The government’s efforts to restart coal mines cancelled by the Supreme Court in September 2014 have been hampered by a clutch of court cases.
The government’s efforts to restart coal mines cancelled by the Supreme Court in September 2014 have been hampered by a clutch of court cases. At least 23 mines reallocated after the apex court ruling that cancelled 204 mining leases holding them illegal have been left high and dry as the Delhi High Court has not delivered the judgments several months after arguments were concluded.
With the administrative and judicial delays and, in some cases, leaseholders’ disinterest, just 13 of the cancelled mines have resumed production so far. To put it differently, production from the cancelled mines stood at a measly 14 million tonnes in FY16, compared with the pre-judgment peak production of 70 million tonnes by all the 35 Schedule-II mines that were under production at the time of the verdict. Production levels are unlikely to have improved in the current financial year.
In all, the government has so far reallocated 73 coal mines — 35 that were under production when the cancellation order came and the other 38 (Schedule-III) readying for commencement of production. According to a list prepared by coal ministry and reviewed by FE, cases involving 12 Schedule-II and 11 Schedule-III mines have been awaiting judgment for the past 9-18 months.
Of the cases heard by the Delhi HC, most have been filed by the previous owners of the mines, seeking higher compensation for the investments made in mining infrastructure. Other cases involve disputes over change of end use of the blocks — for instance, in some cases mines used by steel, cement and captive power plants were put in the regulated category of non-captive power plants, constricting the miners’ pricing power.
Meanwhile, Delhi HC on Wednesday faulted the Centre’s decision to club the end uses, namely sponge iron and steel, cement, and captive power plants, within the non-regulated sector for coal block auctions, saying it would “amount to arbitrariness.”
It, however, dismissed the pleas of some private companies challenging the decision for different reasons like they had come to the court after delay and after participating in the tender/auction process. The decision comes after almost 18 months when it was reserved on April 13, 2015, on the pleas of four companies — Utkal Coal, Monnet Ispat and Energy, Jayaswal Neco Industries and Bhushan Power and Steel.
The court is still sitting on a number of cases though arguments by all sides were concluded many months ago. A total of 85 cases were filed in various high courts challenging the provisions of the Coal Mines (Special Provision) Act, 2015, after the auction. Among these, 40 have been disposed of so far. While nine cases have gone in favour of the government, 29 were either dismissed by the courts or withdrawn by the petitioners. In two cases, the government has filed special leave petitions in the Supreme Court.
Besides the auctioned mines, the government also allotted some 40 mines to government-owned companies including state-run power companies.
However, nearly 15 mine of these mines given to Karnataka, Punjab, Rajasthan and West Bengal too have been stuck in legal battles after the previous mine developer and operator (MDO) EMTA approached the courts, challenging the cancellation of its mining licences. The Coal Mines Act requires the states to select the MDO through a tender process. These states had given EMTA the majority stake (74%) in the joint venture that was designated the MDO.