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IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) NO. 463 OF 2012
PUBLIC INTEREST LITIGATION
In the matter of:
Common Cause & Ors …Petitioners
Versus
Union of India & Ors …Respondents
REJOINDER SUBMISSIONS ON BEHALF OF THE PETITIONERS
1. The instant petition filed under Article 32 of the Constitution of India has
raised a fundamental question as to whether the state is empowered to
distribute scarce and precious natural resources worth lakhs of crores of
rupees to a few favoured companies as largesse without following any
competitive, transparent and objective process of selection, and by
allowing private companies to make windfall gains from public resources.
The entire allocation of coal blocks made by the Central Government is
illegal & unconstitutional on the following legal grounds:
A. Not following mandatory legal procedure under MMDR Act
B. Allotment to companies and corporations in violation of
Section 3 (a)(iii) of the Coal Mines (Nationalisation) Act of 1973
C. Violation of the principle of trusteeship of natural resources,
gifting away of precious resources as largesse
D. Arbitrariness, lack of transparency, lack of objectivity and
non-application of mind
E. Mala-fides, allotment to ineligible companies and corruption
2. This Hon‟ble Court has heard the arguments advanced by the Union of
India, State Governments of 7 coal bearing states and of Coal Producers
Association in response to the above writ petition. These rejoinder
submissions deal with the arguments put forth by these respondents.
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Not following mandatory legal procedure
3. Certain coal mines were nationalised through the Coal Mines
(Nationalisation) Act 1973 and vested in the Central Government after
payment of specified compensation. However, the States continued to be
the owner of the coal reserves and the coal mineral continued to be a
mineral specified by the first schedule of the Mines and Minerals
(Development & Regulation) Act 1957. The process of grant of allocation of
mining leases including coal blocks continued to be governed by the
MMDR Act as admitted by the Government in its Counter Affidavit at page
3-6. Under the said Act, though leases/mining plans need the approval of
the Central Government, however it is the State Government which has to
receive applications for mining leases including for coal blocks, make the
selection from amongst applicants, and has to process such applications
as per the MMDR Act and Mineral Concession Rules 1960.
4. In this light, it is important to consider the statutory effect of Section 4,
10, 11 and 19 of the MMDR Act. Section 4(1) states: “No person shall
undertake any reconnaissance, prospecting or mining operations in any
area, except under and in accordance with the terms and conditions of a
reconnaissance permit or of a prospecting licence or, as the case may
be, of a mining lease, granted under this Act and the rules made
thereunder.”
5. Section 10 of the MMDR Act provides: “(1) An application for a
reconnaissance permit, prospecting licence or mining lease in respect of
any land in which the minerals vest in the Government shall be made to
the State Government concerned in the prescribed form and shall be
accompanied by the prescribed fee.
(2) …
(3) On receipt of an application under this section, the State Government
may, having regard to the provisions of this Act and any rules made
thereunder, grant or refuse to grant the permit, licence or lease.”
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6. Section 11 (2) proviso of the MMDR Act deals with the grant of prospecting
licenses, mining leases in non-virgin area and it states: “…the State
Government, after taking into consideration the matter specified in sub-
section (3), may grant the reconnaissance permit, prospecting license or
mining lease, as the case may be, to such one of the applicants as it may
deem fit.” Thus it is clear that the selection of the successful applicant has
to be made by the State Government and not the Central Government.
7. Section 19 of the MMDR Act states: “Any reconnaissance permit,
prospecting licence or mining lease granted, renewed or acquired in
contravention of the provisions of this Act or any rules or orders made
thereunder shall be void and of no effect.”
8. Rule 22 (1) of the MC Rules states: “An application for the grant of a mining
lease in respect of land in which the mineral vest in the Government shall
be made to the State Government in Form I through such officer or
authority as the State Government may specify in this behalf.” Form I is a
detailed form that elicits certain necessary information on the basis of
which an applicant has to be evaluated as per Section 11(3) of the MMDR
Act. While making the coal block allocations, the Central Government did
not follow such a procedure. The Form I application was made to the State
Government after the final allocation to a particular company for a
particular coal block had already been made by the Central Government.
9. Rule 63A of the MC Rules states: “The State Government shall dispose of
the application for grant of reconnaissance permit, prospecting license or
mining lease in the following period:
…
…
Provided further that the disposal by the State Government in case of
minerals listed in the First Schedule to the Act shall mean either
recommendation to the Central Government for grant of the mineral
concession, or refusal to grant the mineral concession by the State
Government under rule 5 for reconnaissance permit, rule 11 for
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prospecting license and rule 26 for mining lease, and in all other cases,
disposal shall mean either intimation regarding grant of precise area, or
refusal to grant the mineral concession under rule 5 for reconnaissance
permit, rule 12 for prospecting license and rule 26 for mining lease.”
Therefore, the stage of prior approval would only after the State
Government has made the selection and approved a particular applicant
for grant of mining lease.
10. It is clear from the above, that the procedure under the MMDR Act is
mandatory and under section 19 any lease or permit granted in
contravention of any provision of the Act or of the Rules made under the
Act is void and of no consequence. In the case of coal, the entire process
for grant of captive coal blocks that has been followed since 1993 is
completely in violation and contravention of the MMDR Act. Here the
Central Government was receiving the applications, deciding whom to
allocate, for what end use and in which area. Only after the decision has
been taken, State Governments were signing the mining leases as per the
MMDR Act. On this ground alone, all the allocations for captive coal blocks
made since 1993 are illegal, against mandatory statutory procedure and
are liable to be set-aside.
11. The State Governments have accepted in their affidavits that it was the
Centre which was receiving the applications and making all the allocations,
leaving the State Governments to only sign the mining lease as per MMDR
Act. Extracts from the affidavits of the State Governments is given below:
Chhatisgarh: “The State Government of Chattisgarh accordingly
understood the allocation of blocks by the Central Government, pursuant
to the allocation orders issued from time to time to the several applicants,
as being final, in so far as it concerns identification of the allocate and
the coal block.” (para 39)
Orissa: “That a conjoint reading of the MMDR Act, 1957 and the CMN
Act indicates that the persons specified under Section 3(3) of the CMN
Act alone can be considered for grant of a mining lease for coal but the
procedure for the grant shall be as prescribed under the MMDR Act,
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1957. Thus, the applications for grant of prospecting license or mining
lease for coal will have to filed with the State Government having
jurisdiction over the applied area. The application would be considered in
accordance with the provisions of the MMDR Act, 1957 and the MC
Rules, 1960 as detailed in paragraphs hereinbefore. The State
Government may recommend to the Central Government one or more
applicant for the grant of the prospecting license or mining lease over the
applied area. The role of the Central Government would arise only after it
receives a recommendation for prior approval from the State
Government under section 5(1) of the MMDR Act, 1957 and not prior
thereto.
