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Our Legal Correspondent

Kolkata , March 21

Coal India has won a legal battle in the Calcutta High Court over a case pertaining to a contract for supply of explosives. A Division Bench of the High Court comprising the Chief Justice, Mr V.S. Sirpurkar, and Mr Justice A.K. Mitra on Tuesday allowed the appeal filed by CIL, challenging the order of a single judge restraining CIL from incorporating a supplementary clause relating to the powder factor in the principal contract with four explosives companies.

While setting aside the order of the single judge, the Bench held that the contract was purely private in nature, and that there was no public element involved. The judges held that the controversy was purely between two parties to the contract. Unilateral introduction of a clause is not a variation, and as such cannot be deemed as unreasonable arbitrary exercise of power, the court further held.

4 cos file writ

Four explosives companies - Indian Explosives, Ideal Industrial Explosive, Gulf Oil Corporation and Solar Capital - filed the writ petition against the inclusion of a supplementary clause in the contract, regarding the powder factor in the explosives to be supplied for blasting in the mines owned by Coal India.

In the petition, the explosives companies alleged that CIL was seeking to alter the condition of contract after it has been concluded and the transaction had progressed for a considerable length of time. However, the clause stipulates that in the event of failure of the blast, the cost of the explosives used for blasting, and all other incidental charges will be recovered from the supplier.

There is a further clause stipulating that in the case of low powder factor, the companies will be penalised, and supplies will be restricted for continuous performance.

Coal India took serious exception to the tenability of the writ petition, stating that the present contract was non-statutory, and that it had the prerogative to impose the additional clause in the contract.

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