# B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA AND ANOTHER

- **Citation:** [2022] 11 S.C.R. 184
- **Court:** Supreme Court of India
- **Decided:** 2022-08-17
- **Bench:** N. V. Ramana, Krishna Murari, Hima Kohli
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/b-l-a-industries-private-limited-v-union-of-india-and-another-35627
- **Pages:** 19

## Headnote

Mines and Minerals (Development & Regulation) Act, 1957
- Mineral Concession Rules, 1960 - Mines (Special Provisions)
Ordinance, 2014 - Supreme Court in Manohar Lal Sharma v. Principal
Secretary and Others [2014] 8 SCR 446 (the First Judgment) declared
that the entire allocation of coal blocks, as per the recommendations
made by the Screening Committee constituted by respondent no.1Union of India (UOI) from 14th July, 1993 onwards and the
allocations made through the Government Dispensation Route after
1993 were arbitrary and illegal - Outcome of the illegal allocations
was subject matter of subsequent judgment delivered in the same
case reported as [2014] 12 SCR 110 (the Second Judgment) wherein
Coal block allotments were divided in two categories on the basis
of the documents furnished by UOI - First category of the allotments
was quashed outright as illegal and arbitrary - Second category
comprised of 46 coal blocks mentioned in Annexure-1 and
Annexure-2 that could possibly be "saved" from cancellation on
imposition of certain terms and conditions, out of which 42 coal
blocks were cancelled with a grace period of six months granted
for the said cancellation to take effect - Coal blocks allocated to
the petitioner were mentioned in Annexure-1 extracted at the end of
the Second Judgment - Petitioner's name and mining lease area
included by UOI in the Schedules appended to the 2014 Ordinance
even though, the Screening Committee had not allocated any coal
block to it - Held: Allocation of the coal block made in favour of
the petitioner did not run foul of the procedure prescribed in the
MMDR Act and the MC Rules - 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 the UOI at the appropriate stage, that led to painting the
petitioner with the same brush as the other allottees listed in
[2022] 11 S.C.R. 184
184
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Annexures- 1 and 2 - It was not a beneficiary of the flawed process,
thus the consequences spelt out in the Second Judgment would not
apply to it and thus, it cannot be called upon to pay penalty as
compensatory payment, as demanded by UOI - UOI not entitled to
claim payment of an additional levy for the coal extracted by the
petitioner from the subject mine - Any such demand raised is set
aside - Contempt Petition filed by UOI is also dismissed as meritless
- Costs of Rs. 1,00,000/- be paid by UOI to the Petitioner -
Deprecation.
Allowing the writ petition and dismissing the contempt
petition, the Court
HELD: 1.1 The issue that requires to be answered in the
instant case is whether the petitioner was allocated coal mines
through the Screening Committee Route and/or the Government
Dispensation Route. Only if the answer to the said question is in
the affirmative, would the respondent No.1-UOI be entitled to
claim compensatory payment from the petitioner in terms of the
Second Judgment and not otherwise. [Para 14][196-B-C]
1.2 Admittedly, the petitioner had submitted a mining lease
application to the Collector (Mining), Narsingpur, Madhya
Pradesh on 8th November, 1994. The said application was
forwarded to the Tehsildar, Gadarwara and the Mining Inspector,
Narsingpur for seeking an inspection report for the area applied
for. Ground work was done by the Tehsildar and the Mining
Inspector who submitted a report of the proposed area which in
turn was confirmed by the Mine Surveyor. The map of the applied
area submitted by the petitioner was also certified by the
Divisional Forest Officer and a consent from Chief Conservator
of Forest was obtained. Additionally, a mineral analysis report
was sought from the petitioner and after all the aforementioned
information was gathered and analyzed, the Collector, Narsingpur
addressed a letter dated 15th May, 1995 to the Principal Secretary,
Mineral Resource Department, Bhopal (Madhya Pradesh) stating
inter alia that if no Government authorized unit was

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B.L.A. INDUSTRIES PRIVATE LIMITED
v.
UNION OF INDIA AND ANOTHER
(Writ Petition (Civil) No. 63 of 2015)
AUGUST 17, 2022
[N. V. RAMANA, CJI, KRISHNA MURARI AND
HIMA KOHLI, JJ.]
