M/S. SUSHI LA CHEMICALS PVT. LTD. AND ANR.versusBHARAT COKING COAL LTD. AND ORS.

                      [2010] 11 S.C.R. 518


A        M/S. SUSHI LA CHEMICALS PVT. LTD. AND ANR.
                                 v.
             BHARAT COKING COAL LTD. AND ORS.
              (Civil Appeal Nos. 8037-8038 of 2010)
                       SEPTEMBER 15, 2010
B
           [ALTAMAS KABIR AND A.K. PATNAIK, .JJ.]

          Coal: New Coal Distribution Policy - Check on black-
    marketing of coal - Agreement for supply of coal by
C   Government Company for use in the plants of consumers -
    Term, of agreement that the coal was meant for use in the
    plants .of consumers and not for sale or diversion in open
    market - Criminal case by CBI against consumers alleging
    sale of coal in open market - Suspension of supply of coal -
D   Writ petition challenging suspension - Single judge of High
    Court quashing the order of suspension - Division Bench of
    High Court holding that in larger interest suspension of supply
    was correct - On appeal, held: There were materials with the
    CBI in support of the allegations made that the consumers
E   were not utilizing the allotted coal in their plants but were
    selling the same in black-market - Government Company is
    bound by the policy decision of the Government of India and
    since under the Coal Distribution Policy, mis-utilization of
    allotted coal and black-marketing of such coal by the
F   consumers was to be checked, the Government Company did
    not act arbitrarily or unreasonably to suspend the supplies of
    coal, since they entertained a serious doubt on the basis of
    the FIR lodged by the CBI - Single judge of High Court,
    therefore,erred in allowing the writ petitions - Code of Criminal
    Procedure, 1973 - ss.226, 482 - Administrative law - Policy
G   decision - Government contracts - Constitution of India, 1950
    - Article 14.

        The Ministry of Coal adopted a new coal distribution

H                                 518
   SUSHILA CHEMICALS PVT. LTD. AND ANR. v.               519
          BHARAT COKING COAL LTD.
policy under which coal was to be supplied to different         A
consumers through a Fuel Supply Agreement (FSA) at
notified prices to be fixed and declared by Coal India Ltd.
In terms of the policy, respondent no.1, a subsidiary of
Coal India Ltd. entered into an FSA with the appellants
for supply of coal. The terms of the FSA provided that the      B
total quantity of coal supplied to the appellants under the
agreement was meant for use in the plants of the
appellants and the same could not be sold or diverted or
transferred for any purpose whatsoever and in the event
the appellant did so, respondent no. 1 would terminate          c
the FSA without any damages whatsoever payable to the
appellants.

    On 7.6.2009, the CBI registered an FIR against 10
consumers including the appellants alleging inter a/ia that
the consumers entered into criminal conspiracy with the         D
then General Manager of respondent no.1 and lifted huge
quantity of coal and instead of utilizing the same ~n their
respective plants sold the same in the open market on
higher prices and as a result respondent no.1 suffered a
loss of 4.3 crores and thereby the accused made                 E
corresponding wrongful gain to themselves. Respondent
no.1 passed an order suspending the supply of coa1 to
the appellants. The appellants filed writ petition before the
High Court challenging the suspension of the supply of
coal by respondent no.1 to the appellants.                      F

    The single judge of the High Court quashed the order
directing suspension of supply of coal to the appellants
holding that there was no provision in the FSA for
suspension of supply of coal to the appellants on account       G
of criminal case instituted regarding misuse of the coal.
The Division Bench of the High Court, however, allowed
the appeals and held that in the larger interest,
resumption of supply of coal cannot be directed. The
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    520      SUPREME COURT REPORTS            [2010] 11 S.C.R.


A appellants filed the instant appeals challenging the order
  of Division Bench of the High Court.

