Holding

The Coal Controller is a delegated authority whose powers are subject to, and may be overridden by, Central Government instructions; he cannot grant linkages beyond the limits set by the Central Government, and the applicable policy at the time of allotment governs the allocation.

Summary

The dispute concerned applications by several industrial units for coal allotment and linkages. The Coal Controller, under Clause 12A of the Colliery Control Order, 1945, allotted more than 5,000 tonnes of coal and granted linkages, contrary to a Central Government circular that limited linkages to 5,000 tonnes per month and required larger applications to be decided by the Ministry of Coal. The Joint Secretary, Ministry of Coal, subsequently issued an order stating that the Coal Controller was not authorized to grant long‑term linkages and that his allotments were subject to any later Central Government instructions. The High Court held that the Coal Controller could grant linkages and that the Central Government could not review his order, applying the position at the date of application. The Supreme Court reversed this, holding that the Coal Controller is a delegated authority bound by Central Government instructions, that the circular and later guidelines are binding, and that the applicable position is the one prevailing at the time of allotment, not at the time of application. Consequently, the High Court’s orders were set aside and the respondents' writ petitions dismissed.

Issues considered

The extent of the Coal Controller's authority to grant coal linkages, especially beyond the 5,000‑tonne limit.
Whether the Central Government may review or override orders of the Coal Controller under the Colliery Control Order, 1945.
The effect of subsequent Central Government circulars and guidelines on the Coal Controller's powers.
Whether the legal position at the date of application or at the date of allotment governs the allotment of coal.
Whether guidelines issued by a Director of the Ministry of Coal are binding on the Coal Controller.

Legislation cited

Essential Commodities Act, 1955s. 3

Subjects

Coal allocationColliery Control Order, 1945Central Government instructionsLinkagesAdministrative lawDelegated authorityReview of administrative actionVested rights

Judgment

THE CHIEF OF MARKETING (MARKETING DIVISION), COAL A
INDIA LTD. AND ANR.
v.
MEWAT CHEMICALS & TINY S.S.!. COAL PULVERISATION UNIT
AND ORS.

MARCH 26, 2004 B

[S.N. VARIAVA AND H.K. SEMA, JJ.]

Colliery Control Order, 1945:
c
Powers of Coal Controller-Scope and ambit of-Held: Although Coal
Controller was competent to allot coal, his orders were subject to Central
Government's instructions-The control of the Central Government was all
pervasive-Coal Conirol/er was not an authority equal to Central
Government-Hence, overruling the Coal Controller's order by the Central D
Government did not amount to a review-Moreover, Coal Controller not
_empowered to grant linkages of coal.

Clause 12-A--Guidelines issued by Director, Ministry a/Coal-Binding
nature of-Held: Was binding on the Coal Controller although such guidelines
not issued by the Joint Secretary (Coal). E
Clause 12-A-Allotment of coal-Central Government's instructions
in the matter of-Applicability-Held: Central Government's instructions on
the date of allotment took precedence over those on the date of filing of
application for allotment of coal-Hence, Coal Controller bound to apply
those instructions on the date of allotment and not those on the date offiling F
applications-Administrative Law.

The Central Government issued a Notification specifying the Coal
Controller as the competent authority to allot coal under the Colliery Control
Order, 1945. By another circular, the appellant was authorized to give coal G
clearances/linkages to the new applicants up to 5,000 tones per month and
applications for more than 5,000 tones per month were to be decided by the
Ministry of Coal.

The respondents had made applications for allotment of coal and had
597 H
598 SUPREME COURT REPORTS • [2004] 3 S.C.R.

A also applied for linkages. The High Court directed the Coal Controller to
consider the said applications within a certain period. The Joint Secretary
(Coal) pointed out that the Coal Controller was not authorized to give linkages
but could only allot coal.