That notwithstanding the aforesaid legal provisions and schemes of the
statute, the allocation of the coal blocks was made by the Central
Government from 1993 to 2012 by evolving its own mechanism by
constituting a Screening Committee, as apparent from the counter
affidavit filed by the Central Government. The Screening Committee
framed its own guidelines and also followed the guidelines framed by the
ministry of coal from time to time in the matter of allocation of coal
blocks, including identifying the final allocate/beneficiary having already
been identified by the Central Government, on the basis of the purported
recommendation of the Screening Committee, processing the
prospecting license/mining lease application by the State Government
did not arise before such decision. That it may be relevant here to state
that the proviso to Section 5(1) of the MMDR Act, 1957 vests with the
Central Government with the final authority for grant of approval in the
absence of which no State Government is mandated to grant any
person, any prospecting license or mining lease. Once the beneficiary
has been identified by the Central Government by making the allocation
of coal block, there was nothing left out for the State Government to
decide, save and except to carry out the formality of processing the
application and for execution of the lease deed with the beneficiary
selected by the Central Government subject to all the statutory
clearances under various enactments like Forest (Conservation) Act,
1980, the Environment Protection Act, 1986. In the above said
circumstances, it is apparent that the Central Government exercised
pervasive control in the matter of allocation of coal block and
consequently grant of mining lease.” (para 5.12, 5.13)
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Maharashtra: “…the role of the State Government is limited in the case
of coal mines as the discretion to reject once the Central Government
has issued an allocation letter is virtually non-existent. The necessary
compliances are prescribed by law and the role of the State Government
is to ensure the necessary compliances and the terms and conditions of
the allocation letter issued by the Central Government.” (para 10)
“...the Authority for grant of coal mines is with the Central Government
and the State Government plays a sub-ordinate role in so much as the
role of State Government is only to ensure that the conditions imposed in
the allocation letter including statutory compliances are to be ensured by
the State Government before the actual issuance of coal mining lease. It
is respectfully submitted that the State Government as per the existing
statutory framework cannot go behind the allocation letter or can review
any of the conditions imposed by the Central Government in the
allocation letter. The State Government cannot impose any further
conditions than what has been imposed by the Central Government. It is
appropriate to say that State Government comes into picture only when
the allocation letter gets issued and not before that.” (para 18)
“The allocation letter thus confers a right to a mining lease upon the
allocatee. It is submitted that as per the understanding of the State
Government it is the statutory obligation of the State to grant a mining
lease for coal to a person selected for coal mining by the Central
Government for the specified end use.” (para 24, 25)
West Bengal: “It is stated that in case of companies, including private
companies engaged in the production of iron and steel, sponge iron,
power and cement, the applications for the allocation of the coal blocks
are made directly to the Central Government. In some cases the State
Government has knowledge of such applications and in some cases the
State Government has no such knowledge.” (para 7)
“It is the Central Government, which has the final say in the allocation of
coal blocks.” (para 8)
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12. It is clear from the provisions of the CMN Act 1973, that only two kinds of
entities: a) Central Government, and undertakings/corporations owned by
the Central Government, and b) Companies having end-use plants in iron
& steel, power, cement etc. Under the Constitutional scheme, the
Parliament could not have prescribed such an eligibility criteria, without
declaring this under Entry 54 of the 7th
Schedule of the Constitution as a
regulation under the control of Union to be expedient in public interest.
Section 1A of the CMN Act needs to be read under this light as without
having made such a declaration, Parliament could not have prescribed
such eligibility criteria as it did under Section 3 of the CMN Act. The CMN
Act does not in any way give the power of calling for applications, selection
and allocation of coal blocks to the Central Government. Section 3 of the
CMN Act only provides eligibility criteria for allocation of coal mines, and
the procedure for allocation continues to be governed by the MMDR Act.
That is why ultimately Section 11A for allocation of coal mines was
introduced in MMDR Act only.
13. It is a settled law that when an authority is entrusted with decision making
powers under a statute, then it cannot further sub-delegate its authority to
some other body, unless permitted by the statute itself. Also, while
delegating one must retain control over that body, i.e. that body must be
subordinate, and the final control must be with the authority entrusted by
the statute. Here Central Government is not subordinate to State
Governments and was taking all decisions, many times over-ruling the
wishes of the State Government. Also, in the instant case, no such
delegation has actually been made by the State Governments to the
Central Government. Even if this kind of delegation of statutory duty and
power under the MMDR Act could have been legally made by the State
Governments to the Central Government, then also it could not have
been done without a notification, circular or order made in writing by all
the concerned State Governments delegating their statutory powers &
duties to the Central Government.
14. In NGEF Ltd. v. Chandra Developers (P) Ltd., (2005) 8 SCC 219, at
page 240, this Hon‟ble Court held: “69. BIFR admittedly had the power
to sell the assets of the Company but the High Court until a winding-up
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order is issued does not have the same. BIFR in its order dated 24-8-
2002 might have made an observation to the effect that the Company
may approach the High Court in case it intended to dispose of its
property by private negotiation but the same would not mean that BIFR
could delegate its power in favour of the High Court. BIFR being a
statutory authority, in the absence of any provision empowering it to
delegate its power in favour of any other authority had no jurisdiction to
do so. “Delegatus non potest delegare” is a well-known maxim which
means unless expressly authorised a delegatee cannot sub-delegate its
power. Moreover, the said observations of BIFR would only mean that
the Company Court could exercise its power in accordance with law and
not dehors it. If the Company Court had no jurisdiction to pass the
impugned order, it could not derive any jurisdiction only because BIFR
said so.”
15. Therefore it is submitted that the entire allocation made to the through the
screening committee and government dispensation route by the Central
Government after 1993 is in violation of the clear provisions of the statute
and therefore illegal. Under Section 19 of the MMDR Act, it is expressly
stated that any lease or permit granted in contravention of any provision of
the said Act or of the Rules made thereunder is void and of no
consequence. It is a settled principle that when law provides a procedure
for doing something, then that procedure must be followed. On this ground
alone, all the allocations ought to be set-aside.