          Dismissing the appeals, the Court

       HELD: 1. The FIR lodged by the CBI contained
B allegations of mis-utilization of and sale of the allotted
  coal by the appellants in the open market. As a matter of
  fact, in the charge sheet which was filed after
  investigation in the Court of Special Judge, CBI Cases,
  it was stated that a search was conducted at the plant
C premises of the appellants in June 2009 by the CBI
  officials in the presence of independent witnesses during
  which the plants of the appellants were found to be non-
  functional and the names of employees/workers as per
  the Attendance Register as well as other documents
D relating to sale of finished goods as produced by the
  appellants were found to be fake and fabricated as full
  particulars, addresses etc. were not provided in the
  records in respect of such employees/workers engaged
  and the purchasers of finished goods and thus the
E quantity of coal issued to the appellants-companies was
  not utilized in their plants but sold in the black-market. It
  was thus clear that there were materials with the CBI in
  support of the allegations made in the FIR against the
  appellants that they were not utilizing the allotted coal in
F their plants but were selling the same in black-market, but
  these materials could not be placed before the Court
  because the CBI was not impleaded as a respondent in
  the writ petitions filed by the appellants. The Coal India
  Ltd. and respondent no.1 are Government Companies
  and are bound by the policy decisions of the Government
G
  of India, Ministry of Coal, and since under the ne"!' Coal
  Distribution Policy formulated pursuant to the
  observations of the Supreme Court in * Ashoka
  Smokeless Coal India (P) Ltd., mis-utilization of allotted

H
    SUSHILA CHEMICALS PVT. LTD. AND ANR. v.              521
           BHARAT COKING COAL LTD.

coal and black-marketing of such coal by the appellants         A
was to be checked, the Coal India Limited and
respondent no.1 did not act arbitrarily or unreasonably
to suspend the supplies of coal under FSA to the
appellants, if they entertained a serious doubt on the
basis of the FIR lodged by the CBI that the supplies of         B
coal, if made, to the appellants may be mis-utilized by the
appellants and may be sold in the open market. (Paras
11-12] [529-B-F; 530-8-D]

     *Ashoka Smokeless Coal India (P) Ltd. & Ors. v. Union      C
of India & Ors. (2007) 2 SCC 640, relied on.

     2. It is settled law that even in the domain of
contractual matters, the High Court can entertain a writ
petition on the ground of violation of Article 14 of the
Constitution when the impugned act of the State or its          D
instrumentality is arbitrary, unfair or unreasonable or in
breach of obligations under public law. However, the
public authorities are essentially different from private
persons. Even while taking decision in respect of
commercial transactions, a public authority must be             E
guided by relevant considerations and not by irrelevant
ones. [Para 13] (530-E-G]

     Sterling Computers Ltd. v. Mis M & N Publications
Limited and Others (1993) 1 SCC 445, relied on.
                                                                F
     Kumari Shrilekha Vidyarthi v. State of U.P. (1991) 1 SCC
537; ABL International Ltd. & Anr. v. Export Credit Guarantee
Corporation of India Ltd. & Ors. (2004) 3 SCC 553; Noble
Resources Ltd. v. State of Orissa & Anr. (2006) 10 SCC 236,
referred to.                                                    G

    3. It is true, as was held by the single judge of the
High Court, that Clause 13(1) of FSA provides that in the
event the appellants fail to pay any amount including any
interest due to respondent no.1 under FSA within a
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    522     SUPREME COURT REPORTS             [2010] 11 S.C.R.


