Rs 1 lakh fine on Centre for carelessness in blacklisting a mining company

New Delhi: The Supreme Court on Wednesday slapped a fine of Rs 1 lakh on the Centre government over its careless and callous approach in including a mining company in the errant mine owners, because of which the company had to suffer loss and ignominy.

The company's name was included on the list of coal block allottees whose leases were cancelled by the top court in 2014.

A bench headed by Chief Justice N.V. Ramana and comprising justices Krishna Murari and Hima Kohli said: "We are constrained to make certain observations regarding the conduct of the respondent no. 1 -- UOI (Union of India). 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."

The top court quashed the coal ministry's demand for an additional levy for the coal extracted by the company.

It added: "In fact, it appears from the facts of the case that it was the respondent no. 1 - UOI 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 respondent no. 1 - UOI."

Justice Kohli, who authored the judgment on behalf of the bench, said to compound the petitioner's woes, the Centre filed an affidavit before the top court including the petitioner in the list of errant mine owners, based on its 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 respondent no. 1 - UOI, the present petitioner had to suffer loss and ignominy," said justice Kohli.

The petitioner, BLA Industries Private Limited, had moved the top court under Article 32 of the Constitution raising a grievance against the Ministry of Coal, Union of India for having included its name and mining lease area in the schedules appended to the Coal Mines (Special Provisions) Ordinance, 2014 , even though, the screening committee constituted by the Ministry of Coal, had not allocated any coal block to it.

In 2014, the apex court had cancelled the allocation of coal blocks -- Gotitoria (East and West) in Mahapani coalfields of Madhya Pradesh -- which were granted to BLA Industries on a PIL alleging the blocks were arbitrarily allocated between 1993 to 2011. The PIL claimed blocks were granted without adhering to the mandatory legal procedures in order to favour companies, which were not ineligible.

The company's coal block was also on the list of 46 coal blocks that could have been "saved" from cancellation on imposition of certain terms and conditions.

The conditions included payment of an additional levy compensatory amount at the rate of Rs 295 per MT on the allottees of the coal blocks for coal produced from September 25, 2014 till March 31, 2015.

Advocate Abhimanyu Bhandari instructed by advocate Ayush Aggarwal, representing BLA industries, argued that the erroneous inclusion of the name of his client on the list of 46 allottees of coal blocks and its mining lease area in the schedule appended to the Ordinance as also the erroneous inclusion of its name in annexure-1 filed by the respondent No. 1 - UOI before the top court, has resulted in cancellation /quashing of the lease that was validly granted in its favour.

"The petitioner was neither the beneficiary of the screening committee route nor of the Government Dispensation Route. It had followed the correct procedure prescribed under the MMDR Act/MC Rules by submitting an application for grant of a lease directly to respondent No. 2 - State Government (Madhya Pradesh) and only after the latter had processed the application and recommended the same for approval to the respondent No.1 - UOI, was the mining lease granted in favour of the petitioner," said the petitioner's counsel.

The UOI filed a contempt petition claiming that the petitioner is in wilful disobedience of the top court judgments, which directed payment of additional levy compensatory amount @ Rs 295 per MT on the allottees of the coal blocks which was to be paid latest by 31 December, 2014.

The top court said: "The upshot of the aforesaid discussion is that the respondent No. 1 - UOI is not entitled to claim payment of an additional levy for the coal extracted by the petitioner from the subject mine. Any such demand raised by the respondent No. 1 - UOI is hereby quashed and set aside. The writ petition is allowed on the aforesaid terms. Contempt Petition. is dismissed as meritless".

The top court held that the allocation of the coal block to the petitioner did not run afoul of the procedure prescribed in the MMDR Act and the MC Rules.

"The petitioner was not allocated the coal block either through the Screening Committee Route or the Central Government Dispensation Route, which fact was not pointed out by respondent No. 1 - UOI at the appropriate stage, which led to painting the petitioner with the same brush as the other allottee," noted the top court.

The bench added: "We find force in the submission made by the counsel for the petitioner that the mining lease granted in favour of the petitioner was not tainted by mala fides, as was the case of the other allottees."

The top court directed the Centre to pay Rs 1 lakh as litigation cost to the petitioner within four weeks.

IANS Input