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  1. Coal Ordinance: Setback for Centre as Supreme Court rejects pleas

Coal Ordinance: Setback for Centre as Supreme Court rejects pleas

Government today suffered a jolt when the Supreme Court dismissed its plea to stop private firms from challenging...

By: | New Delhi | Published: February 3, 2015 8:30 PM
Supreme Court, Coal blocks, Coal ordinance

Supreme Court had quashed allocation of 214 out of 218 coal blocks alloted to various companies since 1993, terming it as “fatally flawed” and allowed the Centre to take over operation. (Reuters)

Government today suffered a jolt when the Supreme Court dismissed its plea to stop private firms from challenging the validity of certain provisions of the controversial 2014 Coal Ordinance in various high courts.

A Bench headed by Chief Justice H L Dattu, which rejected the Centre’s plea seeking transfer of five petitions of private firms from various high courts to the apex court, also refused to stay an order of the Madhya Pradesh High Court allowing BLA Power Ltd to take part in the auction process for allocation of coal mines in the state.

“We are not saying anything on the merits of the case. It is a debatable issue (whether BLA Power is related to prior allottee BLA Industries of a coal block)…

“We are at the stage of an interim order. Moreover, you (Centre) did not file any counter/reply affidavit before the (MP) High Court,” the bench, also comprising justices A K Sikri and Arun Mishra, said while dismissing the petitions filed by the Ministry of Coal.

The Madhya Pradesh High Court, on January 29, had allowed BLA Power Ltd to take part in the process of auctioning of two coal mines – Gotitoria (East) and Gotitoria (West) mine in Mahapani coalfields of Madhya Pradesh.

BLA Industries, a sister concern of BLA Power Ltd, was allocated these coal blocks in Madhya Pradesh in June 1996, which got cancelled following the Supreme Court verdict.

At the outset, Attorney General Mukul Rohatgi, appearing for Coal Ministry, said that M/s Jindal Power and Steel, M/s BLA Power and M/s Sova Ispat Ltd have filed five separate petitions in Delhi, Madhya Pradesh and Calcutta high courts respectively.

“The questions of law that arise in the pending petitions are similar and are substantial questions challenging the validity of The Coal Mines (Special Provisions) Ordinance, 2014 and the validity of the provisions of Standard Tender Document for auction of coal blocks being held in pursuance of the judgment dated August 25, 2014 and order dated September 24, 2014 of this Court…,” he said and sought their transfer to the apex court.

However, the bench after giving an hour-long hearing, declined to give any relief to the Centre.

Senior advocate Kapil Sibal along with advocate Shally Bhasin opposed the Centre’s contention and argued that there was also misrepresentation of facts about the share holding pattern of the firm.

Earlier, the court had quashed allocation of 214 out of 218 coal blocks alloted to various companies since 1993, terming it as “fatally flawed” and allowed the Centre to take over operation.

Rohatgi, dealing with the MP HC order allowing BLA Power Ltd to take part in the auction process, said it was not eligible as its sister concern BLA Industries Ltd was a prior allottee of coal blocks, which got cancelled in pursuance to the apex court verdict and it did not pay the penalty.

The firm had to pay the additional levy at the rate of Rs 295 per metric tonne and moreover, the promoters of both the firms were same, he said, adding that BLA Power Ltd took a plea that it was not an affiliate of the prior allottee and hence, not liable to pay the penalty.

“Breach of the Supreme Court cannot be permitted just because he sets up a sister concern and wants to bid for the mines without paying the levy,” Rohatgi said.

“They are all BLA firms, same Agrawal promoters and sister concern of each other. What else do we need to prove? Moreover, the onus to disclose these lie with them,” he said.

The Attorney General also raised the issue of the end-use of coal blocks in question and said, “method for bidding for allocation of coal blocks for generating power is different from other end-uses.”

“Every (coal) block has specified end use. If a block is meant for power, then it cannot be used for another end-use,” he said.

He also said that if High Courts are allowed to hear such cases, then the Centre will not be able to meet the deadline fixed by the apex court to conclude the bidding process by March this year.

To this, the bench said “litigants are free to challenge any rule, regulation and law. Let the High Courts deal with them expeditiously.”

Sibal, appearing for BLA Power Ltd, said the firm was not covered under the definition of companies which cannot bid for coal block, provided under the Coal Ordinance.

The Centre, in its transfer petition, has said, “the cases are being filed all over the country before different High Courts challenging the constitutional validity of provisions of the Ordinance, Rules and Tender document thwarting the auction process of coal blocks.”

“The cases involve the same questions of law and are substantial questions of general importance in as much as challenging the constitutional validity of the provisions of Ordinance, Rules and Tender document by means of various Writ Petitions before different High Courts, which require adjudication and authoritative pronouncement of this Hon’ble Court,” it said.

The plea said it would be in the interest of justice that the apex court “adjudicate upon the common questions of law arising due to challenge of the provisions of the Ordinance, Rules and auction process.”

The Centre maintained that differing orders passed by the High Courts could lead to “a complex situation crippling the auction process which has to be completed before March 31, 2015 as ordered by this court”.

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