Writ Petition (Crl.) Nos. 120, 463, 515 of 2012 and 283 of 2013. Case: Manohar Lal Sharma Vs The Principal Secretary. Supreme Court

Case Number:Writ Petition (Crl.) Nos. 120, 463, 515 of 2012 and 283 of 2013
Party Name:Manohar Lal Sharma Vs The Principal Secretary
Judges:R.M. Lodha, C.J.I., Madan B. Lokur and Kurian Joseph, JJ.
Issue:Mines and Minerals (Development and Regulation) Act, 1957 - Sections 2, 3, 3(1), 3(2), 3(3), 3(4), 4, 4(1), 4(2), 5, 5(1), 5(2), 6, 6(1), 7, 8, 8(2), 10, 10(3), 11, 11A, 11(1), 11(2), 11(3), 13, 13(2), 17, 17A, 18, 18A, 18A(1), 19, 30; Coal Mines (Nationalisation) Act, 1973 - Sections 1A, 1A(1), 1A(2), 3, 3(2), 3(3), 3(4), 30(2), 370(1B); Mines...
Judgement Date:August 25, 2014
Court:Supreme Court
 
FREE EXCERPT

Judgment:

R.M. Lodha, C.J.I.

  1. Coal is king and paramount Lord of industry is an old saying in the industrial world. Industrial greatness has been built up on coal by many countries. In India, coal is the most important indigenous energy resource and remains the dominant fuel for power generation and many industrial applications. A number of major industrial sectors including iron and steel production depend on coal as a source of energy. The cement industry is also a major coal user. Coal's potential as a feedstock for producing liquid transport fuels is huge in India. Coal can help significant economic growth. India's energy future and prosperity are integrally dependant upon mining and using its most abundant, affordable and dependant energy supply-which is coal. Coal is extremely important element in the industrial life of developing India. In power, iron and steel, coal is used as an input and in cement, coal is used both as fuel and an input. It is no exaggeration that coal is regarded by many as the black diamond.

  2. Being such a significant, valuable and important natural resource, the allocation of coal blocks for the period 1993 to 2010 is the subject matter of this group of writ petitions filed in the nature of Public Interest Litigation, principally one by Manohar Lal Sharma and the other by the Common Cause. The allocation of coal blocks made during the above period by the Central Government, according to Petitioners, is illegal and unconstitutional inter alia on the following grounds:

    (a) Non-compliance of the mandatory legal procedure under the Mines and Minerals (Development and Regulation) Act, 1957 (for short, '1957 Act').

    (b) Breach of Section 3(3)(a)(iii) of the Coal Mines (Nationalisation) Act, 1973 (for short, 'CMN Act').

    (c) Violation of the principle of Trusteeship of natural resources by gifting away precious resources as largesse.

    (d) Arbitrariness, lack of transparency, lack of objectivity and non-application of mind; and

    (e) Allotment tainted with mala fides and corruption and made in favour of ineligible companies tainted with mala fides and corruption.

  3. The first of these writ petitions was filed by Manohar Lal Sharma. When that writ petition was listed for preliminary hearing on 14.09.2012, the Court issued notice to Union of India and directed it to file counter affidavit through Secretary, Ministry of Coal dealing with the following aspects:

    (i) The details of guidelines framed by the Central Government for allocation of subject coal blocks.

    (ii) The process adopted for allocation of subject coal blocks.

    (iii) Whether the guidelines contain inbuilt mechanism to ensure that allocation does not lead to distribution of largesse unfairly in the hands of few private companies?

    (iv) Whether the guidelines were strictly followed and whether by allocation of the subject coal blocks, the objectives of the policy have been realised?

    (v) What were the reasons for not following the policy of competitive bidding adopted by the Government of India way back in 2004 for allocation of coal blocks?

    (vi) What steps have been taken or are proposed to be taken against the allottees who have not adhered to the terms of allotment or breached the terms thereof?

  4. Another PIL came to be filed by Common Cause after the above order was passed. PIL by Common Cause came up for preliminary hearing on 19.11.2012. Since, certain additional issues were raised and additional reliefs were also made in the PIL by Common Cause, this Court issued notice in that matter as well on 19.11.2012.

  5. Principally, two prayers have been made in these matters, first, for quashing the entire allocation of coal blocks made to private companies by the Central Government between 1993 and 2012 and second, a court monitored investigation by the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) or by a Special Investigation Team (SIT) into the entire allocation of coal blocks by the Central Government made between the above period covering all aspects.

  6. The present consideration of the matter is confined to the first prayer, i.e., for quashing the allocation of coal blocks to private companies made by the Central Government between the above period. At the outset, therefore, it is clarified that consideration of the present matter shall not be construed, in any manner, as touching directly or indirectly upon the investigation being conducted by CBI and ED into the allocation of coal blocks.

