1 2025:CGHC:10959 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 1065 of 2013 1 - Bihar Sponge Iron Limited, A Company Incorporated Under The Provision Of The Companies Act 1956 Having Its Reg. Office At Umesh Nagar, Chandil Saraikela, Kharsawan, Jharkhand 832 401 Thro. Its Director Finance, Bk. Thakur, S/o G.C. Thakur, R/o J-52, Vatika Green Jamshedur, Ps And Post Office Jamshedpur Jharkhand , Jharkhand ... Petitioner(s) versus 1 - Union Of India Through Its Secretary, Ministry Of Coal, Government Of India, New Delhi, Delhi 2 - Coal India Limited Through Its Chief General Manager Cp 10, N.S. Road, Kolkata West Bengal , District : Kolkata, West Bengal 3 - Southern Eastern Coalfields Limited Through Its Chairman-Cum- Managing Director, Seepat Road, Bilaspur C.G. , District : Bilaspur, Chhattisgarh 4 - Central Coalfields Limited Through Its Chairman-Cum-Managing Director, Darbanga House, Ranchi Jharkhanda , District : Ranchi, Jharkhand ---- Respondents For Petitioner : Mr. Rajeev Shrivastava, Senior Advocate along with Mr. Sourabh Sahu, Advocate For Union of India : Mr. Roop Ram Naik, Advocate and Ms. Anmol Sharma, Advocate -2- For Respondents No.2 & 3 : Mr. Vaibhav Shukla, Advocate Hon'ble Shri Justice Rakesh Mohan Pandey Order on Board 05.03.2025 1. The petitioner has filed this petition seeking the following relief(s):- “i) writ of certiorari or any other appropriate writ, order of direction quashing the impugned penalty bill dated 15/12/2011 (Annexure - P/1) signed on 22/12/2011 bearing No. SECL/KOL/PL/2011-12/0012 passed by the respondent No.3 and the letter dated 3/1/2012 (Annexure P/2) bearing No.SECL/KOL/5032 sent by the SECL to ICICI Bank and a copy of the same endorsed to the petitioner. ii) an appropriate writ or order or direction directing the Respondent No. 3 to refund the amount of Bank Guarantee amounting to Rs 1,25,49,827/-along with interest @ 18% per annum. iii) Cost of the petition may also be granted to the petitioner. iv) Any other relief, which this Hon'ble Court deems fit and proper, may also kindly be granted to the petitioner, in the interest of justice.” 2. Mr. Shrivastava, the learned Senior Advocate appearing for the petitioner would submit that the Coal/Fuel Supply Agreement was entered into between the petitioner and respondents No.2 & 3 on 30.04.2008. He would further submit that the petitioner moved an application before the Union of India for a change of linkage from respondent No.3/SECL to respondent No.4/CCL on 07.12.2010. 3 The application moved by the petitioner was approved on 06.11.2011. The petitioner failed to lift the coal from SECL from 01.04.2011 to 30.11.2011. Mr. Shrivastava would also submit that various complaints were made to the SECL authorities for the supply of C-Grade Coal and as a request was pending, the coal was not lifted. Mr. Shrivastava would contend that the penalty bill to the tune of Rs. 2,15,28,317/- was issued by the SECL on 15.12.2011 and vide letter dated 03.01.2012, the Bank Guarantee to the tune of Rs 1,25,49,827/- was encashed. Mr. Shrivastava would further contend that Clause 15 of the Fuel Supply Agreement (for short the ‘FSA’) provides settlement of disputes. He would also submit that the petitioner approached the SECL authority for the settlement of the dispute but no date was provided by the SECL for the appearance of the petitioner. 3. On the other hand, Mr. Shukla, the learned counsel appearing for the respondent/SECL would oppose the submissions made by Mr. Shrivastava, the learned Senior Counsel appearing for the petitioner. He would submit that the petitioner failed to lift the coal from SECL from 01.04.2011 to 30.11.2011, therefore, the penalty bill was issued. He would further submit that when the petitioner -4- failed to deposit the amount of the penalty bill, the bank guarantee was encashed and the remaining amount was adjusted from the available cash. He would contend that a proceeding with regard to the settlement of the dispute was initiated and a competent officer was appointed by the SECL but the petitioner and its representative failed to appear before it, therefore, the same could not be concluded. 4. Learned counsels appearing for the Union of India would support the contentions made by Mr. Shukla. 5. Heard learned counsel appearing for the parties and perused the documents placed on the record. 6. From a perusal of the penalty bill dated 15.12.2011, it is apparent that it was issued by the SECL authority as the petitioner failed to lift the coal according to the Fuel Supply Agreement. 7. The petitioner has assigned reasons for the non-lifting of coal that the matter for change of linkage was pending consideration before the Union of India and the representations made to the SECL with regard to the supply of Grade-C Coal was also pending. 8. Clause 15 of the Fuel Supply Agreement reads as under:- 5 “15. SETTLEMENT OF DISPUTES : 15.1 In the event of any dispute, disagreement or difference arising out of or in connection with this Agreement, including any question regarding its performance, existence, validity, termination and the rights and liabilities of the Parties to this Agreement ("Dispute"), the Parties shall in the first instance endeavour to amicably settle the same through negotiations carried out in good faith. 15.2 For the purpose of conducting negotiations, each Party shall designate in writing to the other Party a representative who shall be authorised to negotiate on its behalf with a view to resolving any Dispute (the "Representative"). Each such Representative shall remain so authorised until his replacement has been designated in writing to the other Party by the Party he represents. 15.3 The Representative of the Party which considers that a dispute has arisen shall give to the Representative of the other Party, a written notice setting out the material particulars of the dispute ("Dispute Notice"). Within thirty days, or such longer period as may be mutually agreed, of the Dispute Notice having been delivered to the other Party, the Representatives 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 reduced in writing and signed by the Representatives of the Parties". 9. Mr. Shrivastava, the learned Senior Advocate as well as Mr. Shukla, the learned counsel appearing for the SECL would submit that the competent authority was appointed by the SECL as the proceeding with regard to the settlement was initiated but there was no representation on behalf of the petitioner, therefore, the same could not be finalized. -6- 10.Taking into consideration the submissions made by Mr. Shrivastava and Mr. Shukla, it appears that there is a possibility of settlement between the parties, therefore, General Manager (Marketing & Sales), SECL, Bilaspur (C.G.) is directed to initiate a fresh proceeding according to Clause 15 of the FSA for settlement of disputes. Both parties are directed to appear before General Manager (Marketing & Sales), SECL, Bilaspur (C.G.) on the 21st of April, 2025. The concerned authority shall afford an opportunity of hearing to the petitioner and the respondent/SECL and a decision shall be taken by the said authority strictly in accordance with the law in an objective manner. The authority concerned shall consider the submissions made by the petitioner or its representatives and decide the same preferably within a period of 60 days from the 21st of April, 2025. The petitioner would be at liberty to revive its prayer, if the cause of action still subsists. 11.With the aforesaid observation(s)/direction(s), the present petition is disposed of. Sd/- (Rakesh Mohan Pandey) Judge Rekha