1 2026:CGHC:6712-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR W.P(C) No.509 of 2026 Hindustan Zinc Limited Through Authorised Representative, (As Mentioned In Affidavit) Registered Office- Yashad Bhawan, Udaipur (Raj)- 313004 ... Petitioner versus 1 - Union Of India Through The Ministry Of Railway, Represented By Its Secretary, Railway Board, Railway Bhawan, New Delhi- 110001 2 - Union Of India Through Ministry Of Coal, Represented By Its Secretary A- Wing, Shastri Bhawan, Dr. Rajender Prasad Marg, New Delhi- 110001 3 - Coal India Limited Through The Director, Coal Bhawan, 10 Netaji Subhash Road Calcutta- 700001 (West Bengal) 4 - South Eastern Coalfields Limited Through Its Chairman Cum Managing Director, Seepat Road, Bilaspur (Chhattisgarh) Pin- SISTLA NEELIMA VISHNU PRIYA Digitally signed by SISTLA NEELIMA VISHNU PRIYA Date: 2026.02.06 18:35:25 +0530 2 495006 5 - South East Central Railway Through The General Manager, S.E.C. Railway, Bilaspur Zone, Bilaspur, Chhattisgarh 495004 ... Respondents (Cause-title taken from Case Information System) ----------------------------------------------------------------------------------------- For Petitioner : Mr. Prafull Bharat, Senior Advocate along with Mr. Mayank Chandrakar and Mr. Aditya K. Singh, Advocates. For Respondents/UOI : Mr. Ramakant Mishra, Dy. Solicitor General. For Respondent/SECL : Mr. Vaibhav Shukla, Advocate. ---------------------------------------------------------------------------------------- Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal, Judge Order on Board Per Ramesh Sinha , Chief Justice 06.02.2026 1. Heard Mr. Prafull Bharat, learned Senior Advocate for the Petitioner. Also heard Mr. Ramakant Mishra, learned Deputy Solicitor General and Mr. Vaibhav Shukla, learned Counsel for the respective Respondents. 2. The present Writ Petition has been filed by the Petitioner with the following reliefs:- “10.1 The Hon'ble Court may kindly be pleased to issue writ, order or direction in the nature of appropriate writ, quashing and setting aside the Railway Receipts (Annexure 3 P/9) and Rake Cancellation Notices (Annexure P/8) issued by the SECR in respect of the impugned rake allotments/cancellations as being illegal, arbitrary and violative of Articles 14 and 19(1) (g) of the Constitution of India; 10.2 The Hon'ble Court may be pleased to direct SECR to restore and maintain and to direct SECL to procure restoration of HZL's original seniority in the wagon-allotment queue as per its programme submitted, ensuring that the Rake Cancellation Notices do not prejudice or alter HZL's seniority status, 10.3 The Hon'ble Court may kindly be pleased to direct SECL to reimburse the penalties along with the interest imposed and collected by SECR from HZL. 10.4. 10.4. Pass such other orders or directions as this Hon'ble Court deems just and proper in the interest of justice.” 3. The present Writ Petition has been filed by the Petitioner under Articles 226 and 227 of the Constitution of India challenging the actions of the Respondents, particularly South Eastern Coalfields Limited (SECL) and South East Central Railway (SECR), in cancelling valid coal rake allotments, extinguishing the Petitioner's accrued seniority in the railway freight queue and unilaterally recovering substantial penalties, despite no default on the part of the Petitioner. The Petitioner is engaged in mining and production of zinc, lead, and silver and relies on assured coal supply through auction-based linkages governed by valid Fuel 4 Supply Agreements (FSAs) with SECL. Pursuant to these FSAs, coal transportation was agreed to be undertaken via Railways and the Petitioner complied with all procedural and contractual requirements including submission of coal-lifting programmes, FOIS registrations and rake scheduling. Despite full compliance, SECR allegedly cancelled over 80 rake allotments between July 2025 and October 2025 on the ground of non-loading within “Free Time” without notice, reasons, or opportunity of hearing, even though delays were attributable to SECL’s failure to supply coal. The impugned actions resulted in the loss of seniority accrued over nearly three years and recovery of penalties amounting to Rs.69,18,090/-, which the Petitioner contends to be arbitrary, unreasonable and violative of Articles 14 and 19(1)(g) of the Constitution of India. The Petition seeks quashing of the cancellations and