Case Note & Summary
The appeal before the Supreme Court arose from a writ petition filed by the Tata Iron and Steel Company Limited (the Company) challenging criminal proceedings and seizure of coke breeze under the Essential Commodities Act, 1955 and the Bihar Trade Articles (Licenses Unification) Order, 1984. The Company is an integrated steel manufacturer owning captive coking coal mines and coke oven plants. The State of Bihar contended that the Company needed a license as a dealer under the State Unification Order, while the Company claimed exemption as a colliery under the central Colliery Control Order, 1945. The Company owns coking coal mines in Jharia and West Bokaro, coal washing plants, and coke oven plants at Jamshedpur. It uses about 85 per cent captive coal and procures the rest indigenously or by import. It sells inferior coke fractions such as coke breeze, pearl coke, and middlings that are not of metallurgical quality. A Supply Inspector seized six trucks loaded with coke breeze sold by the Company without obtaining a license under the Unification Order, and criminal proceedings under Section 7 of the Essential Commodities Act were initiated. The Company filed a writ petition before the Patna High Court, which was dismissed on 12 November 1986. The Company appealed to the Supreme Court, which on 3 December 1987 set aside the High Court judgment and remanded the matter for fresh consideration, noting that the question whether the Company is a dealer needed examination. On remand, the High Court allowed the writ petition on 14 April 1988, holding that the Company is a colliery under the Central Order and not governed by the State Unification Order. The State of Bihar then appealed to the Supreme Court. The legal issues were whether the Company's coke oven plant located within the factory premises falls within the definition of colliery under clause 2(2) of the Colliery Control Order, 1945, and whether a colliery governed by the Central Order can also be subjected to the State Unification Order, 1984. The State argued that the coke oven plant being within factory premises could not be a colliery, and that the Company was a dealer required to obtain a license. The Company argued that the definition of colliery includes any plant for the production of coke irrespective of proximity to the coal mine, that the Central Order is an exhaustive code for collieries, and that the State order does not apply to producers of coal. The Supreme Court examined the definition of colliery in clause 2(2) and noted that it specifically includes a plant for the production of coke or for the washing of coal. It relied on the principle that the word 'include' is a word of extension, so the coke oven plant need not be near the coal mine. The court approved the High Court's reasoning and the earlier Black Diamond Industries decision, which held that the Colliery Control Order deals specifically with collieries and producers of coal, while the Bihar Unification Order deals with dealers and not producers; applying both would create conflict. The court observed that the Central Order contains provisions for price fixation, sale, purchase, returns, and directions, making it an exhaustive code for collieries. Therefore a colliery owner need not obtain a license under the State order. The Supreme Court dismissed the State's appeal and affirmed the High Court judgment, holding that the Company is a colliery under the Colliery Control Order, 1945, not a dealer under the Bihar Trade Articles (Licenses Unification) Order, 1984, and no license was required for the sale of coke breeze. The criminal proceedings under Section 7 of the Essential Commodities Act were not maintainable for want of a license under the State order.
Headnote
A) Interpretation of Statutes - Inclusive Definition - 'Colliery' includes a plant for production of coke or washing of coal - Colliery Control Order, 1945, Clause 2(2) - The court held that the definition of colliery specifically adds coke oven plants and coal washeries to the ordinary meaning of a coal mine, and does not require proximity between the plant and the mine; using the principle that 'include' is a word of extension, the respondent's coke oven plant at Jamshedpur was a colliery under the Central Order. Held that the company is a colliery and not required to take a license under the State order (Paras 6-7, 4). B) Essential Commodities - State versus Central Orders - Colliery Control Order is an exhaustive code for collieries; Bihar Unification Order does not apply to coal producers - Essential Commodities Act, 1955, Section 3; Colliery Control Order, 1945; Bihar Trade Articles (Licenses Unification) Order, 1984 - The court approved the High Court's reasoning in Black Diamond Industries that the two orders operate in different fields; the Central Order deals with collieries and producers of coal while the State order deals with dealers and does not include producers; applying the State order to collieries would create conflict with the Central Order. Held that colliery owners need not obtain a license under the Unification Order (Paras 5, 8-9). C) Criminal Proceedings - Quashing of Prosecution - Seizure and prosecution for sale of coke breeze without State license set aside as no contravention - Essential Commodities Act, 1955, Sections 3 and 7; Bihar Trade Articles (Licenses Unification) Order, 1984 - The supply inspector seized six trucks of coke breeze sold by the company without obtaining a license under the Unification Order, leading to criminal proceedings under Section 7 of the Essential Commodities Act; because the company was not a dealer and not subject to the State order, the proceedings were unsustainable. Held that the High Court's judgment allowing the writ petition was upheld and the State appeal dismissed (Paras 3-4, 8-9).
Issue of Consideration
Whether the respondent Company is a 'dealer' within the meaning of the Bihar Trade Articles (Licenses Unification) Order, 1984, and whether it is a 'colliery' under the Colliery Control Order, 1945, such that the State order does not apply to it.
Final Decision
The Supreme Court dismissed the appeal filed by the State of Bihar and affirmed the judgment of the Patna High Court dated 14 April 1988. It held that the Tata Iron and Steel Company Limited is a colliery within the meaning of clause 2(2) of the Colliery Control Order, 1945, as its coke oven plant is included in the definition of colliery. It further held that the Colliery Control Order is an exhaustive code for collieries and the Bihar Trade Articles (Licenses Unification) Order, 1984 does not apply to collieries or producers of coal. Consequently, the Company was not a dealer under the Unification Order and was not required to obtain any license for the sale of coke breeze. The criminal proceedings under Section 7 of the Essential Commodities Act, 1955 for violation of the Unification Order were not maintainable.
Law Points
- Inclusive definition of 'colliery' extends to coke oven plants irrespective of location
- Colliery Control Order
- 1945 is an exhaustive code for collieries
- Bihar Trade Articles (Licenses Unification) Order
- 1984 does not apply to producers of coal
- The word 'include' is a word of extension
- State order cannot conflict with central order
- Prosecution under Essential Commodities Act
- 1955 for lack of license not maintainable if no contravention of valid order
