M/S. COAL INDIA LIMITED AND ORS. versus ALOK FUELS (P) LTD. THROUGH DIRECTOR

Citation: [2010] 12 S.C.R. 299 · Decided: 15-09-2010 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2010] 12 S.C.R. 299 
MIS. COAL INDIA LIMITED AND ORS. 
v. 
ALOK FUELS (P) LTD. THROUGH DIRECTOR 
(Civil Appeal No. 8034 of 2010) 
SEPTEMBER 15, 2010 
[ALTAMAS KABIR AND A.K. PATNAIK, JJ.] 
A 
B 
Coal - Coal Distribution - Mis-utilization and black 
marketing of allotted coal -
Coal supplied to different 
consumers like respondents through Fuel Supply Agreement C 
(FSA) at prices notified by Coal India Ltd. - Respondents had 
entered into an FSA with BCCL, a subsidiary of Coal India 
Ltd. - FIR lodged by CBI alleging that respondents were 
involved in a criminal conspiracy leading to breach of the 
terms and conditions of FSA - It was alleged that instead of D 
utilizing the allotted coal in their respective plants as required 
under the FSA, the respondents sold the same in open 
market at higher prices - Subsequently, BCCL suspended the 
supply of coal to respondents - Respondents filed writ 
E 
petitions challenging the suspension of coal supply - High 
Court passed interim orders directing resumption of coal 
supply to the respondents on the ground that no material was 
placed by the BCCL to show that the respondents were 
involved in any kind of black marketing or mis-utilization of 
F 
the allotted coal - Justification of - Held: Not justified - The 
High Court failed to appreciate that the FIR was lodged by CBI 
and, therefore, CBI and not BCCL was in possession of 
material in support of the allegations made in the FIR - Such 
material could not be placed before the Court because the 
G 
CBI was not impleaded as a respondent in the writ petitions 
filed by the respondents - BCCL is a public authority; and if 
the FIR lodged by CBI created serious doubts that the allotted 
299 
H 
. . .,. 
300 
SUPREME COURT REPORTS 
[2010] 12 S.C.R . 
A coal could be diverted or sold in the open market instead of 
being utilized in the plants of respondents, BCCL was within 
its rights to suspend the supplies of coal to the respondents 
till the doubts were cleared in appropriate proceedings -
Orders of High Court set aside - Orders of High Court set 
B aside Penal Code, 1860 - s.120-8 rlw ss.420, 467, 471 -
Prevention of Corruption Act, 1988 - s.13(2) rlw s.13(d). 
Coal was supplied to different consumers such as 
the respondents through Fuel Supply Agreement (FSA) 
C at prices notified by Coal India Ltd. The respondents had 
entered into an FSA with BCCL, a subsidiary of Coal 
India Limited. The Central Bureau of Investigation (CBI) 
lodged FIR alleging that the respondents were involved 
in a criminal conspiracy leading to the breach of the terms 
D and conditions of FSA. It was alleged that instead of 
utilizing the allotted coal in their respective plants as 
required under the FSA, the respondents sold the same 
in open market at higher prices. Subsequently, upon 
advice of Coal India Ltd., BCCL suspended the supply of 
E coal to respondents. 
Aggrieved, the respondents filed the writ petitions in 
the High Court praying for quashing the communications 
suspending the supply of coal to the respondents under 
F 
FSA and also praying for interim orders directing BCCL 
to resume supply of coal. The Single Judge of the High 
Court passed interim order directing resumption of 
supply of coal to the respondents on the ground that no 
material was placed by the BCCL to show that there was 
G any kind of black marketing or mis-utilization of the 
allotted coal by the respondents. The interim order was 
upheld by the Division Bench of the High Court. 
Allowing the appeals, the Court 
H 
COAL INDIA LIMITED AND ORS. v. ALOK FUELS (P) 301 
LTD. THROUGH DIRECTOR 
HELD:1.1. The Single Judge and the Division Bench 
A 
of the High Court were not right in directing BCCL to 
resume the supplies of coal to the respondents. What the 
Single Judge and the Division Bench of the High Court 
failed to appreciate is that the FIR containing the 
allegations of mis-utilization of the allotted coal and sale 
B 
of the allocated coal by the respondents in the open 
market was lodged by the CBI and, therefore, the CBI and 
not the BCCL was in possession of information or 
materials with regard to such mis-utilization of the allotted 
coal or sale of the coal in the open market by the C 
respondents. As a matter of fact, in the charge-sheet filed 
after investigation in the Court of Special Judge, CBI 
cases, it is stated that a search was conducted at the 
plant premises of the respondents by the CBI. officials in 
D 
presence of independent witness
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