Railway receipts, restoration of seniority, reimbursement of penalties and directions to ensure continuity of coal supply under the subsisting FSAs. 4. Learned counsel for the Petitioner submits that the arbitrary cancellation of coal indents by SECR despite Petitioner’s full compliance and the consequential deduction of Rs.69,18,090/- is manifestly arbitrary, unreasonable and violative of Article 14 of the Constitution of India. He further submits that the cancellations have resulted in the loss of accrued seniority in the FOIS rake- 5 allotment queue, a vested right earned over nearly three years, thereby causing disproportionate civil consequences and prejudice to the Petitioner. It is contended that the unilateral financial deductions by SECR are without any contractual or statutory authority, lacking intelligible criteria and constitute unjust enrichment under Section 70 of the Indian Contract Act, 1872. it is further submitted that SECR, being a State instrumentality under Article 12, failed to observe principles of natural justice including notice and opportunity of hearing making the cancellations arbitrary, void, and liable to be quashed. It is further contended that the Petitioner had a legitimate expectation of supply in accordance with the FOIS procedure and FSAs and cannot be penalized for SECL’s operational lapses making the actions violative of Article 14. Learned Senior Advocate further submits that the arbitrary cancellation and deductions constitute hostile discrimination and unreasonable classification, thereby infringing Petitioner’s rights under Articles 14 and 19(1)(g) of the Constitution. He submits that the actions of SECL and SECR fail the test of reasonableness under the Wednesbury principle, are devoid of rational nexus to any legitimate objective and warrant judicial interference under Article 226. It is further submitted that the Petitioner has complied with all procedural and regulatory 6 requirements under FOIS but SECR cancelled indents on pretextual grounds, arbitrarily depriving the Petitioner of its accrued rights and entitlement. Learned Senior Advocate placed reliance on the decisions of the Hon’ble Supreme Court in R.D. Shetty v. IAA, A.P. Southern Power Distribution Co. Ltd. v. Hinduja National Power Corpn. Ltd., State of Jharkhand v. Brahmputra Metallics Ltd., and Food Corporation of India v. Kamdhenu Cattle Feed Industries establishing that arbitrary State action, breach of natural justice, and denial of legitimate expectation are amenable to judicial review and prays to allow the Petition. 5. On the other hand, learned Counsel for the Union of India and SECL submit that the Petitioner’s grievance regarding loss of seniority in the FOIS queue and imposition of penalties arises from operational requirements of the railway freight system. The cancellations of rakes and recovery of penalties by SECR were carried out in accordance with procedural rules and timelines and any delay was attributable to circumstances beyond the control of the railway. They further submit that these actions do not amount to arbitrariness or discrimination and were in line with the statutory and contractual framework governing rake allocation and coal supply, therefore, the Writ Petition lacks merit and deserves to be dismissed. 7 6. Having heard learned Counsel for the parties and careful examination of the record, we are of the considered opinion that no ground is made out for interference in exercise of jurisdiction under Articles 226 and 227 of the Constitution of India. The material available on record reflects that the cancellation of coal indents and the consequential levy of penalty were undertaken by the Railway authorities in accordance with the applicable operational framework governing placement, loading and cancellation of rakes and the Petitioner has failed to demonstrate any manifest arbitrariness, mala fides, breach of statutory duty or violation of the principles of natural justice warranting judicial review. The dispute sought to be raised is essentially contractual and operational in nature for which, appropriate remedies are available in accordance with law and therefore, invocation of the extraordinary writ jurisdiction is unwarranted. 7. Accordingly, the Writ Petition, being devoid of merit, is liable to be and is hereby dismissed. No order as to costs. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice Priya