Mines and Minerals (Development & Regulation) Act, 1957
- Mineral Concession Rules, 1960 - Mines (Special Provisions)
Ordinance, 2014 - Supreme Court in Manohar Lal Sharma v. Principal
Secretary and Others [2014] 8 SCR 446 (the First Judgment) declared
that the entire allocation of coal blocks, as per the recommendations
made by the Screening Committee constituted by respondent no.1Union of India (UOI) from 14th July, 1993 onwards and the
allocations made through the Government Dispensation Route after
1993 were arbitrary and illegal - Outcome of the illegal allocations
was subject matter of subsequent judgment delivered in the same
case reported as [2014] 12 SCR 110 (the Second Judgment) wherein
Coal block allotments were divided in two categories on the basis
of the documents furnished by UOI - First category of the allotments
was quashed outright as illegal and arbitrary - Second category
comprised of 46 coal blocks mentioned in Annexure-1 and
Annexure-2 that could possibly be "saved" from cancellation on
imposition of certain terms and conditions, out of which 42 coal
blocks were cancelled with a grace period of six months granted
for the said cancellation to take effect - Coal blocks allocated to
the petitioner were mentioned in Annexure-1 extracted at the end of
the Second Judgment - Petitioner's name and mining lease area
included by UOI in the Schedules appended to the 2014 Ordinance
even though, the Screening Committee had not allocated any coal
block to it - Held: Allocation of the coal block made in favour of
the petitioner did not run foul of the procedure prescribed in the
MMDR Act and the MC Rules - 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 the UOI at the appropriate stage, that led to painting the
petitioner with the same brush as the other allottees listed in
[2022] 11 S.C.R. 184
184
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Annexures- 1 and 2 - It was not a beneficiary of the flawed process,
thus the consequences spelt out in the Second Judgment would not
apply to it and thus, it cannot be called upon to pay penalty as
compensatory payment, as demanded by UOI - UOI not entitled to
claim payment of an additional levy for the coal extracted by the
petitioner from the subject mine - Any such demand raised is set
aside - Contempt Petition filed by UOI is also dismissed as meritless
- Costs of Rs. 1,00,000/- be paid by UOI to the Petitioner -
Deprecation.
Allowing the writ petition and dismissing the contempt
petition, the Court
HELD: 1.1 The issue that requires to be answered in the
instant case is whether the petitioner was allocated coal mines
through the Screening Committee Route and/or the Government
Dispensation Route. Only if the answer to the said question is in
the affirmative, would the respondent No.1-UOI be entitled to
claim compensatory payment from the petitioner in terms of the
Second Judgment and not otherwise. [Para 14][196-B-C]
1.2 Admittedly, the petitioner had submitted a mining lease
application to the Collector (Mining), Narsingpur, Madhya
Pradesh on 8th November, 1994. The said application was
forwarded to the Tehsildar, Gadarwara and the Mining Inspector,
Narsingpur for seeking an inspection report for the area applied
for. Ground work was done by the Tehsildar and the Mining
Inspector who submitted a report of the proposed area which in
turn was confirmed by the Mine Surveyor. The map of the applied
area submitted by the petitioner was also certified by the
Divisional Forest Officer and a consent from Chief Conservator
of Forest was obtained. Additionally, a mineral analysis report
was sought from the petitioner and after all the aforementioned
information was gathered and analyzed, the Collector, Narsingpur
addressed a letter dated 15th May, 1995 to the Principal Secretary,
Mineral Resource Department, Bhopal (Madhya Pradesh) stating
inter alia that if no Government authorized unit was prepared to
operate in the area and the petitioner is granted the lease, it
would result in development of the area and generation of
employment. Therefore, the Collector (Mining) recommended
B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA
AND ANOTHER
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grant of a mining lease for a period of 30 years to the petitioner
in accordance with the Rules and the policy of the Government.
Based on the aforesaid input received from the Collector
(Mining), Narsingpur, the respondent No. 2-State Government
wrote a letter dated 23rd December, 1995 to the respondent No.1
- UOI specifically stating inter alia that the petitioner had
furnished all the relevant information as required under Rule 22
(3) (d) (e) (f) and (g) of the MC Rules, 1960 along with the coal
mining plan of the specified area and after examination, the
petitioner was found to be eligible under the Rules for grant of a
mining lease. Stating that prior approval of the Central
Government was necessary under Section 5(1) of the MMDR
Act, the respondent No. 2 - State Government requested the
respondent No. 1-UOI to grant requisite approval in favour of
the petitioner. It was in the aforesaid background that the
recommendation received from the respondent No.2-State
Government was acted on by the respondent No. 1-UOI and the
letter dated 27th August, 1997 was issued granting approval of
the mining lease in favour of the petitioner. The aforesaid
sequence of events belies the plea taken by the respondent No.