Violation of Section 3 of the CMN Act
16. The Government of India while making the allocations failed to even follow
the basic statutory eligibility for grant of captive coal blocks. The power of
grant of captive coal blocks is governed under the Coal Mines
(Nationalisation) Act of 1973. Section 3 (a) of the said Act provides:
(3) On and from the commencement of section 3 of the Coal Mines
(Nationalisation) Amendment Act, 1976 (67 of 1976),--
(a) no person, other than—
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(i) the Central Government or a Government, company or a
corporation owned, managed or controlled by the Central
Government, or
(ii) a person to whom a sub- lease, referred to in the proviso
to clause (c), has been granted by any such Government,
company or corporation, or
(iii) a company engaged in—
(1) the production of iron and steel,
(2) generation of power,
(3) washing of coal obtained from a mine, or
(4) such other end use as the Central Government
may, by notification, specify,
shall carry on coal mining operation, in India, in any form.
It is clear from the provisions of the CMN Act 1973, that only two kinds of
entities: a) Central Government, and undertakings/corporations owned by
the Central Government, and b) Companies having end-use plants in iron
& steel, power, cement and washing of coal.
17. Thus, State Government undertakings are not included in the above
provision, and any allocation to them can only be made if they are engaged
in any of the end-uses specified under Sec 3(a)(iii) of the CMN Act.
Commercial mining is not permitted to State public sector
undertakings/companies. However, the Central Government allocated
about 38 coal blocks to State PSUs for commercial mining, which were not
engaged in any specified end-use activity (Pg 114-138 of intervener‟s
application). Such an allocation made by the Central Government (whether
by way of screening committee route or dispensation route) is ipso-facto
illegal and in total violation of the CMN Act 1973. Almost all of these State
PSUs then signed agreements with private companies wherein the right to
mine coal was given to the private company which then later sold the coal
to the State PSU either at market price or at Coal India Ltd (CIL) price. A
CAG report on Chhattisgarh mining for Bhatgaon Extension coal block (at
pages 302-303 of the intervenor‟s application) reported Rs. 1052 crore loss
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to the exchequer in the formation of JV agreement between the State PSU
and the private company.
18. From the expression “engaged in” used in Section 3 (1)(iii), it is clear that
the company that was applying for the coal block must have set-up an iron
& steel plant, power plant or cement plant (Central Govt. has notified
cement as an end use under Sec 3(a)(iii)(4) of the Act) and be engaged in
the production of steel, power or cement. In fact, most companies that did
apply did not even state in their applications that they were operating a
power, steel or cement plant. All that they claimed was that either they
propose to set-up such plants. The screening committee cleared them and
the government allotted them coal blocks despite the clear statutory bar for
the same (Pg 55, para 62 of UoI Counter). From 2006, even the
requirement of end use project was done away (Pg 68, para 88(i) of UoI
Counter). Government allowed coal mining companies to apply and obtain
coal blocks, and stated that the coal mined from these blocks would be
transferred to an end user company. This relaxation was completely
contrary to the requirement of the statute. The applicant ought to have
demonstrated that a steel, power or cement plant has been set-up or is in
the final stages of being set-up, and that the applicant has obtained all
statutory clearances and only then it could ought applied and been
considered by the State Government as per the MMDR Act. The fact that
this basic minimum statutory requirement was not followed makes the
entire allocation process illegal.
19. Also, the allocation of blocks were made which had reserves far in excess
of requirement for the end use project. This shows total non-application of
mind and arbitrariness of the decision making process. It is also in violation
of the principle of captive block allocation enshrined in the Sec 3 (a) (iii) of
the Coal Nationalisation Act. Examples: Coal requirement parameter for
the sponge iron category is 1:1.6, which means for producing 1 ton of
sponge iron, 1.6 ton of F grade coal is required. When the projected
requirement of the coal by the applicants for the same category (sponge
iron) differs hugely, Screening Committee went on to allot the coal blocks.
Even same company (JSPL) mentioned different quantity of coal
requirement, Screening Committee allotted the Gare IV/1 block even
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hugely disproportionate to the exaggerated requirement. Even the highest
project requirement was 2 MTPA, but the block allotted to it contains 123
MT coal much in excess to its 30 year requirement (In AG‟s compilation
volume 3-A). The Raipur Alloys and Steel Ltd sought a coal block with an
exaggerated requirement of 1.2 MTPA coal for producing 0.3 MTPA
sponge iron at the ratio of 1:4. However the screening committee ultimately
allotted Gare IV/7 having coal reserve upto 156 MT against the projected
requirement of 36 MT. This arbitrariness is evident from the fact that in the
same meeting BS Ispat was allotted Marki Mangli block having 34.34 MT
coal for the similar 1.2 MTPA coal requirement (at pages 856-858 of
volume IV of UoI‟s counter affidavit).
20. Excessive allotment for power plants is evident from the Sarisatoli coal
block in which 1.7 MTPA of coal requirement for the RPG group company
ICCL for 30 years would make up for a figure of 51 MT, whereas the
allotted block contains 140 MT coal (In AG‟s compliation volume 3-A). The
aforesaid company is producing the coal much in excess of the projected
requirement thus negating the government‟s claim that no mining
permission has been accorded for extra quantity (Pg 142-144 of
intervenor‟s Crl.M.P. for production figures). Inspite of the aforesaid
situation the arbitrary allotment continued and a major example of this sort
is the case of M/s Bhushan Steel Ltd. which has got the Bijahan coal block
of 80 MT for a project and the block is sufficient for its requirement, yet it
was allotted another coal block Jamkhani of 130 MT without any new
project (AG‟s compilation volume 3-B).
Allocation constitutes a largesse and is therefore unconstitutional
21. The AG has argued that since an allocatee of the coal block did not
automatically have a right to mine the block without first executing a lease
with the State Government, therefore the allocation does not confer a
largesse or substantial benefit to the allocatee. This argument is not correct
as the allocation, as was understood, by the Centre & the State
Governments was the most critical step in the final award of a coal mining
lease. The allocation conferred a very valuable benefit on the applicant to
apply for mining lease. The final selection for a particular block was made
by the Centre, which has been challenged in these proceedings. To say
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that allocation per se is not a largesse, is like arguing giving away free land
for building factories is not a largesse, because before starting a factory
you need clearance from municipal authorties, fire department etc.
