passed by this Court, petitioners were heard on 4.9.2000 and ultimately by the impugned order dated 22.9.2000 being annexure-C to the petitioner rejected the aforesaid representation of the petitioners.
8. For rejecting the aforesaid representation. Chief General Manager (Marketing), Coal India Ltd. assigned the following five reasons in the impugned order:-
1) Vide their letter No. NBU/CF/Coke/DUK/21 dates 25.8.98 and No.
NBU/CF/Coke/DUK/23 dated 23.9.98, the petitioner had applied for issuance of Coal clearance for their Soft Coke Manufacturing Unit based on CFRI technology situated in Bihar.
The petitioner is their said applications did not mention/specify any particular Coal Company for issuance of Coal clearance for their said unit.
As per extent policy of CIL, the petitioner’s unit was issued Coal clearance on BCCL vide this office letter No. CH-/C4A/41526/DFSC/1472/73 dated 23.9.98.
2) Subsequently as per extent policy, petitioner’s unit was inspected on 21.5.99 jointly by a team comprising CIL, CMPDIL and BCCL for status
verification and capacity assessment/requirement of Coat. In terms of the recommendation of the joint inspection team, petitioner’s unit was released NLW ROM Coal @ 2415 MTS per month from BCCL sources vide this office letter No. CIL/C4A/41526/803-07 dated 18th June, 1999. The petitioner vide their registered letter No. NBU/SC/DUK 99-35 dated 11.11.99/19.11.99 received at office on 26.11.99 i.e. after 5(five) months from the dale of “coal release” order issued by this office had informed that they were obtaining Coal from BCCL as per release order in their favour. The petitioner also requested for change of source of allotment from BCCL to CCL.
(3) since the petitioner was already drawing Coal from BCCL. change of source of linkage was not considered as per extant policy guidelines of CIL. Moreover, ECL had already intimated this office vide their fax message dated 25.11.99 that to keep issue of new/additional linkage suspended until further advise.
(4) In this regard your attention is also invited towards judgment given by Hon’ble High Court and Supreme Court of India, wherein the Hon’ble Court have observed that supplies cannot be source specific and rather supplies did not create any vested right in the petitioner to buy Coal from a particular Colliery. He is not being deprived of coal supplies.
(5) That the records in respect of the unit mentioned in your writ petitioner where Coat clearance was considered from ECL has also been checked-up and it is noted that such coal clearance was issued by this office on 18/22.11.99 i.e. prior to the embargo imposed by ECL. In the light of the above facts and circumstances, your claim for change of allotment from BCCL to ECL, therefore, does not merit consideration.”
9. In this petition the aforesaid order dated 22.9.2000 being annexure-C to the petition is under challenge. I am, therefore, called upon to decide whether or not said impugned order should be quashed. I have heard learned counsel for both sides at length.
10. Therefore, it appears from the above quoted impugned order that petitioners’ representation to supply them with Coal from ECL Collieries was rejected on five grounds mentioned therein. The first ground taken in the impugned order is that in the application and their letters by which petitioners had applied for Coal clearance for their soft coke manufacturing unit based on CFRI technology, it was not specifically mentioned as to from which particular Coal Company petitioners preferred Coal clearance for their said unit. In this regard, it appears that it is indeed true that in their application for Coal clearance petitioners did not specify that they preferred supply of Coal for their unit to be made from ECL Collieries. In fact they did not specify name of any Coal Company from which such Coal should be supplied to the plant of the petitioners. However, failure on the part of the petitioner to specify particular Coal Company from which supply of Coal to the plant of the petitioners is to be made is not very important as because it is presumed that the CIL authorities will grant Coal clearance to the petitioners for supply of Coal from such collieries which would be more advantageous to the petitioners unless for some special reasons it is not feasible to ensure supply from such Coal Company. It is expected that the respondents being stale authority will act reasonably. It is not at all
reasonable to deny the petitioners supply of Coal from collieries situated in the vicinity of the plant of the petitioners provided sufficient quantity of Coal is available in such collieries or the Coal Company. It is equally reasonable to expect that the respondents, being state authority, will act in a reasonable manner so that petitioners are not put in any disadvantageous position by supplying Coal from Collieries of a Coal Company situated at a place far away from the plant of the petitioners. If It is really possible to supply such Coat to the plant of the petitioners from the Coal Company having collieries situated in the vicinity of the plant of the petitioners, it is not expected that the respondents being state authority would deny such supply merely because petitioners did not mention their preference as to the Coal Company or the Collieries from which such Coal is to be supplied to their plant.