A period of 30 days of the same falling due, respondent
  no.1 shall have the right to suspend supplies of coal to
  the appellants, but Clause 13(1) does not stipulate that
  in no other contingency the respondent no.1 can
  suspend supplies of coal under FSA to the appellants.
B Moreover, Clause 13(1) of FSA enumerates the three
  options available to respondent no.1 in case the dues
  towards the price of coal and interest is not paid by the
  appellants and it does not provide for the different
  contingencies in which respondent no.1 can suspend the
c supplies of coal to the appellants. Respondent no.1 will
  also have the right to suspend supp"lies of coal to the
  appellants where it has doubts that the appellants may
  mis-utilize the allott~d coal and divert or sell the same in
  open market because, as would be clear from Clause 4.4
  of the FSA and the new Coal Distribution Policy decision
0
  dated 18.10.2007, the very object of FSA as well as policy
  decision of the Government is to allot coal to the
  appellants for utilization in their plants and not for any
  other purpose. Therefore, if the FIR lodged by the CBI,
E which is a premier investigation agency of the Central
  Government, created serious doubts that the allotted coal
  may be diverted or sold in the open market instead of
  being utilized in the plants of the appellants, respondent
  no.1 would be within its rights to suspend the supplies
  of coal to the appellants till the doubts are cleared in
F appropriate proceedings. The Division Bench of the High
  Court was, therefore, right in setting aside the judgment
  and order of the single judge quashing the order of
  resp.ondent no.1 suspending supplies of coal to the
  appellants. [Paras 14, 15] [531-B-H; 532-A]
G
                        Case Law Reference:
          (2004) 3 sec ss3      referred to          Para 6
          (2006) 1o sec 236     referred to          Para 6
H
   SUSHI LA CHEMICALS PVT. LTD. AND ANR. v.                     523
           BHARAT COKING COAL LTD.
     (2007) 2 sec 640            referred to            Para 10        A
     (1991) 1 sec 537            relied on              Para 13
     (1993) 1 sec 445            relied on              Para 13

    CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.                   B
8037-38 of 2010.

    From the Judgment & Order dated 27.10.2009 of the High
Court of Judicature at Patna in LPA Nos. 1265 & 1266 9f2009.

    Jaideep Gupta, M.L. Varma, S.B. Upadhyay, Anupam Lal               C
Das, Abhishek Kumar, Gaurav Agrawal, Manish Kumar Saran,
Rajendra Krishna, Ratan Kumar Chaudhary, Santosh Mishra,
Dharmendra Kumar Sinha for the appearing parties.

     The Judgment of the Court was delivered by
                                                                       D
     A. K. PATNAIK, J. 1. Leave granted.

    2. These appeals are against the common judgment and
order dated 27.10.2009 passed by the Division Bench of the
Patna High Court in LP.A Nos.1265 and 1266 of 2009.                    E

      3. The relevant facts very briefly are that pursuant to public
advertisements issued by Coal India Limited (respondent No.2
herein) calling upon entrepreneurs to establish coal based
industries on the basis of technology developed by the Central
Mines, Planning and Design Institute Ltd., the appellants              F
purchased the technology and established plants for
manufacturing special smokeless fuel during 1990-1991. The
subsidiary of Coal India Limited, Bharat Coking Coal Limited
(for short 'BCCL'), the respondent No.1 herein, recommended
grant of linkage of 5,000 MT of coal to the plants of the              G
appellants and Coal India Limited granted coal linkage to the
appellants and the appellants continued to run their respective
plants and manufacture special smokeless fuel by processing
the coal supplied by BCCL to them. On 18.10.2007, the
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    524      SUPREME COURT REPORTS                [2010] 11 S.C.R.


