The Draft Coal Regulatory Authority Bill, 2008 envisages wide ranging powers to the coal regulatory authority. The establishment of regulatory authority could lead to optimal and appropriate resource management including a regulatory mechanism to attend to all issues relevant for development of coal resources, regulation of coal price, and creating and nurturing a level playing field between the influential large public sector coal companies and the emerging small coal companies in the state-level public sector and the captive mining sector.

According to the Bill, which is in FE?s possession, the state governments will retain the authority to grant licences and mining leases in the coal sector to the applicants, while the coal regulator will authorise the entities to undertake mining operations, produce and supply coal from the mine. The regulatory authority will issue within sixty days after receipt of such application, an authorisation subject to provisions of this Act and the rules and regulations made there under and the terms and conditions of the mining lease issued by the state government; or it may reject the application for reasons to be recorded in writing if such application does not conform to the provisions of this Act or the rules and regulations made there under or the provisions of any other law for the time being in force.

Moreover, the regulatory authority will determine the pricing of coal washing, specify standard procedure for automatic coal sampling and weighment and above all encourage competition and promote efficiency in the coal industry so as to facilitate its growth.

The regulatory authority will subject to the provisions of this Act and to the guidelines issued by the government in this behalf, specify the terms and conditions for determination of price of coal for all coal producers, including captive coal producers.

The price determination will be based on heat value or grade of coal with certain adjustment for quality, such as moisture content, volatile matter, size and any other relevant parametres. The regulatory authority will show any undue preference to any consumer of coal while determining the price.

The price will not ordinarily be modified, more frequently than once in a financial year, except in respect of charges expressly permitted under the terms of any price adjustment formula approved by the regulatory authority.

The price of coal produced by captive mines will be determined on the basis of the amount of royalty payable to the sate government and the price of such coal determined as surplus by the central government. The regulatory authority within one hundred and twenty days from receipt of an application will take decision on the application filed by the authorisation holder after considering all suggestions and objections received from the public.

Offences and punishments

In case of contravention of the provisions of Act or the rules or regulations or any directions issued by the regulatory authority, the authorisation holder will be liable for penalty not exceeding Rs 10 lakh. If the authorisation holder continues to contravene, the authorisation holder will be liable for additional penalty which may extend up to Rs 10,000 for every day during which failure continues.

In addition to the penalty under section 34, if the authorisation holder fails to comply with any order or direction given under this Act, within such time as may be specified in the said order or direction or contravenes or abets the contravention of any of the provisions of this Act or any rules or regulations made there under, the authorisation holder will also be punishable with imprisonment for a term which may extend to three months or with fine which may extend up to Rs 10 lakh, or both as the case may be for each offence and in the case of a continuing failure, with an additional fine which may extend up to Rs 10,000 for every day during which the failure continues in addition to the conviction for the first such offence. The penalties imposed under this Act will be in addition to, and not in derogation of, any liability in respect of payment of compensation or in the case of authorisation holder, the cancellation of his authorisation, which the offender may have to incur.

In case of offences by companies, every person who at the time of committing the offence was in charge of and was responsible to the company for the conduct of the business of the company, will be deemed to be guilty of having committed the offence and will be liable to be proceeded against and punished as deemed necessary based on the merits of the case. If any person willfully fails to comply with any order of the appellate tribunal, will be punishable with a fine which may extend up to Rs 1 crore in the case of first offence and in case of second or subsequent offence with a fine which may extend up to Rs 2 crore and in the case of continuing contravention with an additional fine which may extend up to Rs 20 lakh for every day during which such failure continues.

If a person operates a mine and produces coal without valid authorisation as required under section 16 such person will be liable for punishment with an imprisonment for a term which may extend up to three years or penalty up to a maximum of Rs 25 crore or both and in case of continuing contravention with an additional fine which may extend up to Rs 10 lakh for every day during which the contravention continues.

Subject to the provisions of this Act, the appellate tribunal established under Section 110 of the Electricity Act, 2003 will also function as the appellate tribunal for the purposes of this Act to hear appeals against the orders/directions issued by the coal regulatory authority and said the tribunal will exercise the jurisdiction, powers and regulatory authority conferred on it by or under this Act.

Interestingly, no civil court will have jurisdiction to entertain any suit or proceeding, in respect of any matter for which the regulatory authority or appellate tribunal is empowered by or under this Act to determine, and no injunction, will be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred on it by or under this Act. Every offence punishable under Sections 34 to 39 will be cognisable. The director general mine safety will furnish periodical reports to the regulatory authority on safety measures taken by the authorisation holder, accidents as may be specified by the regulatory authority.