THE STATE OF BIHAR v. THE TATA IRON AND STEEL CO. LTD.

F The Judgment of the Court was delivered by

KULDIP SINGH, J. The Tata Iron and steel Company limited (the · Company), respondent in the appeal herein, is primarily engaged in the manufacture of iron and steeViron and steel materials. According to the Company, it owns captive "coking coal mines" _. has also installed "coke oven plants" within the factory premises • and as such such it comes within the defiiiition of 'colliery' under the Colliery Control Order, 1945 (the Order) promulgated by the Government of India. The State of Bihar, with the prior concurrence of the Central Government, and in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955, has issued an order called the Bihar Trade Articles (Lice~ Unification~·

STATEv. TATAIRONANDSTEEL[KULDIPSINGH,J.) 105

Order, 1984 (The Unification Order). The question for consideration in this appeal is whether the Company· is a 'dealer' within the Unification Order, and as such is governed by the provisions thereunder. A Division Bench of the Patna High Court has answered the question in the negative and in favour of the conipany. This appeal by the State of Bihar is against the judgment of the Patna High Court dated April 14, 1988. B The Company has its registered office at Bombay and its integrated steel plant at Jamshedpur. The captive coking coal mines of the Company are in the Jharia Coal Fields and at West Bolcaro in the State of Bihar. The coking coal extracted and raised from the mines is beneficiated in the coal w¥hing plants, sterlised Jamaduba and West Bakaro and thereafter the entire production is transferred to the Company's coke over plants at Jamshedpur for converting the same into Hard Coke meant for use in the blast furnaces. According to the Company about 85 per cent of its coal requirement is received from the captive coal mines and the remaining 15 per cent procured indigenously or by import from abroad. It is asserted by the Company that for the purpose of Steel manufacturing only metallurgi- cal quality of coke is used and for that purpose the coking coal, whether received from the captive coal mines or otherwise, is converted into metal- lurgical coke through the process of coke over plants. According to the Company inferior quality of coke such as middlings, and coal rejects produced at the Company's collieries and some of the coke fractions such E a coke breeze, pearl coke, etc. produced at its oven plants which are not of metallurgical quality and not capable of being used in its steel plant that are sold and disposed of by the Company. It is stated that the disposal of such unwanted and unusable material arising in the continuous process of the integrated manufacturing operation becomes a necessity for preventing congestion in the steel plant.

The Supply Inspector of the State of Bihar seized six trucks loaded with c0ke breeze which were sold by the. Company without obtaining licence as envisaged under the Unification Order. Criminal Proceedings under Section 7 of the Essential Commodities Act, 1955 for violation of the Unification Order were also initiat.ed against the Company, which was challenged by way of a writ petition before the Patna Court. The primary contention of the Company before the High Court was that it being colliery under the Order which was Central Government promulgation, the Unification Order issued by the State Government, was not applicable. The H

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A High Court by the judgment dated November 12, 1986 dismissed the writ petition. The Company challenged the judgment of the High Court by way · of special le.ave petition before this Court. this Court in Civil Appeal 576 of 1986 decided on December 3, f987 set aside the judgment of the High Court and remanded the matter for fresh decision. The operative part of the order is as under : B "We are of the view that very contentious issues were involved in the matter. The aspects that required examination could riot have been disposed of in the matter in which the Division Bench has dealt with it. The questjon as to whether the appellants are dealers, c has to be-examined-a{without the appellants being a dealer within the meaning of the 1984 order, no liability to comply with the impugned requirements of the Order, would arise. Even Mr. Jai Narain found it difficult to ask for sustaining the impugned order as relevant aspect have not been examined. Taking all these aspects into consideration, we set aside the order of the High Court and remit the matter to it for fresh disposal on merits after hearing the . parties. Full opportunity should be given to the parties to place their arguments and the case should be disposed of in accordanee with law. We did not intend to express any opinion on merit and' if anything has been said it should be taken by way of justifieatj.on for the remit."

On remand, the. High Court heard the parties afresh and ,by the impugned judgment dated April 14, 1988 allowed the writ petition. The High Court came to the conclusion that the Company was a colliery and as such was governed by the provisions of the Order. The High Court F reached the said conclusion on the following reasoning. ·

"8. As noticed above, the Company is the owner of coal mines as well as coke oven plant. Colliery within the meaning of the defini- tion of the Central Order not only means any mine or open working . where the getting of coal is the principal object of the mining, G quarrying or ·other operations carried on therein but includes a plant for the production of coke or for the washing of ooal. In view of the inclusive definition, eoke oven plant and coal washeries arc also collieries within the meaning of that Order. . .

