outh Eastern Coalfields Ltd & Ors. Vs. Subhash Kumar Gupta & Anr.
EmailAppeal: Special Leave Petition (C) No.7841 of 1992
Petitioner: outh Eastern Coalfields Ltd & Ors.
Respondent: Subhash Kumar Gupta & Anr.
Apeal: Special Leave Petition (C) No.7841 of 1992
Judges: M.N. VENKATACHALIAH, CJI P.B.SAWANT, JJ.
Date of Judgment: Nov 08, 1994
Head Note:
MERCANTILE LAW
Release of Coal to consumers – Held up due to conflicting letters – Petitioner deposited sales proceeds with Court –
Held:
Ordered a two men committee to decide the credentials of the payees and to pay – No interest payable by the petitioner.
Held –
The validity of the judgment of the High Court is no longer in question before us, and all that is necessary for us to consider is whether the amount deposited in this Court should be refunded to the two respondents who claim to be the del credere agents of the 21 applicants or whether it should be paid directly to the 21 applicants individually, and if so on what terms, to ensure a valid discharge of the liability of the petitioner. (Para 8)
The entire amount lying in this Court inclusive of the interest accrued thereon should be sent by the Registry forthwith to the General Manager, District Industrial Centre, Sheopuri. The General Manager, District Industrial Centre, Sheopuri and District Collector-cum-District Magistrate, Sheopuri will be the member of a two- member Committee. This Committee shall cause each of the applicants to appear before it and examine each of them in the matter. If the Committee is satisfied with regard to their identity, they should pay to each of the applicants the amounts due to him together with the proportionate interest. (Para 10)
We are also of the view that the fact of the case do not warrant burdening the petitioner with any interest on the amount in question.
(Para 11)
JUDGEMENT:
ORDER
1. The 1st petitioner, South Eastern Coalfields Ltd. which is a subsidiary of Coal India Limited, releases coal to actual users/industries for consumption in their units alone. To ensure the supply of coal to the actual user, the practice adopted by it in agreement with the General Managers, District Industries Centres (‘G.M.DIC’ for short) is that the G.M. DIC would issue recommendations/sponsorship letters recommending the quantity and grade for consumption of the applicants in their unit/factory etc. The petitioner, after scrutiny of the applications and the recommendation-certificate would issue what is known as the Road Release Order stipulating certain conditions. Since the controversy before us, as will be pointed out a little later, is now narrowed down to on what terms and conditions the money paid allegedly by the respondents on behalf of the applicants, should be refunded so as to give a valid discharge to the petitioner, it is not necessary to refer to the terms and conditions on which the coal is supplied to the actual users.
2. On 30th March/2nd April, 1991, one recommendation/sponsorship letter from G.M. DIC, Sheopuri was brought by hand to the petitioner recommending release of coal to 25 bricks-kiln units, the total quantity of the coal being 43,890 metric tonnes. It appears that although the G.M.DIC had recommended the issue of coal in favour of 25 units, only the value of coal for 21 units was deposited with the petitioner. The petitioner issued Road Release Orders and also supplied coal to the tune of 208 metric tonnes.
3. On 7th September, 1991, the petitioner’s office received an intimation from the G.M. DIC that none of the 25 bricks-kiln units was recommended by them for the issue of coal and that the purported letters of recommendation were fake and forged and hence, supply of coal should not be made to them. To the similar effect was a subsequent letter from the G.M. DIC on 27th September, 1991. However, on 3rd October, 1991, a letter quite contrary to the contents of letters of 7th and 27th September,1991 was received from the G.M. DIC whereunder it was stated that on verification of their office record, it was found that the 25 units were genuine. This letter was again contradicted by subsequent letters from G.M. DIC received on 18th and 25th October, 1991. Thereafter on 31st October,1991, G.M. DIC again relented and stated that in fact the recommendations for the issue of coal had been made and they were genuine. The letter was followed by another letter of 7th November,1991 from G.M. DIC enclosing a copy of telegram whereunder it was stated that the 25 parties were recommended by them. This ding-dong of contradictory messages from the G.M.DIC went on, and contrary signals were sent, on 14th and 15th November, and on 7th December,1991. It appears further that during this period, the matter was referred to the Vigilance Department of Coal India Limited. The report of the Senior Vigilance Officer, among other things, stated that it was found that the authenticity of the recommendations/sponsorship letters was doubtful and that there were serious lapses on the part of certain officers of the petitioner. The petitioner thereafter took up the matter with the Ministry to take further steps to refer the matter to the C.B.I. It also further appears that the actual users did not take any steps to get the supply of coal at any time.