1-UOI that the mining lease was granted in favour of the
petitioner solely on the basis of the recommendations made by
the Screening Committee. Simply because the petitioner had
participated in the meetings conducted by the Screening
Committee cannot be held against it. Participation in the said
meetings can also not be taken to mean that the petitioner had
applied directly to the respondent No. 1-UOI for grant of the
mining lease. In fact, the records reveal that the letter dated
21st June, 1996 issued by the respondent No. 1 - UOI stating
that the petitioner's proposal for identification of the captive
mining block for supply of coal to the 24 MW captive power plant
in Madhya Pradesh was considered in the meeting of the
Screening Committee and was approved, never found its way to
the respondent No. 2 - State Government. This position is borne
out on a perusal of the copies of the said letter endorsed by the
respondent No. 1 - UOI to different authorities. At Serial No.
(iv), the name of the "Chief Secretary, Government of
Maharashtra, Mumbai" has been endorsed instead of the "Chief
Secretary, Government of Madhya Pradesh" which fact stand
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confirmed from the reply dated 10th April, 2015 issued by the
respondent No. 1 - UOI to an RTI query received by it. A similar
stand has been taken by the respondent No. 2- State Government
in its reply dated 6th April, 2015 to an RTI query received by the
concerned department. The petitioner had also clarified that it
had applied to the State Government for grant of a mining lease
through the District Collector, Narsingpur, Madhya Pradesh in
the prescribed form and it was the said proposal that had been
recommended by the State Government to the respondent No. 1
- UOI for necessary approval. The said position is apparent from
the letter dated 3rd July, 1996 addressed by the petitioner to the
respondent No. 1 - UOI. [Paras 16, 17][197-A-H; 198-A-E]
1.3 Another relevant aspect that tips the scale in favour of
the petitioner is the counter affidavit filed by the respondent No.
2 - State Government which is in consonance with the plea taken
by the petitioner that the decision to grant the mining lease in its
favour was not based on any allocation letter issued directly by
the Central Government and/or the Screening Committee, but
was founded on an independent consideration of the petitioner's
application made by the State Government and done in accordance
with the provisions of the MMDR Act read with the MC Rules.
Respondent No. 2 - State Government has also referred to its
earlier affidavit dated 28 th October, 2013 filed before this Court
in the connected matters decided by the First Judgment, wherein
it had explained the procedure adopted for allocation of coal blocks
by the Screening Committee constituted by the Central
Government and had categorically averred that the said procedure
was followed in all cases "Other than one", where the application
was made directly to the State Government and not to the Central
Government. The said one case was explained to be that of the
petitioner herein. In other words, the respondent No. 2 - State
Government has affirmed the stand taken by the petitioner that
the procedure of allocation of the coal block through the Screening
Committee Route/Government Dispensation Route had not been
followed in the case of the petitioner and therefore there was no
illegality in allocation of the specified coal mines in its favour,
unlike the other cases. In the light of the aforesaid stand taken
by the respondent No. 2 - State Government which can be coB.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA
AND ANOTHER
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related with the correspondence placed on record, the plea of
the respondent No. 1 - UOI that the case of the petitioner was
considered by the Screening Committee in its 9th, 10th, 14th,
15th, 16th and 20th meetings, would not make the allocation
illegal. 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 which application on being received, was routed
by the Office of the Collector (Mines), Narsingpur to the Mineral
Resource Department, Government of Madhya Pradesh and
onwards to the respondent No. 1 - UOI, for prior approval. [Paras
18, 19][200-A-G]
1.4 The mining lease granted in favour of the petitioner
was not tainted by mala fides, as was the case of the other allottees.
It was the respondent No. 2 - State Government that had
undertaken a diligent exercise to examine the petitioner's
application before recommending its case to the respondent No.
1 - UOI for grant of the mining lease. Founded on the said
recommendations, the respondent No. 1 - UOI had issued the
letter allocating the coal block to the petitioner and not the other
way round. The respondent No.1 - UOI ought not to have included
the name of the petitioner and the coal blocks allotted to it in
Annexure - 1 filed before this Court that forms a part of the
Second Judgment. Taking the contents of the said Annexures -
1 and 2 filed by the respondent No. 1 - UOI as true and correct,
this Court passed the consequential order directing payment of
compensation as an additional levy. The fact that the petitioner
did not get an opportunity to inform the Court about the error on
the part of the respondent No. 1 - UOI of including its name in
Annexure - 1 can be discerned from the observations made in
para 24 of the Second Judgment to the effect that the Court had
not dealt with any individual case but only with the process of
allotment of coal blocks which was found to be fatally flawed.
