1 2025:CGHC:23284-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 2764 of 2025 M/s Agrawal Structure Mills Private Limited (Unit-2) Through Its Director, Shri Anil Kumar Agrawal S/o Madanlal Agrawal, Aged About 57 Years, Address Industrial Area, Silpahri, Sirgitti, District Bilaspur Chhattisgarh, Having Its Registered Office At Govind Kunj Behind Krishna Talkies, Bhimsen Marg, Samta, Colony, Raipur Chhattisgarh - 492001. ... Petitioner(s) versus South Eastern Coalfield Limited Through Its General Manager, Marketing And Sales Department, South Eastern Coalfield Limited, Situated At Seepat Road, Bilaspur Chhattisgarh. ...Respondent(s) For Petitioner : Mr. Anand Shukla, Advocate. For Respondent : Mr. Pankaj Agrawal, Advocate. Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Bibhu Datta Guru , Judge Order on Board Per Ramesh Sinha , Chief Justice 12.06.2025 1. Heard Mr. Anand Shukla, learned counsel for the petitioner. Also heard Mr. Pankaj Agrawal, learned counsel, appearing for the respondent. BRIJMOHAN MORLE Digitally signed by BRIJMOHAN MORLE Date: 2025.06.13 11:13:47 +0530 2 2. The present writ petition has been filed by the petitioner with the following prayers: “10.1 That, this Hon’ble Court may kindly be pleased issue appropriate writ and quash the impugned compensation bills dated 05.03.2025 (Annexure P/1): Under the FSA no. 81758, amounting to Rs.1,289,379.64/- and under the FSA No. 81759, amounting to Rs. 2,395,711.57/-. 10.2 That, the Hon’ble Court may kindly be pleased issue appropriate writ and direct the respondent that no coercive steps shall be taken against the petitioner in respect of the encashment of the Bank Guarantee or termination of FSA in respect of the FSA No. 81758 and under the FSA No. 81759 dated 13.09.2023. 10.3 Any other relief or relief(s) which this Hon’ble Court may think proper in view of the facts and circumstances of the case may also kindly be granted.” 3. Learned counsel for the petitioner submits that the petitioner is a private limited company registered under Companies Act of 1956 and registered under Small Scale Industry at Bilaspur. The petitioner is an industry working in business of manufacturing and production of direct reduction of iron (sponge iron) and related products & generation of power, etc. He further submits that the respondent i.e. South Eastern Coalfields Limited (SECL) is the largest coal producing company of India. It is a "Miniratna" Company, and one of eight fully owned subsidiaries of 3 Coal India Limited. Thus as a government owned entity, the respondent is amenable under the writ jurisdiction of this Hon'ble Court. 4. It is further stated by the learned counsel for the petitioner that the petitioner is a law-abiding industrial unit operating in the Sponge Iron Sub Sector with an installed capacity of 2x100 TPD. The petitioner participated in the Linkage Auction Tranche-VI for procurement of coal through the MSTC Ltd. platform after submitting all requisite documentation, including technical details and end-use plant (EUP) capacity as per Annexure V of the Scheme Documents dated February, 2023. He also stated that the petitioner emerged as successful bidder in the said auction and pursuant to the same, the petitioner entered into total six Fuel Supply Agreement (for short, ‘FSA’) with respondent/SECL, on 13.09.2023, bearing numbers A1758, Α1759, A1760, A1761, A1762 & A1763. 5. Learned counsel for the petitioner contended that the respondent on earlier occasion had issued compensation bills in respect of the FSA dated 06.12.2017 against the petitioner, against which the petitioner had approached this Hon'ble Court in WPC No. 3407 of 2024 and this Hon'ble Court vide order dated 10.07.2024, directed the respondent to decide the representation of the petitioner in terms of Clause 16 of the FSA and restrained the respondent from encashing the bank guarantee furnished by the petitioner till the representation is not decided by the respondent SECL. He further contended that as per Clause 3 of the Auction Process read with Annexure VII of the Consumption Norms of the Scheme Document, the normative coal consumption for an industrial unit of 100 TPD capacity is1208 kg/ton of production. Accordingly, the petitioner 4 annual normative coal requirement is 72,480 MT, based on installed capacity and standard consumption. However, the quantity allotted to the petitioner was arbitrarily fixed at 141,069 MT of G-10 grade coal, which is far exceeding the petitioner declared and certified requirement, and in contravention of the Scheme norms. He further submits that the aforesaid discrepancy came into light during the process of registration for Tranche- VII of the auction on the website of Mjunction Ltd., when the petitioner was notified of a negative “savings energy” of (-)88,61,58,00000, based on a total energy figure of 3,33,55,42,00000 and FSA energy of 4,22,17,00,00000, which clearly indicated gross miscalculation. He would submit that upon realization of the mismatch between actual requirement and allotted quantity, the petitioner voluntarily refrained from lifting the excess coal in good faith, to avoid misutilization or unlawful diversion of coal, which is a punishable offence. 