4. According to the petitioner, thereafter it suddenly received a notice from the High Court of Madhya Pradesh on 4th May, 1992 directing it to remain present in the the Court on 7th May, 1992 to show cause why the writ petition filed in the court should not be admitted. The petitioner’s counsel who put in appearance in the High Court on 6th and 7th May, 1992 and prayed for grant of some time to file reply as the matter was being dealt with by the Vigilance Department, and the concerned officers were not available. The High Court granted time only upto the next day, i.e., 8th May, 1992 and on that day the petitioner’s counsel filed some submissions by way of reply but could not file a proper and effective reply in the absence of instructions. Again a prayer was made to the High Court for grant of more time to file a proper reply. The High Court, however, refused to grant further time and decided the matter by the impugned judgment, on that day, i.e., 8th day, 1992, whereby the petitioner was directed to forthwith cease to raise any obstruction or hindrance to the respondent’s lifting the coal the quantity of which had already been specified in the Road Release Order, and further to allow the respondents to carry the coal in question.
5. When the present petition came up for admission before this Court, the learned counsel for the respondents herein, stated in answer to a query made by Court, that the respondents who claimed to be the del credere agents of the actual users would secure and file the information required by the Court with regard to their business stature and the capacity for the financial outlays for purchase of the coal, and also to assure the authenticity of the essentiality-certificates relied upon by them. It was also stated that the deposit of the money with the petitioner was made by the respondents on behalf of the actual users who were the principals of the respondents. It is not necessary to refer to all that transpired on the adjourned dates of the hearing, and also to the pleadings and the further pleadings filed by the parties in support of their respective contentions. Suffice it to point out that on August 7,1992, this Court passed an order whereunder, among other things, the petitioner was directed to deposit in this Court a sum of Rs.80,29,942/- being the amount received by the petitioner initially, for the supply of the entire quantity of coal less the value of about 208 metric tonnes of coal which had already been delivered to the respondents. The deposit was to be made before 19th August, 1992. Consequently, an amount of Rs.79,75,537,34 was deposited by the petitioner on 20th August, 1992. The correctness of this amount being the original amount paid less the value of 208 metric tonnes of coal already supplied, is not disputed before us.
6. In the meanwhile, separate affidavits of 21 alleged actual users i.e., the applicants, were filed in this Court which uniformly stated, among other things, that if the petitioner was unable to supply coal to the respondents who were their del credere agents, the value of the coal deposited by the respondents on their behalf should be refunded to the respondents. It is also stated in categorical terms in the affidavits that the respondents as del credere agents had deposited their own money with the petitioner and that they were fully entitled to take refund of the said money from the petitioner if the coal was not supplied. It is further added there that the affiants had no objection at all if the value of the coal was refunded to the respondents by the petitioner. When the matter reached hearing thereafter, Shri Sibal the learned counsel for the respondents stated that neither the respondents nor their principals were any longer interested in coal and that the money deposited in the Court should be refunded to the respondents
7. Shri Sanghi, the learned counsel for the petitioner, however, vehemently opposed the prayer for refund of the amount to the respondents on the ground that the identity of the 21 alleged actual users was not established with the officers of the petitioner at any stage. He further stated that the officers had never issued any recommendation/sponsorship letters in favour of the alleged applicants and that their officers’ signatures obtained on the said letters were forged. Some of the officers of the petitioner who were allegedly in collusion with the respondents had been suspended and complaints had been registered and First Information Reports lodged with the police. The investigation was in progress. He further submitted that as far as the petitioner’s office record is concerned, it showed that it had received from 21 different applicants separate bank drafts of varying amounts. The office record does not show that the amounts were paid by the two respondents herein on whose behalf the request is being made for the refund of the amount. In the circumstances, he contended that if the amount deposited in the Court is paid over to the respondents, the petitioner will not be validly discharged of its liability to the 21 applicants who had paid the amounts. However, he submitted that without prejudice to all its contentions, the petitioner was willing to make payment individually to the 21 applicants against their valid receipts. The learned counsel for the respondents equally vehemently opposed this suggestion and contended that since the 21 applicants have filed their individual affidavits in this Court stating in categorical terms that the amounts were paid by the two respondents and that they had no objections to the amounts being refunded to the respondents who were their del credere agents, the amount should no longer be paid to the 21 applicants individually. He further stated that if now the payments are made individually to 21 applicants, they may change their mind and money would be lost to the respondents. Since the fear was expressed by the counsel for the petitioners with regard to the validity of the discharge to be given by them, the learned counsel for the respondents suggested that those 21 applicants should be called to this Court at the cost of the petitioner. They could be identified before such officer of the Court as the Court may name, and upon their identification, and acceptance of the fact that they had filed the relevant affidavits, the money should be paid to the respondents. He also submitted that since the petitioner had the money in their possession eversince 30th March/2nd April, 1991, the petitioner should be asked to pay interest at 21 per cent from the said date till 20th August, 1992 when the amount was deposited in this Court.