Allocation of the coal block made in form of the petitioner did not
run foul 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
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Government Dispensation Route, which fact was not pointed out
by the respondent No. 1 - UOI at the appropriate stage, that led
to painting the petitioner with the same brush as the other allottee
listed in Annexures - 1 and 2. The petitioner was not a beneficiary
of the flawed process thus, the consequences spelt out in the
Second Judgment would not apply to it and therefore, it cannot
be called upon to pay penalty as compensatory payment, as
demanded by the respondent No. 1 - UOI. 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. Contempt Petition (Crl.) No.7 of 2016 is
dismissed as meritless. Litigation costs of ` 1,00,000/- (Rupees
one lakh) shall be paid by the respondent No.1-UOI to the
petitioner within four weeks. [Paras 20-24][200-H; 201-A-H; 202A-C]
Manohar Lal Sharma v. Principal Secretary and Others
(2014) 9 SCC 516 : [2014] 8 SCR 446; Manohar Lal
Sharma v. Principal Secretary and Others (2014) 9 SCC
614 : [2014] 12 SCR 110 - referred to.
Case Law Reference
[2014] 8 SCR 446
referred to
Para 7
[2014] 12 SCR 110
referred to
Para 8
CIVIL ORIGINAL JURISDICTION: Writ Petiion (Civil) No. 63
of 2015.
Under Article 32 of The Constitiution of India
Abhimanyu Bhandari, Mahesh Agarwal, Ayush Agarwal,
Ms. Madhavi Agarwal, Victor Dass, Ms. Rubina, E. C. Agrawala, Advs.
for the Petitioner.
Balbir Singh, ASG, Saurabh Mishra, AAG, Rajat Nair, Naman
Tandon, Shyam Gopal, Samarvir Singh, Chinmayee Chandra, Gurmeet
Singh Makker, Manoj Kumar, Sunny Choudhary, Mrs. Shally Bhasin,
Advs. for the Respondents.
B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA
AND ANOTHER
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The Judgment of the Court was delivered by
HIMA KOHLI, J.
1. The petitioner has approached this Court under Article 32 of
the Constitution of India raising a grievance against the respondent No.1
- Ministry of Coal, Union of India1 for having included its name and
mining lease area in the Schedules appended to the Coal Mines (Special
Provisions) Ordinance, 20142, even though, the Screening Committee
constituted by the Ministry of Coal, Union of India had not allocated any
coal block to it.
2. A quick glance at the relevant chronology of events, as narrated
in the petition, are considered necessary. The petitioner had submitted
an application dated 8th November, 1994 under Section 2 of the Forest
(Conservation) Act, 19803 to the District Collector, Narsinghpur District,
Narsingpur, Madhya Pradesh for permission to undertake coal mining
on forest land. On 21st November, 1994, the petitioner applied to the
respondent No.2 - State of Madhya Pradesh4 in Form-I under the Mineral
Concession Rules, 19605 for grant of a mining lease. On 7th April, 1995,
the petitioner submitted an application to the respondent No.1 - UOI
under Section 5(2) of the Mines and Minerals (Development &
Regulation) Act, 19576 for approval of the mining plan.
3. On 15th May, 1995, the District Collector, Narsinghpur
forwarded the petitioner's application to the Principal Secretary of the
respondent No.2 - State Government with a recommendation for grant
of a mining lease in its favour. In the very same month, in reply to a letter
dated 5th May, 1995 received from the respondent No. 1 - UOI seeking
essential details regarding the approval of the mining plan, the petitioner
furnished the necessary information under cover of letter dated 19th
May, 1995. On 15th December, 1995, the respondent No. 1- UOI issued
a letter to the petitioner calling upon it to appear before the Screening
Committee in a meeting scheduled on 20th December, 1995 for screening
the proposals relating to captive mining by power generation companies
and companies engaged in the manufacture of iron and steel. Accordingly,
1 For short 'UOI'
2 For short 'Ordinance'
3 For short 'FC Act'
4 For short 'State Government'
5 For short 'MC Rules'
6 For short 'MMDR Act'
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the petitioner participated in the 9th Meeting held by the Screening
Committee on 20th December, 1995.
4. On 23rd December, 1995, the Department of Mineral Resources
of the respondent No.2 - State Government addressed a letter to the
respondent No.1 - UOI for seeking prior approval under Section 5(1) of
MMDR Act for grant of mining lease for coal in favour of the petitioner
for a period of 30 years over an area measuring 249.243 hectares situated
in Villages Mohapani, Richhai and Chargaonkhurd. On 21st June, 1996,
the respondent No.1 - UOI wrote a letter to the petitioner informing it
that the Screening Committee had identified "Gotitoria (East & West)
Coal Blocks" in Mohapani Coalfield, Madhya Pradesh to meet the coal
requirements of the captive power plant and that the petitioner should
approach the authorities for obtaining a mining lease of the specified
blocks. Pertinently, a copy of the aforesaid letter was not marked by the
respondent No.1 - UOI to the respondent No.2 - State Government.