11. Paragraph 2 of the above quoted impugned order merely states certain facts on the basis of the record. But, one thing is evident therefrom that soon after Coal clearance was Issued in favour of the petitioners on ad hoc basis, petitioners requested for changing source of allotment from BCCL to ECL. It is also seen from annexure-D to the petition being letter dated 7.12.2000 issued by Dy. Sales Manager (linkage) of BCCL that since such Coal clearance was issued in favour of the petitioners on ad hoc basis, they did not lift any quantity of Coal from the BCCL Collieries. This letter belles the ground assigned in the impugned order in paragraphs 2 and 3 thereof. In the said paragraph 3 it was recorded in the impugned order that since petitioners was already drawing Coal from BCCL Collieries, change of source of linkage was not considered as per extent policy guidelines of CIL. But, I find from the annexure-D being the letter dated 7.12.2000 that petitioners never lifted any Coal from the BCCL Collieries pursuant to the aforesaid Coal clearance/linkage. However, in paragraph 3 it has been noted that ECL has already intimated the office of CIL that no further new/ additional linkage should be issued in respect of ECL Collieries until further order. Said decision was intimated to CIL authorities vide fax message date 25.11.99. This aspect of the case will be dealt with little later in this judgment.
12. In paragraph 4 of the impugned order it has been recorded that certain judgment rendered by the High Court and Supreme Court it has been, Inter alia, observed that supply of Coal cannot be made from a specific source. Supply of Coal did not create any vested right in favour of the petitioner to buy Coal from particular collieries. On being asked learned Counsel for the respondents produced copies such orders of the High Court and Supreme Court. I am surprised to see that Supreme Court in its order has not made any such observation whatsoever. In fact learned counsel for the respondents produced a copy of the order dated 27.4.99 passed by the Supreme Court in SLP No. 9216-17/94. In the last paragraph of the said order the Supreme Court observed as follows :-
“It sought to raise the contention that the authority decided and allotted 15 persons’ linkage to NCL which are similarly situated to the petitioner and the petitioner had been singled out. Unfortunately, no acceptable material has been placed before us nor available in this behalf to the High Court for consideration. Therefore, it is open to the petitioner to make a representation afresh to the authority to look into the matter
and consider afresh. The order passed by the High Court is not on merit. The give an opportunity to the authorities to have a fresh look into the matter for supply of the Coal from N.C.L., Singrauli we are remitting the matter to the authorities. In case it is not possible, the petitioner unit may be tagged to any other nearest unit so as to reduce the cost of transport charge to the petitioner. The petitioner is not entitled to question the order in the High Court in another litigation. The petition is, accordingly, disposed of.”
13. Therefore, in the aforesaid order the Supreme Court never observed that if It is possible for the respondents to transfer the allotment/linkage of Coal granted in favour of the petitioner to ^a particular Colliery/Coal Company, same cannot be done by them. It is of course true where it is not at all possible for certain acceptable reason to grant such transfer, it is obvious that no such transfer can be allowed by the C1L.
14. Learned counsel for the respondents produced a short order dated 30.3.93 passed by Madhya Pradesh High Court in a certain case said order reads as under :-
“The order impugned requires the petitioner to buy Coal either from SECL or RCCL as may be convenient to him. He is aggrieved by this order mainly because the earlier order annexure P-2 permitted him to lift the Coal from coalmines in Sidhi Dist. The aforesaid order does not create any vested right in the petitioner to buy Coal from a particular Colliery. He is not being deprived of the Coal supply. There is, therefore, no justification for entertaining this petition which falls and is dismissed summarily.”
15. It appears from the aforesaid order passed by the Madhya Pradesh High Court that on scrutiny of the materials in that case no justification could be found for entertaining the writ petition and accordingly, same was dismissed. However, if some justification was available on the basis of material placed before the Court, surely the Court would not have dismissed the writ petition summarily. What is important is not see whether any justification is available on record in the instant case for interference so that petitioners’ grievances can be redressed. If such justification is available, there is absolutely no reason to dismiss the Instant petition.
