Report On Internship Ccl.docx

REPORT ON INTERNSHIP AT CENTRAL COALFIELDS LIMITED

INTERNSHIP PERIOD: 1ST JUNE’18 TO 21ST JUNE’18

SUBMITTED TO:

MRS. RICHA MITTAL Designation: Assistant Manager REPORTING OFFICER DEPARTMENT: LEGAL

SUBMITTED BY: TORSHA SAHA BA. LL.B (3rd YEAR) SCHOOL OF LAW, KIIT(Bhubaneshwar)

INTRODUCTION Central Coalfields Limited (CCL) a public sector undertaking, a subsidiary of Coal India Limited, an undertaking of the government of India. CCL manages the nationalized coal mines of the Coal Mines Authority, Central Division. CCL headquartered at Darbhanga House , Ranchi, Jharkhand. It was founded on 1 st November 1975. It presently has 62 operative mines ( 22 underground and 40 opencast) in areas of East Bokaro, West Bokaro, North Karanpura,South Karanpura, Ramgarh Giridih and Hutar. Their facilities include 7 washeries ( 5 coking coal and 2 non- coking coal) , 1 cnetral workshop (Barkakhana), 5 regional workshops.

CCL earned Mini Ratna status in 2007. Ashok porject, Piparwar Project, Magadh Project and Amarpali Project are among the largest projects of India.

ACKNOWLEDGEMENT I would like to express my special thanks of gratitude to General Manager (legal) MR. Partha Bhattacherjee and my thesis advisor Mrs. Richa Mittal, who helped me in completing my report which also helped in doing research works and I also came to know many things about CCL and the matters related to cases. I would also like to thank HRD department for granting me this golden opportunity to study about CCL. I would also thank other officers in the legal department, friends and my parents who helped me a lot in finalizing this project.

1. M/S. Upendra Prasad and Brothers vs CCL (WP[c] No./2001/16) Facts: An e-tender was put on by CCL dated 7/07/13 which was successfully was granted in favour of the petitioners on date 2/05/14 and all necessary documents were annexed on date 9/6/14. The petitioners started their work on the site from 1/11/14 and various challenges were faced by them for the same. Petitioners did not inform the same to the respondents. Various criminal activities and protests were showed by naxalites on the site for which the petitioners also went to the police. Respondents finally terminated or canceled the e-tender. A writ petition was filed by the petitioner.

Issue: Whether the e-tender canceled by the respondent was legal?

Arguments on behalf of Petitioners:  Respondent has canceled the entire work order granted to the petitioner and also forfeited the amount of performance security and retention money furnished by Petitioner against the work order is illegal, arbitary and malafide in manner.  The petitioner had raised all its difficulties, circumstances, incidents etc. which are being faced by them while executing the contract work.  Respondent may take coercive action against petitioner by the way of recovery of the alleged penalty/ damages from the other contractual work of the petitioner awarded by the petitioner.  The petitioner had taken effective steps for execution of the work and deployed its men, machineries and tried to execute and meet whatever possible target was available with the petitioner.  Petitioner raised various running account bills but respondent did not release bills of coal which was pending since 15th May 2015 and the bill of OB which was pending since July 2015 was bent upon to terminate the contract.  Petitioner has made every attempt to execute the work and has requested CCL to provide adequate security and safety because the work was falling under naxalite area.  There was a huge delay in release of duns by respondent and difference in the bill of the petitioners and that of respondent.

 Respondents have failed to provide any security and safety, also men and machineries for the same.  Invocation of bank guarantees by CCL is illegal and arbitary.  Entire action of CCL is arbitary and illegal and malafide.

Arguments on behalf of Respondent:  The writ petition is not maintainable as disputes b/w the parties are purely of civil nature arising out of non-statutory contract. Petitioner must approach civil court of competent court with jurisdiction.  Cancellation of the tender was under conditions of NIT, GTC and agreement of the contract.  Petitioner has deliberately committed various breach of terms and conditions of the contract failed in spite of various opportunities.  Respondent have right to cancel the work and pass order in terms of agreement and petitioner is liable to face the consequences.  Petitioner has never deployed sufficient men and machineries for work.  The bills were paid by CCL raised by petitioner. The coal bill since 2015 hasn’t been asked by the petitioner.

