1 2025:CGHC:45485-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 4752 of 2025 1 - Association of Power Producers Having Its Registered Office At 501- 502, 5th Floor, Mohan Dev Building 13, Tolstoy Marg, New Delhi-110001 2 - Adani Power Limited Having Its Registered Office At Adani Corporate House, Shantigram, Near Vaishno Devi Circle, S.G. Highway, Khodiyar, Ahmedabad - 382421, Gujarat. 3 - DB Power Limited Having Its Registered Office At 3rd Floor, Naman Corporate Link, Opp. Dena Bank, C-31, G-Block, Bandra Kurla Complex, Bandra (E), Mumbai, Maharashtra-51. 4 - RKM Powergen Private Limited Having Its Registered Office At No. 14, Dr. Giriappa Road, T. Nagar, Chennai, Tamil Nadu-600017 5 - MB Power (Madhya Pradesh) Ltd. Having Its Registered Office At Corporate Off - 239, Okhla Industrial Estate Not A Party Appellant No. 3 19 Phase - Iii, New Delhi – 110020 6 - Rattan India Power Ltd. Having Its Registered Office At 402, 11th Floor, Udyog Vihar Phase 3, Gurgaon Haryana-122016. ... Petitioners versus 1 - South East Central Railways New Zonal Building, Bilaspur, Chhattisgarh – 495004. 2 - South Eastern Coalfields Limited Seepat Road, Bilaspur, Chhattisgarh – 495006 3 - Coal India Limited Through Its Secretary Coal Bhawan, Premise No. 04, Mar, Plot No.Af-Iii, Action Area - 1a, Newtown, Rajarhat, Kolkata – 700156 ANURADHA TIWARI Digitally signed by ANURADHA TIWARI Date: 2025.09.08 17:39:09 +0530 2 4 - Union of India Through Its Secretary, Ministry of Railways, 256-A, Raisina Road, Rajpath Area, Central Secretariat, New Delhi, 110001 5 - Union of India Through Its Secretary, Ministry of Coal, A-Wing, Shastri Bhawan, Dr. Rajendra Prasad Road, New Delhi - 110001 ... Respondents (Cause-title taken from Case Information System) For Petitioners : Mr. Kishore Bhaduri, Senior Advocate with Mr. Ishan Bhaduri, Advocate For Respondents No.1, 4 and 5 : Ms. Anmol Sharma, Central Government Advocate For Respondents No.2 and 3 : Mr. Pankaj Singh, Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Bibhu Datta Guru, Judge Order on Board Per Ramesh Sinha , Chief Justice 08.09 .2025 1 Heard Mr. Kishore Bhaduri, learned Senior Counsel assisted by Mr. Ishan Bhaduri, learned counsel for the petitioners as well as Ms. Anmol Sharma, learned Central Government Counsel, appearing for the respondents No.1, 4 and 5 and Mr. Pankaj Singh, learned counsel appearing on behalf of the respondents No.2 and 3. 2 By filing this writ petition, the petitioners have prayed for following relief(s):- “(a) Pass an order/direction/writ in nature of mandamus directing Respondent No. 1 to refund the WRF recovered from Petitioner Nos. 2 to 6 along with applicable interest. 3 IN THE ALTERNATIVE TO PRAYER (A) ABOVE, (b) Pass an order/direction to Respondent No. 2 to adjust/refund the debited WRF from the coal bills raised upon Petitioner Nos. 2 to 6 along with applicable interest. (c) Pass such other orders / directions as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.” 3 Brief facts of the case, are that the Petitioner No. 1 is a society registered under the Societies Registration Act, 1860, comprising leading private power developers of India who own and operate thermal power plants and account for more than 90% of the private sector’s existing and planned capacity. Petitioners No. 2 to 6 are generating companies within the meaning of Section 2(28) of the Electricity Act, 2003, who procure coal from SECL under Fuel Supply Agreements (‘FSAs’) and transport the same through South East Central Railway (‘SECR’). The Respondents include SECR, SECL, Coal India Limited (‘CIL’), Union of India through Ministry of Railways, and Union of India through Ministry of Coal. On 07.01.2020, the Ministry of Railways issued rules governing the registration of indents and levy of cancellation charges, under which failure to load rakes after placement results in forfeiture of Wagon Registration Fee (‘WRF’). Between July and September 2024, SECL, despite being aware of coal shortages, continued to place indents with SECR, which resulted in large-scale 4 cancellation of rakes due to non-availability of coal at SECL sidings. Consequently, SECR deducted substantial amounts from the Petitioners’ freight accounts towards cancellation charges, even though the Petitioners had no role in placing indents or causing the cancellations. The Petitioners made repeated representations to SECL, SECR, Coal India Limited, Railway Board, NITI Aayog, and the concerned Ministries between July 2024 and June 2025, highlighting that the cancellations were solely attributable to SECL’s failure to supply coal and seeking refund of the WRF forfeited. In fact, SECL itself admitted that excessive rake placement and cancellation charges under SECR’s guidelines were causing consumer grievances, whereas SECR accused SECL of failing to timely communicate coal unavailability. Despite these exchanges, no resolution has been provided to date. As a result of SECL’s conduct, Petitioners have suffered significant financial losses, running into crores of rupees by way of wrongful forfeiture of WRF, without any fault on their part. Left without any efficacious remedy, the Petitioners are constrained to invoke the writ jurisdiction of this Court for redressal of their grievances. 