22. Mining leases have not been executed in most of the cases, because of the
delay and default on the part of the allocatee, mostly in setting up end use
plant. Some delay is also due to the fact the allocatee has not been able to
obtain environment or forest clearance. The delay has been due to the fact
that arbitrary allotments were made to non-suitable and ineligible
companies. But the allocation letters have been treated as bankable by the
allotees, they have taken huge loans on the basis of these letters, and
some allottees have divested their companies of shares at huge prices.
23. Coal Secretary in a note moved for competitive bidding on 16.07.2004, had
himself stated that “…since there is a substantial difference between price
of coal supplied by Coal India and coal produced through captive mining,
there is a windfall gain to the person who is allotted a captive block…” (Pg
109 of WP). CAG in its conservative estimate of this windfall gain to the
private companies stated: “Audit has attempted to estimate the financial
estimate of the benefit to the coal blocks allottees restricting itself to private
parties… Based on the above method, financial gain of Rs 185,591.34
crore to private parties in respect of 57 OC/Mixed mines as on 31 March
2011 has been calculated.” (para 4.3)
24. Parliamentary Standing Committee on Coal (comprising of 30 MPs from
across party lines) in its report submitted on 23.04.2013 has inter-alia
stated: “The Committee observe that most non-transparent procedure was
adopted from 1993 to 2010 for allocation and supply of coal blocks. Several
coal blocks were allocated to few fortunate without disclosing the same to
the public at large. The natural resources and state largesse were
distributed to few fortunate for their own benefit without following any
transparent system, was total abuse of power by the Government… It is
unfortunate that for allocating coal blocks neither any auction was held nor
the Central Government earned any revenue… The Committee observe
that whole procedure adopted by the Government for distributing coal
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blocks betrays the confidence of the people of our country reposed in the
Government… Since Committee have come to conclusion that entire
procedure for distribution of coal was unauthorized, no one should enjoy
the benefit of distribution/allocation, and therefore, recommend that all coal
blocks allotted to the private coal companies, at least where coal
production has not yet started, should be cancelled immediately…” (Pg 55-
56 of IA-3).
“The Committee are perturbed to note that although normative date of
production from coal blocks like Utkal B2 (Talcher, Odisha) allotted to
Monet Ispat Enerfy Ltd on 16.08.1999 was 16th
February, 2003, it is only
the stage-II forest clearance that has been obtained on 21.07.2011.
Another coal block Brahmadih (Jharkhand) allocated on 01.09.1999 to
Castron Mining Ltd. for steel sector, though all milestones are reported to
be completed, there is synchronization problem between coal production
and end use steel plant, as the company does not have its own steel
plant… The question that why a coal block was allotted to a company who
has failed to set up end use projects for 13 years, needs to be answered…
These instances speak volumes of the total failure on the part of the
Ministry in the entire process of allotment of coal blocks and their
subsequent development. From the analysis of status report of captive coal
blocks and end use project linked with the blocks allocated from August
2004 to November 2008, the Committee observe that for 138 coal blocks
allocated for captive mining for power, iron and steel, commercial
purposes, etc, the normative date of production was kept more than 6 and
7 years i.e. 72 to 84 months though the guidelines provide that in respect of
unexplored block, the allocate company shall apply for prospecting license
within 3 months of date of issue of allotment. The Committee are further
constrained to note that forest clearances/ prospecting license has been
obtained/granted only in 2010 and 2011 to those blocks which were
allocated in the years 2004-2005. The Committee further find that out of
195 coal blocks allocated so far for captive mining 30 blocks have started
production and out of 160 captive coal blocks allocated during 2004 to
2008, only 2 have started production.” (Pg 57-59 of IA-3)
“The Committee feel that the Screening Committee has failed to take into
account state of project preparedness, track record, etc of applicant
company, which have resulted in major setback to the ambitious policy
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decision to exploit 44.23 BT of coal by allocation of blocks for captive use.”
(Pg 60 of IA-3)
“The Committee are dismayed to note that although coal blocks were
allocated to private power sector projects without any monetary
consideration by the Government with the purpose of making available
cheap power to the consumers, no specific condition was included by the
Screening Committee in the allocation letter to ensure that benefit of
allocating coal free of cost is passed on to the consumer.” (Pg 61 of IA-3)
“…the Committee are unable to accept the Government’s contention that
the Screening Committee acted in a fair and transparent manner for
allocating coal blocks during 2004-2009, as coal blocks allocates approved
by the Screening Committee have failed to start production so far which
raises apprehension that they were considered without taking into account
the techno-economic feasibility of the end use projects, past track record of
the developers in execution of projects and their technical and financial
capabilities.” (Pg 70 of IA-3)
25. The fact that huge losses have been caused is clear from the report of the
Central Empowered Committee (CEC, expert committee appointed by this
Hon‟ble Court) made in I.A. No. 2167 made to the Forest Bench regarding
the loss from the allocation of coal mine in State of Madhya Pradesh. CEC
estimated the loss at a staggering sum of Rs. 80,000 crores, and therefore
recommended that the agreement entered between the mining company
and the state government corporation be cancelled (Pg 332-333 of WP).
CEC stated: “The total mineable reserves of these two mines are to the
tune of about 400 Million tonnes of coal… If the private entity is selected for
the joint venture after giving wide publicity and laying transparent
guidelines, the States are likely to get substantially higher revenues to the
tune of tens of thousands of crores… to a staggering sum of Rs 80,000
crores. It would be in public interest that instead of allowing a private entity
to corner this huge benefit, sincere efforts should be made to make the
States beneficiary of this… The MoU signed with M/s Sainink Mining &
Allied Services Ltd should be cancelled…” The CEC and the MoEF (Govt
of India) thereupon made a joint recommendation to this Hon‟ble Court to
cancel the said agreement (Pg 334 of WP). It submitted: “The State of
MP/MP State Mining Corporation Ltd may be asked to cancel the MOU
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entered…” Thereafter this Hon‟ble Court vide order dated 20.02.2009
directed the MoEF to take appropriate decision in light of CEC‟s
observations, pursuant to which the said agreement was cancelled (Pg 336
of WP).
