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TMI Blog2005 (1) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... orts, 2) Power Utilities, 3) Defence, 4) Railways (Loco), 5) Fertilizers, 6) Steel including Sponge Iron and Pig Iron and 7) other metallurgical industries who use coal/coke for their own use. Core/priority sector industries alone consume about 90-95% of the coal produced and left over 5% plus are supplied to the non-core/unlinked sector industries to which the appellants belong. The Government of India has been fixing the grades and prices of the coal produced in India in pursuance of clauses 3 and 4 of the Colliery Control Order, 1945 as continued in force by Section 16 of the Essential Commodities Act, 1955. It appears that the company had accumulated heavy losses and was reeling under financial problems. The Government of India by its notification dated 22.3.1996 issued under clause 3(2) of the Colliery Control Order, 1945 deregulated the price and distribution of non-coking coal of grades 'A', 'B' & 'C'. By a further notification dated 12.3.1997, decontrol was extended to some other grades of coal as well. By a communication dated 13.3.1997 addressed by the Government of India (Ministry of Coal), it was clarified that the Board of the respondent company "will henceforth dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... national interest. It was denied that there was any arbitrariness or unreasonableness in the price structure. In the High Court the appellants gave up their challenge to the fixation of the price being arbitrary or unconscionably high or that the respondent has fixed the price of 20% extra according to its whims and fancies without appraisal of relevant factors. The only point argued before the High Court was with regard to dual pricing. According to the appellants, the non-core/unlinked sector customers could not be charged more than what the respondent was charging from the core sector/linked sector customers. The High Court dismissed the writ petitions with costs finding no infirmity in Clause 10 of the Price Notification. It was held that Clause 10 of the Price Notification did not violate Article 14 of the Constitution of India. It was observed that core sector/linked sector industries had been given priority from the beginning so as to ensure regular supplies of coal to them. This benefit has been extended to them due to their intrinsic importance and the role played by such industries in nation building activities and the propensities of public utility possessed by them. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prices it deems fit from any customer. That there is no reasonable basis for the classification introduced for the first time and the appellants cannot be subjected to bear the brunt of much higher prices. As against this, Shri Altaf Ahmed, learned senior counsel appearing for the respondents submitted that fixation of price is within the discretion of the company and coal being not a controlled commodity now, the company cannot be precluded from fixing appropriate price for the produce including dual price and no customer has any say in the matter. It was submitted that a mandamus could not be issued to the respondent to charge lesser price from the appellants or to charge uniform price from all the customers. That number of factors such as financial problems of the company, operational cost and importance of certain categories of industries in the larger national interest can be legitimately taken into account while fixing the price. That there was enough justification for adopting dual pricing having regard to the financial position of the company and the additional cost of production peculiar to the respondent, there was nothing wrong in charging a higher price from non-core/u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the determination of the price, we will, if necessary, enquire into the question whether the policy and the factors are present to the mind of the authorities specifying the price. But our examination will stop there. We will go no further. We will not deluge ourselves with more facts and figures. The assembling of the raw materials and the mechanics of price fixation are the concern of the executive and we leave it to them. And, we will not revaluate the considerations even if the prices are demonstrably injurious to some manufacturers or producers. The Court will, of course, examine if there is any hostile discrimination. That is a different 'cup of tea' altogether." [Emphasis supplied] A Constitution Bench of this Court in M/s. Shri SitaRam Sugar Co. Ltd. v. Union of India [AIR 1990 SC 1277] {in paras 57 & 58} has held that in judicial review the Court is not concerned with the matters of economic policy. The Court does not substitute its judgment for that of the Legislature or its agent as to the matters within the province of either. The Legislature while delegating the powers to its agent may empower the agent to make findings of fact which are conclusive provided, such f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding Linkage Committee which is a committee formed as per the guidelines of the Ministry of Coal, Government of India. The core sector industries consume nearly 90% of the entire production of the respondent company. In fact, the Power Sector consumes nearly 75% and the other industries consume nearly 15% of the entire production and only 10% or less is being drawn by other medium/small-scale industries. As per the averments made in the counter affidavit, the electricity which is being generated by the Power Sector, the quantity of coal consumed amounts to 75% of the product cost. To generate one unit of electricity, 0.5 kg to 1 kg quantity of coal is consumed. In case of cement, steel and fertilizers, the percentage of cost of coal in the entire cost of production is ranging from 15% to 25%. Keeping in view the several factors, the Board of Directors after due deliberations felt that the core sector industries are of intrinsic importance to the building of the nation and to the common man in general. It was thought fit to keep the price increase at particular levels for the core industries and charge a bit extra from other industries. This was a policy decision taken by the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of consumption of coal either for captive power generation of for use in manufacturing operations legitimately calls for a special treatment as far as these industries are concerned. For charging lesser prices or evolving a dual price policy, it cannot be said that equals are treated unequally or that the classification does not rest on rational basis. The objective of dual pricing purportedly is to ensure that core-sector industries or customers are not unduly burdened with price increase while at the same time the respondent gets adequate return for its products so as to cover the financial deficit. There is no such law that a particular commodity cannot have a dual fixation of price. Dual fixation of price based on reasonable classification from different types of customers has met with approval from the courts. Monopolistic organizations like Electricity Boards, Petroleum Corporations are having dual price fixation. It is a common feature that Electricity Boards which generate power sell the power at different rates to different types of customers such as domestic, agricultural and industrial consumers. Even different types of industries are charged different rates. Ke ..... X X X X Extracts X X X X X X X X Extracts X X X X
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