Vedanta moves Delhi HC against retrospective contributions to DMF

Interim relief provided earlier to BALCO, extended till February 14

Vedanta Limited moved the Delhi High Court on Tuesday, against an August 31, 2016 notification made by the Ministry of Coal, amending the Mines and Mineral (Contribution to District Mineral Foundation) Rules 2015 with retrospective effect from January 12, 2015.

Pursuant to the introduction of the Mines and Minerals (Development and Regulation) Amendment Act 2015, the Ministry of Coal had on September 16, 2015 notified various District Mineral Foundations (DMFs), which were deemed to have come into effect on January 12, 2015. The rules for contributions to these foundations were subsequently framed for ‘non-fuel’ and ‘fuel’ minerals in September and October 2016, respectively. According to the rules, contributions to the DMFs were to be made from January 12, 2015 for ‘non-fuel’ minerals and October 20, 2015 for ‘fuel’ minerals.

The notification of the DMFs and levy of contributions with retrospective effect had been challenged by the Federation of Indian Mineral Industries in the Delhi High Court in December 2015 and an interim relief was granted directing the government not to take any coercive steps, at that time. In January 2016, Bharat Aluminum Company Limited (BALCO) also filed a similar petition on the same grounds before the Chhattisgarh High Court

However, before these petitions could be finally adjudicated, the Supreme Court stayed all proceedings pending before the various high courts and transferred the matter to itself on August 16, 2016. As a result, the earlier high court proceedings and underlying orders came to a halt.

On August 31, 2016, while the Supreme Court was seized of the issue, the Ministry of Coal amended the rules for contributions for ‘fuel’ minerals making it effective from January 12, 2015 instead of the earlier October 20, 2015 date. Challenging this amendment, BALCO moved the Delhi High Court for a second time in September 2016 and the court directed the government not to take any coercive steps in pursuance of the amendment.

Vedanta’s present plea before Chief Justice G Rohini and Justice Sangita Dhingra Sehgal on Tuesday, follows suit with the BALCO petition, seeking a similar relief against the alleged retrospective demand of contributions made by Mahanadi Coalfields Limited (a subsidiary of Coal India Limited) for previous supplies of coal made to the Vedanta for its operations in Orissa.

Responding to the submissions made by senior advocate Arvind Nigam, appearing on behalf of Vedanta, the government counsels responded by challenging the jurisdiction of the Delhi High Court as the company’s interests in the petition lay in outside the territory of Delhi. Allowing the government to make a formal response to the contentions raised, the bench directed the Centre to file its objections within one week and listed the petition for further consideration on February 14.

Taking note of the interim order currently in operation in the BALCO petition which was also listed on Tuesday, the court extended the relief earlier provided to the company till the next date of hearing and fixed the matter alongside the Vedanta petition for further consideration.