In Brief
Indian Explosives Ltd. and others challenged the High Court's dismissal of their writ petitions against Coal India Ltd. The petitioners alleged that Coal India unilaterally inserted a supplementary clause into their explosives supply contract that altered performance metrics (powder factor) retrospectively—constituting an unlawful novation. The Supreme Court held that Coal India, a Government company with majority state shareholding, is a 'State' bound by Article 14. Where a commercial contract discloses public law elements, unilateral contract modification that arbitrarily disadvantages a party violates constitutional fairness. The supplementary clause was per se arbitrary and not amenable to alternative remedies. The Court set aside the High Court's order and allowed the appeals, directing all consequential benefits be conferred on the appellants without delay."
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