8. It would thus be observed that the validity of the judgment of the High Court is no longer in question before us, and all that is necessary for us to consider is whether the amount deposited in this Court should be refunded to the two respondents who claim to be the del credere agents of the 21 applicants or whether it should be paid directly to the 21 applicants individually, and if so on what terms, to ensure a valid discharge of the liability of the petitioner.
9. There is no dispute that the amount was paid to the petitioner for supply of coal. The petitioner has not supplied coal other than 208 metric tonnes. There is further no dispute that the amount which the petitioner has deposited in this Court represents correctly the amount due to the claimants after deducting the value of the supply of 208 metric tonnes. Whether the amount belongs to the 21 applicants or to the two respondents is a question on which no controversy would survive if the statements made by the 21 applicants in their affidavits filed in this Court, are correct. Whether those statements are correct or not can be verified by some responsible officers by questioning the said applicants individually with regard to the authenticity of their respective affidavits. Further, whether those who come before the officer are the very persons who had made the applications for the supply of coal for their units and in whose name the individual bank drafts were sent as alleged by the petitioners, can only be ascertained with the help of those who can identify them personally. In view of the allegations that the original recommendations for the supply of coal obtained from the G.M. DIC, Sheopuri were fake, and in view of the suspension of some of the officers of the petitioners and the pending criminal complaints, and in view of the further fact that although the respondents claim that they had paid the amount, the record of the petitioner shows that it had received bank drafts individually from 21 different applicants, we agree with learned counsel for the petitioner that it would not be proper to hand over the money to the respondents, if the petitioner is to stand validly discharged of its liability.
10. It is, therefore, necessary that those who have filed the affidavits in question claiming to be the original applicants and from whom the money was received by the petitioners, are properly identified. We, therefore, direct as follows:-
The entire amount lying in this Court inclusive of the interest accrued thereon should be sent by the Registry forthwith to the General Manager, District Industrial Centre, Sheopuri. The General Manager, District Industrial Centre, Sheopuri and District Collector-cum-District Magistrate, Sheopuri will be the member of a two- member Committee. This Committee shall cause each of the applicants to appear before it and examine each of them in the matter. If the Committee is satisfied with regard to their identity, they should pay to each of the applicants the amounts due to him together with the proportionate interest.
11. We are also of the view that the fact of the case do not warrant burdening the petitioner with any interest on the amount in question. The petitioner is a Public Corporation. The record shows that the allegations made by the petitioner are not without substance. The petitioner was always willing to refund the amount to the individual applicants from whom it had received the amount. There was no delay on its part in either making the said offer or in depositing the amount in Court when directed to do so.
12. The Special Leave Petition is disposed of accordingly. In view of what is stated above, the I.A. No.3 of 1994 would also stand disposed of.
1. The 1st petitioner, South Eastern Coalfields Ltd. which is a subsidiary of Coal India Limited, releases coal to actual users/industries for consumption in their units alone. To ensure the supply of coal to the actual user, the practice adopted by it in agreement with the General Managers, District Industries Centres (‘G.M.DIC’ for short) is that the G.M. DIC would issue recommendations/sponsorship letters recommending the quantity and grade for consumption of the applicants in their unit/factory etc. The petitioner, after scrutiny of the applications and the recommendation-certificate would issue what is known as the Road Release Order stipulating certain conditions. Since the controversy before us, as will be pointed out a little later, is now narrowed down to on what terms and conditions the money paid allegedly by the respondents on behalf of the applicants, should be refunded so as to give a valid discharge to the petitioner, it is not necessary to refer to the terms and conditions on which the coal is supplied to the actual users.
2. On 30th March/2nd April, 1991, one recommendation/sponsorship letter from G.M. DIC, Sheopuri was brought by hand to the petitioner recommending release of coal to 25 bricks-kiln units, the total quantity of the coal being 43,890 metric tonnes. It appears that although the G.M.DIC had recommended the issue of coal in favour of 25 units, only the value of coal for 21 units was deposited with the petitioner. The petitioner issued Road Release Orders and also supplied coal to the tune of 208 metric tonnes.
