EMIL Mines and Mineral Resources Limited v. Union of India

1. This hearing has been done through hybrid mode.

2. These two writ petitions, have been filed by M/s EMIL Mines and Mineral Resources Limited (“EMIL”) and M/s Hindalco Industries Limited (“HIL”), the allottees of coal mines, Radhikapur (East) Coal Mine, and Dumri Coal Mine (“the allotted mines”) respectively, situated in Odisha and District Hazaribagh, Jharkhand respectively. Radhikapur (East) Coal Mine was vested in EMIL vide Vesting Order dated 3rd March, 2021 and Dumri Coal Mine was vested in HIL vide Vesting Order dated 22nd April 2015.

3. It is the Petitioners’ case that these allotted mines were subject matter of the judgment dated 24th September, 2014 passed by the Supreme Court in Manohar Lal Sharma v. Principal Secretary, & Ors. (2014) 9 SCC 614 cancelling the coal block allocations. After the said judgment was passed, the Central Government promulgated the Coal Mines (Special Provisions) Act, 2015 (“CMSP Act”) providing the regulatory framework for allocation / allotment of the coal blocks as covered in Manohar Lal Sharma (supra). The allotted mines were put up for auction by the Central Government under the CMSP Act on 18th June 2020 and 7th January 2015 respectively. Both the Petitioners participated in the auction process and were declared successful bidders for their respective allotted mines. Thereafter in 2022, a One-Time Surrender Policy (“OTS Policy”) was announced by the Central Government on 9th May, 2022 by which the Ministry of Coal (“MoC”) granted a one time window to public sector allottees to surrender nonoperational coal mines without any penalties.

4. The case of both the Petitioners in this Petition, is that the OTS Policy ought to be extended even to the private coal block allottees in parity with government allottees, inasmuch as the distinction sought to be drawn, between public sector and private allottees would be arbitrary, discriminatory and contrary to law.

5. In the present petitions, notice was issued on 25th July, 2022 and the following directions were passed. “Notice. Since the respondents are duly represented by learned counsels, let a counter affidavit be filed on their behalf on or before the next date fixed. The Court clarifies that the issuance of notice on these two writ petitions at this stage stands restricted to the challenge laid by the petitioners to the exclusion of a private entity from the benefit of the One-Time Surrender Scheme. List again on 30.08.2022. The respondents shall ensure that a copy of the counter affidavit is circulated amongst learned counsels representing the petitioners at least a week prior to the date fixed to enable them to file their response.”

6. As seen from the above Order, the notice in this petition, has been restricted to the challenge made by the Petitioners in respect of exclusion of private allottees from the benefit under the OTS Policy. However, all parties are ad idem that there was an assurance given on behalf of the Union of India by the ld. ASG that the Bank Guarantees would not be invoked, subject to the same being kept alive.

7. In this background, when the matter was considered on 21st February, 2023, submissions were made on behalf of the Petitioners that the OTS Policy which was offered to various public sector companies ought to be fairly extended even to the private companies. On behalf of the Ministry of Coal (MoC), Mr. Kurup, ld. Counsel for the Respondents submitted that the Government has not been able to generate any revenue from the Mines allotted to the Petitioners, due to the pendency of these writs, as the mines have been kept non-operational for the last several years. The extension or otherwise of the OTS Policy to private auction purchasers/allottees is a policy decision which has to been taken by the Government/MoC and the Court ought not to interfere in the same.

8. The matters were being fixed for hearing as the issues raised would have to be adjudicated by the Court. It was then expressed on behalf of MoC that the non-utilization of the allotted mines and the same remaining dormant and unexploited, leads to continued losses for the exchequer during the pendency of this writ petition. Moreover, the same also does not have any corresponding benefit even for the Petitioners. Considering these submissions, the following order was passed on 21st February, 2023:

As per the above order, an interim arrangement was put to the parties to enable utilisation of the Mines by the Government during the pendency of these writ petitions and parties were to seek instructions.

9. Today, all parties have reverted with their respective instructions. On behalf of EMIL, Mr. Dayan Krishnan, ld. Senior Counsel submits that the Petitioner is broadly agreeable to the interim arrangement except to the extent that the Petitioner at this stage cannot be held to be liable for payment of any compensation. He further submits that one of the questions that would arise for consideration is whether the Bank Guarantee amounts are liable to be forfeited by the Respondents.

10. On behalf of HIL Mr. Amit Sibal, ld. Senior Counsel submits that the interim arrangement is also broadly acceptable HIL. This is subject to the clarification that no appropriation order can be passed as the same may then result in various adverse consequences to HIL.

11. On behalf of the Ministry of Coal, Mr. Kurup, ld. Counsel submits that the CSMP Act and the Rules thereunder require obeying of a particular scheme whenever a surrender of an allotted mine takes place. Therefore, compensation would have to be calculated according to the scheme of the CSMP Act and Rules thereunder and the same would be liable to be paid by the Petitioners upon surrender of the allotted mines. If the Petitioners do not wish to operate the allotted mines, MoC is keen on making the same operational by further allotments/auction.

12. It is further submitted by Mr. Kurup that the Bank Guarantees would need to be enhanced by EMIL in terms of the calculations which the Respondent has made.

13. Mr. Dayan Krishnan, ld. Senior Counsel submits that in terms of a Policy announced by the MoC on 14th January 2023, in respect of nonoperational coal mines, there is a relaxation which is being granted from submission of any enhanced bank guarantees.