 Repeated opportunities were granted to the petitioner to improve their performance and execute the contract. Petitioner never cared to execute work in terms of the agreement.  Petitioner was always at liberty to lodge a complaint to local police. It is a mere excuse, as CCL has provided sufficient personnel.  CCL warned the petitioners to improve his performance by letters.  Site was properly handed over the petitioner and at the time of handing over , there was no whisper of any disturbance by any so called unlawful element. An Affidavit was filed by the petitioners to which a counter affidavit was filed by the respondent. A rejoinder has been filed by the petitioner. No order has been passed by the court until now.

2. Krishna Gopal Tiwary and Ors. VS

Union of India(through

secretary) and ORS. Facts: The petitioners retired from the respondent no. 3 company CCL, i.e petitioner no.1 retired on 31/10/2009 and petitioner no.2 on 31/01/2009. The gratuity was given to the petitioners under Section 4 of Payment of Gratuity Act,1972 for which the required calculated taxes were deducted from the amount paid to them, but the same law was amended on 18th May, 2010 and enforced by official gazette on 24th May,2010. Petitioners filed a suit against the respondents, for asking to grant them the benefit under the amended law with a retrospective application of the order by official gazette, firstly in Jharkhand High Court and then moved to the honorable Supreme Court through Special Leave Petition.

There are total six petitioners and four respondents. Issue: a) Whether the income tax deducted amount above 6.5 lakhs accordingly is made with jurisdiction and duty bound or not? b) Whether justice is granted in the name of social security provided under the responsible legislation? c) Whether prescribed cut off date is discriminative and violative of Article 14 of Constitution of India? d) What is the true scope of section 1 (2) of Payment of Gratuity Act,1972? e) Whether CPSE’s employees will be benefited by the order who retired prior to 24 th May,2010 (after the amendment)? Arguments on behalf of Petitioners:  The prescribed cut off date is discriminative and violative of Article 14 of Constitution of India as it totally divides the group of “retired employees” into two and discriminates on the same ground.  After the amendment was put into force, it could be seen that the limit of deduction of income tax on gratuity paid by the respondents was increased from 6.5lakhs to 10lakhs.  Income taxes deducted on petitioners’ gratuity was about 1.5lakhs-2lakhs, which is quite a huge amount in itself. The petitioners contests that this amount should be refunded to their accounts keeping in mind the retrospective effect of the official gazette notification mentioned in this case.  Previously such orders had been passed by the respondents with retrospective effect of one year. Therefore, the petitioners appeal to pass this order with the retrospective effect in order to promote justice and equality.

Arguments on behalf of Respondents:

 It is clearly mentioned in the official gazette notification that the amended law will be enforced from 24th May 2010, and the petitioners have already retired from the respondent company before the enforcement of the above law.  It is clear that for every such amendments being made in law will divide the groups into one who has the benefit and other, who does’nt.  If retrospective effect is enforced then, the retired employees of the previous years will also contest for the same and the same will go on.

Important cases referred by respondents: i. UOI vs Parameswaram Match works ii. Hatisingh Mfg. Co. Ltd. vs UOI iii. Bhikuse Yamasa Kshatriya (P) Ltd. Vs UOI iv. UOI vs Sudhir Kumar Jaiswal

SLP has been filed and ORDER has not been passed yet.

3. Godavari Commodities vs CCL WPC 5826/17 Facts: The sole business of petitioners consists of purchasing coal through e-auction that are being put for sale by college, through it's subsidies companies.The instant writ petition was filed on behalf of petitioners jointly in as much as all petitioners are aggrieved by the steps taken by the respondents in demanding amount on account of contribution DMF.

