UNION OF INDIA vs. PRAKASH INDUSTRIES LIMITED: Supreme Court judgment on coal supply

UNION OF INDIA vs. PRAKASH INDUSTRIES LIMITED: Supreme Court judgment on coal supply

Meta: UNION OF INDIA vs. PRAKASH INDUSTRIES LIMITED — dispute on coal supply vs compensation. Supreme Court judgment rejects MAs and directs supply under chosen 'current price' date.

Introduction

UNION OF INDIA vs. PRAKASH INDUSTRIES LIMITED: Supreme Court judgment concerns whether the respondent was entitled to monetary compensation or to supply of coal at the current price for the period during which coal supply was suspended. The Court dismissed the Miscellaneous Applications and directed that the respondent may choose either 09.04.2014 or 17.05.2019 as the date for fixing the current price and prevailing policy, after which SECL must enter a Fuel Supply Agreement within specified timeframes.

QUICK FACT BOX

Case name: UNION OF INDIA vs. PRAKASH INDUSTRIES LIMITED

Court: Supreme Court of India

Citation: 2026 INSC 250

Judges: Pankaj Mithal; S.V.N. Bhatti

Judgment date: March 17, 2026

Petitioners: Union of India

Respondents: Prakash Industries Limited

Outcome: Miscellaneous Applications dismissed; directions for Fuel Supply Agreement and choice of 'current price' date

BACKGROUND OF THE CASE

Parties involved: Union of India (petitioner) and Prakash Industries Limited (respondent).

On 13.01.2006, the Ministry of Coal allocated the Madanpur (North) Coal Block to the respondent for specified end use.

On 14.10.2011, the Ministry of Coal issued an order finding diversion of coal, and SECL suspended coal supplies to the respondent on 09.11.2011.

The respondent filed Writ Petition No. 7413 of 2011; the High Court allowed the petition on 13.02.2012 and quashed SECL's suspension order.

The Union of India and SECL filed Writ Appeal No. 127 of 2012; the Division Bench, by order dated 31.01.2013, directed restoration of supply from January 2013 and compensation for the past period, calculated under clause 15 of the Agreements with 6% interest from 01.07.2012.

S.L.P. No. 8436 of 2013 was disposed of on 09.04.2014 by this Court, modifying the direction so that petitioners could, in lieu of compensation, supply coal at the current rate and enter a Fuel Supply Agreement for the suspended period.

Subsequent communications included a letter dated 03.05.2014 from SECL and an order dated 31.07.2017 from the Secretary, Ministry of Coal; both were quashed by the High Court on 17.05.2019, and this Court confirmed that order in later proceedings.

The Union of India’s Special Leave Petitions in S.L.P. Nos. 3529-3530 of 2020 were dismissed by this Court on 19.08.2025.

The respondent filed Miscellaneous Application Nos. 2111-2112 of 2025 seeking directions for immediate payment of compensation or credit against supply of coal.

LEGAL ISSUE BEFORE THE SUPREME COURT

The main question before the Court was: what is the effect of the prior orders and what relief the Respondent is entitled to — specifically whether the respondent is entitled to monetary compensation or supply of coal at the current price for the suspended period.

SUPREME COURT ANALYSIS

The Court reviewed the sequence of orders, including this Court’s order dated 09.04.2014 that modified earlier relief to allow petitioners to supply coal at the current rate in lieu of compensation and to enter a Fuel Supply Agreement for the suspended period.

The Court noted that the direction in the earlier orders is to supply coal for the suspended period at the current price and in accordance with the prevalent policy, and not to require payment of compensation for the price difference by the Union of India or SECL.

The Court observed a dispute as to whether "current price" meant as of 09.04.2014 or as of 17.05.2019. The Court recorded the statement of the Learned ASG that Coal India Limited and SECL are willing to supply coal and that this Court may treat that date to be 09.04.2014.

The Court rejected the Miscellaneous Applications’ prayers as unavailable, holding that Union of India and SECL are obligated to supply coal at the current price/prevalent policy either as of 09.04.2014 or as of 17.05.2019.

The Court gave the respondent the choice to select one of the two dates (09.04.2014 or 17.05.2019) to operate the current price and prevailing policy in the proposed Fuel Supply Agreement.

Procedure ordered: once the respondent chooses a date and communicates willingness to buy coal from SECL, within two weeks a Fuel Supply Agreement shall be entered into between SECL and the respondent for the suspended period; the supply shall be as a normal coal linkage and not on a tapering basis; the Fuel Supply Agreement is to be entered into and completed within four weeks from the date of the judgment.

The Court also observed that the purported Compliance Affidavit dated 16.09.2025 should be rejected because it was filed by a person not privy to or aware of communications between SECL and the respondent.

FINAL VERDICT

Miscellaneous Application Nos. 2111-2112 of 2025 were dismissed; the prayers in those applications were held to be unavailable and rejected.

The Court directed that the respondent may choose either 09.04.2014 or 17.05.2019 as the date for fixing the current price and prevalent policy for the suspended period.

Upon the respondent’s choice and communication of willingness to purchase, SECL shall enter into a Fuel Supply Agreement within two weeks; supply shall be as a normal coal linkage (not tapering); the Fuel Supply Agreement is to be entered into and completed within four weeks from the judgment date.

Pending applications, if any, were disposed of.

WHY THIS JUDGMENT MATTERS

The judgment does not explicitly state broader implications.

CONCLUSION

The Supreme Court in UNION OF INDIA vs. PRAKASH INDUSTRIES LIMITED dismissed the Miscellaneous Applications and directed that the respondent choose either 09.04.2014 or 17.05.2019 to fix the current price and prevalent policy. SECL was directed to enter a Fuel Supply Agreement within the specified timeframes and supply coal as a normal linkage.