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 | Supreme Court judgment on coal supply and compensation | MAs dismissed; FSA direction

INTRODUCTION

UNION OF INDIA vs. PRAKASH INDUSTRIES LIMITED: This Supreme Court judgment addresses a dispute over supply of coal and compensation for a period when coal supply was suspended. The Court rejected the Miscellaneous Applications filed by Prakash Industries Limited and directed the Union/SECL to supply coal for the suspended period at the current price as of either 09.04.2014 or 17.05.2019, with specified timelines for entering a Fuel Supply Agreement.

QUICK FACT BOX

Citation: 2026 INSC 250

Court: Supreme Court of India

Bench: [Pankaj Mithal], [S.V.N. Bhatti]

Judgment date: March 17, 2026

Petitioner: Union of India

Respondent: Prakash Industries Limited

Relief outcome: Miscellaneous Applications dismissed; directions to enter Fuel Supply Agreement

BACKGROUND OF THE CASE

Parties involved: Union of India (petitioner), Prakash Industries Limited (respondent), Southern Eastern Coal Fields Limited (SECL).

13.01.2006: Madanpur (North) Coal Block allocated to the respondent for use in a sponge iron plant and a captive power plant.

14.10.2011: Ministry of Coal issued an order alleging diversion of coal by the respondent.

09.11.2011: SECL suspended coal supplies to the respondent.

13.02.2012: High Court allowed Writ Petition No. 7413 of 2011 and quashed the suspension order dated 09.11.2011.

31.01.2013: Division Bench dismissed Writ Appeal No. 127 of 2012 and directed restoration of supply from January 2013 and compensation for the past period.

09.04.2014: This Court disposed of S.L.P. No. 8436 of 2013, modifying the relief to permit supply at the current rate in lieu of compensation and directing entry into a Fuel Supply Agreement for the suspended period.

03.05.2014 and 31.07.2017: Communications/orders proposing tapering linkage issued by SECL and Secretary, Ministry of Coal.

17.05.2019: High Court quashed the communications dated 03.05.2014 and 31.07.2017 and directed SECL to supply coal at the current rate.

19.08.2025: This Court dismissed S.L.P. Nos. 3529-3530 of 2020, reiterating compliance reporting.

March 17, 2026: Present judgment disposing M.A. Nos. 2111-2112 of 2025 and related applications.

LEGAL ISSUE BEFORE THE SUPREME COURT

The main question before the Court was: what is the effect of the earlier orders in the first and second rounds of litigation and what relief the Respondent is entitled to (supply of coal at the current rate or monetary compensation) for the period during which coal supply was suspended.

SUPREME COURT ANALYSIS

The Court observed that parties were interpreting prior orders to suit their respective positions.

The Court reviewed the order dated 09.04.2014 which, as modified, permitted petitioners to supply coal at the current rate in lieu of monetary compensation and directed entry into a Fuel Supply Agreement for the suspended period at the current rate in accordance with prevalent policy.

The Court held that the modified order requires supply of coal at the current price for the suspended period and that the term "current price" could be understood as of 09.04.2014 or 17.05.2019.

The Court stated that the prior orders cannot be construed as directing the Union of India/SECL to pay monetary compensation for the difference in coal price paid by the respondent during the suspended period.

The Court recorded the statement of the Learned ASG that Coal India Limited and SECL are willing to supply coal to the respondent at the current price and that this Court may treat that date to be 09.04.2014.

The Court concluded that the Petitioner and SECL must offer the respondent the choice to operate the current price and prevalent policy as of either 09.04.2014 or 17.05.2019.

The Court directed that after the respondent chooses one of the dates and communicates willingness to buy coal from SECL, a Fuel Supply Agreement be entered into within two weeks and completed within four weeks from the date of the judgment.

The Court specified that the supply shall be as a normal coal linkage and not on a tapering basis.

FINAL VERDICT

The Miscellaneous Applications Nos. 2111-2112 of 2025 filed by Prakash Industries Limited are dismissed/rejected.

The Court directed that the Union of India and SECL are to supply coal for the suspended period at the current price and in accordance with the prevalent policy, with the respondent given the choice of the date (09.04.2014 or 17.05.2019) for fixing the current price/policy.

After the respondent communicates its choice, SECL and the respondent shall enter into a Fuel Supply Agreement within two weeks; the agreement process is to be completed within four weeks from the judgment date.

The supply under the Fuel Supply Agreement shall be a normal linkage and not on a tapering basis.

Miscellaneous Applications are disposed of and pending applications, if any, are also disposed of.

WHY THIS JUDGMENT MATTERS

The judgment does not explicitly state broader implications.

CONCLUSION

UNION OF INDIA vs. PRAKASH INDUSTRIES LIMITED results in dismissal of the respondent's miscellaneous applications. The Supreme Court judgment directs supply of coal for the suspended period at the current price as of either 09.04.2014 or 17.05.2019, with a Fuel Supply Agreement to be executed within the timelines stated.