Case Note & Summary
The dispute arose from the introduction of a new E-auction scheme by Coal India Ltd. and its subsidiaries, which required industrial undertakings with coal linkages to pay higher prices for coal than the previously notified prices. This led to various industrial undertakings filing writ petitions in different High Courts, challenging the scheme and seeking interim protection to continue receiving coal at the notified prices. The High Courts issued conflicting orders, with the Gauhati High Court declaring the E-auction scheme invalid, while the M.P. High Court upheld its validity. The Union of India sought to transfer these cases to the Supreme Court to resolve the conflicting judgments and ensure a consistent approach to coal supply. The Supreme Court, while considering the petitions, initially ordered that coal be supplied at notified prices, contingent upon the petitioners executing indemnity bonds and providing undertakings to pay any price differences if their petitions failed. The court noted that some companies had not complied with its earlier orders and that the financial stability of the petitioners was a concern. The court ultimately decided to modify the interim order, requiring the petitioners to pay a portion of the enhanced price and provide security for the remaining amount, while ensuring that any excess payments would be refunded with interest if the petitioners succeeded in their challenge. The court also directed that coal would be supplied to those who complied with these conditions, and allowed the transfer of pending writ petitions to the Supreme Court for final resolution. The interim order was set to remain in effect until the writ petitions were finally heard and disposed of.
Headnote
A) Administrative Law - Interim Relief - Conditions for Coal Supply - Special Leave Petition (Civil) 20471 of 2005 - Court directed that coal be supplied at notified prices with conditions of payment and security to balance interests of both parties. The petitioners were required to pay a part of the enhanced price and furnish security for the balance, ensuring protection of their rights while addressing Coal India Ltd.'s business needs (Paras 7-9).
Issue of Consideration
Whether the petitioners are entitled to coal supply at notified prices instead of E-auction prices and the conditions for such supply.
Final Decision
The Supreme Court modified the interim order, requiring petitioners to pay 33 1/3% of the enhanced price and furnish security for the remaining 66 2/3% before coal supply, with a refund provision if the petitioners succeeded in their challenge.
Law Points
- Interim relief
- E-auction scheme
- coal linkage
- bank guarantee
- security for payment
- refund of excess payment
- compliance with court orders