4 Learned Senior Counsel assisted by learned counsel for the Petitioners submits that the impugned levy and forfeiture of Wagon Registration Fee (WRF) by Respondent No. 1 – South East Central Railway (SECR) from the dedicated freight accounts of Petitioner Nos. 2 to 6 is wholly arbitrary, unjustified and violative 5 of Article 14 of the Constitution of India. The Petitioners, who are generating companies under the Electricity Act, 2003, are merely beneficiaries of coal supply under the Fuel Supply Agreements (FSAs) executed with SECL. The Petitioners have no role whatsoever in the placement of rake indents. It is SECL alone which, under Clause 7.1.2 of the FSA, is responsible for placing indents with SECR, and the Petitioners have no authority, control or discretion in that regard. Therefore, the burden of cancellation charges cannot, in law or equity, be fastened upon the Petitioners. It is further submitted that Para 15 of the Railway Board’s Rules dated 07.01.2020 explicitly provides that the liability for rake cancellation lies with the party placing the indent. In the instant case, SECL, despite being aware of coal shortages in the Korba region, continued placing indents and failed to honour them due to non-availability of coal. This failure was solely attributable to SECL’s operational lapses. Consequently, the forfeiture of WRF from the Petitioners’ freight accounts, instead of from SECL, is unsustainable and contrary to the governing Railway Rules and FSAs. 5 Learned Senior Counsel would submit that SECL itself, in its communication dated 10.08.2024, admitted that cancellations occurred due to coal shortages arising from operational constraints and rainfall. Likewise, SECR, in its letter dated 13.08.2024, categorically recorded that SECL failed to communicate loading constraints and continued placing excessive 6 indents despite being aware of coal unavailability. These admissions by the Respondents themselves establish that the Petitioners were not at fault. Yet, without issuing any prior notice or affording an opportunity of hearing, SECR unilaterally debited large sums from the Petitioners’ freight accounts. Such action is not only contrary to the principles of natural justice but also in violation of Articles 14, 19(1)(g) and 21 of the Constitution of India. It is next submitted that the Petitioners, despite being subjected to repeated forfeiture of WRF, continued to make representations to SECL, SECR and other Respondents, pointing out that they were being penalised for no fault of theirs. However, no redressal was granted. The failure of SECL and SECR to resolve the issue amongst themselves, despite both being instrumentalities of the State under Article 12 of the Constitution, amounts to administrative inefficiency and abdication of public duty. This abdication has resulted in wrongful enrichment at the expense of the Petitioners. 6 Learned Senior Counsel further contends that the wrongful deductions of WRF are in the nature of penalties imposed without any attribution of fault to the Petitioners. It is a settled principle of law that penalties cannot be imposed unless there is a breach or default by the party concerned. In the present case, the Petitioners have not violated any contractual or statutory obligation either under the FSAs or under the Railway Rules. Hence, the impugned forfeiture of WRF is manifestly arbitrary, 7 disproportionate and unsustainable in law. It is also emphasised that the Petitioners are power generators supplying electricity under long-term Power Purchase Agreements (‘PPAs’). Wrongful imposition of cancellation charges not only causes substantial financial loss to the Petitioners but also has a cascading effect on their ability to maintain coal stocks as per the Central Electricity Authority (‘CEA’) norms, thereby affecting electricity generation, grid stability and ultimately the larger public interest. Lastly, it is submitted that SECL and SECR, being dominant and monopolistic State instrumentalities in coal supply and transport, are duty bound to act fairly, reasonably and transparently. Their arbitrary conduct in the present matter is violative of constitutional norms, amounts to abuse of dominant position, and cannot be countenanced. The Petitioners have no alternative efficacious remedy except to invoke the extraordinary writ jurisdiction of this Court under Article 226 of the Constitution for securing refund of the wrongfully debited WRF amounts and for preventing recurrence of such arbitrary actions in future. 