9Copy pinpoint9. Learned Standing Counsel ~.that the word 'include'

__STATEv. TATA IRON ANDSTEEL[KULDIPSINOH,J.) 107

in the context mean only such coke oven plant which is near the vicinity of a -coal mine and shall be a colliery. This submission cannot be accepted. The word 'include' is generally used as a word of extension and when this word is used it adds to the word or phrase a meaning which does not naturally belong to it. The word · 'colliery' ordinarily will signify a coal mine, but because of the use of the word 'include' in the defu}ition of· Colliery, it must be construed as comprehending not only · such things as it signify according to its natural import, but also those things which the "'!" interpretation clause declares that they shall include. Thus where 'includes' has an extending force, it adds to the word or phrase a meaning which does not belong to it. Reference may be made to the South Gujarat Roofing 1iles Manufacturers Association and another v. The State of Gujarat and another, (1976) 4 SCC 601.

10Copy pinpoint10. The word 'colliery' as defined in the Central Order does not envisage that coke oven plant must be near about or in the vicinity of the coal mine. We. may mention that coal mines and coke oven plant belonging to the Company have not been nationalised under the Coking Coal Mines (Nationalisation) Act, 1972 or the Coal Mines (NatiOQalisation) Act, 1973. It must, therefore, be held that the coke oven plant at Jamshedpur belong- ing to the Company is a 'colliery' within the meaning of the Central E Order". ·

· The High Court further followed its earlier judgment in Black Diamond Industries and others v. Coal Controller and others, (1986) B.L.T. (Repons) 127, and held as under : F . "For the reasons given in Black Diamond Case, it must be held that to the coke oven plant at Jamshedpur, the Central Order applies ~d the Unification Order shall have no application.• ' . In Black Diamond's case, a Division Bench of the High Court ex- amined the provisions of the Order and also the Unification Order, and G came to the conclusio~ that the two operated U.. different fields. The Bench further came to the conclusion that the Order dealt with producers -of coking coal" whereas the Unification Order was only applicable to thQSe · who were not the producers of coal. It would be useful to reproduce the -~ Court reasoning in BliCk Diamond's case, which .is as under : . H

p. 108 Copy page pinpoint

A "A comparison of the different provisions of the Orders noticed above, brings out this picture. Colliery Control order is applicable throughout India and deals with coal including coke. The provisions which are found in the Coal Controli9rder, Unification Order and Display Order with regard to sale,\rpurchase, storage price, inspection, compliance of order given by different authorities B under those orders and filing of returns are also provided in the Colliery Control Order. Colliery Control Order further provides for regulating production of coal which is not there in any of the Bihar Orders. Colliery Control Order is a special statute which deals with colliery which means a mine or open working where the c heating of coal is the principal object of the mining, quarrying or other operations carried on therein and includes a plant for the production of coke. None of the Bihar Orders deal in colliery. The very significant difference between Colliery Control Order on one hand and the Bihar Orders on the other is that whereas the former order specifically deals with colliery and producers of coal, the D latter Orders, i.e., Bihar Orders do not specifically include them but purport to deal with all dealers of coal.

Respondents want us to include within the ambit of 'dealer' in Bihar Orders producers of coal also. This cannot be done. Firstly, E Colliery Control Order .deals with producers of coal and the definition of 'dealer' in Bihar Orders do not include producers of coal. Secondly, Colliery Control Order is an exhaustive Code in respect of Colliery. If Bihar Orders are made applicable to Col- liery, then these Orders will come in conflict with Colliery Control F Order. But this conflict can bC avoided if it is held that Bihar Orders do not apply to Colliery. Thirdly, according to. the respon- dents, when Colliery Control Order and Bihar Orders operate in · different fields, there is no scope for holding that Bihar Order will operate also in the field covered by Colliery Control Order.

G It was urged on behalf of the respondents that in the Colliery Control Order, there is no provision for obtaining a licence. This appears, to be true, but the issuanee of licenr . · under the Unifica- tion Order ~ meant for controlling the sale, purchase, and storage and contravention of teims and conditions of the licence has been H u ~de penal Colliery owners, Who are the petitioners, are re~

STATE v. TATA IRON AND STEEL [KULDIP SINGH, J.] 109.

quired to obtain licence under the Unification Order, that must A. be for the purpose that production, sale, purchase and storage of coke may be regulated within the terms and conditions of the licence. Since the State Government cannot regulate the produc- tion, sale, purchase and storage of coke colliery owner, no licence is required to be taken by the colliery owners under the unification B Order."

