V.K.Gupta, J. - (1.) This appeal is directed against the judgment dated 17th August, 1999 passed by the learned single Judge of this court in W.P. No. 1652(W) of 1999 wereby the writ application filed by Respondents 1 & 2 against the appellants and respondents 3 to 5 was allowed and by moulding the relief, the learned single Judge issued a Writ of Mandamus directing the Appellants not to stop supply of Coal to the Petitioners under the Programmes established on the basis of the current Linkage for alleged non-payment of interest claimed by the appellant arising out of the Programme established on the basis of the Linkage which was later on transferred to Eastern Coal Fields Limited.
(2.) The facts giving rise to this Appeal are that the respondent No. 1, being a Company incorporated under the Companies Act had been taking Coal from the Appellant No. 1, (South Eastern Coal Fields Limited) a Government Company and a subsidiary of Coal India Limited, for running its Cement Factory at Ambuja Nagar in Gujarat. Respondent No. 1 being a manufacturer of Cement at its factory at Ambuja Nagar (Gujarat) required Coal in bulk quantity for its manufacturing activity. Coal India and its subsidiaries admittedly have a monopoly in respect of supply of Coal and the Coal is supplied on the recommendation of Standing Linkage Committee directly under the control of Govt. of India, Ministry of Coal. If appears that during the period 23rd March, 1992 and 29th March 1996, on the recommendation of the said Standing Linkage Committee, while the appellants had been supplying Coal to respondent No. 1 at a particular price at its Cement Factory at Ambuja Nagar (Gujarat), the Appellants decided to charge premium @10% over and above the original price of the Coal as fixed. The Respondent No. 1 did not agree to the levy of this 10% premium charge. It challenged such levy by filing a writ petition in the High Court of Madhya Pradesh at Jabalpur. In that Writ petition an interim order was passed by the High Court of Madhya Pradesh restraining the recovery of the 10% premium amount on the the price of Coal. On 4th May 1993 however the writ petitioner was dismissed by Madhya Pradesh High Court. Respondent No. 1 filed a Special Leave Petition in the Supreme Court on 19th May 1993. On 20th May 1993 an interim order was passed by the Supreme Court in this S.L.P. whereby the appellants were restrained from stopping supply of Coal to respondent No. 1 by reason of the fact that amount relating to the aforesaid non-payment of the premium of 10% was outstanding against respondent No. 1 towards the appellants. Ultimately on 12th August 1998 the aforesaid Special Leave Petition was allowed by the Supreme Court and the Judgment of the High Court of M.P. was set aside. The Writ petition pending in the High Court was revived and the High Court was directed to re-hear the Writ petition. The interim order earlier granted by the Supreme Court in the aforesaid S.L.P. was allowed to continue until the final disposal of the Writ petition by the High Court. In effect and substance therefore, Respondent No. 1 without payment of the premium amount @ 10% continued to avail of the supply of Coal from the appellants between 23rd March 1992 and 29th March 1996. On 4th May 1999 the High Court of Madhya Pradesh dismissed the Writ petition and upheld the validity of the claim of the appellants for levying 10% premium. The Respondent No. 1 accordingly became liable to pay the amount for the aforesaid period towards 10% premium on the price of the Coal in respect of the supplies received by it at its Ambuja Nagar Plant for this period. It is undisputed that on this account a sum of Rs. 3,40,16,878.54 became due from the respondent No. 1 and payable to the appellants. It is the admitted case of the parties, as would be seen later that this amount has since been paid by respondent No. 1 to the appellants. The appellants however also claimed that because of the belated payment of this amount, the appellants are entitled to charge interest from respondent No. 1 and according to the appellants the interest amount works out to Rs. 3,29,44,523.05.