Thereafter, by a circular, the then Director, Ministry of Coal specified
B that all grades of coal which were governed by notified prices should only be
allotted to power sector. It was also specified that other consumers of coal
had to be given coals of grades for which the prices have been decontrolled.

Subsequently, the Coal Controller in exercise of his power under Clause
12-A of the Colliery Control Order, 1945, allotted more than 5,000 tones of
c coal from two coalfields to the respondents. Thereafter, the Joint Secretary,
Ministry of Coal issued an order that the Coal Controller was not authorized
to grant any long term linkages and that allotment of coal by the Coal
Controller had to be subject to such instructions that the Central Government
may issue from time to time. The Joint Secretary also held that the order of
D the Coal Controller being contrary to the instructions issued by the Central
Government no action was to be taken to supply coal as per that order till a
final decision was taken by the Central Government.

The respondents filed a writ petition before the High Court challenging
the said order of the Joint Secretary. The High Court held that the Coal
E Controller was competent to grant linkages and that in any case he being a
competent authority the Central Government could not sit in review over the
order passed by the Coal Controller. It further held the allotment to the
respondents had to be governed by the position prevailing on the date they
made their applications. The High Court also held that the guidelines having
F been issued by a Director could not be said to be the guidelines issued by the
Central Government. Hence the appeal.

On behalf of the appellant, it was contended that under the Colliery
Control Order the control of the Central Government was all-pervasive; that
the Coal Controller was bound to comply with the instructions of the Central
G Government; and that the Coal Controller had no power to grant linkages
contrary to the instructions issued by the Central Government.

On behalf of the respondents, it was contended that that the Coal
Controller was an independent authority under the Colliery Control Order;
that he had the powers equal to those of the Central Government; and,
H therefore, the Central Government could not sit in Appeal over or Review
·-I:.

CHIEF OF MAKT. COAL INDIA LTD. 1·. MEWA T Cl IEMI. & TINY S.S.!. COAL PUL VERJSATION UNIT 599

the order of the Coal Controller and that the Coal Controller could grant A
linkages.

Disposing the appeal, the Court

HELD: 1. The various provisions of the Colliery Control Order, 1945
show that certain functions have been specifically given to the Coal Controller. B
However, Clause 12-A of the Order makes it clear that it is the Central
Government which has to specify who is the authority authorized to allot coal.
•
..... That authority is subject to the instructions issued by the Central Government
from time to time. Undoubtedly, under Clause 15 the Coal Controller may
also exercise the powers, which could be exercised by the Central Government
under the clauses mentioned therein. However, such a power is merely a
c
delegated power. The Coal Controller is not an authority equal to the Central
Government. Only the Central Government can decide policy matters in
respect of questions of production, distribution and sale of coal. 1609-E-F]

Coal India Ltd v. Continental Transport and Construction Corporation, D
11997] 9 sec 258, referred to.

2. The circular issued by the Central Government specified that
linkages could only be given up to 5,000 tones per month. This circular was
binding on the Coal Controller. 1610-D]
E
3. Even otherwise, there is no substance ill the submission that the
Order passed by the Joint Secretary (Coal), Ministry of Coal amounted to a
review of the order of the Coal Controller. Under Clause 12-A any order
passed by the Coal Controller is subject to the instructions issued by the
Central Government from time to time. These instructions may be prior
instructions or they may be subsequent instructions. Such a subsequent order
F
would not be a review. (610-G; 611-AI

4.1. The High Court was also in error ·in concluding that the position
prevailing on the date of the application must apply. It is settled law. that there
is no vested right when a per5on makes an application. The position prevailing
G
at the time of allotment is to apply. Before the allotment was made the
-\ Circular was issued by the Central Government. The Coal Controller whilst
... allotting was bound to take note of the Circular. The Joint Secretary (Coal)
had brought it to the notice of the Coal Controller. Thereafter, guidelines had
also been issued by the Director. The Coal Controller was bound to take note
of those guidelil!_es also. 1611-C-DI H
600 SUPREME COURT REPORTS 11004] 3 S.C.R.