6. It is further submitted by the learned counsel for the petitioner that the petitioner had also submitted a certificate from a Chartered Engineer (Certificate No. TPSA/BSP-Agrawal SMPL/2023-24/CE-01 dated 16.06.2023) certifying the petitioner's Plant actual capacity. But, despite of the same, the final FSA was executed for an inflated quantity without proper verification, which amounted to gross negligence on the part of the respondents. He would submit that the petitioner had also addressed representation on 03.03.2025 to the respondent, requesting correction of the erroneous FSA. However, rather than addressing the error or initiating a process as per Clause 16 of the FSA (“Settlement of Disputes”), the respondent issued the impugned Compensation Bills, allegedly on account of short lifting of the coal. Thereby, violating the principles of 5 natural justice. He also submits that the FSA expressly provides for a dispute resolution mechanism under Clause 16.4, which mandates mutual resolution of disputes between parties before proceeding to punitive steps like invocation of bank guarantees or raising compensation claims. But, instead of taking decision amicably, the respondent authorities have issued compensation bills upon the petitioner in pursuance of the FSA dated 13.09.2023 on 05.03.2025, under the FSA No. 81758, amounting to Rs. 1,289,379.64/- and under the FSA No. 81759, amounting to Rs.2,395,711.57/-. 7. Learned counsel for the petitioner submits that the petitioner has made repeated representation before the respondent raising his grievances, but the respondent has neither considered the representation made by the petitioner, nor responded to the same. Copy of the representations are filed herewith as Annexure P-6 collectively. He further submits that the petitioner has furnished heavy bank guarantee with the respondent in pursuance of the FSA dated 13.09.2023 and due to arbitrary and illegal action of the respondent, the bank guarantee furnished by the petitioner is at the risk. Further, the respondent may terminate the FSA with the petitioner, without any fault of the petitioner. Thus, the actions of the respondent in issuing the impugned compensation bills without correcting the technical error or invoking the dispute resolution mechanism are arbitrary, unreasonable and violative of FSA. Hence, this petition. 8. On the other hand, learned counsel, appearing for the respondent opposes the prayer made by the learned counsel for the petitioner. He further submits that as per the Clause 16 of the FSA there is a mechanism 6 for the payment of dispute between the parties. The Clause 16 of the agreement, reads as under: “16. SETTLEMENT OF DISPUTES 16.1 In the even of any dispute, disagreement or difference arising out of or in connection with this Agreement, including any question regarding its performance, existence, interpretation, validity, termination and the rights and liabilities of the parties (“Dispute”), the parties shall in the first instance endeavour to amicably settle the same through negotiations carried out in good faith. 16.2 For the purpose of conducting such negotiations, each party shall designate in writing to the other party, a representative who shall be authorized to negotiate on its behalf with a view to resolving any Dispute (the “Representative”). Each such representative shall remain so authorized until his replacement has been notified in writing to the other party, by the party he represents. 16.3 The Representative of the party which considers that a dispute has arisen shall given to the Representative of the other Party, a written notice setting out the material particulars of the dispute (“Dispute Notice”). Within 30 (thirty) days, or such longer period as may be mutually agreed by the 7 parties, of the Dispute Notice having been delivered to the other Party, the Representative of both parties shall meet in person to attempt in good faith and using their best endeavours at all times, to resolve the Dispute. Once the Dispute is resolved, the terms of the settlement shall be recorded in writing and signed by the Representatives of the Parties. In the event that the Representatives of the parties fail to resolve or settle the Dispute within 90 (ninety) days of their meeting, the parties shall be entitled to exercise the remedies available to them under Clause 16.4. 16.4 If amicable settlement as above is not possible, then the unresolved disputes or differences shall be settled through the process as given below: In the event of any dispute or difference relating to the interpretation and application of the provisions of commercial contract(s) between Central Public Sector Enterprises (CPSEs)/Port Trusts inter se and also between CPSEs and Government Department/Organizations (excluding disputes concerning Railways, Income Tax, Customs & Excise Departments), such dispute or difference shall be taken up by either party for resolution through AMRCD as mentioned in DPE OM No. 05/0003/2019-FTS-10937 dated 14.12.2022” 8 9. It is further submitted by the learned counsel for the respondent that with regard to compensation bill FSA Nos. 81758 and 81759, the petitioner had sent an e-mail to the respondent and the same has been received by the respondent, but no representative has been authorized by the petitioner in terms of Clause 16.2 of the agreement, to which learned counsel for the petitioner states that an authorized representative would be sent to the respondent for settlement of the dispute. 10. Be that as it may, we are not inclined to interfere in the matter, petitioner is at liberty to pursue the remedy available to him. 11. Accordingly, the present writ petition is dismissed. However, it is made clear that the observations made hereinabove shall not be construed as an expression of opinion of this Court on the merits of the matter. Sd/- Sd/- (Bibhu Datta Guru) (Ramesh Sinha) Judge Chief Justice Brijmohan