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<h1>Unjustified 20% surcharge on linked coal consumers held arbitrary, violative of Article 14; refund or interest ordered</h1> <h3>M/s MAA MUNDESHWARI CARBON PVT LTD Versus THE CENTRAL COALFIELDS LTD, THE COAL INDIA LTD, THE GENERAL MANAGER (SALES & MARKETING) CENTRAL COALFIELDS LTD</h3> HC allowed the writ petition and held that respondent coal company's unilateral levy of an extra 20% over the notified coal price for January 2007-March ... - ISSUES PRESENTED AND CONSIDERED 1. Whether the unilateral imposition of an additional 20% charge over the notified coal price, levied only on previously linked consumers for the period January 2007 to March 2008, has any legal basis and is consistent with Article 14 of the Constitution. 2. Whether the respondent's contention that fixation and charging of price is a company policy decision beyond judicial interference justifies the selective 20% levy. 3. Whether the additional 20% charge represented a legitimate means to recoup refunds ordered (or likely to be ordered) by higher courts in related litigation (i.e., whether it was authorized by law, by any government notification, or by any competent legal opinion). 4. Whether equitable doctrines (including promissory estoppel and principles announced by higher courts in related coal distribution litigation) constrain the respondents from imposing or retaining such additional charges. 5. Remedy: Whether the additional amounts so charged should be refunded or adjusted and whether interest is payable if refund/adjustment is not made within a specified period. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Legality and constitutionality (Article 14) of the 20% selective levy Legal framework: The charging of price by a public/privately-owned nationalised sector undertaking must comply with statutory/regulatory prescriptions and the constitutional guarantee of equality under Article 14 where state action or state-instrumentality action creates classifications affecting rights. Precedent treatment: The judgment relies on the general principle that discriminatory levies imposed by public sector undertakings without intelligible differentia or rational nexus may violate Article 14; it also treats earlier Supreme Court observations in related coal-distribution litigation (not as authority to charge extras) as indicating protective treatment for units set up at the behest of the coal companies (invoking promissory estoppel and welfare obligations). Interpretation and reasoning: The Court examined the temporal and classificatory features of the impugned levy: (a) it operated only during an interregnum (Jan 2007-Mar 2008); (b) it was applied only to previously linked consumers; (c) no government notification, policy provision, or recorded corporate decision was produced to justify a selective 20% surcharge. The Court found no intelligible differentia or rational nexus between the class targeted (linked consumers) and any permissible objective disclosed in the materials. The levy appeared to operate as ad hoc recompense for refunds the companies had to make following higher court orders rather than pursuant to an authorized policy objectively promulgated. Ratio vs. Obiter: Ratio - selective imposition of the 20% charge without statutory/authoritative basis and lacking rational classification violated Article 14 and is liable to be set aside or refunded. Obiter - observations on the companies' motive to protect balance-sheets and on the broader welfare role of nationalised undertakings, insofar as illustrative, but consistent with precedents. Conclusion: The 20% surcharge for Jan 2007-Mar 2008, levied only on linked consumers, was arbitrary, discriminatory and violative of Article 14 and therefore unlawful. Issue 2 - Justiciability of price-fixing and policy decisions of coal companies Legal framework: Administrative/policy decisions of public undertakings are amenable to judicial review where they transgress constitutional guarantees, statutory limits, or are ultra vires, arbitrary, mala fide or tainted by procedural unfairness. Precedent treatment: The respondents' submission that price fixation is solely a policy matter not subject to Court interference was considered against the backdrop of judicial supervision of public functionaries whose actions affect rights and equality. Interpretation and reasoning: The Court rejected the absolute non-justiciability plea because the impugned pricing practice lacked any authorizing notification or deliberative record. Where an entity purports to implement a pricing measure that affects a defined class differently, the courts can determine whether there is legal authority and reasoned justification. Absent such authorization, the policy label does not immunize the action from review. Ratio vs. Obiter: Ratio - labels of 'policy decision' do not oust judicial review when the decision is arbitrary, discriminatory or without legal basis. Conclusion: The claim that price fixation was a non-justiciable company policy failed; the Court is competent to examine legality and discrimination in such pricing. Issue 3 - Whether the 20% charge was authorized by any government/consultative opinion or interim policy Legal framework: Valid levies by public undertakings require statutory/regulatory basis, government notification where required, or clear corporate decision-making supported by record; reliance on external legal opinions does not substitute for authorizing law or proper administrative act. Precedent treatment: The Court examined the respondents' reliance on an interim coal sale policy and an opinion of the Additional Solicitor General as purported justification. Interpretation and reasoning: On scrutiny, neither the interim policy nor the AGS opinion contained any provision authorizing a selective 20% surcharge on linked consumers. The respondents failed to produce any documentation of government approval, board resolution, or formal notification permitting such a levy. The Court held that an unrecorded innovation to recoup amounts could not stand as lawful authority. Ratio vs. Obiter: Ratio - absence of any written authorization, notification, or policy provision authorizing the surcharge renders the levy unlawful. Conclusion: The 20% charge was not authorized by any government notification, interim policy provision, or binding legal opinion; it was an internal innovation without legal foundation and therefore invalid. Issue 4 - Interaction with promissory estoppel and higher court observations in related litigation Legal framework: Where entities have induced action or investment by representations or encouragement, equitable doctrines such as promissory estoppel may operate to protect beneficiaries; higher court observations regarding welfare obligations of nationalised undertakings inform the normative context. Precedent treatment: The Court noted that higher court observations in related coal-distribution cases recognized that smokeless fuel operators were encouraged by coal companies and that promissory estoppel principles could apply. Interpretation and reasoning: The Court treated the earlier higher court observations as reinforcing the invalidity of any surreptitious penal or recompensatory levy on those who acted on the companies' encouragement. In this factual matrix, imposing a selective surcharge to offset refunds ordered by higher courts violated the equitable expectations of the linked consumers and the public-duty character of the companies. Ratio vs. Obiter: Ratio - equitable considerations and higher court observations support setting aside the surcharge as inconsistent with the obligations of the coal companies toward consumers they encouraged to invest. Conclusion: Promissory estoppel and the welfare-oriented judicial observations supported invalidation of the 20% levy and entitled the affected consumers to relief. Issue 5 - Remedy: refund/adjustment and interest Legal framework: When an unlawful charge is established, appropriate remedies include refund or adjustment; courts may award interest where a monetary obligation was wrongfully exacted and not returned within a reasonable time. Precedent treatment: The Court exercised its remedial power to direct refund or adjustment and to prescribe interest if compliance was not achieved within a defined period. Interpretation and reasoning: Considering the unlawful nature of the charge and absence of any valid justification, the Court directed respondents either to refund the 20% overcharge for the specified period or to adjust it against future supplies within eight weeks of communication of the order. The Court further provided that failure to comply would attract interest at 6% per annum from the date of charging until refund/adjustment. Ratio vs. Obiter: Ratio - unlawful overcharges must be refunded or adjusted; reasonable timelines and interest for delayed compliance are proper remedies. Conclusion: The respondents were directed to refund or adjust the excess 20% charged for Jan 2007-Mar 2008 within eight weeks, failing which interest at 6% p.a. would be payable from the date of charging until payment/adjustment.