A   Government of India, Ministry of Coal discontinued the
    traditional linkage system and in its place adopted a new coal
    distribution policy under which coal was to be supplied to
    different consumers through a Fuel Supply Agreement (for short
    'FSA') at notified prices to be fixed and declared by Coal India
B   Limited. In accordance with this new policy, BCCL entered into
    FSA with the two appellants for supply of coal. Clause 4.4 of
    FSA provided that the total quantity of coal supplied to the
    appellants under the agreement is meant for use in the plants
    of the appellants and the appellants shall not sell or divert or
c   transfer the coal for any purpose whatsoever and in the event
    they engage or plan to engage into any such re-sale or trade,
    the BCCL shall terminate the FSA forthwith without any liabilities
    or damages whatsoever payable to the appellants. On
    07.06.2009, the Central Bureau of Investigation (for short the
    'CBI') registered First Information Report (FIR) against 10
0
    consumers including the appellants alleging inter alia that the
    ten consumers entered into a criminal conspiracy with Shri
    Udayan Bhattacharya, the then General Manager (S&M) of
    BCCL and in furtherance thereof, lifted 11,94,940 tonnes of coal
    and instead of utilizing the same in their respective plants, sold
E   the same in the open market at higher prices and as a result
    BCCL has suffered a loss of Rs.4,36, 15,300/- approximately
    and the accused have made corresponding wrongful gain to
    themselves. In the FIR, the CBI further stated that the facts
    disclosed the commission of offences punishable under
F   Section 120-B read with Sections 420, 467, 471 of the Indian ·
    Penal Code (for short · IPC') and Section 13(2) read with
    Section 13(d) of the Prevention of Corruption Act, 1988 by Shri
    Udayan Bhattacharya and the proprietors of different consumer
    firms and therefore a criminal case be registered and the
G   investigation be taken up. The Chairman of the Coal India
    Limited thereafter advised the Chairman-cum-Managing
    Director of BCCL to suspend supply of coal to the firms named
    in the FIR including the appellants and accordingly BCCL
    suspended supply of coal to the appellants by a wireless
H
    SUSHI LA CHEMICALS PVT. LTD. AND ANR. v.                525
   BHARAT COKING COAL LTD. [A.K. PATNAIK, J.]
message dated 13.06.2009. BCCL also issued notices to them         A
to explain why FSA executed in favour of the appellants should
not be cancelled on the basis of the FIR lodged by the CBI
containing the allegations that the appellants were involved in
a criminal conspiracy leading to the breach of terms and
conditions of FSA.                                                 B.

     4. Aggrieved, the appellants filed writ petitions Nos. 8144
of 2009 and 8311 of 2009 before the Patna High Court
challenging the suspension of supply of coal by BCCL to the
appellants by the Wireless Message dated 13.06.2009 and the
learned Single Judge, who heard the writ petitions, held in his    C
common judgment and order dated 26.08.2009 that clause 13
of the FSA was the only clause which provided for suspension
of supply of coal to the units of the appellants and this clause
provided that suspension shall be permissible when the
appellants failed to pay any amount towards purchase price or      D
interest thereon and there was no provision in the FSA for
suspension of supply of coal to the appellants on the ground
that a criminal case has been instituted regarding misuse of
the coal. The Learned Single Judge further held that misuse of
coal by the appellants was however germane as per clause 15        E
of FSA for termination of the agreement and the General
Manager (S&M) vide his letter dated 16.07.2009 has issued a
show cause to the appellants for termination of the agreement
on the ground of misuse of coal and institution of FIR. The
learned Single Judge, therefore, quashed the order directing       F·
suspension of supply of coal to the appellants and allowed the
writ petitions.

     5. The respondents then challenged the common judgment
and order dated 26.08.2009 before the Division Bench of the        G
Patna High Court in LP.A. Nos. 1265 and 1266 of 2009 and
in the common judgment and order dated 27.10.2009, the
Division Bench placed reliance on a judgment of the Division
Bench of the Patna High Court dated 05.07.2002 passed in
M/s. Central Coal Field Limited vs. Mis, Aman Lime Works
                                                                   H~
    526      SUPREME COURT REPORTS                  [2010] 11 S.C.R.

A (LPA No.701 of 2002) and held that in the larger interest,
  resumption of supply of coal cannot be directed by the court
  so long as the respondents do not consider the explanation of
  the appellants in response to the show cause notice issued by
  the respondents and allowed the appeals but directed the
B appellants to take a final decision pursuant to the show cause
  notice dated 16.07.2009 at an early date.