Instead, the same was marked to the Chief Secretary, Government of
Maharashtra, Mumbai. The fact that the said letter was not endorsed to
the respondent No.2 - State Government was also confirmed by the
respondent No.1 - UOI in its reply dated 10th April, 2015 to a query
raised in an application under the Right to Information Act, 20057.
5. On its part, the petitioner responded to the letter dated
21st June, 1996 sent by the respondent No.1 - Union of India by writing
back on 3rd July, 1996, stating inter alia that it had already applied to the
State Government in the prescribed form for grant of a mining lease
through the District Collector, Narsinghpur, Madhya Pradesh and the
said proposal had been recommended by the respondent No. 2 - State
Government to the Ministry of Coal for grant of approval. The petitioner
requested that the approval to the proposal forwarded by the respondent
No.2 - State Government for grant of a mining lease be accorded by the
respondent No.1 - UOI at the earliest.
6. Finally, vide letter dated 27th August, 1997, addressed by the
respondent No.1 - UOI to the respondent No.2 - State Government,
approval was accorded by the Central Government for grant of a mining
lease in favour of the petitioner under Section 5(1) of the MMDR Act.
Pursuant to the aforesaid letter, the mining lease for the area in question
was executed by the respondent No.2 - State Government in favour of
the petitioner on 21st May, 1998. On the petitioner setting up a coal
7 For short 'RTI'
B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA
AND ANOTHER [HIMA KOHLI, J.]
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washery operation in September, 2001, coal mining operations were
finally commenced in October, 2004.
7. After passage of almost a decade, a group of petitions in the
nature of Public Interest Litigations were filed before this Court with the
grievance that coal blocks had been arbitrarily allocated between the
years 1993 to 2011 without adhering to the mandatory legal procedure
prescribed under the MMDR Act and in breach of the relevant provisions
of the Coal Mines (Nationalization) Act, 19738, to favour ineligible
companies tainted with mala fides and corruption. The said group of
petitions were decided by a three Judges Bench of this Court, by a
detailed judgment dated 25th August, 20149 in Manohar Lal Sharma v.
Principal Secretary and Others10 wherein, the prayer regarding
quashing of the allocation of coal blocks to private companies made by
the Central Government between 1993 to 2011, was considered
extensively and it was held that the exercise undertaken by the Central
Government of allocation of coal blocks, was neither traceable to the
MMDR Act or the CMN Act and the practice and procedure adopted
by the Central Government for allocation of coal blocks to the beneficiaries
through the Screening Committee Route, was inconsistent with the extant
law already enacted and the Rules framed. Consequently, this Court
declared that the entire allocation of coal blocks, as per the
recommendations made by the Screening Committee constituted by the
respondent No.1 - Union of India from 14th July, 1993 onwards and the
allocations made through the Government Dispensation Route after 1993
suffered from the vice of arbitrariness and were illegal.
8. The outcome of the illegal allocations were the subject matter
of the subsequent judgment dated 24th September, 201411 delivered in
the same case12. After carefully examining all the consequences of
cancellation of the coal blocks, as put forth by the respondent No.1 -
UOI and the learned counsel appearing for the allottees, this Court divided
the coal block allotments in two categories on the basis of the documents
that were furnished by the respondent No.1 - UOI. The first category
was of allotments other than those that were mentioned by the respondent
No.1 - UOI in Annexure-1 and Annexure-2, filed by it. The second
8 For short 'CMN Act'
9 For short 'First Judgment'
10 (2014) 9 SCC 516
11 For short 'Second Judgment'
12 (2014) 9 SCC 614
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category comprised of 46 coal blocks mentioned in Annexure-1 and
Annexure-2 that could possibly be "saved" from cancellation on imposition
of certain terms and conditions. The first category of the allotments
was quashed outright by the Court as patently illegal and arbitrary. This
left the second category of coal block allotments that had come into
production or were likely to come into production.
9. Out of 46 coal blocks, mentioned in Annexure-1 and Annexure2, 42 coal blocks were cancelled with a grace period of six months
granted for the said cancellation to take effect. Pertinently, the coal
blocks allocated to the petitioner herein were mentioned at Sr. No.22
and 23 of Annexure-1 that was extracted at the end of the Second
Judgment. Besides deferment of cancellation, this Court issued the
following directions:
"38. In addition to the request for deferment of cancellation, we
also accept the submission of the learned Attorney General that
the allottees of the coal blocks other than those covered by the
judgment and the four coal blocks covered by this order must pay
an amount of Rs 295 per metric tonne of coal extracted as an
additional levy. This compensatory amount is based on the
assessment made by CAG. It may well be that the cost of extraction
of coal from an underground mine has not been taken into
consideration by CAG, but in matters of this nature it is difficult to
arrive at any mathematically acceptable figure quantifying the
loss sustained. The estimated loss of Rs 295 per metric tonne of
coal is, therefore, accepted for the purposes of these cases. The
compensatory payment on this basis should be made within a period
of three months and in any case on or before 31-12-2014. The
coal extracted hereafter till 31-3-2015 will also attract the additional
levy of Rs 295 per metric tonne."