Issue: Whether the petitioner or the respondent shall pay the DMF, District mineral foundation? Arguments on behalf of Petitioners:  Sale under e-auction is a one time, independent and complete transaction and it is not continuous sale like FSA.  On advice from service providers of respondent no.1 ,petitioners deposit Money through banking instruments like RTGS and NEFT.  Notice dated 26 Oct 16, issued by resp. 3 and statement of demand Issued by resp 3, bills issued by resp. 6 to some petitioners etc.The petitioner no 1, also received bills on 30 April 2016, and demand statements were posted in website of respective subsidiaries . From the said notice, bills and the statement if demands, petitioners came to know that respondent no. 3,6,8,10 and 12 are seeking to collect DMF and National mineral exploration trust, 30% of the royalty with effect 12 Jan 2015, for coal obtained on and from 2015.  Petitioners stated that they came to know that notification dated 20th October,15 later amended on 31wt Aug,2016 which was published in gazette of India extraordinary, that the contribution towards dmf was to paid from 12th Jan’15.  Petitioners state that from mines and minerals rules 2015, it is clear that contribution towards dmf ur required to be paid by holder of a mining lease or a prospecting license cum mining lease. Petitioner state that the respondent 1 and all

subsidiaries included 3,6,8,10 and 12 are holder of mining lease in terms of section 5(2) of coal mines act, 1973.  In terms of section 9B, as also mines and minerals rules 2015, the said amount is exclusively payable by the holder of the mining lease or prospecting license cum mining lease, there is no scope what's over to pass off the same to consumers of the coal.  It is to be paid as compensation which is payable by holder of mining lease for adversely affecting the area under mining operation.  The impunged notices, demands and bills is in complete violation of clause 4.4 of the spot e-auction scheme, and section 9B of the mines and minerals act, 1957.  Respondents have already realized profit by selling coal at the highest possible price and as such there can be no retrospective deduction.  Even in conditions written in the sale order, it is clearly mentioned that price of coal will be as on date of actual delivery. After taking delivery of coal there is no obligation for the petitioners to pay any enhanced amount far less 12th Jan 2015.  Even then the money has been Deducted from the customer code of petitioners for no rhyme or reason (arbitrary in nature).  Respondents cannot recover any amount from the petitioners with retrospective effect in as much as any amount if at all payable shall be payable by respondents.  Concerned respondents have violated article 4 and 19(1)(g) of the Constitution of India. Article 21 is violated in as much as the petitioners have to borrow money from banks after paying commercial rate of interest which is very high.  The notices,bills and demands are wholly without jurisdiction.  There is no scope to realize any payment with retrospective effect from 12 th Jan 2015 which should be paid by respondents.

ORDER has not been passed yet.

4. M/s Adhunik Alloys and Power Ltd. Vs CCL and Ors. WPC 4178/16 Facts: The respondent took initiative for executing tapering linkage . Petitioner was alloted the DRI plant. Two agreements were executed by respondent with the petitioner. 1st agreement was made on 23rd June 2009 for Kilm-I and 2nd agreement was

made on 23rd February 2009, valid for 5 years. 40% add on to be paid by the petitioner, charged by the respondent was notified to them. On 10 th July, extention of agreement of 23rd June 2008,for 3 months more was done or till new tapering policy is made whichever is earlier. 21st July, CCL also granted extention with 40% increase on basic pay on coal. Petitioner did not pay the 40% basic as it is already discharged by the them. FSA was withdrawn and the respondent claimed 13.46crs and also the 40% basic pay on coal supplied by them to petitioners. Petitioner files a suit in court.

Issues: a) Whether petitioner is liable to pay add on basic price of coal supplied in accordance to FSA made on 23rd July,2009? b) Whether petitioner is liable to pay approx 13.46crores after the petitioner has already made payment of entire amount respect to coal supplied to it by the respondents? c) Whether the action is in violation of Article 14 and 19(g) of Constitution of India? d) Whether action of respondent is wholly illegal and contrary to the dealer decision taken by respondent CCL? e) Whether the bank guarantess can be encashed of group company i.e M/s Adhunik Natural Resources and Power Limited which is completely a separate company separate legal entity with that of the petitioner?

Arguments on behalf of Petitioner:  Petitioner contends that they are group companies but are different jurisdic personality in the eyes of law.  Both companies have different income tax accounts, sales tax accounts, excise registration.  No co-relation between the two companies except the fact that at initial stage, it had some common promoters.  Invocation of bank guarantees if it is satisfied that such invocation of bank guarantee leads to fraud, rise to special equity injunction or irretrieval damage to petitioner.

