The Supreme Court on Tuesday sought response from Adani Enterprises-led joint venture Parsa Kente Collieries to a plea seeking deallocation of two coal blocks in Chhattisgarh and filing of a criminal case for violation of allotment agreement that caused financial loss to the exchequer. The coal blocks in question are Parsa East and Kante Basan that were allotted in 2007 to Rajasthan Rajya Vidyut Utpadan Nigam, which chose Adani as the mine-developer and operator. Parsa Kente Collieries is a joint venture between Rajasthan Rajya Vidyut Utpadan Nigam and Adani Enterprises in which the latter has a majority stake of 74%.
A bench led by Justice M B Lokur issued notice to Parsa Kente Collieries on an application filed by a Chhattisgarh-based lawyer Sudiep Shrivastava alleging that the JV was formed in contravention of the apex court’s earlier order on coal block allocation and in the Coal Mines (Special Provisions) Act 2015. He further sought cancellation the joint venture (JV) agreement for Parsa and Kente extension coal blocks and filing of a criminal case against officials of Rajasthan Rajya Vidyut Utpadan Nigam, ministry of coal, Parsa Kente Collieries and Adani Enterprises.
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He told the bench that the Rajasthan Rajya Vidyut Utpadan Nigam had been buying coal at inflated prices from the Adani-led JV violating the conditions of the allotment agreement in a ‘wilful manner’ causing financial loss to the exchequer. Parsa Kente Collieries is a part of the Hasdeo-Aran Coal fields in Chhattisgarh, with a reserve of 450 million tonnes of coal.
Seeking cancellation of the joint venture and the coal block allocation, the plea sought a direction to Rajasthan Rajya Vidyut Utpadan Nigam to recover the extra money paid to the Parsa Kente Collieries and taken away by Adani Enterprises. “As per new law, any PSU which secured allotment through nomination basis without any auction, cannot transfer any interest to a private company and in the instant case up to 29% production has been allowed to private party in the garb of reject. Even the powers conferred to the JV includes identification of coal block to land acquisition to mine and operate virtually makes the private party the owner of the mine which is impermissible…The ministry of coal has allowed the continuance of the old JV and CMDA in violation of the coal block judgement and the new law governing the sector,” the application stated.
According to Shrivastava, the said arrangement was also impermissible in current regime as it prevented the benefits of having a captive coal block reaching to the allottee (Rajasthan Rajya Vidyut Utpadan Nigam), and thus from passing it on further to its consumers. The Supreme Court had on in September 2014 quashed the allocation of 204 coal blocks allotted to various companies between 1993-2010. It was subsequently held that any joint venture companies set up so as to transfer the mining rights to a private company were illegal under the Coal Mining Nationalisation Act, 1973.