10. We have been informed in the course of arguments that the
coal blocks in question allocated to the petitioner have already been
allocated to a third party. Learned counsel for the petitioner states that
the only issue that survives for consideration in this petition relates to the
liability of the petitioner to pay compensation towards the coal extracted
as an additional levy demanded by the respondent No.1 - UOI, in terms
of the directions issued in para 38 of the Second Judgment extracted
above. Notably, respondent No.1 - UOI has filed a contempt petition
registered as Contempt Petition (Criminal) No. 7/2016 alleging inter
B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA
AND ANOTHER [HIMA KOHLI, J.]
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alia that the petitioner herein is in willful disobedience of the First and
Second Judgments that had 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 31st December, 2014. Stating that
respondent No. 1 - UOI had already filed Contempt Petition No. 2/2015
against prior allottees, the captioned contempt petition has been filed
against the petitioner herein on account of its failure to pay the additional
levy for the second phase, i.e., for coal produced from 25th September,
2014 till 31st March, 2015 that was directed to be paid by 30th June,
2015.
11. Mr. Abhimanyu Bhandari, learned counsel for the petitioner
has argued that the erroneous inclusion of the name of the petitioner in
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 at serial No. 22 and 23 in Annexure-1 filed by the respondent
No. 1 - UOI before this 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 the respondent No. 2 - State Government 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. Therefore, the petitioner ought not to be saddled
with any compensation/levy towards the coal extracted. Learned counsel
submitted that had an opportunity of hearing being granted to the petitioner,
the above position would have been clarified but no such opportunity
was given.
12. Per Contra, Mr. Balbir Singh, learned ASG appearing for the
respondent No.1 - Union of India explained that the levy has been
imposed in principle on the beneficiaries of illegal allocation just like the
petitioner herein. The additional levy is in the nature of penalty as well
as compensation for the loss caused to the public exchequer. He stated
that the object and purpose of imposition of the additional levy was that
since the process of allocation was found to be fundamentally flawed by
this Court therefore, all the beneficiaries of the said flawed process
including the petitioner herein ought to suffer the consequences and
compensate the public exchequer for the loss caused. Stating that as it
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was the Screening Committee constituted by the respondent No. 1 -
UOI that had identified Gotitoria (East and West Blocks) in Mohapani
Coalfield in Madhya Pradesh for captive mining by the petitioner herein
to meet the coal requirements of the captive power plant vide allocation
letter dated 21st June, 1996, the petitioner was covered under both the
judgments but it has failed to pay any amount towards additional levy in
the first phase that was to be paid on or before 31st December, 2014 and
the second phase that was to be paid on or before 30th June, 2015. He
specifically referred to the First Judgment in particular, para 125 thereof
to urge that the petitioner's name was mentioned along with some other
allottees in the 11th Meeting of the Screening Committee held on 26th27th September, 1997 and once the allocations made by the Central
Government on the recommendations of the Screening Committee have
been held by this Court to be illegal, the petitioner cannot claim any
different treatment from that extended to the other allottees. To rebut
the contention of the learned counsel for the petitioner that principles of
natural justice have been violated in the instant case, as the petitioner
was not afforded an opportunity of hearing, learned ASG had drawn the
attention of this Court to the observations made in the Second Judgment
to the effect that all parties who were adversely affected, were duly
given a hearing before the First Judgment was pronounced. He submitted
that the petitioner was afforded an opportunity of hearing along with
several other allottees and only thereafter the First and Second Judgments
were passed.
13. In his rejoinder, learned counsel for the petitioner has
vehemently opposed the submission made on behalf of the respondent
No. 1 - UOI that the petitioner was afforded an opportunity of hearing
by the Court which he submits is quite apparent from a perusal of para
24 of the Second Judgment, where this Court has itself observed that
"The judgment did not deal with any individual case. It dealt only
with the process of allotment of coal blocks and found it to be illegal
and arbitrary." He reiterated the fact that the mining lease was granted
in favour of the petitioner in the same manner and sequence as was
approved by this Court in the First Judgment and therefore the petitioner's
case did not fall foul of the said judgment. To reinforce the aforesaid
stand, learned counsel also alluded to the counter affidavit filed by the
respondent No. 2 - State Government on 09th February, 2016 which
supports the plea of the petitioner that the State Government's decision
to grant a mining lease in its favour was not the result of any allocation
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letter issued by the Central Government and/or the Screening Committee,
but was based on its own independent consideration done strictly under
the provision of MMDR Act read with the MC Rules.
