IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
I.A.NOS.259 & 263 IN I.A.NO.259
WRIT PETITION (CIVIL) NO.562 OF 2009
SAMUDAYA & ORS. PETITIONER(S)
STATE OF KARNATAKA & ORS. RESPONDENT(S)
J U D G M E N T
RANJAN GOGOI, J.
I.A.NO.259 of 2016
1. This application has been filed by the Karnataka Iron and Steel
Manufacturers Association seeking the following reliefs:-
a) Allow the instant application and direct NMDC to restrain from
adopting differential pricing mechanism for the iron ore sold in the e-
auction in the State of Karnataka.
b) Direct the CEC/Monitoring Committee to fix the floor price of iron
ore on realistic grounds and to ensure that NMDC does not take undue
advantage of acute shortage of iron ore availability in the State of
c) Pass any such further orders/directions which this Hon'ble Court may
deem fit and proper in the interest of justice.
2. Specifically it is contended on behalf of the applicant-Association
that the NMDC had all along been fixing the floor price/sale price by
adopting PAN India Uniform pricing. However, since April, 2016 by taking
advantage of an increased demand a differential pricing policy has been
adopted so far as State of Karnataka is concerned and the identical floor
price/sale price that was prevailing in respect of the States of
Chhattisgarh and Karnataka has been altered and the floor price for
Karnataka has been increased. Hence the prayers made.
3. Comments of the C.E.C. on the prayers made in I.A. No.259 of 2016
have been called for and received. The stand of the NMDC and the State of
Karnataka has also been submitted in writing. One M/s. Vedanta Limited, a
lessee of a 'B' category mine, has filed an application for permission to
file reply to I.A. No.259 and has opposed the prayers made therein.
4. The response of the C.E.C. to the said application filed by M/s.
Vedanta Limited has also been duly received and considered.
5. By our previous orders passed in the Writ Petition (C) No.562 of 2009
titled Samaj Parivartana Samudaya & Ors. vs. State of Karnataka & Ors., out
of which these miscellaneous matters/applications have arisen, we had held
that the issue of base price should be left to be decided by the concerned
lessee. This has been affirmed in our final order dated 18.04.2013
disposing of the Writ Petition [paragraph 7(E)]. A somewhat similar prayer
made by the present applicant-Karnataka Iron and Steel Manufactrurers
Association to tag/fix the base price to the sale price fixed by the NMDC
in a situation where private leaseholders were artificially hiking their
prices, was rejected by this Court on 24.02.2014 in I.A.No.209 with the
following order :
“The grievance of the applicants is that the leaseholders are jacking up
the base price of iron ore and as a result the industrial consumers of iron
ore are suffering a lot of prejudice.
We find from the judgment of this Court in Samaj Parivartan Samudaya v.
State of karnataka and Ors. (2013) 8 SCC 154 that the lessees have been
given the right to fix the base price.
Hence, we are not inclined to pass any orders on this application filed by
6. The above apart, it is the stand of the NMDC before the Court that
the base price/floor price fixed by it has been determined by market
conditions and despite the higher price in Karnataka than in Chhattisgarh,
the cost of landing in Karnataka is lower than in Chhattisgarh.
7. The C.E.C. in its response has indicated that as NMDC is working
under a special dispensation granted by this Court, until such dispensation
continues it should not be allowed to resort to dual pricing. While it is
correct that the special dispensation granted to NMDC by this Court cannot
continue in perpetuity and the regulatory measures prescribed by this Court
for other leaseholders must also apply to NMDC, the working of its leases
by NMDC under the special dispensation, by itself, cannot be a legitimate
ground for not resorting to a dual price mechanism if the same is dictated
by market forces. There is nothing in the report of the C.E.C. to indicate
otherwise. We, therefore, do not accept the said part of the recommendation
of C.E.C. The issue of continuity of the special dispensation in favour of
NMDC will be considered in due course.
8. Insofar as the statements made on behalf of M/s. Vedanta Limited are
concerned, all we would like to observe, at this stage, is that the
inability of M/s. Vedanta Limited to sell the output from its leases, as
expressed, could very well be because of the pricing patterns adopted by
it. Inability to sell on account of higher prices cannot be a ground for
export of the mineral, at least at this stage of developments pursuant to
the final order dated 18.04.2013. Permission for export must be governed by
norms and parameters of general application as distinguished from ad hoc
decisions in individual cases. Until such guidelines are framed, the prayer
of M/s. Vedanta Limited for export of its iron ore cannot be granted. So
far as issue of framing of guidelines/norms for exports are concerned, the
same will be dealt with separately at an appropriate time and stage.
Consequently and in light of the foregoing, I.A. No. 259 is dismissed.
9. Shri Shyam Divan, learned amicus curiae, may at an appropriate
stage, mention the matter so for as the issues relating to continuance of
the special dispensation in favour of NMDC and norms to govern exports are
I.A. No.263 IN I.A.NO.259
10. In view of the dismissal of the I.A. No.259 of 2016, no separate
orders will be called for on I.A. No.263 of 2016 and is dismissed
(PRAFULLA C. PANT)
SEPTEMBER 1, 2016.