A 4.2~ The High Court further erred in holding that those guidelines had
been issued by a Director and thus could not be said to be guidelines issued
by the Central Government. Those guidelines have been issued by the Ministry
of Coal. Merely because they are forwarded not by a Joint Secretary but by
a Director would not mean that they are not binding on the Coal Controller.
(611-D-E(
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6310of1998.

From the Judgment and Order dated 20.3.98 of the Calcutta High
Court in A.P.O. No. 483 of 1997.

c Harish N. Salve, S.K. Dholakia, G.L. Sanghi, N.N. Goswami, K.S.
Bhati, Rupesh Ranjan, Satish Mudgil, M.P. Jha, Ram Ekbal Roy. Harshvardhan
Jha, Anil K. Chopra, Ms. R. Pattanaik, Rajendra Kumar, N.D.8. Raju, Ms.
Bharathi, Ms. Prema Kumari, Goodwill lndeevar, Shakil Ahmed Syed, Anip
Sachthey, Shriniwas R. Khalap, E. Venu Kumar, Ilarshas V. Hameed, Hemant
D Sharma, Mrs. Anita Verma, Ajay Sharma, D.S. Mahra and Arvind Kumar
Sharma for the Appearing parties.

The Judgment of the Court was delivered by

S. N. VARIAVA, J. This Appeal is against the Judgment of the Calcutta
•
E High Court dated 20th March, 1998.

Briefly stated the facts are as follows:

In pursuance of the power under Section 3 of the Essential Commodities
Act, 1955 the Colliery Control Order was framed. Under Clause 12A of the
F Colliery Control Order the Central Government could by Notification speci~r
the authorities competent to allot quota of coal to any person or class of
persons. Clause l 2A further provides that every such authority shall allot
coal subject to such instructions as the Central Government may issue from
time to time.

G On 25th June, 1992 the Central Government issued a Notification
specifying the Coal Controller as the competent authority to allot coal. On
5th January, 1995 a Circular was issued by the Central Government specifying
that Coal India Ltd. would give coal clearances/linkages to the new applicants
up to 5,000 tones per month and applications for more than 5,000 tones per
H month were to be decided by the Ministry of Coal. This Circular also specified
that no allocation of coal could be made to private cookeries from any mines
CHIEFOFMAKT. COAL INDIA LTD_ i·. MEWATCHEMI & T.INY S.S.I COAL rULVERISATION UNIT(VARIAVA ,J] 601

that are linked to waslieries. A
It appears that the Respondents had made applications for allotment of
coal and had also applied for linkages. As their applications were not decided
they filed Writ Petitions which were .disposed off by an Order dated 25th
September, 1995. The Coal Controller was directed to consider the
representations of the Respondents within 6 weeks. On 8th January, 1996 the B
Joint Secretary (Coal), New Delhi sent a fax message to the Coal Collector
setting out that the Order of the High Court had not been complied with. It
was pointed out that the Coal Controller was not vested with the power to
give linkages, but that he could allot quota of coal. The Coal Controller was
requested to intimate the latest position.
c
Thereafter on 23rd April, 1996 a Circular was issued by the then
Director, Ministry of Coal, wherein it was specified that all grades of coal
which were governed by notified prices should only be allotted to power
sector. It was specified that other consumers of coal had to be given coals of
grades for which the prices have been decontrolled. This Circular also withdrew D
allotment of coal of D grade and below to small scale industries and Vriquetting
units.