          6. Mr. Jaideep Gupta, learned counsel for the appellants,
    submitted that the reasons given by the Division Bench of the
C   High Court in reversing the order passed by the learned Single
    Judge are not correct. He submitted that the plants of the
    appellants, admittedly, were manufacturing smokeless fuel and
    the object of the FSA executed by the BCCL in favour of the
    appellants was to provide coal for the plants of the appellants
    manufacturing smokeless fuel and, therefore, suspension of
D   supplies of coal by BCCL without terminating the agreement
    (FSA) is unreasonable and arbitrary and violative of Article 14
    of the Constitution and for this reason the learned Single Judge
    had quashed the suspension of supplies of coal by the BCCL
    to the appellants. He further submitted that the BCCL
E   suspended supplies of coal to the plants of the appellants only
    on the basis of the allegations in the FIR lodged by the CBI.
    He argued that as BCCL did not have sufficient materials in
    its possession, the suspension of supplies of coal to the
    appellants was arbitrary and unreasonable and violative of
F   Article 14 of the Constitution. He cited the decisions of this
    Court in ABL International Ltd. & Anr. v. Export Credit
    Guarantee Corporation of India Ltd. & Ors. [(2004) 3 SCC
    553] and Noble Resources Ltd. v. State of Orissa & Anr.
    [(2006) 10 sec 236] for the proposition that a writ petition was
G   maintainable against the State and its instrumentalities and
    functionaries even in contractual matters of the State if their
    action is found to be violative of Article 14 of the Constitution
    or in the breach of public law or vitiated by mala tides or ulterior
    motives.
H
    SUSHILA CHEMICALS PVT. LTD. AND ANR. v.                  527
   BHARAT COKING COAL LTD. [A.K. PATNAIK, J.)
     7. Mr. Gupta next submitted that the learned Single Judge      A
of the High Court had rightly held that under Clause 13.1 of
FSA, suspension of coal supply is permitted only on the limited
ground of non-payment of the dues by the appellants to the
BCCL towards amount of the price of the coal and any interest
thereon and not on any other ground and, therefore, BCCL            B
could not suspend the supply of coal to the appellants on the
mere institution of the criminal case by the FIR lodged by the
CBI. He submitted that after the judgment and order of the
Division Bench of the High Court, the appellants submitted their
explanation in reply to the show-cause notice dated 16.07.2009      c
of the BCCL, but the BCCL has passed the orders on
03.02.2010 holding that the appellants have failed to submit
substantial proof regarding end use of the coal in their plants
for which the coal was delivered as per FSA and hence
resumption of supply of coal to the appellants cannot be agreed     D
to. He submitted that since the. respondents have not terminated
FSA for supply of coal to the appellants this Court should direct
the respondents to resume supply of coal to the appellants.

      8. Mr. Anupam Das, learned counsel for the respondents,
submitted that the FIR lodged by a premier investigating            E
agency like the CBI and the chequered history of the appellants
before the FIR were sufficient for the BCCL to suspend the
supply of coal to the appellants under FSA. He submitted that
in any case investigation into the allegations made in the FIR
has already been completed by the CBI and charge sheet has          F
been filed against the appellants which vindicate the stand taken
by the respondents that the appellants were diverting coal meant
for their plants for sale in the open market.

      9. Mr. Das further submitted that the Division Bench of the   G
Patna High Court has rightly held that in larger public interest
resumption of supply of coal could not be ordered. He submitted
that in the orders dated 03.02.2010 the BCCL have taken view
that the documents submitted on behalf of the appellants only
prove payment of sales tax and the appellants have failed to
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    528      SUPREME COURT REPORTS                 [2010] 11 S.C.R.


A submit substantial proof regarding the end use of the coal in
  the plants for which coal was delivered as per FSA and hence
  the resumption of supply of coal to the appellants cannot be
  agreed to.

