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Union of India v. Prakash Industries Limited and Another

Special Leave Petition (Civil) · 2026 INSC 250Decided 17 Mar 2026
MA-001806-001807 - 2025 (in SLP(C) No. 3529-3530 of 2020, with connected MA Nos. 2111-2112 of 2025)
Justice Pankaj Mithal · Justice S.V.N. Bhatti

Background

Prakash Industries Limited (PIL) had its coal supply from South Eastern Coalfields Limited (SECL) suspended in 2011 over allegations of diverting coal meant for one plant to another. Over more than a decade, the dispute went through multiple rounds of litigation: the Chhattisgarh High Court, the Supreme Court in 2014, the High Court again in 2019, and the Supreme Court again in August 2025, which directed the Union of India to file a compliance affidavit. After the Union/SECL offered to resume coal supply at current prices for only part of the suspended period, PIL filed applications seeking either roughly Rs. 106 crore in monetary compensation (the price difference it had paid buying coal via e-auction during the suspension) or an equivalent credit adjustable against future coal supply.

Decision Breakdown

The Supreme Court held that both sides were misreading its own prior orders to suit their convenience. Reviewing the 2014, 2019, and 2025 orders together, the Court clarified that none of them had ever directed payment of monetary compensation for the price difference: the actual and consistent direction was that SECL must supply coal for the entire suspended period at the "current price" prevailing under the prevalent policy, not pay cash compensation. Since there was ambiguity over whether "current price" meant the price as of the 2014 order or the 2019 order, and since the Union/SECL had failed to comply for years, the Court gave PIL the commercial choice of selecting either date's price/policy, directed the parties to execute a fresh Fuel Supply Agreement within two weeks of PIL's choice (on normal linkage terms, not a reduced "tapering" basis), and rejected PIL's applications for monetary compensation.

Lesson Learnt

When a court order is ambiguous or has been complied with only partially over many years, the remedy for the defaulting party's delay may be to give the aggrieved party a favourable choice among the disputed terms, rather than converting a specific-performance-type direction (supply of goods) into open-ended monetary compensation that was never actually ordered.

Official source (sci.gov.in)View Judgment (PDF)

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