On 21st June, 1996 the Coal Controller passed the following Order:

"Having heard at length to all the present Parties and gone through E
this Office Order dated 17th October '95 & 27th November '95 as
well as Ministry of Coal, Government of India's directive vide Ministry
of Coal letter No. 23028/18/95-CPD dated 9th November '95 in the
matter in pursuance of the Order of the Hon 'ble High Court at Calcutta
and the Inspection Report submitted by Coal India Ltd., vide their
letter No. CIL/C4B/489 !2/599-60 I dated 30.3.9613.4.96 in respect of F
all the petitioner Units, I, in exercise of the provision under Clause
- 12A of the Colliery Control Order, I 945, do hereby grant linkage/
quota of coal in quantities of 500 M.T. D, E & F Grade Steam/ROM
Coal per month (6000 M.T. per annum) from the sources of Northern
Coalfields Limited and 480 M.T. D, E & F Grade Steam/ROM Coal G
per month (5,760 M,T. per annum) from the sources of Eastern
Coalfields Limited by road/rail from the date of issuance of this Order

H
).

602 SUPREME COURT REPORTS [2004] 3 S.C.R.

A with the details noted below:

Name of the Allocation of Quantity Source with
Petitioner Tiny/ Quota of coal per annum mode of
SSI Units per month in with grade transportation
situated in the quantity &
B Distt. of grade of
Gurgaon
(Haryana)

I. Suraj Coal 500 m.te.D.E&F 6,000 m.te. N.C.L.
Chemicals Grade Steam/
c ROM Coal
& & &
480 M.te.D,E&F 5,760 m.te. E.C.L.
Grade Steam/
ROM coal
D 2.
Soni Coal
Chemicals " "
3. Anand Coal "
Plaster Industries
4. Jain Chemicals "
E 5. Jawala Coal
Chemicab
6. Harneja Coal "
Chemicals

F 7. Hariyana Chemicals " "
8. Mewat Chemicals "
9. Goel Chemicals "
Quota of the coal shall be despatched by Northern Coalfields
Ltd./Eastern Coalfields Ltd. to the above noted Tiny/SSI Units either
G
by road/rail as per the convenience of the Units."

On 30th July, 1996 the Joint Secretary, Ministry of Coal issued an Order that
the Coal Controller was not authorized to grant any long term linkages and .>
that allotment of coal by the Coal Controller had to be subject to such
H instructions that the Central Government may issue from time to time. It was
.,..
CHIEFOFMAKT.COALINDlA LID. r. MEWATC'HEMl.&TINYS S.1 COALPULVERIS1,TIONUNIT[VARIAVA,J.] 603

held that the above mentioned Order of the Coal Controller being contrary A
to the instructions issued by the Central Government no action was to be
taken to supply coal as per that order till a final decision was taken by the
Central Government.

The Respondents then filed a Writ Petition challenging the validity of
the Order dated 30th July, 1996. That Writ Petition came to be allowed by B
an Order dated 11th September, 1997. The Appeal of the Appellants has been
dismissed by the impugned Judgment dated 20th March, 1998. It has been
held that the Coal Controller was competent to grant linkages and that in any
case he being a competent authority the Central Government could not sit in
review over the order passed by the Coal Controller. It has also been held C
that the allotment to the Respondents has to be governed by the position
prevailing on the date they made their applications. It was held that as they
had made their applications prior to the issuance of Circular dated 23rd April,
1996 the restrictions laid down in that circular could not be applied whilst
considering the applications of the Respondents.
D
On behalf of the Appellants the submission has been that under the
Colliery Control Order the control of the Central Government is all pervasive.
It was submitted that the Coal Controller was bound to comply with the
instructions of the Central Government. It was submitted that the Coal
Controller had no power to grant linkages contrary to the instructions issued E
by the Central Government.

On the other hand, on behalf of the Respondents, the submission has
been that the Coal Controller is an independent authority under the Colliery
Control Order. It was submitted that he has powers equal to those of the
Central Government. It was submitted that the Coal Controller had power to F
make allotment, not only by virtue of order of the Central Government dated
25th June, 1992, but also under the provisions of the Colliery Control Order.
It was submitted that the Coal Controller being an authority equal to the
Central Government, the Central Government could not sit in Appeal or
Review over the order of the Coal Controller. It was submitted that the Coal
Controller could grant linkage. G
In order to consider the rival submissions one must look at the relevant
-'ll provisions of the Colliery Control Order. It must be remembered that the
Colliery Control Order is passed under the Essential Commodities Act. The
purpose being that the production, sale and distribution of certain commodities,
H
604 SUPREME COURT REPORTS [2004] 3 S.C.R.