          10. Mr. Das cited the observations of this Court in Ashoka
8
    Smokeless Coal India (P) Ltd. & Ors. Vs. Union of India &
    Ors. [(2007) 2 SCC 640] in Para 188 at Page 703 on the need
    to control black marketing and mis-utilization of coal. He
    submitted that it is pursuant to these observations of this Court
    that the new Coal Distribution Policy has been framed to
C   discontinue the Linkage System which could not check the
    menace of black marketing and diversion of coal to the open
    market and supply of coal on strict terms and conditions
    stipulated in FSA to the consumers has been contemplated to
    ensure proper utilization of the coal in the plants. He submitted
D   that this is why in Clause 4.4 of the FSA it is clearly provided
    that the total quantity of coal supplied to the appellants under
    the agreement is meant for use in the plants of the appellants
    and the appellants shall not sell/divert and/or transfer the coal
    for any purpose whatsoever and in the event they engage or
E   plans to engage into any such resale or trade, the BCCL shall
    terminate the FSA forthwith without any liabilities and damages
    whatsoever payable to the appellants. He submitted that
    therefore the BCCL can suspend supply of coal to the
    appellants if the appellants have not been able to establish that ·
F   the coal already supplied to the appellants has been used in
    the plants of the appellants. He submitted that Clause 13 of
    FSA, which provides that if the appellants fail to pay any amount
    including any interest due to the BCCL towards purchase price
    of the coal the BCCL can suspend supply of coal to the
G   appellants, is not exhaustive of the contingencies in which the
    BCCL can suspend supply of coal to the appellants.

         11. We have considered the submissions of the learned
    counsel for the parties and we are unable to accept the
    contention of the appellants that the Division Bench of the High
H
   SUSHI LA CHEMICALS PVT. LTD. AND ANR. v.                    529
  BHARAT COKING COAL LTD. [A.K. PATNAIK, J.]

Court should have sustained the judgment and order of the             A
learned Single Judge of the High Court quashing the order
suspending the supplies of coal to the appellants under FSA.
The learned Single Judge of the High Court had held that BCCL
could not suspend the supplies of coal to the appellants on the
mere institution of a criminal case by the FIR lodged by the CBI.     B
The FIR lodged by the CBI contained allegations of mis-
utilization of the allotted coal and sale of the allotted coal by
the appellants in the open market. As a matter of fact, in the
charge sheet which has been filed after investigation in the
Court of Special Judge, CBI Cases, Dhanbad, it is stated that         c
a search was conducted at the plant premises of the appellants
in June 2009 by the CBI officials in the presence of
independent witnesses during which the plants of the appellants
were found to be non-functional and the names of employees/
worke.-s as per the Attendance Register as well as other              D
documents relating to sale of finished goods as produced by
the appellants were found to be fake and fabricated as full
particulars, addresses etc. were not provided in the records in
respect of such employees/workers engaged and purchasers
of finished goods and thus the quantity of coal issued to the
appellants-companies was not utilized in their plants but sold
                                                                      E
in the black-market. It was thus clear that there were materials
with the CBI in support of the allegations made in the FIR
against the appellants that they were not utilizing the allotted
coal in their plar:ts but were selling the same in black-market,
but these materials could not be placed before the Court              F
because the CBI was not impleaded as a respondent in the
writ petitions filed by the appellants.

     12. We further find that in the counter-affidavit filed in the
High Court in reply to the writ petitions filed by the appellants,    G
Coal India Limited and BCCL have pleaded that under Clause
4.4 of FSA the appellants were required to utilize the entire
quantity of coal allotted to them in their respective plants and
had undertaken not to sell/divert/transfer the coal for any
purpose whatsoever and as the FIR lodged by the CBI                   H
    530     SUPREME COURT REPORTS                   (2010] 11 S.C.R.