7 On the other hand, learned counsel appearing for Respondents No.2 and 3 opposed the submissions advanced by learned Senior counsel appearing for the Petitioners and respectfully submits that the present writ petition is not maintainable under Article 226 of the Constitution of India, inasmuch as the controversy raised by the Petitioners arises out of contractual obligations and alleged breaches under the Fuel Supply Agreements (‘FSAs’) executed 8 between the parties. It is well settled that disputes pertaining to interpretation of contracts, liability arising therefrom, and recovery of amounts under commercial agreements fall squarely within the domain of civil Courts and cannot be adjudicated in writ proceedings. It is submitted that the Petitioners have, by their own showing, accepted the contractual framework under the FSAs as well as the Railway Rules notified on 07.01.2020, which clearly provide the mechanism for placement of indents and levy of cancellation charges. The Petitioners are seeking refund of Wagon Registration Fee (‘WRF’) allegedly forfeited by the Railway authorities. Such claims essentially amount to a demand for recovery of money, which is a civil liability requiring adjudication of disputed facts, including whether SECL or the Petitioners were at fault, whether indents were properly placed, and whether cancellation charges were justified. These are disputed questions of fact which cannot be adjudicated in exercise of writ jurisdiction. It is further contended that the Petitioners have effective and efficacious remedies available in law, including institution of civil suits or invocation of arbitration, if any such clause exists in the FSAs, for ventilating their grievance. Instead of availing those remedies, the Petitioners have chosen to invoke the extraordinary writ jurisdiction of this Court, which is not meant for resolution of purely contractual or commercial disputes. Reliance is placed on the settled principle that writ jurisdiction is not a substitute for ordinary remedies available under civil law and cannot be invoked 9 merely because a party is aggrieved by monetary claims or deductions under a contract. It is also submitted that the Petitioners are large commercial entities engaged in power generation under long-term arrangements and are fully aware of the contractual risks involved in coal procurement and transportation. Having entered into FSAs with open eyes, they cannot now seek to bypass the dispute resolution framework envisaged thereunder and convert a contractual dispute into a constitutional one. Mere invocation of Article 14 does not ipso facto confer maintainability when the lis is essentially civil in nature. 8 We have heard learned counsel appearing for the parties and perused the documents annexed with the writ petition with utmost circumspection. 9 Having considered the rival submissions and upon perusal of the record, this Court finds that the controversy raised by the Petitioners essentially arises from the contractual framework of the Fuel Supply Agreements executed between the Petitioners and SECL, as well as the corresponding administrative arrangements with SECR in relation to placement of indents and levy of Wagon Registration Fee. 10 The issues sought to be raised involve highly disputed questions of fact, such as the attribution of responsibility for indent placement, the alleged defaults of SECL in making coal available, 10 and the legality of deductions made by SECR from the freight accounts of the Petitioners. 11 It is well settled that such disputes arising out of contracts, even when one of the parties is a State instrumentality, cannot ordinarily be adjudicated in proceedings under Article 226 of the Constitution of India. Determination of the present controversy would necessarily require examination of evidence, scrutiny of contractual obligations, and resolution of factual disputes, which lie within the province of the competent civil Court and not within the limited scope of judicial review. 12 In view of the above, this Court is of the considered opinion that the present writ petition is not maintainable. Accordingly, the writ petition stands dismissed. However, it is made clear that the dismissal of this petition is only on the ground of maintainability and shall not be construed as an expression of opinion on the merits of the claims put forth by the Petitioners. The Petitioners shall be at liberty to avail appropriate remedies by instituting proceedings before the competent civil court or any other forum as may be permissible in law. If such proceedings are instituted, the same shall be decided on their own merits and in accordance with law, uninfluenced by any observations made in the present order. Sd/- Sd/- (Bibhu Datta Guru) (Ramesh Sinha) Judge Chief Justice Anu