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SC raps govt for unlawful levy of penalty on BLA Industries

“In fact, it appears that it was the Union of India 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 the UoI.”

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The Supreme Court on Wednesday reprimanded the Union government for making a private company — BLA Industries —suffer due to its “careless and callous approach”.

Quashing the coal ministry’s demand for additional levy for the coal extracted by BLA Industries, a bench of Chief Justice N V Ramana and justices Krishna Murari and Hima Kohli held that the company was not a beneficiary of the flawed process and the mining lease granted to it was not tainted by malafides. Hence, the company cannot be asked to pay penalty as compensatory payment by the government.

The erroneous inclusion of the company’s name in the list of allottees of coal blocks and its mining lease area by the government had resulted in cancellation/ quashing of the lease by the SC in 2014 that was validly granted in its favour, it said, while asking the ministry to pay a cost of Rs 1 lakh to the company within four weeks.

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Dismissing the contempt petition filed by the government against the company for non-payment of levy as “meritless,” the apex court said: “…we are constrained to make certain observations regarding the conduct of the Union of India (coal ministry). Here is a case where a private party followed all the rules and the law, as applicable, before investing large sums of money to undertake business.

“In fact, it appears that it was the Union of India 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 the UoI.”

“To compound the BLA’s woes, the coal ministry filed an affidavit before the SC including it 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. As a result of this callous, careless and casual approach of the UoI, the petitioner had to suffer loss and ignominy,” Justice Kohli, writing the judgment for the Bench, stated.

It rejected the government stand that the purpose of imposition of the additional levy was that since the process of allocation was found to be fundamentally flawed by the SC, all the beneficiaries of the said flawed process including BLA should suffer the consequences and compensate the public exchequer for the loss caused.

The SC had in 2014 cancelled the allocation of coal blocks — Gotitoria (East and West) in Mahapani coalfields of Madhya Pradesh — to BLA Industries on a PIL alleging that the coal blocks were arbitrarily allocated between 1993 to 2011 without adhering to the mandatory legal procedures to favour ineligible companies.

BLA’s coal blocks had also figured in the list of 46 coal blocks that could have been “saved” from cancellation on imposition of certain terms and conditions, including payment of additional levy compensatory amount @ Rs 295 per MT on the allottees of the coal blocks for coal produced from September 25, 2014 till March 31, 2015.

“Simply because the petitioner had participated in the meetings conducted by the Screening Committee cannot be held against it… No parity can be drawn between the petitioner and the other allottees of the coal blocks when the petitioner followed the correct procedure of applying through proper channel for grant of a mining lease….,” the judgment stated.

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