Sikri, J. - (1.) This is an appeal by special leave against the judgment of the Rajasthan High Court allowing the petition filed by the respondent, Messrs Karam Chand Thapar and Bros. (Coal Sales) Ltd. Jaipur (hereinafter referred to as the petitioner) under Art. 226 of the Constitution.
(2.) The facts relevant to the determination of the points raised before us are as follows. The petitioner carries on the business of supplying coal throughout India. It has a branch at Jaipur, which was registered as a dealer with the Sales Tax Officer, Jaipur. The branch does retail business in Jaipur and supervises the supply of coal made to consumers directly by collieries. On September 2, 1948, the petitioner secured a monopoly to sell the coal of collieries belonging to the Equitable Coal Company for certain areas including Rajputana. On April 28, 1955, the Company entered into a contract with the Government of Rajasthan for the supply of coal for one month to Jaipur Power House for the first time. Various similar agreements were entered into later for the regular supply of coal to the said power house at Jaipur and Kotah power house. The petitioner supplied coal under these agreements up-till May 1958. It is necessary to set out the terms of the agreement dated April 28, 1955, as the effect of the agreement has been the subject of much debate before us. "Articles of agreement made this twenty eighth day of April, one thousand Nine-hundred and fifty five between His Highness the Rajpramukh of the State of Rajasthan, of the one part, and Messrs Karamchand Thapar and Bros. (Coal Sales) Ltd. of 5, Royal Exchange Place, Calcutta, hereinafter called the 'contractor' of the other part. The contractor shall supply the coal to the Rajasthan Government Power House at Jaipur in accordance with the specifications and terms as follows, for a period of one month 1. Rubble Coal, selected grade A, double screened; size 3/4" to 11/2" fusion point of ash 1250" F, from Bejdih, Dhamomain and Jamuria West Collieries and as per coal analysis mentioned in their letter No. CS/4844 dated 11-2-1955. 2. The contractor shall deposit a sum of Rs.10,000/- (Rupees ten thousand only) as security for due performance of the contract which would be forfeited in the event of their failure to fulfil their part of the contract satisfactorily. 3. The test report given by the laboratory at Jaipur power house will be final. 4. The decision of the Chief Engineer, Electrical and Mech. Department, Govt. of Rajasthan, will be final, for all purposes. 5. The coal will be supplied F. O. R. colliery subject to the following (a) Payment will be claimed only in respect of supplies actually received and admitted as per specifications at the Jaipur Power House. (b) The contractor will arrange all the transport and safe delivery of coal at Jaipur Power House. (c) First consignment is to reach Jaipur Power House within 10 days from the date of order and supplies will not be less than 150 tons per day for the first ten days. 6. Coal will be supplied at the controlled rate. Railway freight will be paid by the coal supplier in the first instance and reimbursement claimed afterwards on the strength of relevant vouchers along with the bill, for the admitted supplies of the coal in Jaipur Power House."
(3.) It is common ground that at the time of the supply of coal the Colliery Control Order, 1945, governed the supply of coal from the collieries. Clause 4 enabled the Central Government to fix the price at which the coal may be sold. Clause 5 ensured that no colliery could sell at a price different from that fixed under clause 4. Clauses 6(1) and (2) read thus: "6. (1) Where a colliery owner has signified to the Deputy Coal Controller (Distribution) in writing his willingness to self direct to consumers and an allotment is made by the Deputy Coal Controller (Distribution) to a consumer with his consent for such direct sale, the coal shall be delivered to the consumer at the price fixed under clause 4, and no commission or other charges shall be paid in addition, except that where a broker is employed, brokerage not exceeding six annas per ton may be paid by the colliery owner to the broker. (2) Where a consumer purchases coal through a del credere agent such agent shall not, on the sale of such coal, charge or receive from the consumer a margin over the price fixed under clause 4 which exceeds:- (a) one rupee per ton in the case of coal; or (b) one rupee eight annas per ton in the case of soft coke; or (c) two rupees eight annas per ton in the case of hard coke." ;