A which are considered to be essential, should be controlled by the Central
Government. The relevant provisions of the Colliery Control Order read as
follows:

"2. In this Order, unless there is "nything repugnant in the subject or
context -
B
(I) 'Coal' includes anthracite, bituminous coal, lignite, peat and
any other form of carbonaceous matter sold or marketed as
coal and also coke.

(l)(a) 'Coal Controller' means the person appointed by the Central
c Government to hold the post of Coal Controller and include
the Joint Coal Controller and Deputy Coal Controller.

xxx xxx xxx

D 3. The Central Government may for the purpose of this Order
prescribe the classes, grades, sizes into which coal may be
categorized and the specifications for each such class, grade
or size of coal.

3A(I) The coal of any seam or section of a seam occurring in
E colliery shall be categorized into grades or sizes under this
order by the Owner, Agent or Manager of the colliery, in
accordance with the standards laid down by the Coal
controller. Initially, a provisional grade on the basis of seam
sample shall be fixed. As soon as may be thereafter, such
Owner, Agent or Manager shall cause wagon samples to be
F drawn. On the basis of the wagon samples drawn on at least
three different days, the final grade of seam or seams of a
particular colliery shall be fixed by such Owner, Agent Ol"
Manager.

(2) the final grade fixed for a seam or section of a seam may be
G altered by the Owner, Agent or Manager from time to time
on the basis of analysis of wagon samples, if such Owner,
Agent or Manager is satisfied that the grade, so fixed, could
not be maintained.

(2A)'The Coal Controller' may draw the samples from
H
CHIEF0f MAKT:COAL INDIA LTD_ 1·. f\'.IEWATCHEMI. & TINY S.S. I. COAL P0L VERlSATION UNIT(VARl/\VA_. J.] 605

underground, stock, wagons, trucks, conveyor or any other A
mode of transport at any reasonable time for the purpose of
checking the grade as dedared by the Owner, Agent or
Manager of the colliery.

(2B) The Owner, Agent or Manager of the colliery will provide
all reasonable facilities for drawing samples as mentioned in B
sub-clause (2A).

(2C) If on physical verification, the grade does not conform to
~ the grade as declared by the Owner, Agent or Manager of
the colliery or if the Coal Controller has reasons to believe
that the grades of coal, as declared by the Owner, Agent or c
Manager of the colliery, is not correct or the grades declared
by the Owner, Agent or Manager of the colliery are not
sustainable, he may determine the grade as obtained by
physical verification and direct the Owner, Agent or Manager
of the colliery to revise the grade to be effective from a date D
as directed by the Coal Controller.

(20) The grade, so determined by the Coal Controller either_ as
a settlement of a dispute or as a result of such verification,
shall be final and binding.

(2E) Coal Controller may issue such directives as deemed fit for
E
the purpose of declaration and maintainance of grades of
seem(s) or section of a seam mined in a colliery.

(2F)If it comes to the knowledge of the Coal Controller that any
colliery declared the grade of any seam of which there is no F
> valid permission for opening under clause 14, the Coal
Controller may withdraw the grade of the seam.

(3) If the production or despatch of coal from a seam or section
of a seam has stopped for a continuous period of 6 months
for any reason whatsoever, the grade fixed for the seam or G
section of the seam shall stand withdrawn. The Owner, Agent
or Manager of the colliery shall notify such withdrawal of
grades in the manner as prescribed by the Coal Controller.
"'-·
(4) The Coal Controller shall lay down the standards and methods
of sampling and analysis of coal which alone shall be sued H
606 SUPREME COURT REPOR rs [2004] 3 S.C.R.

