1994 (9) TMI 348 - SC - Indian Laws

Summary

Issues Involved:
1. Entitlement to realize service charges for selling coke.
2. Applicability of the Colliery Control Order, 1945, and subsequent notifications.
3. Interpretation of "special sizing" under Note 14 of the notification.
4. High Court's interpretation and judgment.

Detailed Analysis:

1. Entitlement to Realize Service Charges for Selling Coke:
The primary issue in this appeal is whether Bharat Coking Coal Limited (the appellant) is entitled to realize service charges from its buyer while selling coke. The appellant argued that additional work and effort, such as shifting and sizing after production, justified the recovery of service charges. The respondent contended that such charges were arbitrary and illegal, as the price of hard coke was already fixed by a statutory notification.

2. Applicability of the Colliery Control Order, 1945, and Subsequent Notifications:
The Colliery Control Order, 1945, and its relevant clauses were central to this case. Clause 2(1) defines coal to include coke, but they are distinct products. Clause 4 empowers the Central Government to fix the sale price of coal and coke. Clause 4A allows for the fixation of retention prices considering production costs. Clause 5(1) prohibits selling coal or coke above the fixed price. The notification issued under these clauses fixed prices for different grades and sizes of coal and coke.

3. Interpretation of "Special Sizing" Under Note 14 of the Notification:
The appellant argued that handling charges were justified under Note 14, which allows additional charges for special sizing or beneficiation of coal. The respondent countered that they did not request special sizing, and thus, Note 14 did not apply. The Court, however, found that the process of screening and sizing to meet ISI specifications for foundry coke constituted "special sizing." The ISI report and the appellant's counter-affidavit supported this interpretation, showing that the coke required handling to meet specified sizes.

4. High Court's Interpretation and Judgment:
The High Court had ruled against the appellant, stating that Note 14 did not apply as the respondent did not purchase coke of a special size. The Supreme Court found this interpretation flawed, noting that the High Court failed to consider the definition of "size" under the Order and the ISI report. The Supreme Court concluded that the appellant's activities did fall under "special sizing," allowing them to charge additional fees.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's judgment, and dismissed the respondent's writ petition. The Court held that the appellant was entitled to realize service charges for handling and sizing coke to meet ISI specifications, as this constituted "special sizing" under Note 14 of the notification. No order as to costs was made.