3. On 7th September, 1991, the petitioner’s office received an intimation from the G.M. DIC that none of the 25 bricks-kiln units was recommended by them for the issue of coal and that the purported letters of recommendation were fake and forged and hence, supply of coal should not be made to them. To the similar effect was a subsequent letter from the G.M. DIC on 27th September, 1991. However, on 3rd October, 1991, a letter quite contrary to the contents of letters of 7th and 27th September,1991 was received from the G.M. DIC whereunder it was stated that on verification of their office record, it was found that the 25 units were genuine. This letter was again contradicted by subsequent letters from G.M. DIC received on 18th and 25th October, 1991. Thereafter on 31st October,1991, G.M. DIC again relented and stated that in fact the recommendations for the issue of coal had been made and they were genuine. The letter was followed by another letter of 7th November,1991 from G.M. DIC enclosing a copy of telegram whereunder it was stated that the 25 parties were recommended by them. This ding-dong of contradictory messages from the G.M.DIC went on, and contrary signals were sent, on 14th and 15th November, and on 7th December,1991. It appears further that during this period, the matter was referred to the Vigilance Department of Coal India Limited. The report of the Senior Vigilance Officer, among other things, stated that it was found that the authenticity of the recommendations/sponsorship letters was doubtful and that there were serious lapses on the part of certain officers of the petitioner. The petitioner thereafter took up the matter with the Ministry to take further steps to refer the matter to the C.B.I. It also further appears that the actual users did not take any steps to get the supply of coal at any time.
4. According to the petitioner, thereafter it suddenly received a notice from the High Court of Madhya Pradesh on 4th May, 1992 directing it to remain present in the the Court on 7th May, 1992 to show cause why the writ petition filed in the court should not be admitted. The petitioner’s counsel who put in appearance in the High Court on 6th and 7th May, 1992 and prayed for grant of some time to file reply as the matter was being dealt with by the Vigilance Department, and the concerned officers were not available. The High Court granted time only upto the next day, i.e., 8th May, 1992 and on that day the petitioner’s counsel filed some submissions by way of reply but could not file a proper and effective reply in the absence of instructions. Again a prayer was made to the High Court for grant of more time to file a proper reply. The High Court, however, refused to grant further time and decided the matter by the impugned judgment, on that day, i.e., 8th day, 1992, whereby the petitioner was directed to forthwith cease to raise any obstruction or hindrance to the respondent’s lifting the coal the quantity of which had already been specified in the Road Release Order, and further to allow the respondents to carry the coal in question.
5. When the present petition came up for admission before this Court, the learned counsel for the respondents herein, stated in answer to a query made by Court, that the respondents who claimed to be the del credere agents of the actual users would secure and file the information required by the Court with regard to their business stature and the capacity for the financial outlays for purchase of the coal, and also to assure the authenticity of the essentiality-certificates relied upon by them. It was also stated that the deposit of the money with the petitioner was made by the respondents on behalf of the actual users who were the principals of the respondents. It is not necessary to refer to all that transpired on the adjourned dates of the hearing, and also to the pleadings and the further pleadings filed by the parties in support of their respective contentions. Suffice it to point out that on August 7,1992, this Court passed an order whereunder, among other things, the petitioner was directed to deposit in this Court a sum of Rs.80,29,942/- being the amount received by the petitioner initially, for the supply of the entire quantity of coal less the value of about 208 metric tonnes of coal which had already been delivered to the respondents. The deposit was to be made before 19th August, 1992. Consequently, an amount of Rs.79,75,537,34 was deposited by the petitioner on 20th August, 1992. The correctness of this amount being the original amount paid less the value of 208 metric tonnes of coal already supplied, is not disputed before us.
