2022 (5) TMI 1648 - SC - Indian Laws

SC dismisses appeals challenging writ jurisdiction in coal procurement dispute between state entity and private party

Karnataka Power Corporation Limited Versus EMTA Coal Limited and Ors.

SC dismissed appeals challenging HC's writ jurisdiction in contractual dispute between state instrumentality and private party regarding coal procurement ... Challenge to adverse decisions taken by the Appellant with respect to the arrangement regarding coal procurement entered into by the parties for the purposes of the Appellant's thermal power projects in the State of Karnataka - primary submission of the learned Senior Counsel appearing on behalf of the Appellant is that the High Court granted the relief without adjudicating the disputes between the parties or properly appreciating the facts in issue - HELD THAT:- It is worth noting that this Court has already held that in matters pertaining to a state instrumentality, a writ may be maintainable in matters concerning contractual disputes in certain circumstances. While there is no bar on the maintainability of such writ petitions, the discretion lies with the High Courts as to whether to exercise the said jurisdiction or not. This Court has elaborately discussed the principles that must guide the High Courts while deciding whether to exercise their writ jurisdiction in contractual disputes between a State and a private party in a catena of judgments. No material has been placed on record by the Appellant to suggest that there was ever any problem with respect to the quality of coal being supplied by KEMTA to the Appellant. Rather, the impugned order suggests that coal supplied by KEMTA was utilized by the Appellant in its thermal power plants in order to generate electricity. No material has been brought to the notice of this Court that would compel us to interfere with the impugned common judgment passed by the High Court in exercise of our jurisdiction Under Article 136 of the Constitution. The Civil Appeals filed by the Appellant are dismissed. Issues:1. Challenge to High Court judgment allowing writ petitions filed by Respondents regarding coal procurement arrangement.2. Dispute over reimbursement demand from KEMTA based on CAG report.3. Challenge to deductions made by Appellant on bills payable to KEMTA for washing charges.4. Appellant's contention of High Court not properly adjudicating disputes.5. Maintainability of writ petitions in contractual disputes between State and private party.6. Change of stand by Appellant on objections raised to CAG report.7. Lack of specification in agreements for deductions on washing charges.8. Quality of coal supplied by KEMTA and utilization by Appellant.9. Justification for interference with High Court judgment under Article 136 of the Constitution.Analysis:The Supreme Court judgment pertains to Civil Appeals arising from a High Court judgment allowing writ petitions challenging decisions taken by the Appellant regarding a coal procurement arrangement for thermal power projects in Karnataka. The Appellant was allotted coal mines for captive consumption and formed a joint venture with EMTA for mine development and coal supply. A dispute arose when the CAG report highlighted coal rejects quantification issues, leading to reimbursement demands from KEMTA and challenges to deductions made by the Appellant on bills for washing charges. The High Court directed the Appellant to refrain from recovery solely based on the CAG report and ordered reimbursements for deductions. The Appellant contended that the High Court did not properly adjudicate the disputes.The Court addressed the maintainability of writ petitions in contractual disputes involving a State entity and a private party, emphasizing the High Court's discretion in exercising writ jurisdiction. Despite the Appellant's objection to the High Court's jurisdiction, the Court declined to delve into the issue due to the longstanding nature of the dispute. The Court highlighted the lack of justification to question the High Court's exercise of jurisdiction given the circumstances of the case.Regarding the merits, the Court noted the Appellant's change of stance on objections to the CAG report and the lack of specification in agreements for deductions on washing charges. It observed no evidence of coal quality issues from KEMTA and affirmed the utilization of coal in power generation. Consequently, the Court found no compelling reason to interfere with the High Court's judgment under Article 136 of the Constitution, leading to the dismissal of the Civil Appeals. The judgment concluded by disposing of any pending applications related to the case.