A in declaration of grades or sizes of coal.

(5) If any disputes arises out of the declaration of grades and
sizes of coal, the same shall be referred to the Coal Controller
whose decision shall be binding on the Owner, Agent or .
Manager of the colliery. A memorandum of reference to the
B Coal Controller regarding such dispute shall be accompanied
by such fees not exceeding Rs. I 00 and in such manner as
may be notified by the Coal Controller from time to time in
the Official Gazette.

4.(1) The Central Government may by notification in the official
c Gazette, fix the sale price at which, or the maximum or the
minimum sale price or both, subject to which coal may be
sold by colliery owners and any such notification may fix
different prices -

(i) for different grades and sizes of coal and
D
(ii) for different collieries.

(2) Nothing contained in sub-clause(!) shall effect the sale of
coking coal and such grades of non-coking coal for which
no price has been fixed by the Central Government under
E this Order.

4A.( I) The Central Government may having regard to all the
relevant factors, including the geological and mining
conditions of and the mining technology employed in the
collieries by the colliery owner, as well as the estimated cost
F of production of coal and coke produced by such colliery
owner, fix by notification in the official Gazette, the retention
price in respect of each class, grade or size of coal and coke
produced and sold by such colliery owner.

(2) Nothing contained in sub-clause (I) shall effect the retention
G price of coking coal and such grades of non-coking coal for
which no retention price has been fixed by the Central
Government under this Order.

48.(1) The Central Government may specify any person or
authority including a Government Company who shall
H
CHIEF0Ff\1AKT.COALINDIALTD. 1·. f\1EWATCHEMl.&TINYS.S.I COALPULVERISATIONUNJT[VARIAVA,J] 607

maintain an account to be called the 'Coal Price Regulation A
Account.'

xxx xxx xxx

8. The Central Government may from time to time, issue such B
direction as it thinks fit to any colliery owner regulating the
disposal of his stocks of coal or of the expected output of
coal in the colliery during any period including direction as
to the class, grade, size and quantity of coal which may be
disposed of and person or class or description of persons to C
whom coal shall or shall not be disposed of, the order of
priority to be observed in such disposal and the stacking of
coal on Government account.

xxx xxx xxx

xxx xxx xxx D

9. Notwithstanding any contract to the contrary every colliery
to whom a direction is given under clause 8:-

(i) shall dispose of coal in accordance therewith;
E
(ii) shall not dispose of coal in contravention thereof.

I0.( I) Where a colliery owner has coal available for disposal not
covered by the directions issued under clause 8 or where
wagons are not available for despatch in accordance with
those directions, the colliery owner may, with the general or p
special permission of the Central Government, stack such
coal in Government account.

(2) Where any coal is stacked on Government account under
sub-clause (I) or otherwise, there shall be paid to the colliery
owner, in addition to the price payable for the coal, a sum G
for stacking at such rates as may be determined by general
or special order of the Central Government.

JOA(!) The Coal Controller with the Government of India may,
by order in writing, direct, that any coal despatched by any
colliery owner, or a person acting on behalf of a colliery H
608 SUPREME COURT REPORTS [2004] 3 S.C.R.

A owner, to any person, which is in transit, shall subject to
such terms and conditions, if any, as the said Coal Controller
deems fit, be diverted and delivered to another person
specified in the order.

xxx xxx xxx
B
xxx xxx xxx

11. The Central Government may issue such directions as it
thinks fit to any colliery owner prohibiting or limiting the
mining or production of any grade of coal and the colliery
c owrier shall comply with the directions.

12. No colliery or group of collieries which is or may hereafter
be worked as a single mining concern shall be sub-divided
and worked in separate parts except with the previous
permission of the Central Government, may at the time of
D granting permission or subsequently give to the owner or
owners concerned.