6. In the meanwhile, separate affidavits of 21 alleged actual users i.e., the applicants, were filed in this Court which uniformly stated, among other things, that if the petitioner was unable to supply coal to the respondents who were their del credere agents, the value of the coal deposited by the respondents on their behalf should be refunded to the respondents. It is also stated in categorical terms in the affidavits that the respondents as del credere agents had deposited their own money with the petitioner and that they were fully entitled to take refund of the said money from the petitioner if the coal was not supplied. It is further added there that the affiants had no objection at all if the value of the coal was refunded to the respondents by the petitioner. When the matter reached hearing thereafter, Shri Sibal the learned counsel for the respondents stated that neither the respondents nor their principals were any longer interested in coal and that the money deposited in the Court should be refunded to the respondents
7. Shri Sanghi, the learned counsel for the petitioner, however, vehemently opposed the prayer for refund of the amount to the respondents on the ground that the identity of the 21 alleged actual users was not established with the officers of the petitioner at any stage. He further stated that the officers had never issued any recommendation/sponsorship letters in favour of the alleged applicants and that their officers’ signatures obtained on the said letters were forged. Some of the officers of the petitioner who were allegedly in collusion with the respondents had been suspended and complaints had been registered and First Information Reports lodged with the police. The investigation was in progress. He further submitted that as far as the petitioner’s office record is concerned, it showed that it had received from 21 different applicants separate bank drafts of varying amounts. The office record does not show that the amounts were paid by the two respondents herein on whose behalf the request is being made for the refund of the amount. In the circumstances, he contended that if the amount deposited in the Court is paid over to the respondents, the petitioner will not be validly discharged of its liability to the 21 applicants who had paid the amounts. However, he submitted that without prejudice to all its contentions, the petitioner was willing to make payment individually to the 21 applicants against their valid receipts. The learned counsel for the respondents equally vehemently opposed this suggestion and contended that since the 21 applicants have filed their individual affidavits in this Court stating in categorical terms that the amounts were paid by the two respondents and that they had no objections to the amounts being refunded to the respondents who were their del credere agents, the amount should no longer be paid to the 21 applicants individually. He further stated that if now the payments are made individually to 21 applicants, they may change their mind and money would be lost to the respondents. Since the fear was expressed by the counsel for the petitioners with regard to the validity of the discharge to be given by them, the learned counsel for the respondents suggested that those 21 applicants should be called to this Court at the cost of the petitioner. They could be identified before such officer of the Court as the Court may name, and upon their identification, and acceptance of the fact that they had filed the relevant affidavits, the money should be paid to the respondents. He also submitted that since the petitioner had the money in their possession eversince 30th March/2nd April, 1991, the petitioner should be asked to pay interest at 21 per cent from the said date till 20th August, 1992 when the amount was deposited in this Court.
8. It would thus be observed that the validity of the judgment of the High Court is no longer in question before us, and all that is necessary for us to consider is whether the amount deposited in this Court should be refunded to the two respondents who claim to be the del credere agents of the 21 applicants or whether it should be paid directly to the 21 applicants individually, and if so on what terms, to ensure a valid discharge of the liability of the petitioner.
9. There is no dispute that the amount was paid to the petitioner for supply of coal. The petitioner has not supplied coal other than 208 metric tonnes. There is further no dispute that the amount which the petitioner has deposited in this Court represents correctly the amount due to the claimants after deducting the value of the supply of 208 metric tonnes. Whether the amount belongs to the 21 applicants or to the two respondents is a question on which no controversy would survive if the statements made by the 21 applicants in their affidavits filed in this Court, are correct. Whether those statements are correct or not can be verified by some responsible officers by questioning the said applicants individually with regard to the authenticity of their respective affidavits. Further, whether those who come before the officer are the very persons who had made the applications for the supply of coal for their units and in whose name the individual bank drafts were sent as alleged by the petitioners, can only be ascertained with the help of those who can identify them personally. In view of the allegations that the original recommendations for the supply of coal obtained from the G.M. DIC, Sheopuri were fake, and in view of the suspension of some of the officers of the petitioners and the pending criminal complaints, and in view of the further fact that although the respondents claim that they had paid the amount, the record of the petitioner shows that it had received bank drafts individually from 21 different applicants, we agree with learned counsel for the petitioner that it would not be proper to hand over the money to the respondents, if the petitioner is to stand validly discharged of its liability.
10. It is, therefore, necessary that those who have filed the affidavits in question claiming to be the original applicants and from whom the money was received by the petitioners, are properly identified. We, therefore, direct as follows:-
The entire amount lying in this Court inclusive of the interest accrued thereon should be sent by the Registry forthwith to the General Manager, District Industrial Centre, Sheopuri. The General Manager, District Industrial Centre, Sheopuri and District Collector-cum-District Magistrate, Sheopuri will be the member of a two- member Committee. This Committee shall cause each of the applicants to appear before it and examine each of them in the matter. If the Committee is satisfied with regard to their identity, they should pay to each of the applicants the amounts due to him together with the proportionate interest.
11. We are also of the view that the fact of the case do not warrant burdening the petitioner with any interest on the amount in question. The petitioner is a Public Corporation. The record shows that the allegations made by the petitioner are not without substance. The petitioner was always willing to refund the amount to the individual applicants from whom it had received the amount. There was no delay on its part in either making the said offer or in depositing the amount in Court when directed to do so.
12. The Special Leave Petition is disposed of accordingly. In view of what is stated above, the I.A. No.3 of 1994 would also stand disposed of.