14. We have heard the rival submissions advanced by learned
counsel for the parties and perused the records in the backdrop of the
First Judgment dated 25th August, 2014 and the Second Judgment dated
24th September, 2014 rendered in the case of Manohar Lal Sharma
(supra). The issue that requires to be answered in the instant case is
whether the petitioner was allocated coal mines through the Screening
Committee Route and/or the Government Dispensation Route. Only if
the answer to the said question is in the affirmative, would the respondent
No. 1 - UOI be entitled to claim compensatory payment from the
petitioner in terms of the Second Judgment and not otherwise.
15. A perusal of the First Judgment leaves no manner of doubt
that this Court held that the practice and procedure adopted by the
respondent No. 1 - UOI for allocation of coal blocks through the
administrative route was not consistent with the statute and the Rules
and that the legal regime under the MMDR Act imposes a statutory
obligation upon the State Governments to recommend or not to
recommend to the Central Government, grant of prospecting license or
mining lease for coal. This Court also questioned the entire exercise of
allocation of coal mines through the Screening Committee Route and
observed that it suffered from the vice of arbitrariness; that there was
no evaluation on merits and no inter se comparison of the applicants;
that the determination of the Screening Committee was subjective and
most of the companies which had been allocated coal blocks, were not
engaged in the production of steel, power or cement at the time of
allocation and nor did they disclose in their applications whether or not
the power, steel or cement plants were operational. Noting the aforesaid
legal flaws that went to the root of the matter, the entire allocation of the
coal blocks in terms of the recommendations made by the Screening
Committee in 36 meetings conducted by it from 14thJuly, 1993 onwards
and the consequential allocation through the Central Government
Dispensation Route were struck down as being unfair, ambiguous and in
gross breach of the guidelines.
16. To test the veracity of the submission made by the petitioner
that in its case, the procedure laid down was followed "to the T" for
allocation of the coal blocks, it is imperative to examine the chronology
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of the events and the documents placed on record. Admittedly, the
petitioner had submitted a mining lease application to the Collector
(Mining), Narsingpur, Madhya Pradesh on 8th November, 1994. The said
application was forwarded to the Tehsildar, Gadarwara and the Mining
Inspector, Narsingpur for seeking an inspection report for the area applied
for. Ground work was done by the Tehsildar and the Mining Inspector
who submitted a report of the proposed area which in turn was confirmed
by the Mine Surveyor. The map of the applied area submitted by the
petitioner was also certified by the Divisional Forest Officer and a consent
from Chief Conservator of Forest was obtained. Additionally, a mineral
analysis report was sought from the petitioner and after all the
aforementioned information was gathered and analyzed, the Collector,
Narsingpur addressed a letter dated 15th May, 1995 to the Principal
Secretary, Mineral Resource Department, Bhopal (Madhya Pradesh)
stating inter alia that if no Government authorized unit was prepared to
operate in the area and the petitioner is granted the lease, it would result
in development of the area and generation of employment. Therefore,
the Collector (Mining) recommended grant of a mining lease for a period
of 30 years to the petitioner in accordance with the Rules and the policy
of the Government. Based on the aforesaid input received from the
Collector (Mining), Narsingpur, the respondent No. 2 - State Government
wrote a letter dated 23rd December, 1995 to the respondent No. 1 -
UOI specifically stating inter alia that the petitioner had furnished all
the relevant information as required under Rule 22 (3) (d) (e) (f) and (g)
of the MC Rules, 1960 along with the coal mining plan of the specified
area and after examination, the petitioner was found to be eligible under
the Rules for grant of a mining lease. Stating that prior approval of the
Central Government was necessary under Section 5(1) of the MMDR
Act, the respondent No. 2 - State Government requested the respondent
No. 1 - UOI to grant requisite approval in favour of the petitioner. It
was in the aforesaid background that the recommendation received from
the respondent No. 2- State Government was acted on by the respondent
No. 1 - UOI and the letter dated 27th August, 1997 was issued granting
approval of the mining lease in favour of the petitioner.
