Reasonable classification sustains differential pricing where commercial policy and distinct consumer roles justify higher charges for some users.

Differential pricing for core/linked and non-core/unlinked coal consumers was upheld as a reasonable classification under Article 14. The Court held that price fixation is primarily a policy and economic decision, and judicial review is limited to checking whether relevant factors were considered and irrelevant ones excluded. It accepted that core sector consumers were nationally important, consumed most coal, and had assured linkage, while non-core consumers had a different consumption profile. The respondent's financial constraints and the need to protect core industries from sharp price increases provided a rational basis for charging non-core consumers more. The challenge alleging arbitrariness and hostile discrimination therefore failed.

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Issues: Whether the respondent's dual pricing policy, by charging a higher price from non-core/unlinked sector consumers while granting a lower price to core/linked sector consumers, was arbitrary, amounted to hostile discrimination, and violated Article 14 of the Constitution of India.

Analysis: Price fixation is ordinarily a matter of policy and economic choice, and judicial review is limited to examining whether relevant considerations were taken into account and irrelevant considerations excluded. The Court found that the core sector industries were identified as nationally important consumers, receiving assured linkage and consuming the bulk of coal output, while non-core industries had comparatively lower consumption and lesser systemic impact. The respondent's financial distress, the need to protect core industries from sharp price increases, and the commercial justification for recovering a higher price from other consumers supported the pricing structure. The classification was held to rest on intelligible differentia with a rational nexus to the object of the policy.

Conclusion: The dual pricing policy did not violate Article 14 and was not discriminatory; the challenge failed.

Final Conclusion: The impugned clause upholding differential pricing between core/linked and non-core/unlinked consumers was sustained, and the appeals were rejected.

Ratio Decidendi: A differential pricing policy based on reasonable classification, commercial considerations, and the distinct role and consumption pattern of consumer groups does not offend Article 14 unless hostile discrimination or irrationality is shown.

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