Case: Central India Power Company, Nagpur Vs. Union of India &amp; Others

2.The facts which are not in dispute and which are relevant for the decision in the matter areIn April, 1993, M/s. Nippon Denro Inpat Ltd., hereafter called as "the NIPPON CO.", the parent company of the petitionerCentral India Power Company, hereinafter called as "the CIPCO" or "the petitioner", submitted a proposal to the Government of Maharashtra for setting up 1000 MW thermal coal based Thermal Power Project at UmredDistrict, Nagpur. On 18th October, 1993, the Government of India communicated to NIPPON CO. that the screening committee in its meeting held on 27th September, 1993 had identified the three coalfield blocks of Lohare West, Baranj I to IV and Bander and had recommended the same for allotment to NIPPON for development as captive source for supply of coal to the proposed Umred Thermal Powerby Gazette Notification under Section 3(3)(a)(iii)(4) of the Coal Mines (Nationalisation) Act, 1973, hereinafter called as "the said Act", was issued on 27th March, 1996 specifying as "an end use" the supply of coal from the said three coalfield blocks excluding Morpar by Central India Coal Company Limited, hereinafter called as "the CICCO", (which was formed by NIPPON) to undertake mining operations on an exclusive basis to CIPCO (which was also formed by NIPPON), for generation of thermal power subject to the condition that M/s. Inpat Urja Limited, hereinafter called as "the ISPAT", holds atleast 26% of voting equity share capital of the CICCO and of the CIPCO. on 11th September, 1998, an amended notification specifying supply of coal for thermal power generation by the CICCO, from the coal mines of Baranj I to IV, Manora Deep and Killoni to the CIPCO, the petitioner as "an end use" with the conditions mentioned in the notification, was issued. Accordingly, there was a change in the coalfield blocks from Lohara West and Bandar to Manora Deep and Killoni. On 19th June, 1999, coal supply through linkage of 4.5 million tonnes to Bhadravati TPS was granted to the CIPCO from Baranj I to IV, Killoni and Manora Deep subject to ratification of the Standing Linkage Committee (Long Term) of Ministry of Coal. The said coal linkage was to be from the mines to be developed by the Western Coalfield Limited, hereinafter called as "the WCL".(B) On 3rd August, 1999, the CICCO addressed a letter to Collector, Chandrapur informing that the CICCO had informed the Ministry of Coal that they could not undertake coal mining with restriction put by Ministry of Defence, and therefore, the petitioner had approached Ministry of Coal to provide alternative coal supply arrangement in view of the CICCOs inability to develop the mines and the land having been acquired by the WCL under the Coal Bearing Areas Act and in view of the said development, the CICCO would no longer be interested in developing coal mines and the Ministry of Coal had already granted linkage of 4.5 million tonnes per year from WCL and that therefore, the acquisition of the proceedings initiated for the benefit of the petitioner be cancelled. On 2nd September, 1999, the CICCO requested the Government of Maharashtra to withdraw the proposal for mining lease and informed the Ministry of Coal, Government of India accordingly. The same was followed by a letter from the Government of Maharashtra dated 17th September, 1999 to the Government of India for cancellation of proposal to grant mining lease for coal to CICCO. Under a letter dated 30th October, 1999 addressed to Deputy Commissioner of Labour, the CICCO informed that in the absence of any other alternative suitable for captive mining being available, the CICCO was constrained to withdraw all proposals relating to mining lease, land acquisition and decided to close down the proposed coal project, and therefore, they were surrendering the coal mining blocks as they were not planning to do the mining, further confirming that the project being abandoned, they had closed down their establishment at Sadar, Nagpur, with effect from 30th November, 1999.(C) On 26th March, 2002, this Court by its order directed that no further steps should be taken for implementation of Bhadravati Thermal Power Station without further order of the Court. The said order was passed in the Writ Petition No.2594 of 1998. The said interim order is still in force, and the said petition is still pending.(D) On 30th April, 2002, the Standing Linkage Committee (SLC) decided to cancel the coal linkage granted to the petitioner, making it clear that the cancellation was without prejudice to the petitioners right to apply for linkage as and when opportune along with the recommendations of Ministry of Power. The said decision about the cancellation of coal linkage was intimated to the petitioner by the Government under its letter dated 11th June, 2002. On 3rd July, 2002, the petitioner requested for linkage to be kept valid and further by letter dated 19th August, 2002 requested to Ministry of Coal for allotment of coal blocks.(E) On 6th June, 2003, the petitioner applied for allocation of coal blocks, Similarly, the respondent No.3 Karnataka Power Corporation Limited, hereinafter called as "the KPCL", has also applied for allocation of coal blocks for captive mining. Both the parties were heard in the 20th meeting of the Screening Committee held on 6th June, 2003.(F) Under a letter dated 18th June, 2003, the Government of India informed the Government of Maharashtra that due to delay in achieving financial closure by the petitioner, the counter guarantee given by the Government of India had lapsed and that there were serious claimants for the coal blocks which had become free forafter surrender of the same by the petitioner and also subsequent cancellation of coal linkage and that considering the extremely slow progress of the Bhadravati TPP and lack of security about the support from the Government of Maharashtra for the said project, the Ministry of Coal was of the view that unless the project could make significant progress within one or two months thereafter and achieve financial closure, the allotment of coal blocks/coal linkage could not be recommended by the Ministry. The Government of Maharashtra, under its letter dated 15th July, 2003, informed the Government of India that it would be impossible to achieve financial closure of Bhadravati project within two months.