A disclosed breach of this clause of FSA, Coal India Limited and
  BCCL had to suspend the supplies of coal to prevent further
  diversion of coal by the appellants and this decision was taken
  pending a final decision regarding termination of FSA in terms
  of Clause 15 thereof. Thus, the case of the respondents herein
B before the High Court was that suspension of supply of coal
  has been ordered to prevent further diversion of coal by the
  appellants. The Coal India Limited and BCCL are Government
  Companies of the Government of India and are bound by the
  policy decisions of the Government of India, Ministry of Coal,
c and since under the new Coal Distribution Policy formulated
  pursuant to the observations of this Court in Ashoka Smokeless
  Coal India (P) Ltd. & Ors. v. Union of India & Ors. (supra) mis-
  utilization of allotted coal and black-marketing of such coal by
  the appellants was to be checked, the Coal 1f1dia Limited and
  BCCL did not act arbitrarily or unreasonably to suspend the
0
  supplies of coal under FSA to the appellants, If they entertained
  a serious doubt on the basis of the FIR lodged by the CBI that
  the supplies of coal, if made, to the appellants may be mis-
  utilized by the appellants and may be sold in the open market.

E         13. It is settled by a series of decisions of this Court
    starting from Kumari Shrilekha Vidyarthi v. State of U.P.
    [(1991) 1 sec 537] that even in the domain of contractual
    matters, the High Court can entertain a writ petition on the
    ground of violation of Article 14 of the Constitution when the
F impugned act of the State or its instrumentality is arbitrary, unfair
    or unreasonable or in breach of obligations under public law .
  . In Sterling Computers Ltd. v. Mis M & N Publications Limited
    and Others [(1993) 1 SCC 445) in para 28, however, this Court
    held:
G
          "Public authorities are essentially different from those of
         private persons. Even while taking decision in respect of
          commercial transactions a public authority must be guided
          by relevant considerations and not by irrelevant ones."

H Obviously, one such relevant consideration which the Coal India
    SUSHILA CHEMICALS PVT. LTD. AND ANR. v.                      531
   BHARAT COKING COAL LTD. [A.K. PATNAIK, J.]
Limited and BCCL as public authorities have to consider is               A
whether continuation of supply of coal to the appellants may not
lead to mis-utilization or black-marketing of the coal by the
appellants which are prohibited under FSA and the policy
decision of the Government considering the allegations made
by the CBI in the FIR on the basis of the reliable information           B
received.

      14. It is true as has been held by the learned Single Judge
of the High Court that Clause 13(1) of FSA provides that in the
event the appellants fail to pay any amount including any interest       C
due to BCCL under FSA within a period of 30 days of the same
falling due, BCCL shall have the right to suspend supplies of
coal to the appellants, but Clause 13( 1) does not stipulate that
in no other contingency the BCCL can suspend supplies of coal
under FSA to the appellants. Moreover, Clause 13(1) of FSA
enumerates the three options available to BCCL in case the               D
dues towards the price of coal and interest is not paid by the
appellants and it does not provide for the different
contingencies in which BCCL can suspend the supplies of coal
to the appellants. In our considered opinion, the BCCL will also
have the right to suspend supplies of coal to the appellants             E
where it has doubts that the appellants may mis-utilize the
allotted coal and divert o~ sell the same in open market
because, as would be clear from Clause 4.4 of the FSA and
the new Coal Distribution Policy decision dated 18.10.2007,
the very object of FSA as well as policy decision of the                 F
Government is to allot coal to the appellants for utilization in their
plants and not for any other purpose. Therefore, if the FIR
lodged by the CBI, which is a premier investigation agency of
the Central Government, created serious doubts that the allotted
coal may be diverted or sold in the open market instead of being         G
utilized in the plants of the appellants, the BCCL would be within
its rights to suspend the supplies of coal to the appellants till
the doubts are cleared in appropriate proceedings.

     15. The Division Bench of the High Court was, therefore,
                                                                         H
   532      SUPREME COURT REPORTS                [201 O] 11 S.C.R.


A right in setting aside the judgment and order of the learned
  Single Judge quashing the order of the BCCL suspending
  supplies of coal to the appellants. We accordingly dismiss these
  appeals with liberty to the appellants to challenge the orders
  dated 03.02.2010 in which the BCCL has held that the
B appellants have failed to submit substantial proof regarding the
  end use of the coal in their plants. No costs.

   D.G.                                      Appeals dismissed.