16. With regard to paragraph 5 of the above quoted impugned order, I do not consider It necessary to deal with the same in detail except what follows hereunder.
17. It is of course true that by fax message dated 25.11.99 ECL authorities requested CIL authorities “to keep the issue of new/additional linkage suspended until further advise.” Relying upon this fax message, It is contended by the learned counsel for the respondents that as sufficient Coal is not available at the ECL Collieries after meeting the requirements of core sector and non-core sector industries, ECL authorities by their aforesaid fax message requested the CIL authorities to keep the Issue of new/additional linkage suspended until further advice. It is further contended by him that the decision contained in the aforesaid fax message is a matter of policy decision and such policy matters are not subject to judicial review under writ jurisdiction of this Court and, accordingly, no Interference is called for in the circumstances of the case.
18. On the other hand contention of the learned counsel for the petitioners is that huge quantity of Coal is being sold to ordinary traders from the ECL Collieries under open Sales Scheme. Surely, petitioners’ plaint being an SSI unit is at least a non-core sector industry and hence it can legitimately claim priority over and above ordinary traders who are getting supply of Coal from ECL Collieries under open Sales Scheme. When ECL Collieries are in a position to sell huge quantity of Coal to ordinary traders under open Sales Scheme, there is absolutely no reason to deny change of Coal clearance/linkage to the petitioners and the fax message in question cannot stand as a bar in granting such change/transfer. It needs to be mentioned here that the fax message in question was issued on 25.11.99. It appears from the impugned order itself that the petitioners by their letters dated 25.8.98 and 23.9.98 had applied for Coal clearance/linkage. So undisputed fact is that about a year before fax message was issued, petitioners submitted their applications for Coal clearance and respondents failed to dispose of the same before the said fax message was Issued. Had the said applications of the petitioners were taken up for disposal before the fax message was issued, respondents could not have taken shelter behind the said fax message for denying them supply of Coal from ECL Collieries. Furthermore said fax message was issued on 25.11.99 whereas Coal clearance was granted on 18.6.99 and, therefore, the fax message was not at all in existence at that time. In such circumstances It is not understood as to why Coal clearance/linkage issued in favour of petitioners was tagged with BCCL Collieries.
19. Under somewhat similar circumstances, though slightly different, Supreme Court in Coal India Ltd. v. M/s. Continental T&C Corporation. issued writ of mandamus upon Chairman-cum-Managing Director of Central Coal Fields Ltd. to implement the directions issued by Coal Controller to transfer allotments of Coal from other Colliery as mentioned therein. So in an appropriate case writ of mandamus can certainly be issued for change of Coal clearance/linkage from one source to another. This Court in Sree Jagadamba Coke Manufacturing Enteiprises v. Union of India, observed that Court should refrain from embarking upon the uncharted ocean of public policy. But the said principle is not absolutely unqualified. There is no manner of doubt that the state authorities can frame the public policy and such right to frame public policy cannot be challenged but in framing such policy or implementing the same, if statutory right of any party is infringed or the fundamental rights guaranteed by the Constitution are violated, the Court is certainly within its jurisdiction to scrutinise such public policy framed by the executive authority and strike down such policy or a part thereof which either infringes any statutory right or comes in conflict with any provision of the Constitution. It has further been observed by this Court in that case that law is well-settled that the state or public bodies in discharging duties and functions of a public nature must not act arbitrarily or capriciously. Reasonableness or non-arbitrari ness of state actions are some of the facts of equality clause as enshrined in Article 14 of the Constitution. It is not at all a reasonable policy to deny supply of Coal to a non-core sector industry like that of the petitioners from nearby Coal mines of another Coal company where an abundance of Coal is available as otherwise sale of such Coal from such Coal mines to ordinary traders under open sales scheme would not have been possible. There is absolutely no reason to compel the petitioners to bear the extra burden of
incurring huge transport cost to bring Coal from collieries situated at great distance from their plant particularly when Coal is said to be available at ECL collieries situated in the vicinity of petitioners’ plant. If it is really true that particular grade of Coal is available at the ECL Collieries for sale to ordinary traders under open sales scheme, the policy of not issuing new/ additional Coal clearance/linkage to non-core sector industries cannot be designated to be sound and reasonable policy as such a policy cannot serve my public purpose whatsoever. This is more so particularly when learned counsel for the respondents fairly concedes that priority wise non-core sector industry stands on a higher footing when compared with ordinary traders under open sales scheme and it is nobody’s case that a soft coke manufacturing plant is not a non-core sector industry. In these circumstances, one is constrained to hold that the fax message in question does not contain any element of public policy.