(G) On 18th July, 2003, the present petition came to be filed by the petitioner against the Union of India and the State of Maharashtra complaining that the Screening Committee was in the process of allotment of coal blocks to some party outside the State of Maharashtra which could result in irreparable loss to the petitioner. On 26th August, 2003, when it came up for hearing for admission, on account of inability on the part of the petitioner to reveal further development in the matter, it was adjourned to further date while refusing interim relief which was then asked for. On 8th September, 2003, the Civil Application No.5587 of 2003 came to be filed by the petitioner for impleadment of the KPCL as the respondent No.3.(H) On 19th August, 2003, the Screening Committee decided to allocate the concerned coal blocks to KPCL while recording the reasons for acceptance of the claim of KPCL. On 10th November, 2003, the Government of India issued a letter to the KPCL allocating captive coal blocks for power generation in their proposed 1000 MW TPS at Bellary, Karnataka, which was followed by an intimation dated 18th/19th November, 2003 by the KPCL to the Secretary, Ministry of Coal, Government of India, that a joint venture company in the name of Karnataka Emta Coal Mines Limited, the respondent No.4 herein, had been incorporated with the main object to develop the captive mines allocated to the respondent No.3 KPCL and to produce coal for effecting exclusive supply to the Thermal Power Station of the respondent No.3.(I) On 8th December, 2003, pursuing its earlier request made under letter dated 7th October, 2003, the Petitioner requested the Ministry of Coal for alternative coal blocks as the Screening Committee had decided to allot the concerned coal blocks to the respondent No.3 for their proposed power project. In reply thereto, the Government of India on 19th January, 2004 informed the petitioner to approach the Ministry of power for their recommendations concerning the blocks alternatively claimed by the petitioner, while calling for various other information as was described in the said letter.(J) On 16th July, 2004, a notification under Section 3(3)(a)(iii)(4) under the said Act came to be issued specifying as "an end use" the supply of coal from the concerned coal mines by the respondent No.4 on exclusive basis to the respondent No.3 for generation of thermal power in their proposed TPS at Bellary, Karnataka, under the conditions specified thereunder. The notification readsexercise of the powers conferred by item (4) of) of clause (a) of(3) of Section 3 of the Coal Mines (Nationalisation) Act, 1973 (26 of 1973) the Central Government hereby specifies as an end use the supply of coal from the coal mines of Kiloni, Manoradeep and Baranjblocks by the Karnataka EMTA Coal Mines Limited on an exclusive basis to the Karnataka Power Corporation Limited for generation of thermal power in their proposed 1000 MW (2 x 500 MW) TPS at Ballary, Karnataka subject to condition that the Karnataka Power Corporation Limited holds atleast 26 per cent of voting equity share capital of the Karnataka EMTA Coal Mines Limited at all times."(K) Under the letter dated 31st August, 2004, the State Government sought approval of Ministry of Coal under Section 5 of the MinesRegulation) Act, 1957, hereinafter called as "the MMDR Act of 1957", while enumerating the various relevant events concerning the petitioners project. Under the letter dated 6th January, 2006, the Government of Maharashtra requested the Government of India for approval of proposal of the State Government to grant mining lease to the respondent No.4 which was favourably answered by the Government of India under its letter dated 31st January, 2006 on certain conditions which were required to be incorporated in the mining lease to be executed by the Government of Maharashtra in favour of the respondent NoA.(L) Under the order 21st February, 2006 passed in this petition, the respondent Nos.3 and 4 were added as party respondents. The petitioner sought for further amendment to the petition under the application dated 2nd May, 2006 complaining of violation of Section 3(3) of the said Act by the respondents in the matter of allocation of coalfield blocks for the respondent Nos.3 and 4 which amendment was allowed under the order dated 3rd May, 2006.

Reasoning:
22. Taking into consideration the facts of the case which apparently disclose that the petitioner by its letter dated 3rd August, 1999 had informed the Collector, Chandrapur, that the petitioner was not interested in developing the coal mines in the concerned coalfield blocks and acquisition proceedings be cancelled, and consequent thereto, the respondents having taken further steps for proper utilisation of the coal resources, no fault can be found with the impugned action on the part of the respondents. Merely because in future, the petitioners may reconsider about establishment of their project that by itself cannot be a justification to restrain the respondents from utilising the national wealth in the best possible manner for the public good and in the interest of the national economy. There is absolutely no substance in the grievance made by the petitioner and apart from the points which are considered herein, no other points have been canvassed in the matter. The petition, therefore, is liable to be dismissed.23.A feeble attempt was made to contend that the mining operation would be contrary to the opinion expressed by the committee headed by Scientific Adviser to the Defence Ministry. However, it has been clearly pointed out on behalf of the respondents that the mining operations would be carried out beyond the area demarcated on the basis of the said report by the said Committee. Being so, no fault can be found with the respondents permitting the mining operations in the area in question.