Court orders Coal India to supply coal at notified price under SHAKTI Policy. Petitioner's applications dismissed.

The court dismissed both the interlocutory application and the review application, holding that the petitioner fulfilled the conditions for the execution of a Fuel Supply Agreement (FSA) under the SHAKTI Policy. The court directed Coal India Limited (CIL) to supply coal to the petitioner at the notified price, subject to standard conditions and the petitioner furnishing the required security deposit and bank guarantee.

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Issues Involved:
1. Interlocutory application and review application seeking to vacate/review interim order dated 31.01.2018.
2. Execution of Fuel Supply Agreement (FSA) under SHAKTI Policy.
3. Validity of the Letter of Assurance (LOA) issued to the petitioner as a Group Captive Power Plant (GCPP) and its conversion to Independent Power Plant (IPP).
4. Compliance with the SHAKTI Policy and the criteria for coal supply.
5. Impact of the competent authority’s decision dated 15.02.2018 on the petitioner’s rights.

Issue-wise Detailed Analysis:

1. Interlocutory Application and Review Application:
The interlocutory application (C.M. No.7039/2018) and review application (R.A. No.102/2018) were filed by Coal India Limited (CIL) and Union of India (UOI), respectively, seeking to vacate/review the interim order dated 31.01.2018. The court had directed CIL to supply coal to the petitioner’s power plant (Unit-I) based on the SHAKTI Policy. The applications argued that the competent authority’s decision dated 15.02.2018, which did not allow the LOA issued to the petitioner as a GCPP to be transferred to an IPP, necessitated recalling the interim order.

2. Execution of Fuel Supply Agreement (FSA) under SHAKTI Policy:
The petitioner argued that it fulfilled the criteria under clause A(i) of the SHAKTI Policy, which mandates the execution of an FSA with pending LOA holders whose plants are commissioned and meet specified milestones. The petitioner’s plant (Unit-I) was commissioned, and it had met all milestones. The court found that the petitioner had a prima facie case for the execution of an FSA under the SHAKTI Policy.

3. Validity of LOA and Conversion from GCPP to IPP:
The petitioner was initially issued an LOA as a GCPP and later permitted to convert to an IPP. The respondents contended that the LOA issued as a GCPP could not be used to seek coal supplies as an IPP. However, the court noted that various documents, including letters from Western Coalfields Limited (WCL) and the Central Electricity Authority (CEA), indicated that the petitioner continued to hold the LOA even after conversion to an IPP. The court found that the petitioner had been treated as an LOA holder throughout.

4. Compliance with SHAKTI Policy:
The court examined the SHAKTI Policy clauses and found that the petitioner met the criteria under clause A(i) for the execution of an FSA. The court also considered the petitioner’s argument that it was not allowed to participate in coal linkage e-auctions under the SHAKTI Policy because it was already an LOA holder.

5. Impact of Competent Authority’s Decision:
The competent authority’s decision dated 15.02.2018, based on the recommendations of the Standing Linkage Committee (Long Term) for Power (SLC (LT)), stated that the LOA issued to the petitioner as a GCPP could not be transferred to an IPP. The court found this decision to be based on the premise that the petitioner had bypassed the queue of IPPs awaiting LOAs. However, the court noted that the conversion from GCPP to IPP was approved by the SLC (LT) and the Ministry of Power, with the rationale that the lower cost of fuel would benefit consumers. The court found no merit in the respondents’ contention that the LOA could not be transferred upon conversion to an IPP.

Conclusion:
The court dismissed both the interlocutory application and the review application, holding that the petitioner fulfilled the conditions for the execution of an FSA under the SHAKTI Policy. The court directed CIL to supply coal to the petitioner at the notified price, subject to standard conditions and the petitioner furnishing the required security deposit and bank guarantee.

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