 FSA / MOU does’nt enable the respondents to encash bank guarantees. Therefore, the very encashment of the bank guarantees is contrary to law.  Petitioner is not liable to pay add on basic price of coal supplied in accordance to FSA made on 23rd July,2009 as the petitioner has already paid all the necessary bills regarding the coal supply by the respondent.  Petitioner is not liable to pay approx 13.46crores after the petitioner has already made payment of entire amount respect to coal supplied to it by the respondents.

Arguments on behalf of Respondent:  Both the companies are same as they share a common website.  Have/had same directors and had same address.  Amount of issue is public money.  Stated that the contention is that a public money can be recovered by invoking group concept and enforcing liability.  It is established that bank guarantee constitutes independent and separate contacts is confined to beneficiary, interface of the other party is irrelevant.  CCL was well within its rights to invoke the bank guarantee, it was rightly invocked and bank has acted rightly.  It is also stated in enumerous cases that it is contended that a subsidiary corporation is so far owned and controlled by another as to make the parent corporation responsible for acts and obligations of subsidiary.  These are sister companies.  Act of encashing 2crores approx. is correct, as the pending amount is of the government and to amount prevent loss by deceitful means and misrepresentations by a private company, such action has been taken after lifting corporate veil and on being satisfied by that though both the companies are separate legal entity but are controlled by same group of persons which are sister concern. Action of the respondents stand justified.  The petitioner did not respond to communication made by CCL ffor 2.96crores, after no way it asked money from Adhunik Alloy company invocking their bank guarantee.

ORDER has been passed by Jharkhand High Court and LPA has been filed.

5. M/s. Adhunik Power and Natural Resource Ltd. Vs CCL & Ors.WPC 4179/16 Facts: The petitioner has a sister company named M/s Adhunaik Alloy and Power Ltd. which has bank guarantees kept in State Bank of India for the contracts made to the CCL, respondent. The respondent has tried repeatedly to communicate the sister company. After not being able to communicate the sister company regarding the bills and the pending work, the respondent has claimed encashment of the bank guarantees of the company of petitioner for the same.

Issues: Whether the act of the encashment of the bank guarantees in the name of another sister company done by respondent is arbitary, illegal and unjust?

Arguments on behalf of Petitioner:

 Petitioner contends that they are group companies but are different jurisdic personality in the eyes of law.  Petitioner do not have any control over the management or affairs of either of the company and both the companies are independant legal entities.  Both companies have different income tax accounts, sales tax accounts, excise registration.  No co-relation between the two companies except the fact that at initial stage, it had some common promoters.  Invocation of bank guarantees if it is satisfied that such invoccation of bank guarantee leads to fraud, rise to special equity injunction or irretrieval damage to petitioner.  FSA / MOU doesnt enable the respondents to encash bank gurantees. Therefore, the very encashment of the bank guarantees is contrary to law.

Arguments on behalf of Respondent:  Both the companies are same as they share a common website.  Have/had same directors and had same address.  Amount of issue is public money.  Stated that the contention is that a public money can be recovered by invoking group concept and enforcing liability.  It is established that bank guarantee constitutes independent and separate contacts is confined to beneficiary, interface of the other party is irrelevant.  CCL was well within its rights to invoke the bank guarantee, it was rightly invocked and bank has acted rightly.  It is also stated in enumerous cases that it is contended that a subsidiary corporation is so far owned and controlled by another as to make the parent corporation responsible for acts and obligations of subsidiary.  These are sister companies.  Act of encashing 2crores approx. is correct, as the pending amount is of the government and to amount prevent loss by deceitful means and misrepresentations by a private company, such action has been taken after lifting corporate veil and on

being satisfied by that though both the companies are separate legal entity but are controlled by same group of persons which are sister concern. Action of the respondents stand justified.  The petitioner did not respond to communication made by CCL ffor 2.96crores, after no way it asked money from Adhunaik Alloy company invocking their bank guarantee.

Updates on the case proceeding:  Writ petition was filed.  Affidavit was filed by petitioner  Counter affidavit was filed on behalf of the respondents.  Rejoinder filed by the petitioner  No reply to the rejoinder on behalf of the respondents  Additional affidavit was filed on behalf of the respondent ORDER has been passed by Jharkhand High Court and LPA has been filed.