20. Learned counsel for the respondents relied upon a decision of the Supreme Court in State of Punjab v. Ramlubnaya Bagga, (1984) SCC 117 to buttress his contention that matters of policy decision cannot be interferred with by this Court in its writ jurisdiction. But I find that in paragraph 25 of the report, Supreme Court observed that “So far as questioning the validity of Govt. policy is concerned in our view it is not normally within the domain of any Court, to weigh the pros and cons of the policy or to scrutinise it and test the degree of its beneficial or equitable disposition for the purpose of varying, modifying or annulling It, based on howsoever sound and good reasoning, except where it is arbitrary or violative of any constitutional, statutory or any other provision of law…..”
Therefore, it appears that Supreme Court has not laid down any such inflexible proposition of law that in no case Court’s interference with policy matters is permissible even if such a policy is found to be arbitrary, unreasonable, whimsical or that it infringes some statutory or constitutional provision.
21. In Bennet Coleman’s Case, it has been held by the Supreme Court that the policy whether import and distribution of newsprint as contained in Newsprint Policy is purely a matter of Government policy and the Court cannot adjudicate upon such policy measures unless the policy is alleged to be mala fide. In fact Supreme Court in that case accepted the right of a party to challenge the policy on the ground that such policy violates provisions of Articles 14 and 19 of the Constitution and ultimately Supreme Court examined various restrictions of newsprint policy and found the same to be unconstitutional and, accordingly, struck down such restrictions. Similarly, in B.P.Royappa v State of Tamil Nadu, , Supreme Court held that equality is opposed to arbitrariness. In fact equality and arbitrariness are sworn enemies, one belongs to the rule of law in a republic and other to the whim and caprice of an absolute monarch. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. Case of Ajay Hasia v. V. Khalid Mujib, is another authority for the proposition that wherever there is arbitrariness in State action, whether legislative or executive or of any other authority under Article 12, Articles 14 immediately springs into action and strikes down such action. The concept of reasonableness and non-arbitrariness pervades the entire Constitutional scheme
and is the golden thread which runs through the whole fabric of the Constitution. Series of similar authorities decided by the apex Court can be referred to which laid down the proposition that Court can certainly interfere with even policy matters if the same are found to be arbitrary, unreasonable, capricious, and whimsical and the law against such vices is contained in the equality clause as enshrined in, inter alia, Article 14 of the Constitution.
22. Therefore, I have absolutely no doubt in my mind that if sufficient Coal is available at ECL Collieries for sale to ordinary traders under Open Sales Scheme. It is certainly unreasonable and arbitrary to deny change of allotment/linkage of Coal to the petitioners from BCCL Collieries to ECL Collieries particularly when plant of the petitioners being a soft Coal manufacturing unit is a non-core sector industry and further because ECL Collieries are situated in the vicinity of the said plant. If such transfer/ change of source of Coal supply is granted, petitioner can substantially save transport cost and hence in the circumstances of the case and in view settled position of law as discussed above it appears to me that the Impugned order cannot be sustained merely on the ground of the said fax message by which ECL authorities requested CIL authorities to suspend issuance of new/additional allotment/linkage until further advice. Such request is not at all reasonable in respect of core sector and non-core sector industries when huge quantity of Coal is being sold to ordinary traders under open Sales Scheme.
23. In the result impugned order is quashed. I further direct the General Manager (Marketing) of CIL to consider the said representation of the petitioner afresh in the light of aforesaid observations and dispose of the same by a reasoned order within a period of 60 days from the date communication of this order. It is needless to mention here that if and so long as, Coal is available for sale to ordinary traders under open Sales Scheme at ECL Collieries, representation of the petitioners cannot be rejected particularly when plant in question is non-core sector industry and, therefore, petitioners can legitimately claim priority over and above ordinary traders under Open Sales Scheme.
Petition is thus allowed.
No order as to cost.
24. Petitions allowed