Coal India can't arbitrarily revise loading, transportation rates: SC

Coal India cant arbitrarily revise loading, transportation rates: SC

New Delhi: The Supreme Court has ruled that Coal India Limited (CIL), the country's largest miner, cannot revise the rates of loading and transportation by companies run by ex-servicemen without consulting the Defence Ministry's Directorate General of Resettlement (DGR).

The ruling by a bench comprising Justice Arun Mishra and Justice Amitava Rao came on a special leave petition by CIL and its subsidiary, Mahanadi Coal Limited, which challenged a Delhi High Court judgement quashing the miner's order revising the rates without consulting DGR.

In 1979, the ministries of energy and defence had formulated a scheme aimed at union- free captive transportation organisations in CIL and its subsidiaries by providing an opportunity to ex-servicemen for their resettlement.

The MoU drawn between CIL and DGR said the modalities of fixing rates and escalation to be paid yearly would be jontly formulated by them.

The representatives of the transport companies had, in a petition before the Delhi High Court, contended that CIL had been fixing rates between 1993-2001 as per the MoU, which amounted to a 7-8 per cent increaseanually. Thereafter, CIL had been revising the rates without consulting the DGR.

A single judge bench of Justice Rajiv Shakdher had upheld the petition and CIL then went in appeal.

A division bench comprising Chief Justice G. Rohini (since retired) and Justice Jayant Nath dismissed the appeal, noting: "There is a specific clause in the MoU providing for fixation of rates and escalation on a yearly basis and in consultation with DGR. A clear finding has been recorded that the CIL failed to adhere to this requirement. The fact that there was no consultation with DGR has been reiterated before us by the counsel appearing for DGR," the court noted.

The court also expressed its displeasure over CIL's failure to file its reply contradicting the specific plea of the petitioners that the MoU's provision was not adhered to by it. Justice Shakdher had also noted that CIL, despite being issued notice in the case, had not responded.

The ex-servicemen's transport companies have been making representations since 2009 for enhancement of rates on a yearly basis. Khushi Coal Transport counsel T.L. Garg pointed out that while the CIL's profits had increased from Rs 5,744 crore to Rs 21,272 crore between 2008 and 2012, the firms had been denied their dues.

The single judge had also said that it could not lose sight of the fact that the instant scheme, as well as several other such schemes, was formulated by the Union government to ensure robust rehabilitation of ex-servicemen, as a vast majority of this class of personnel retire at a relatively young age when compared to their civilian counterparts.

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