In the matter of Coal Ltd vs M/S Rahul Industries and Ors.. the Supreme Court on 12 September 2025 upheld the validity of the Interim Coal Policy notified on 15 December 2006, holding that Coal India Ltd., a public sector undertaking, was competent to fix coal prices for the non-core sector under the deregulated framework of the Colliery Control Order, 2000.
A bench of Justices J.B. Pardiwala and R. Mahadevan dealt with the issue of smokeless fuel against a 20% price hike introduced under the Interim Coal Policy, the same being linked to non-core sectors against consumers in the core sector. The Court clarified that Ashoka Smokeless judgement struck down the e-auction system for lacking a viable pricing mechanism but did not reinstate prior price levels or prohibit interim pricing.
The issues lying before the Court comprised of firstly, whether Coal India Limited (CIL) had the legal authority to notify interim coal prices following the Supreme Court’s decision in Ashoka Smokeless. Secondly, whether the 20% price increase imposed on the non-core sector consumers was arbitrary, discriminatory, and in violation of Article 14 of the Constitution, particularly considering the differential treatment between core and non-core sectors. Thirdly, the question was whether the respondents were entitled to claim refunds for the alleged excess amount paid during the period when the Interim Coal Policy was in effect.
The Court found that from the above legal exposition, it is clear that if there is a concern that the party claiming a refund may have shifted the financial burden or loss to a third party, then a refund should not be allowed. In such situations, the State bears the responsibility to retain those funds and apply them for the benefit of the public, acting in its capacity as parens patriae (guardian of the public interest). The argument of the same being violative of Article 14 of the Constitution was rejected.