26. Government of Maharashtra in their latest affidavit at internal page 4 have
stated: “The allotment of coal blocks under the screening committee
mechanism meant that the benefits of the differential in price of coal as
mined in a captive mine and the market price of coal or the price of
imported coal as the case may be would accrue to the allottee of the coal
block. The differential in price would not necessarily be passed to the
public as the price of the final product of the company is determined by
import parity price in case of steel companies, competitive market price in
case of cement companies (many may not have access to captive coal)
and the price of power on an exchange or in bids by State Utilities
irrespective of the source of fuel. Since the access to low price coal is not
reflected in the sale price of product, this would lead to undue gain for the
allottee companies. The auction process which is now in place would give
a level playing field to all applicants of coal and lower the difference
between the market price of coal and the cost of coal for the allotee by way
of premium which would accrue to the Government.” (para 3)
“Accordingly it is the considered opinion of the State Government of
Maharashtra that in the cases of coal block allotment to private companies
where the Government of India has given approval under S. 5(1) of the
MMDR Act but the mining lease has still not been executed, all such cases
should be put to Auction…” (para 5)
27. The argument of the Government has been that the price of power is
regulated and hence there is no windfall gain to the allottee. As far as
manufacture of steel or cement is concerned, it is clear that there is no
regulation of prices. Even in the case of power, the price of power has
been rising and power producers with captive coal blocks have made
windfall gains. This has been admitted by the State of Maharashtra in their
latest affidavit. It has come to light that while the power producers were
selling power between Rs 4 to 14.50 per unit, the competitive bid for tariff
for Ultra Mega Power Projects (UMPPs) was as low as Rs 1.19 per unit.
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NTPC, which procures coal not from captive coal but from CIL, sells most
of its power at Rs 2 to 2.50 per unit. This is clear from the CERC orders
and The Hindu story of 20.09.2013 based on CERC orders. CERC finally
stepped in and capped the maximum price of electricity as high as Rs 8 per
unit, thereby allowing those with captive coal blocks to continue to make
windfall profits.
28. This Hon‟ble Court has repeatedly held that natural resources are owned
by the people and that the Government only acts as a trustee. As a trustee,
it is the duty of the Government to recover the full value of the resource for
the people. In the Meerut Development Authority case [(2009) 6 SCC 171],
this Hon‟ble Court held: “It is well said that the struggle to get for the State
the full value of its resources is particularly pronounced in the sale of State
owned natural assets to the private sector. Whenever the Government or
the authorities get less than the full value of the asset, the country is being
cheated; there is a simple transfer of wealth from the citizens as a whole to
whoever gets the assets `at a discount'.”
29. In the 2G case (CPIL & Ors vs UoI & Ors, (2012) 3 SCC 1), this Hon‟ble
Court has held that “Natural resources belong to the people but the State
legally owns them on behalf of its people… The State is empowered to
distribute natural resources. However, as they constitute public
property/national asset, while distributing natural resources, the State is
bound to act in consonance with the principles of equality and public trust
and ensure that no action is taken which may be detrimental to public
interest. Like any other State action, constitutionalism must be reflected at
every stage of the distribution of natural resources.” Further this Hon‟ble
Court in the said case held: “As natural resources are public goods, the
doctrine of equality, which emerges from the concepts of justice and
fairness, must guide the State in determining the actual mechanism for
distribution of natural resources. In this regard, the doctrine of equality has
two aspects: first, it regulates the rights and obligations of the State vis-a-
vis its people and demands that the people be granted equitable access to
natural resources and/or its products and that they are adequately
compensated for the transfer of the resource to the private domain; and
second, it regulates the rights and obligations of the State vis-`-vis private
17. 17
parties seeking to acquire/use the resource and demands that the
procedure adopted for distribution is just, non-arbitrary and transparent and
that it does not discriminate between similarly placed private parties.”
30. In the Presidential Reference on the issue of Alientation of Natural
Resources (2012) 10 SCC 1, this Hon‟ble Court has held that when
“precious and scarce natural resources are alienated for commercial
pursuits of profit maximizing private entrepreneurs, adoption of means
other than those that are competitive and maximize revenue may be
arbitrary and face the wrath of Article 14 of the Constitution.” In light of the
above, it is crystal clear that the coal block allocations do not withstand the
test of Article 14 of the Constitution and, in fact, are in subversion of the
rule of law. Justice J S Khehar in his concurring opinion has further
elaborated the above principle by giving the example of allocation of coal
blocks. The said concurring opinion states: “Hypothetically, assume a
competitive bidding process for tariff, amongst private players interested in
a power generation project. The private party which agrees to supply
electricity at the lowest tariff would succeed in such an auction. The
important question is, if the private party who succeeds in the award of the
project, is granted a mining lease in respect of an area containing coal, free
of cost, would such a grant satisfy the test of being fair, reasonable,
equitable and impartial. The answer to the instant query would depend on
the facts of each individual case. Therefore, the answer could be in the
affirmative, as well as, in the negative. …If the bidding process to
determine the lowest tariff has been held, and the said bidding process has
taken place without the knowledge, that a coal mining lease would be
allotted to the successful bidder, yet the successful bidder is awarded a
coal mining lease. Would such a grant be valid? In the aforesaid fact
situation, the answer to the question posed, may well be in the negative.
This is so because, the competitive bidding for tariff was not based on the
knowledge of gains, that would come to the vying contenders, on account
of grant of a coal mining lease. Such a grant of a coal mining lease would
therefore have no nexus to the “competitive bid for tariff”. Grant of a mining
lease for coal in this situation would therefore be a windfall, without any
nexus to the object sought to be achieved. In the bidding process, the
parties concerned had no occasion to bring down the electricity tariff, on
18. 18
the basis of gains likely to accrue to them, from the coal mining lease. In
this case, a material resource would be deemed to have been granted
without a reciprocal consideration i.e., free of cost. Such an allotment may
not be fair and may certainly be described as arbitrary, and violative of the
Article 14 of the Constitution of India. Such an allotment having no nexus to
the objective of subserving the common good, would fall foul even of the
directive principle contained in Article 39(b) of the Constitution of India.
Therefore, a forthright and legitimate policy, on account of defective
implementation, may become unacceptable in law.” The opinion in its
conclusion states: “I would therefore conclude by stating that no part of the
natural resource can be dissipated as a matter of largesse, charity,
donation or endowment, for private exploitation. Each bit of natural
resource expended must bring back a reciprocal consideration. The
consideration may be in the nature of earning revenue or may be to “best
subserve the common good”. It may well be the amalgam of the two. There
cannot be a dissipation of material resources free of cost or at a
consideration lower than their actual worth. One set of citizens cannot
prosper at the cost of another set of citizens, for that would not be fair or
reasonable.”
