Coal mining in Madhya Pradesh: SC pulls up Centre for listing valid firm with those in errant list

The Supreme Court has pulled up the Centre for wrongly including the name of a coal mining company that had a valid licence for mining coal in Madhya Pradesh alongside a list of allegedly errant mine owners, a majority of whose allotments were cancelled by the top court while dealing with the coal block allotment scam in 2014.

A bench of Chief Justice of India N V Ramana and Justices Krishna Murari and Hima Kohli imposed a cost of Rs 1 lakh on the government for “this callous, careless and casual approach” due to which the “petitioner (BLA Industries Private Limited) had to suffer loss and ignominy.”.

The court, which went into the allotment process in its August 17 ruling, also held that “the mining lease granted in favour of the petitioner was not tainted by mala fides, as was the case of the other allottees”.

The bench said the “state government had undertaken a diligent exercise to examine the petitioner’s application before recommending its case to the…UOI (Union of India) for grant of the mining lease”, and that “founded on the said recommendations, the…UOI had issued the letter allocating the coal block to the petitioner, and not the other way round”.

Justice Kohli, writing for the bench, said: “Here is a case where a private party followed all rules and law, as applicable, before investing large sums of money to undertake business. In fact, it appears from facts of the case that it was the…UOI that did not follow the letter of the law. But ultimately it was the private party that had to suffer the consequences of the careless and callous approach of…UOI.”

“To compound the petitioner’s woes, UOI filed an affidavit before this Court, including the petitioner in the list of errant mine owners, based on its own unlawful conduct. It did not undertake the necessary due diligence to determine as to whether the petitioner had been allotted the mine through the lawful procedure”, the court said.

Deciding petitions, which prayed for quashing the allocation of coal blocks to private companies made by the Centre between 1993 and 2011, a three-judges bench of the SC had, on August 25, 2014, held that the exercise to allocate coal blocks was neither traceable to the Mines And Minerals (Development and Regulation) Act, 1957 nor the Coal Mines (Nationalisation) Act, 1973, and that the practice and procedure adopted by the government for allocation of coal blocks to beneficiaries through the screening committee route, was inconsistent with the extant law already enacted and the Rules framed.

Consequently, the court declared that the entire allocation of coal blocks, as per recommendations made by the Screening Committee constituted by the Centre from July 14, 1993 onwards and the allocations made through Government Dispensation Route after 1993, were arbitrary and illegal.

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The outcome of the illegal allocations were the subject matter of the SC’s subsequent judgment dated September, 23, 2014 delivered in the same case. “The court divided the coal block allotments in two categories on the basis of documents furnished by…UOI,” the court held. “The first category was of allotments other than those mentioned by…UOI in Annexure-1 and Annexure-2, filed by it. The second category comprised 46 coal blocks mentioned in Annexure-1 and Annexure-2 that could possibly be “saved” from cancellation on imposition of certain terms and conditions. The first category of allotments was quashed outright by the Court as patently illegal and arbitrary…. Out of 46 coal blocks mentioned in Annexure-1 and Annexure-2, 42 coal blocks were cancelled with a grace period of six months granted for the said cancellation to take effect.”

The coal blocks allotted to the petitioner firm figured in the four whose allotments were not cancelled, but they were ordered to pay Rs 295 per metric tonne of coal already extracted as compensatory payment for any loss.

The SC judgment also said that during the hearing of the matter, it was informed that the coal blocks in question allocated to the petitioner had already been allocated to a third party.

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