(3.) Going back a little, it is the undisputed case of the parties that for obtaining the supplies of Coal from the appellants, in accordance with the sale conditions as set out by the appellants and as agreed to by the respondent No. 1, respondent No. 1 was required to furnish Cash security to the appellants and keep it in deposit with them to the extent of the Linkage granted which in other terms meant to the extent of the Coal supplied by the appellants to the respondent No. 1. On account of such Cash Security therefore, an amount of Rs. 1,46,32,800 was lying with the appellants at the relevant time in respect of such Linkage for supply of Coal at Ambuja Nagar Plant. Some time in January, 1997 respondent No. 1 stopped taking any Coal supply from the appellants for its Ambuja Nagar Cement Factory because from that period onwards it started importing Coal for its said factory from outside India. It also appears that the last supply of the Coal by the appellants to the Ambuja Nagar Factory was made in March 1997 and the transaction between the appellants and respondent No. 1 in respect of Ambuja Nagar Factory formally came to an end and was closed on 12.05.1997. The amount of Security therefore, as deposited by respondent No. 1 and lying with the appellants towards securing the supply of Coal to Ambuja Nagar Cement Factory was refunded by the appellants to respondent No. 1 on 12.05.1977. Actually the demand for such refund was made by respondent No. 1 on 22nd February '97 and the amount was refunded on 12th May '97. It may also be worthwhile to note here that after the respondent No. 1 had stopped taking supply of coal from the appellants for its Ambuja Nagar Cement Factory, in respect of this Factory Respondent No. 1 transferred its linkage from the appellants to Eastern Coal Fields Limited, another subsidiary of Coal India Limited. The facts regarding respondent No. 1 stopping taking any supply of Coal from the Appellants for its Ambuja Nagar Factory, Respondent No. 1 resorting to importing the same from outside India, and the Respondent No. 1 transferring its linkage for this factory from the appellants to Eastern Coal Fields Ltd., coupled with the fact that on 12th May, 1997 the appellants unequivocally refunded to Respondent No. 1 the Cash Security deposit of Rs. 1,06,01,500 are all relevant for our purpose as these are indicative of the fact that as on 12th May, 1997, when the liability of Respondent No. 1 in respect of payment of premium amount was subsisting, the appellants chose to refund to Respondent No. 1 the aforesaid amount without any reservation, unconditionally and without any demur, prejudice or protest. It appears that thereafter, in 1998 the respondent No. 1 opened a new Cement Plant at Roop Nagar in the State of Himachal Pradesh and obtained a linkage with the appellants for supply of Coal to this Plant. For ensuring the supply of Coal to the new Plant at Roop Nagar (H.P.) Respondent No. 1 during April to June 1998 deposited an amount of Rs. 61.85 lacs in Cash with the Appellant Company as and by way of Cash Security Deposit. This amount of Cash Security however kept on increasing from time to time, depending upon the extent of the Linkage and the quantity of Coal supplied by the appellants to respondent No. 1. At this point of time, that is sometime after June, 1998, the Cement Manufacturers' Association made a Representation to the Chairman, Standing Linkage Committee, Govt. of India, Ministry of Coal for allowing them to furnish Bank Guarantees for financial coverage, in place of cash deposits, to secure the supplies of Coal. On consideration, such representation was accepted by the Competent Authority in the Govt. of India and accordingly Respondent No. 1 withdrew the Cash Security Deposit lying with the Appellants and in its place furnished Bank Guarantee from ANZ Grindlays Bank, 19, Netaji Subhash Road Branch, Calcutta. The furnishing of Bank Guarantee, the extent of such Bank Guarantee and the manner in which it was furnished are relevant. The first such Bank Guarantee appears to have been furnished through a covering letter of respondent No. 1 issued on 2nd November 1998. This letter requires to be re-produced verbatim for our ready reference. It reads as under: - "Ref: HIM/SECL/3 2nd November, 1998 The Chief Finance Manager South Eastern Coalfield Ltd. 14 R.N. Mukherjee Road Calcutta-700 001 Kind attn : Mr. M. M. Bhattacharyya Dear Sir, Destination: GACL Siding served by Roopnagar (Northern Railway). Sub : Financial coverage. This is to inform you that Chairman, Standing Linkage Committee and Additional Secretary; Ministry of Coal has accorded approval for enhancing our linkage to 20,400 tons for October-December quarter i.e. 355 Box Wagon per month. As per revised financial coverage system, we are enclosing a sealed envelope received from ANZ Grindlays Bank, 19 NS Branch, Calcutta containing one Bank Guarantee in your favour for Rs. 2.53 crores effective from 1st November, 1998 and valid till 30th October, 1999 with a claim period upto 28th February, 2000. Confirmatory letter issued by the bank regarding issuance of Bank Guarantee is also attached with the Bank Guarantee. Details of B.G. as follows: - Linkage for 200,400 tons/month (i.e. 355 Box Wagons) Cost of Coal per box wagon 71,100,00 Total Cost (71,100 X 355) 2,52,40,500.00 B.G. Required 2,52,40,500.00 (Equivalent to one-month coal cost) Bank Guarantee enclosed 2,53,00,000.00 We undertake to pay your coal bills within 48 hours on receipt of the same. Kindly send us official receipt for the above. Thanking you, Yours faithfully, For Gujarat Ambuja Cements Ltd. Sd/- J K Singhania General Manager (C0-ordination) Encl. one sealed envelope containing B.G. & confirmatory letter.";