  7. The first counter affidavit was filed by the Central Government on 22.01.2013 running into eleven volumes and 2607 pages. Thereafter, further/additional counter affidavit was filed by the Central Government. However, when the matters were listed on 10.07.2013, learned Attorney General submitted that in the counter affidavits filed so far, the Union of India had focused on the six queries raised by the Court on 14.09.2012 in the writ petition filed by Manohar Lal Sharma. He sought some time to enable the Central Government to file appropriate counter affidavit justifying allocation of coal blocks. Thereafter, further/additional counter affidavits have also been filed by the Central Government.

  8. On 10.09.2013, the arguments with regard to challenge to allocation of coal blocks commenced which continued on 11.09.2013, 12.09.2013, 17.09.2013, 18.09.2013, 24.09.2013, 25.09.2013 and 26.09.2013. On 26.09.2013, Attorney General in the course of his arguments submitted that allocation letter by the Central Government was only a first step towards obtaining mining lease and that, by itself, did not confer any right on the allottee to work mines. He submitted that at the best, letter of allocation was a letter of intent and issuance of such allocation letter in no way impinges the rights of the State Governments under the 1957 Act. In light of the submissions of the learned Attorney General on 26.09.2013, we wanted to know from the counsel for the Petitioners whether concerned State Governments should be asked to explain their position in the matter to which Mr. Manohar Lal Sharma, Petitioner-in-person and Mr. Prashant Bhushan agreed and, accordingly, the Court issued notice to the States of Jharkhand, Chhattisgarh, Odisha, Maharashtra, Andhra Pradesh, Madhya Pradesh and West Bengal as the subject coal blocks, for which the allocation is in issue, were located in these States. The Court sought the views of the above States on the following:

    (i) How did the State Government understand the allocation of coal blocks by the Central Government?

    (ii) What was the role of the State Government in the allocation of coal blocks?

    (iii) What was the role of the State Government in the subsequent steps having regard to the provisions of the 1957 Act?

    (iv) The details of the agreements entered into by the State Public Sector Undertakings, which were allotted coal blocks, with private parties for the coal blocks located in the State.

  9. In pursuance of the above, 7 States have filed their responses.

  10. The arguments re-commenced on 05.12.2013. On that day, arguments of the States of Jharkhand, Chhattisgarh and Odisha were concluded and matters were fixed for 08.01.2014. On 08.01.2014, the arguments on behalf of the States of Maharashtra, Andhra Pradesh, Madhya Pradesh and West Bengal were concluded and the matters were fixed for 09.01.2014. On that day, arguments of learned Attorney General were concluded.

  11. Three Associations, viz., Coal Producers Association, Sponge Iron Manufacturers Association and Independent Power Producers Association of India have made applications for their intervention stating that these associations represented large number of allottees who have been allocated subject coal blocks. Accordingly, Mr. K.K. Venugopal, learned senior counsel was heard for Coal Producers Association and Mr. Harish N. Salve, learned senior counsel was heard on behalf of the Sponge Iron Manufacturers Association and Independent Power Producers Association of India. They commenced their arguments on 09.01.2014, which continued on 15.01.2014 and concluded on 16.01.2014. The arguments in rejoinder by Mr. Manohar Lal Sharma, Petitioner-in-person and Mr. Prashant Bhushan, learned Counsel for Common Cause were also concluded on that day. The arguments of Mr. Sanjay Parikh, who had made an application for intervention on behalf of Mr. Sudeep Shrivastav were also heard and concluded. The judgment was reserved on that day.

  12. It is appropriate that we first notice the statutory framework relevant for the issues under consideration. The Mines and Minerals (Development and Regulation) Act, 1948 (for short, '1948 Act') was enacted to provide for the Regulation of mines and oil fields and for the development of the minerals under entry 36 of the Government of India Act, 1935. It received the assent of the Governor General on 08.09.1948 and came into effect from that date.

  13. 1948 Act was repealed by the 1957 Act. The introduction of the 1957 Act reads:

    In the Seventh Schedule of the Constitution in Union List entry 54 provides for Regulation of mines and minerals development to the extent to which such Regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest. On account of this provision it became imperative to have a separate legislation. In order to provide for the Regulation of mines and the development of minerals, the Mines and Minerals (Regulation and Development) Bill was introduced in the Parliament.

  14. 1957 Act has undergone amendments from time to time. Section 2 of the 1957 Act reads:

    Declaration as to the expediency of Union Control-it is hereby declared that it is expedient in the public interest that the Union should take under its control the Regulation of mines and the development of minerals to the extent hereinafter provided.

  15. Sections 3(a), (c), (d), (e), (f), (g) and (h) define: "minerals", "mining lease", "mining operations", "minor minerals"...

To continue reading

REQUEST YOUR TRIAL