BHARAT COKING COAL LTD. versus STEEL ABRASERS AND ALLIED PRODUCTS LTD.

Citation: [1994] SUPP. 3 S.C.R. 118 · Decided: 06-09-1994 · Supreme Court of India · Bench: S.C. AGRAWAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
BHARAT COKING COAL LTD. 
v 
STEEL ABRASERS AND ALLIED PRODUCTS LTD. 
SEPTEMBER 6, 1994 
B 
[S.C. AGRAWAL AND M.K. MUKHERJEE, JJ.] 
Colliery Control Order, 1945 : 
Clauses 2(1), (5), 3,3A(4), 4, 4A, 5(1) and 12-A-<:entral Government's 
C Notification-Tables I, II to VI-Explanatory Notes to Notification-Notes 
JO(i) and (ii), 12, 14 and 15. 
\ 
Coke and coaf-Price fixation-Size of coke and coal-Obligation to 
sell as per IS/ specification-Sale of hard coke--Levy of service charges--Per-
missibility of-Levy held covered by Note 14 of Notification-Absence of 
D contract for supply of special size. held not relevant-Distinction between coke 
and coal-Discussed. 
In exercise of the power conferred by the Colliery Control Order, 
1945 the Central Govt. issued a Notification on December 27, 1991 fixing 
the prices for different types of coal and coke. The Notification read with 
E the Order provided that (i) the size of coal or coke was to be according to 
ISi specification; (ii) the prices fixed were applicable to sale of coal at 
pitheads and of coke at coke oven plants; (iii) the notified prices for hard 
coke and soft coke were not to apply to small size coke; (iv) no colliery 
owner should sell and no person should purchase coal or coke at a price 
F 
which was in excess of the notified price. However, under Note 14 of the 
Notification the colliery owners were entitled to realise additional charges 
as negotiated between producer and purchaser for undertaking special 
sizing or benefication of coal. 
The respondent, carrying on business of foundry casting for which 
' G purpose it was buying hard coke from the appellant· company, filed a writ 
petition alleging that the appellant was illegally demanding and realising 
from it service charges besides the notified prices. The appellant contested 
that in view of the fact that the respondent was supplied hard coke of a 
specified size for which· the appellant had to put in extra work and effort, 
H like shifting and sizing after production of the coke in the plant, incurring 
118 
BHARATCOKINGv. STEELABRASERS 
119 
extra expenditure and the notification permitted such a recovery. 
A 
The High Court held that recovery was not covered by Note 14 of the 
Notification because the said note had no application to the case as the 
respondent did not purchase special size of coal. Accordingly it issued a 
writ of Mandamus directing the appellant not to charge any amount other 
than fixed in terms of the Notification. 
B 
In appeal to this court, it was contended for the appellant that when 
Note 10(1) clarified that the prices fixed under the notification were 
applicable to sale at pitheads they would as regards coke, necessarily refer 
to sale at the coke oven plant. Since the coke as prescribed in the plant C 
was required to be properly handled to attain the specification of foundry 
coke as laid down by ISi, the appellant could legitimately demand handling · 
charges, besides the notified price, in terms of Note 14. 
For the respondent, it was contended that appellant's reliance on 
Note 14 to justify the impugned demand was wholly misplaced because D 
neither did the respondent ask for any special size of coke nor did the 
appellant undertake any process for its benefication. 
Allowing the appeal and setting aside the judgment of the High 
Court, this Court 
HELD : Terminologically coal as mined is known as 'run of the mine' 
and taking a cue from the same, the coke may be conveniently described 
as initially produced in the plant as run-of-the plant. The run-of-the plant 
has been categorised as hard c(lke of different classes and grades in Table 
E 
I and their prices fixed accordingly in Table V of the notification depending F 
upon it ash content. That the coke so produced has to be suitably handled 
to segregate those required for foundries according to ISi specification is 
evident not only from the statements made in the counter affidavit of the 
appellant, but also from the foreword of the ISi report. The exercise so 
undertaken by the appellant to screen the run-on-the plant which has an 
unspecified size distribution to get the extra large size, specially ear· G 
marked for foundry would certainly be one for special sizing within the 
meaning of Note 14. The contention of respondent that since he had not 
contracted for supply of special size it was.not bound to pay for the same 
cannot be accepted as, in view of the definition of 'size' under the Order, 
the a

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