12A. the Central government may, by notification in the official
Gazette, specify the authorities competent to allot quota of
coal to any person or class of persons and every such
E authority shall allot such quota subject to such instructions
as the Central Government may issue from time to time.

12F. The Central Government may, for the purpose of securing
compliance with the provisions of clause I2E, specify from
time to time the Officers to whom applications for pennission
F to transport coal may be made by colliery owners, middleman
or persons to whom coal is allotted, the periods within which
and the form in which, such applications may be made, the
particulars to be entered therein and any other matters
incidental thereto. The functions of the Central Government
under Clause I2F shall also be exerciseable by the Officers
G so specified.

xxx xxx xxx

H 15. The functions of the Central Government under clauses 8,
CHIEF OF l\1AKT_ COAL INDIA LTD. 1•. ~'1E\VATCHEMI & TINY SS I_ C'OAL rULVERISATION UNIT[VARIAVA ,J.] 609
JO, 11, 12, 12A, 12B, 12C, 12D, 12E, 12F, 13 and "J4 shall A
be exerciseable also by the Coal Controller with the
Government of India, the Deputy Coal Controller
(Distribution), the Deputy Coal Controller (Production) and
the Joint Deputy Coal Controller (Distribution).

xxx xxx xxx B
xxx xxx xxx
17. Every colliery owner, every person to whom coal is allotted
under this Order and every other person engaged in the
business of production, supply and distribution of or trade C
and commerce in coal, to whom any order or direction is
issued under any powers conferred by or under this Order
shall comply with such order or direction."

The above provisions show that certain functions have been specifically
given to the Coal Controller. However the control of the Central Government D
is all pervasive. Clause l 2A also makes it clear that it is the Central
Government who has to specify who is the authority authorized to allot coal.
That authority is subject to the instructions issued by the Central Government
from time to time. Undoubtedly, under Clause 15 the Coal Controller may
also exercise the powers which could be exercised by the Central Government
under the clauses mentioned therein. However, such a power is merely a E
delegated power. The Coal Controller is not an authority equal to the Central
Government. Only the Central.Government can decide policy matters in respect
of questions of production, distribution and sale of coal.

Both sides relied upon the authority of this Court in the case of Coal F
India Ltd v. Continental Transport and Construction C01poration reported
in [1997) 9 SCC 258. In this case; the Coal Controller had issued a direction
under Clause 8, to transfer an all6tment of coal from one colliery to another.
The direction of the Coal Control.Ier was challenged. No question arose whether
the Coal Controller· was bound by directions of the Central Government. The
question whether the Coal Controller would give linkage was not considered G
at all. This Court considered the powers of the Coal Controller, under the
Coal Control Order, to give directions. It was held that the Colliery Control
Order assigned an important role to the Coal Controller. It was held that it
was open to the Coal Controller, under Clause 8, to give directions regulating
disposal of stocks of coal by any colliery owner and that such directions may H
610 SUPREME COURT REPORTS [2004] 3 S.C.R.

A be as to class, grade, size a·nd quantity of coal which may be disposed of. It
was held that certain powers conferred on the Central Government could also
be exercised by the Coal Controller. We are unable to accept the submission
on behalf of the Respondents that this authority lays down that the Coal
Controller is an authority equal to that of the Central Government. In our
view, this authority merely states that the Coal Controller also has various
B powers vested in him under the Colliery Control Order and that _he could also
exercise certain powers given to the Central Government. Butthis authority
nowhere lays down that the Coal Controller can ignore instructions issued by
the Central Government. On the contrary in paragraph 11 of this Judgment
it has been held that a perusal of the provisions of Colliery Control Order
C shows that the control of the Central Government over the various activities
involving production, supply and distribution of coal is all pervasive.

It could not be denied that the Government had set up a Linkages
Committee which looked into the question of linkages and gave linkages. It
could not be denied that. the Coal Controller was aware that there was a
D Linkage Committee. The Circular dated 5th January, 1995 specified that
~inkages could only be given by Coal India Ltd. (upto 5000 tonnes per month)
and/or by the Ministry. This Circular was binding on the Coal Controller.