Learned counsel for the State of Bihar has vehemently contended that the coke oven plants of the Comp:iny having been constructed within the factory premises at Jamshedpur, it cannot be considered to be a part of the coal mine and as such cannot come within the definition of 'colliery' C under the Order. To appreciate the argument, it would be useful to examine the definition of 'colliery' given under clause 2(2) of the Order t which is as under : ·

'"Colliery' means any mine or open working where the getting of coal is the principal object of the mining, quarrying or other operations carried on therein and includes a plant for the produc- tion of coke of for the washing of coal."

A plain reading of the above quoted definition makes it clear that it specifically includes 'a plant for the production of coke or for the washing of coal'. The inclusive definition has been given with a purpose. Ordinarily, the coke oven plant is at a place where coking coal is converted into Hard Coke for the purposes of using the same in the industry. Coke oven plants are, therefore, set up !J.t various places where Hard Coke is needed for the industry. Since hard coke also comes within the definition of 'Coal' under the Order and is subject to control by the Central Government authorities, the· coke oven plants which produce hard coke have been rightly included in the definition of 'colliery'. We agree with the above quoted reasoning given by the High Court in reaching the conclusion that the Company i,c; a colliery under the Order. G The crucial question to be considered is whether a colliery which is governed by the Order can, in addition, be made to follow the provisions of the Unification Order issued by the State Government. We may, there- fore, briefly examine the provisions of the Order and the Unification ~~ H

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A Clause 4 of the Order provides that the Central Government may fix the price at which or the maximum or the minimum price, or both, subject to which coal may be sold by colliery owners. Under Clause 5 no colliery owner or his agent can sell, and no person can purchase coal at a price . which is in excess of the price or the maximum price or below the price or the minimum price fixed under clause 4.· Clause 7 lays down that every colliery owner or an allottee of coal under the Order shall, on being requested to do so, submit returns and other information in such form and within such time as .may be specified in the notice or direction. Clause 8 provides that the Central Government may from time to time issue such directions as it thinks fit to any colliery owner regulating the disposal of his stocks of coal or or the expected output of coal in the colliery, during any period. Under clause lOA the Coal Controller may by order direct that any coal despatched by any colliery owner which is in transit shall subject to such terms and conditions, if any, as the Coal Controller deems fit, be diverted and delivered to another person specified in the order. Oause 11 provides that the Central.Government may issue such direction5 as it thinks· fit to any colliery owner prolnoiting or limiting the mining or production . of any grade of coal. Oause 12B prohi'1its any person from using coal so allotted otherwise than in accordance with the conditions contained or incorporated in the order of allotment. Clause 12E provides that no person shall acquire or purchase any coal from a colliery and no colliery owner or • his agent shall despatch coal from the colliery except wider the ~uthority and in accordance with the conditions contained in a general or special authority from the Central Government. Clause 12G provides that not· withstanding anything contained in Clause 12A, 12B and 12E, any person may from September 15, 1975 without any order of allotment or authority acquire or purchase despatch or transfer· hard coke produced from beehive ovens, country ovens .and bye- product ovens, provided that nothing in this clause shall apply to hard coke in respect of which direction is issued by the Central Government under Clause 8 of the Order. It may be mentioned that by the notification dated July 24, 1967 the Central Government has authorized any person to acquire despatch or transfer without any order of allotment or written authority non coking coals of all grades produced in.all coal fields, coking ci:>als not required for metallurgical consumers and coal produced in Assam provided that such coal shall be consumed within H India.

STATEv. TATAIRONANDSTEEL(KULDIPSINGH,J.) 111

It is obvious from the provisions of the Order that it tends regulate from the stage of production to the stage of consumption including price control and inspection. Under the scheme of the Order, the coking coal from various coal mines is allotted to various persons. The provisions of the Order give wide powers to the Central Government to ensure that the coal extracted from the mines is properly utilised for the benefit of the industry and other purpose. Apart from that, the provisions of the Order · give wide powers to the Central Government to keep a track on the allotted coal so that the same is not mis-utilised .

.,.. The Unification order. defines that coal to mean coal, coke and other derivatives including soft and hard cokes of various grades. 'Dealer' has been defined under clause 2(e). 'Retail dealer' has been defined to mean a person engaged in the business of purchase, sale, or storage of any article specified in Schedule I for the purpose other than personal consumption within the storage limit fixed by the Government from time to time. 'Wholesale dealer' has been defined to mean a person engaged in business D . of purchase, sale or storage of any article specified in Schedule I for the purpose other than personal consumption within the storage limit fixed by the Government from time to time. 'Coal dump holder' means a person or firm appointed by or on behalf of the Government as such who is engaged in the business of storing coal from collieries on the basis of allocation made by the Government or by any ~uthority empowered by the State B Government for sale to retail dealers. Part II of the Unification Order provides for. issuance of licence and prohibits a dealer to carry on business of purchase, sale or storage for sale of any of the trade articles mentioned in Schedule I, without a licence issued under the Order. Part ill of the Unification Order imposes restrictions relating to price, stock, etc. It F provides that the retail price of any trade article displayed in compliance with the provisions of the Display Order shall not exceed the retail price fixed or recommended by the Central Go\'.ernment or the State Govern- ment or manufacturer or distributor from time to time forthat trade article. It further provides that no dealer shall sell to any person any trade article at a price higher than that specified in respect of such article in the list of G prices and stocks and no dealer shall refuse to sell' such article to any . person at the price specified. No dealer shall sell any trade article to any person without issuing a cash memo or bill and without keeping a duplicate copy of such memo or bill. Clause 19 of the Unification Order requires every person holding stock of trade articles mentione~ in Schedule I .and H .

