HC dismisses pleas against clubbing end-use of coal mines

Delhi High Court today dismissed the pleas of some private companies challenging Coal Ministry's decision to club all sectors, barring power, under a single category for coal block auctions, observing that these firms had participated in the tender process which was known to them.
However, a bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva also said that clubbing of different specified end-uses together "runs counter" to the logic of the classification itself.
Dealing with the issue of categorisation by the government through its December 18, 2014 order, the bench said, "in our view, the specified end-uses could not be clubbed together. Each coal mine had to be classified for a specific end-use."

The bench observed this while dismissing a separate plea of Monnet Ispat and Energy Ltd.
Besides Monnet Ispat and Energy Ltd, three other firms -- Utkal Coal Ltd, Jayaswal Neco Industries Ltd and Bhushan Power and Steel Ltd -- had approached the court on various issues pertaining to the government's decision on coal block auction.
The firms had argued that the decision to club all end- uses, except power, under 'non-regulated sector' has led to a "skewed" bidding process in which unequals were competing with each other for mines.

In its judgement, the court observed that these firms had participated in the tender process.

Regarding the contentions advanced by Monnet Ispat about coal mine at Gare Palma IV/5, the court said the auction of the mine, in which Hindalco Industries was the successful bidder, cannot be interfered with as the petitioner had participated in the tender process and had even succeeded in respect of Gare Palma IV/7.
While dismissing the plea by Utkal Coal Ltd, the bench
said "the entire tender process was known to the petitioners and they requested for permission to participate and when that permission was given, they chose not to participate. Consequently, the petitioners are not entitled to any relief."

Regarding Jayaswal Neco's plea which had said that there were separate and distinct specified end-uses which cannot be clubbed together, the court said, "We have already indicated that in our view, clubbing of specified end-uses is not permissible".
"Insofar as the issue of splitting generation of power for captive use from generation of power is concerned, we are of the view that perhaps there is a logic behind this. The auction process for independent power plants is reverse bidding whereas the auction process for captive power plants is forward bidding," the bench said.
It also said that "once a prospective bidder participates in the tender process without any demur, protest or reservation, he cannot be allowed to challenge the very same tender process at a later stage in which he has lost out".

"In conclusion, for the reasons aforestated (in the judgement), the petitions are dismissed," the court said.
Some of these companies had earlier contended that due to "wrong" classification, core sectors like iron and steel, which are to be protected as per 2014 coal ordinance, were losing out to aluminium companies in the auction.
They had also said that 'non-regulated sector' was not a specified end-use under the ordinance.