The order of the Coal Controller dated 21st June, 1996 shows that it
has been passed in pursuance of the powers given to him by the Central
E Government under Clause 12A of the Colliery Control Order. Clause 12A
clearly stipulates that such an authority is bound by the instructions issued by
the Central Government from time to time. The Circular dated 5th January,
1995 is an instruction which is binding on the Coal Controller under Clause
12A .. The Coal Controller being bound by such a Circular could not have
p given linkages in the manner he purported to do by his Order dated 25th
June, 1996.

Even otherwise, we see no substance in the submission that the Order
dated 30th July, 1996 passed by the Joint Secretary, Ministry of Coal amounted
to review of the order of the Coal Controller. Under Clause I2A any order
G passed by the Coal Controller is subject to instructions issued by the Central
Government from time to time. These instructions may be prior instructions
or they may be subsequent instructions. Thus, for example, the Coal Controller
may make an allotment which is within his power. Subsequently the Central
Government takes a policy decision that that coal is required for some other
H purpose. The Central Government can always issue a subsequent instructions
·' CHIEF OF MAKT. COAL !NOIA LTD_ r. MEWATCHEML & TINY SSI. COAL PUL \.ERISATION UNIT[\'ARIA VA, J.] 6} ]

~
overriding the order of the Coal Controller. Such a subsequent order would A
not be a review. It is the Central Government exercising power to issue
instructions from time to time. Such a power is categorically provided for in
Clause 12A of the Colliery Control Order. The High Court was therefore
clearly in error in holding that the Order dated 30th July, 1996 amounted to
a review.
B
In our view, the High court was also in error in concluding that the
position prevailing on the date of the application must appl_1. It is settled law
•
.... that there is no vested right when a person makes an application. The position
prevailing at the time the allotment is to apply. Before the allotment was
made the Circular dated 5th January, 1995 had already been issued. The Coal
Controller whilst allotting was bound to take note of that Circular. The Joint
c
Secretary by his fax dated 8th January, 1996 had brought it to the notice of
the Coal Controller. Thereafter guidelines had also been issued on 23rd April,
1996. The Coal Controller was bound to take note of those guidelines also.
We are unable to understand the reasoning given by the High Court that
those guidelines had been issued by a Director and thus could not be said to D
be guidelines issued by the Central Government. These guidelines have been
.... issued by the Ministry of Coal. Merely because they are forwarded not by a
Joint Secretary but by a Director would not mean that they are not binding
on the Coal Controller. If there was any doubt as to whether they had been
issued by the Centrai Government, the Coal Controller should have asked for
E
clarification from the Central Government.

In the above view, we find ourselves unable to sustain the Order of the
single Judge or the Division Bench. They are accordingly set aside. The Writ
Petitions filed by the Respondents stand dismissed.
F
).. It is submitted that the Appellants had deposited monies with ECL in
June 1998. It is submitted that those monies are still lying with ECL. It is
submitted that ECL should now deliver the coal. It was very fairly stated by
Mr. Salve that ECL would deliver D grade coal subject to the requirements
of power sector and subject to availability of D grade coal.
G
It was further submitted that monies have also been deposited with
NCL and against those monies coal should be supplied. However, those
-")[
monies were deposited pending this Appeal. They were deposited knowing
fully well that if the Appeal is decided against the Respondents they would
not be allotted coal from NCL. As the order of the Coal Controller has been
H
612 SUPREME COURT REPORTS [2004] 3 S.C.R.

A set aside the Respondents have no right to receive coal from NCL. Therefore, >-
they are not entitled to any coal from NCL. Thus NCL is directed to return
the monies to the Respondents within 15 days from today.

The Appeal stands disposed of accordingly. There will be no order as
to costs.
B
v.s.s. Appeal disposed of.

.1