Arbitrary, non-transparent selection and mala fides
31. Coal Nationalisation Act was amended with effect from 09.06.1993 to allow
private sector participation in captive coal mining for generation of power,
washing of coal or other end uses notified by the Central Government (Pg
8 of UoI Counter Afd). To start the process of allocation of coal blocks to
private companies for designated end uses (i.e. iron & steel, power &
cement), Central Government by an executive order on 14.07.1992
constituted a „screening committee‟. Since 1993, successive governments
have been allocating coal blocks to government and private companies
through the mechanism of the screening committee to private &
government companies, and later through government dispensation route
also for government undertakings. Till June 2004, 39 coal blocks stood
allocated to government and private companies (Pg 114 of WP).
Government in its first counter affidavit admitted: “From 1st
meeting of the
Screening Committee (held on 14.07.1993) to the 21st
Meeting (held on
19.08.2003), the guidelines did not deal with the subject of determining
19. 19
inter-se priority between applicants… The additional guidelines adopted at
the 22nd
Meeting (held on 4.11.2003) introduced guidelines for determining
inter-se priorities amongst applicants for the first time.” The Government
also admitted that advertisement for coal blocks was first issued only in
2005. (Pg 45-46 of the UoI Counter). This position makes the entire
allocation from 1993 illegal and unconstitutional, as held in numerous
judgments of this Hon‟ble Court. It is also incorrect to argue that there were
not many applicants in the 1993-2003 era of coal block allocation, since the
screening committee way back in 1995 in its meeting dated 20.12.1995
itself has noted that there are many companies seeking coal block and
comprehensive exercise is needed to optimally utilized the resources. (at
page 559 of the Volume III of the UoI‟s counter affidavit). And when coal
blocks were finally advertised in 2005, a situation of huge deluge of
applicants was witnessed.
32. By 2004, prices of the coal had increased manifold in view of its scarcity &
rising demand in industry and power sector. On 16.07.2004, a
comprehensive note on competitive bidding for allocation of coal blocks
was placed by the then Coal Secretary stating that “…since there is a
substantial difference between price of coal supplied by Coal India and coal
produced through captive mining, there is a windfall gain to the person who
is allotted a captive block…” On 30.07.2004, Coal Secretary stated that the
present system of allocation in the changed scenario would not be able to
achieve any transparency or objectivity in the allocation process. (Pg 109
of WP). Therefore, by this time, it had become clear that in view of the
changed scenario, the screening committee method of allocation to private
companies had become decidedly non-transparent, non-objective and was
leading to windfall gains to the private companies, thereby causing a
corresponding loss to the public exchequer.
33. Instead of acting on the categorical stand of the Coal Secretary in favour of
competitive bidding, the government delayed its introduction for 8 years till
February 2012. Since the screening committee had itself been constituted
through an executive order, there was no legal hurdle in introduction of
competitive bidding by an executive order. This was also the clear stand of
the law ministry (Pg 88-89 & 113 of WP). With the proposed introduction of
20. 20
competitive bidding pending, this led to huge rush for the coal blocks under
the old allotment system, and the Government allotted as many as 142
coal blocks between 2004 to 2009, with billions of tonnes of coal (Pg 114 of
WP). Most of the blocks did not have an end use plant in place, and
ultimately have not started coal production even after elapse of several
years.
34. The above actions of the Government have been found to be totally
arbitrary, non-transparent and non-objective by the CAG (Pg 107-127 of
WP), by the Parliamentary Standing Committee on Coal & Steel (Pg 6-71
of IA-3) and also by the CVC & the CBI. The CAG in its report stated: “It
was also noted that the Screening Committee recommended the allocation
of coal block to a particular allottee/allottees out of all the applicants for that
coal block by way of minutes of the meeting of the Screening Committee.
However, there was nothing on record in the said minutes or in other
documents on any comparitive evaluation of the applicants for a coal block
which was relied upon by the Screening Committee. Minutes of the
Screening Committee did not indicate how each one of the applicant for a
particular block was evaluated. Thus, a transparent method for allocation of
coal blocks was not followed by the Screening Committee.” (Pg 108 of
WP).
35. CAG further observed the following:
“Test check of file/documents maintained by MOC in respect of Fatehpur
and Rampia & dip side of Rampia by audit in April 2012 revealed that:
(i) In case of Fatehpur coal block, 69 applications were received
against the advertisement for allocation of coal blocks. Out of
these 69 applications only 36 applicants were scheduled for
making presentation before the Screening Committee. The
Screening Committee recommended SKS Ispat & Power Limited
and Prakash Industries Limited for allocation of Fatehpur coal
block.
(ii) Similarily in case of Rampia and dip side of Rampia coal block,
108 (67 + 41) applications were received against the
advertisement for allocation of coal blocks. Out of these 108
21. 21
applicants only 2 applicants were scheduled for making
presentation before the Screening Committee. The Screening
Committee, however, recommended six companies..for allocation
of Rampia and Dip side of Rampia coal blocks.” (para 4.1)
“Government of India does not charge any money for allocation of coal
blocks for captive mining except the cost of exploration. The allottee has
to pay mainly royalty to the State Government. Thus, the difference
between the market price of the coal and the cost of production is a
direct/incentive gain to the allottee.” (para 5.8)
“Audit has attempted to estimate the financial estimate of the benefit to
the coal blocks allottees restricting itself to private parties… Based on
the above method, financial gain of Rs 185,591.34 crore to private
parties in respect of 57 OC/Mixed mines as on 31 March 2011 has been
calculated… A part of this financial gain could have been tapped by the
Government by taking timely decision on competitive bidding for
allocation of coal blocks.” (para 4.3)
36. The Government claims that the selection was made after proper
assessment by the Screening Committee. However, as can been seen
from the actual minutes of the Screening Committee, there is no such
assessment on record, no verification of claims, no evaluation of merit and
moreover, no inter se comparison of the applicants. The Screening
Committee not only did not follow any criterion, it also did not give any
reason for the final selection either in its decision or in its minutes. (Pg 169-
206 of WP). The Government has submitted that till 21st meeting of the
Screening Committee there were no guidelines to determine inter-se
priority. And post the 21st meeting, the Government claims that the
Screening Committee‟s recommendations were made on the basis of
presentations made by allottee companies and deliberations held as
recorded in the minutes, as well as on the basis of recommendations
received from various quarters. Thus, it is clear, no objective criteria was
followed in determination of who is to be selected and who is to be
rejected. It is also not the case of the Government that proper evaluation
on the basis of these guidelines was made, and all allocations can be
justified on that basis. No chart of evaluation was prepared, and the
determination of the screening committee was kept entirely subjective.