17. The aforesaid sequence of events belies the plea taken by the
respondent No. 1 - UOI that the mining lease was granted in favour of
the petitioner solely on the basis of the recommendations made by the
Screening Committee. Simply because the petitioner had participated in
the meetings conducted by the Screening Committee cannot be held
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against it. Participation in the said meetings can also not be taken to
mean that the petitioner had applied directly to the respondent No. 1 -
UOI for grant of the mining lease. In fact, the records reveal that the
letter dated 21st June, 1996 issued by the respondent No. 1 - UOI stating
that the petitioner's proposal for identification of the captive mining block
for supply of coal to the 24 MW captive power plant in Madhya Pradesh
was considered in the meeting of the Screening Committee and was
approved, never found its way to the respondent No. 2 - State
Government. This position is borne out on a perusal of the copies of the
said letter endorsed by the respondent No. 1 - UOI to different authorities.
At Serial No. (iv), the name of the "Chief Secretary, Government of
Maharashtra, Mumbai" has been endorsed instead of the "Chief
Secretary, Government of Madhya Pradesh" which fact stand confirmed
from the reply dated 10th April, 2015 issued by the respondent No. 1 -
UOI to an RTI query received by it. A similar stand has been taken by
the respondent No. 2- State Government in its reply dated 6th April, 2015
to an RTI query received by the concerned department. The petitioner
had also clarified that it had applied to the State Government for grant of
a mining lease through the District Collector, Narsingpur, Madhya Pradesh
in the prescribed form and it was the said proposal that had been
recommended by the State Government to the respondent No. 1 - UOI
for necessary approval. The said position is apparent from the letter
dated 3rd July, 1996 addressed by the petitioner to the respondent No. 1
- UOI. The letter dated 27th August, 1997 issued by the respondent No.
1 - UOI to the respondent No. 2 - State Government, contents whereof
are extracted below for ready reference, is also on similar lines: -
"13011/1/96-CA
 Dated : 27.08.1997
To,
Shri A.K. Trivedi,
Under Secretary,
Department of Mineral Resources,
Government of Madhya Pradesh,
Ballav Bhawan,
Bhopal
Subject: Grant of mining lease over 2.49 sq. kms. of Mohpani
Block M/s BLA Industries-communication of Prior approval of
the Central Government Regarding.
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Sir,
I am directed to refer to the endorsement of this
Ministry's letter of even number dated 08.07.1997, addressed
to Shri Anup Kumar Agarwalla, President, BLA Industries,
wherein it was stated that fresh recommendation of the State
Government for grant of Mining lease over 2.49 Sq. kms will
be required. However, this has been re-examined in this
Ministry. It has been decided to consider the recommendations
of the State Government dated 23.12.95 for grant of mining
lease over 2.49 sq. kms. Particularly in view of the fact that
the area over which the mining plan has been prepared and
approved and the area which as been recommended by the
State government for grant of mining lease, are same, though
the date of recommendation precedes substantially the date of
communication of the Central Government's approval on the
mining plan.
2. In view of the above, the Central Government, on consideration
of the recommendations of the State Government vide their
letter No. 3-72/95/12/2/5 dated 23.12.95 for grant of mining
lease over an area of 249 .243 hectares in Mohapani and two
other villages in Narsinghpur District of Madhya Pradesh, the
approval of the Central Government for grant of mining lease
in favour of M/s BLA Industries over an area of 249.243
hectares as recommended is hereby accorded under section
5(1) of the Mines and Minerals (Regulation and Development)
Act, 1957.
3. The area co-ordinates of the mining block of 2.49 Sq. Kms.
Over which the approval of the Central Government has been
communicated for grant of mining lease are detailed in the
Annexure for accurate and correct physical identification of
the Coal Mining block. These may appropriately be incorporated
in the mining lease deed executed between the State
Government and M/s BLA Industries Limited. A copy of the
lease deed may also be furnished to the Ministry of Coal.
Yours faithfully,
Sd/-
 (A. Banerjee)
 Director"
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18. Another relevant aspect that tips the scale in favour of the
petitioner is the counter affidavit filed by the respondent No. 2 - State
Government which is in consonance with the plea taken by the petitioner
that the decision to grant the mining lease in its favour was not based on
any allocation letter issued directly by the Central Government and/or
the Screening Committee, but was founded on an independent
consideration of the petitioner's application made by the State Government
and done in accordance with the provisions of the MMDR Act read
with the MC Rules. Respondent No. 2 - State Government has also
referred to its earlier affidavit dated 28th October, 2013 filed before this
Court in the connected matters decided by the First Judgment, wherein
it had explained the procedure adopted for allocation of coal blocks by
the Screening Committee constituted by the Central Government and
had categorically averred that the said procedure was followed in all
cases "Other than one", where the application was made directly to
the State Government and not to the Central Government. The said one
case was explained to be that of the petitioner herein.
19. In other words, the respondent No.