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A Schedule II to sell to the State Government or to any· person or class of persons the whole or specified part of the stock at such priee and in such manner as may be specified in the Order. Clause 20 provides that every dealer shall furnish a return to the prescribed authority from time to time as notified. It is laid down in Clause 21. that the licensing authority may by general or sp~cial order in writing require a dealer holding stock of trade B article to sell article on permits issued by the licensing authority. In P'art IV there are usu,al powers to call for information and issue direction to the · dealers.

The various provisions of the Unification order show that the pur- ..,,- C pose of the said· order is to make available scheduled articles to the public at fair price and without any holding of stock by the deaters. The object of the Unification Order in a nutshell is to make available the essential commodities to the public at large. ),

STATEv. TATAIRONAND.STEEL[KULDIPSINGH,J.) 113

provided lis consumed in India. When the said coal is sold in open market A --+ in the State of Bihar the provisions of the Unification Order, which are meant to protect the interest of the consumers, are squarely attracted and are to be followed even by a colliery which falls within the definition of 'Dealer' J under the said Order.

We may mention that both the Contr9l Orders emanate from the B same source. The Order has been issued by the Central Government, whereas the Unification order has been issued by the State Government of -~ Bihar as a delegate of the Central Government under the Essential Com- modities Act, 1955 and further, the Unification Order has been issued with the prior approval of the Central Government. .c / We, therefore, see no justification for the respondent-Company for not complying with the provisions of the Unification Order. The respon- dent-Company despite being a colliery is bound by the provisions of the Unification Order if it is found to be a dealer under the said Order. D The expression 'dealer' has been defined under clause 2(e) of the Unification Order which is as under :

"'dealer' means a person, a firm, an association of persons or a co-operative society other than a National and State level Co- operative society, engaged in the business of purchase, sale or storage for sale of any trade article whether or not in conjunction with any other business and includes his representative or agent but does not include - . "') (i) a person who hold or is in possession of agriculture land under any tenure or any capacity and on which he raises or has raised crop of foodgrains, oilseeds or whole· pulses;

(ii) a manufacturer of sugar ;

(iii) a producer of pluses and edible oil.• G ~ ... · The Patna High Court in Black Diamond's case came to the conclusion that the colliery being a producer of coal cannot come within the definition of 'dealer' under the Unification Order. We do not agree with the con- clusion of the High Court which is based on no rea8oning. It is the admitted _· case of the Company that they sell coal in the open market which has no H

i14 SUPREME COURT REPORTS [1995] 2 S.C.R.

. A metallurgical quality. In the written submissions filed on behalf of the Company by M/s. J.B. Dadachanji & Co., in paragraph 18 the percentage of clean coal and non-metallurgical coal has been given as un~er : -- "% of the product to the total input

B Jamadoba West Bokaro

Clean coal 62/65% 38/40%

Middlings 19/13% 38/40%

c Rejects 12/14% 8/10%

Slurry 7/8% 10/12% Tailings

Clean coal, the only prime quality product of pietallurgical quality is meant for manufacture of BP hard coke. All the remain- ing three are secondary products of the Washeries which are non-metallurgical quality."

There is thus no doubt that the quantity of non-metallurgical coal sold by the Company is not negligible. In any case, the Company is regularly selling non-metallurgical coal in ·the open market and as such it cannot be said - that it is not engaged in the business of sale or storage for sale of non- metallurgi.cal coal. We have no hesitation in~holding that the Company is a dealer under the Unification Order. r~

F We, therefore, allow the appeal, set aside the impugned judgment of the Patna High Court and dismiss the writ petition filed by the Company before the High Court. We further hold that the Division Bench judgment of the Patna High Court in Black Diamond's case does not lay down correct law to the extent indicated by us above. The appellant shall be entitled to G its costs, which we quantify as Rs. 20,000.

T.NA Appeal allowed.