22. 22
37. Since the entire allocation was absolutely arbitrary, non-objective and non-
transparent, it is therefore no coincidence that a large number of coal block
allottees are either powerful corporate groups, or shady companies linked
with politicians and ministers, as is shown in the writ petition (Pg 207- 237
of WP). Prominent politicians were big beneficiaries of coal block
allocations. (Pg 215 of WP). Other blocks were allotted to companies that
came with high profile recommendations like from Union Ministers, for
instance Union Tourism Minister wrote to the PM for allocation of coal block
to his brother‟s firm and the said firm was then allotted the block. (Pg 217-
220 of WP). Most of the allottees were, in fact, ineligible for allocation and
had misrepresented the facts in their applications, as is clear from the 15
FIRs registered by the CBI itself. However, the Screening Committee still
cleared them despite a stiff competition from a multitude of applicants for
these blocks. There was no verification of claims, no check on eligibility
and nepotistic considerations prevailed. Former Coal Secretary has clearly
stated that the screening committee was susceptible to corruption,
favoritism and political pressure. He has said: “When you are giving assets
worth 1000 and crores rupees without charging anything I don't think any
allottee would mind passing on a few benefits to others.” (Pg 71-72 of WP)
38. In this case, the CBI has registered a set of 15 Regular Cases after
conducting detailed preliminary enquiries, and has found substantial
evidence of large scale illegalities & irregularities in the allocation process,
no inter-se merit evaluation, several instances of manipulations, allotment
of blocks to scores of ineligible companies, no verification of eligibility by
the Ministry, and also instances of corruption, bribery and conspiracy to
cheat the public exchequer. These enquiries and investigations (Pg 269 –
317 of WP) have been carried out after the CVC found serious irregularities
and directed the CBI to investigate the same. (Pg 268 of WP) Irrespective
of whether or not the CBI can eventually successfully prosecute the
accused persons for corruption & conspiracy before the competent criminal
court, the fact remains that the CBI investigations have established that no
proper system of allocation was followed, and the entire process was
subject to serious manipulations and abuse, quite apart from the fact that
23. 23
many ineligible companies were successful in grabbing the blocks, despite
the stiff competition.
39. In Union of India vs. O Chakradhar (2002) 3 SCC 146, this Hon‟ble Court,
while relying on CBI investigation report, held: “If the mischief played is so
widespread and all pervasive, affecting the result, so as to make it difficult
to pick out the person who have been unlawfully benefited or wrongfully
deprived of their selection, in such cases it will neither be possible nor
necessary to issue individual show cause notices to each selected. The
only way out would be to cancel the whole selection.” It further states: “As
per the report of the CBI whole selection smacks of mala fide and
arbitrariness. All norms are said to have been violated with impunity at
each stage viz. right from the stage of entertaining applications, with
answer-sheets while in the custody of Chairman, in holding typing test, in
interview and in the end while preparing final result. In such circumstances
it may not be possible to pick out or choose any few persons in respect of
whom alone the selection could be cancelled and their services in
pursuance thereof could be terminated. The illegality and irregularity are so
inter-mixed with the whole process of the selection that it becomes
impossible to sort out right from the wrong or vice versa. The result of such
a selection cannot be relied or acted upon.”
40. It is a settled law that while entering into contract or while distributing
largesse, the state cannot adopt a policy of „pick & choose‟ or discriminate
between similarly placed applicants. In R D Shetty case (1979) 3 SCC 489,
this Hon‟ble Court held: “In our constitutional structure, no functionary of
the State or public authority has an absolute or unfettered discretion. The
very idea of unfettered discretion is totally incompatible with the doctrine of
equality enshrined in the Constitution and is an antithesis to the concept of
rule of law.” Further this Court held: “It must, therefore, be taken to be the
law that where the Government is dealing with the public, whether by way
of giving jobs or entering into contracts or issuing quotas or licences or
granting other forms of largesse, the Government cannot act arbitrarily at
its sweet will and, like a private individual, deal with any person it pleases,
but its action must be in conformity with standard or norms which is not
arbitrary, irrational or irrelevant. The power or discretion of the Government
24. 24
in the matter of grant of largesse including award of jobs, contracts, quotas,
licences, etc. must be confined and structured by rational, relevant and
non-discriminatory standard or norm and if the Government departs from
such standard or norm in any particular case or cases, the action of the
Government would be liable to be struck down, unless it can be shown by
the Government that the departure was not arbitrary, but was based on
some valid principle which in itself was not irrational, unreasonable or
discriminatory.”
41. In the Petrol Pump allotment case (1996) 6 SCC 530, this Hon‟ble Court
while declaring the discretionary allotments as wholly arbitrary, nepotistic
and motivated by extraneous considerations, held: “While Article 14
permits a reasonable classification having a rational nexus to the objective
sought to be achieved, it does not permit the power to pick and choose
arbitrarily out of several persons falling in the same category. A transparent
and objective criteria/procedure has to be evolved so that the choice
among the members belonging to the same class or category is based on
reason, fair play and non-arbitrariness… Lack of transparency in the
system promotes nepotism and arbitrariness. It is absolutely essential that
the entire system should be transparent right from the stage of calling for
the applications up to the stage of passing the orders of allotment.”
42. In Kasturi Lal vs State of J & K (1980) 4 SCC 1, this Hon‟ble Court held:
“The Government is not free to act as it likes in granting largesse such as
awarding a contract or selling or leasing out its property. Whatever be its
activity, the Government is still the Government and is, subject to restraints
inherent in its position in a democratic society. The constitutional power
conferred on the Government cannot be exercised by it arbitrarily or
capriciously or in and unprincipled manner; it has to be exercised for the
public good. Every activity of the Government has a public element in it and
it must therefore, be informed with reason and guided by public interest.
Every action taken by the Government must be in public interest; the
Government cannot act arbitrarily and without reason and if it does, its
action would be liable to be invalidated. If the Government awards a
contract or leases out or otherwise deals with its property or grants any
other largesse, it would be Liable to be tested for its validity on the touch-
25. 25
stone of reasonableness and public interest and if it fails to satisfy either
best, it would be unconstitutional and invalid.”
43. This Hon‟ble Court in Nagar Nigam Meerut case (2006) 13 SCC 382
analysed the law on Government contracts and held: “This Court time and
again has emphasized the need to maintain transparency in grant of public
contracts. Ordinarily, maintenance of transparency as also compliance of
Article 14 of the Constitution would inter alia be ensured by holding public
auction upon issuance of advertisement in the well known newspapers…It
is well settled that ordinarily the State or its instrumentalities should not
give contracts by private negotiation but by open public auction/tender after
wide publicity.”
Conclusion and Prayers
44. Grant of largesse of natural resources by the Government is today leading
to a situation of huge corruption, depletion of scarce resources,
environmental devastation, local discontent, conflict and displacement,
without the State getting any revenue which could be used for social &
economic development, and without any real benefits from these natural
resources for the ordinary people. Apart from the above, this has also
created a situation where the entire administration, regulators and state
agencies are becoming compromised and those with money power
(acquired through hugely subsidised access to natural resources) are
dictating public policies in the country, as can be discerned from the Radia
tapes.
45. This Hon‟ble Court has held that the collusion between the resource
extraction industry and the agents of the State, leads to failure of the State
and violates Articles 14 and 21 of the Constitution. This Court in Nandini
Sunder‟s case (2011) 7 SCC 547 stated: “…A development paradigm
depending largely on the plunder and loot of the natural resources more
often than not leads to failure of the State; and that on its way to such a
fate, countless millions would have been condemned to lives of great
misery and hopelessness. Policies of rapid exploitation of resources by the
private sector, without credible commitments to equitable distribution of
26. 26
benefits and costs, and environmental sustainability, are necessarily
violative of principles that are “fundamental to governance”, and when such
a violation occurs on a large scale, they necessarily also eviscerate the
promise of equality before law, and equal protection of the laws, promised
by Article 14, and the dignity of life assured by Article 21. Additionally, the
collusion of the extractive industry, and in some places it is also called the
mining mafia, and some agents of the State, necessarily leads to
evisceration of the moral authority of the State, which further undermines
both Article 14 and Article 21.”
46. The show-cause notices to individual allottees and the de-allocations being
made by the Government proceed on the assumption that there was
nothing wrong with the allocation process itself and only seek to obfuscate
the real issue of the massive fraud perpetrated by the Government. The
argument of the counsel for the allottees that the allotment letter created
rights for them is incorrect as the allotment process was itself
unconstitutional, against the provisions of MMDR Act, and creates no
rights.
47. Therefore, the petitioners submit that the entire process of allotment of coal
blocks was non-transparent, unfair and tainted with all kinds of violation of
rules and procedures. Even according to the CBI FIRs, crimes under the
Prevention of Corruption Act were committed during the allotment of coal
blocks. The arbitrary allocation of coal blocks resulted in a windfall gain to
few private parties running into lakhs of crores of rupees, and a
corresponding loss to the public exchequer. The very basis of the allotment
of the coal blocks without any competitive bidding process is against the
doctrine of trusteeship and the Constitutional mandate under Article 14.
The Government also allocated coal blocks to State PSUs (which were not
engaged in any specified end use activity) for commercial exploitation in
direct contravention of the CMN Act. Therefore, this Hon‟ble Court should
set-aside the entire allocation of coal blocks to both private and
government companies.
27. 27
48. The petitioners submit that only those handful number of blocks where
competitive bidding was held for the lowest tariff for power (on the basis
that the winner would be allotted an identified coal block or blocks) for Ultra
Mega Power Projects (UMPPs) may not be cancelled, in accordance with
the opinion given in the Presidential Reference (quoted above) since the
benefit of the coal block is passed onto the public. However, in some
cases, the Government has allowed the diversion of the coal block from
UMPP to other end uses i.e. for the commercial exploitation by the
successful bidder causing huge loss to the public exchequer. This has
been brought out in the detailed report of the CAG on UMPPs (Pg 240-259
of WP) which has concluded: “Permission for use of excess coal by RPL
from the three coal blocks allocated to Sasan UMPP after its award not
only vitiated the bidding process but also resulted in undue benefit to RPL.”
CAG has calculated the benefit to the said private company as over Rs
29000 crores. Therefore this Hon‟ble Court, while not cancelling the
allocation of coal blocks for UMPPs that have been made on the basis of
competitive bidding, may direct that the coal block would only be used for
the UMPP where power tariff is fixed on the basis of competitive bidding
and no diversion of coal would be permitted.
49. There are numerous allocations to public sector corporations wherein the
public sector corporation has entered into an agreement with a private
company under which substantial benefit or interest from the coal block
accrues with the private company, thereby causing a loss to the public
exchequer and a windfall gain to the private company with which the
agreement has been entered. The petitioners therefore request the Hon‟ble
Court to cancel all allotments made to private companies and to public
sector companies either through the Screening Committee or the
Government Dispensation route, and/or to declare as void all the joint
venture agreements made between public sector undertakings holding coal
blocks with private companies wherein private companies are given right to
mine or some other interest in coal blocks, or wherein full or partial benefit
of the coal block came to a private company.
50. A decision was taken in a meeting headed by the PM in 2006, to introduce
competitive bidding and auction for all minerals and not just coal (CAG
28. 28
report). However, new MMDR Bill was only introduced in 2011 and has
been pending for the last 3 years. It provides for competitive bidding and
auction as the only method of allocation of mining leases in non-virgin
areas. Government‟s own committee (2011-12) headed by current
Competition Commission Chairperson Shri Ashok Chawla which was
signed by all the Secretaries of all the Ministries, recommended auction for
all natural resources given for commercial exploitation including mines and
minerals. However, the same has been ignored. Justice M B Shah
Commission has also recommended auctioning of mines and minerals. The
CAG has also stressed on competition, transparency and proper pricing of
all natural resources. Petitioners submit that this is a fit case to lay down as
a matter of constitutional law that when valuable minerals are granted for
commercial exploitation of private parties, in non-virgin areas, where there
are multitude of applicants for such a mineral, then only competitive bidding
or auction would satisfy the twin tests of Article 14 as laid down in the 2G
case (quoted in para 29 above) and in the Presidential Reference.
51. Petitioners submit that this is also a fit case for this Hon‟ble Court to send a
firm message that such kind of crony capitalism, pervasive corruption and
transfer of valuable public resources to profit maximizing companies as
largesse would not be allowed to continue, and this Court would not
hesitate to uphold the rule of law by striking down such unconstitutional
and illegal allocations. The non-transparent and arbitrary allocations made
by Central Government defeated the very object of the policy of captive
coal mining as enshrined in CMN Act. Putting all these blocks to auction
would hugely serve public interest by selecting the best and the most
serious applicants, providing revenue to the State Governments and
increasing power & steel production.
Dated: 16.01.2014 Prashant Bhushan
(Counsel for the Petitioners)
