2015 (2) TMI 642 - SC - Indian Laws

Coal Mines (Special Provisions) Second Ordinance, 2014 (No. 7 of 2014)-Stay of Auction - Compensation for end user plants installed in partly coal block and partly outside- Schedule-I coal mines are those mines whose allocation (made earlier in favour of the various parties like the first respondent herein) were cancelled by the orders of this Court referred to earlier. Under Section 16 of the Ordinance, compensation is required to be paid with reference to land and mine infrastructure of the Schedule-I coal mines. The expression mine infrastructure is defined under Section 3(j) of the Ordinance. The learned Attorney General appearing for the Union of India submitted that the Union of India does not propose to acquire the end user plant of the respondent, as apprehended by the respondent. He further submitted that since the basic concern of the respondent is only to ensure that he is not deprived of his property without adequate compensation, the Union of India gives an undertaking to earmark that portion of the land occupied by the end user plant falling within the coal block area and exclude the same from the process of auction and vesting contemplated under the Ordinance so that the rights of property of the respondent remain intact. In view of the fact that the Writ Petition is pending in the High Court, we do not propose to examine the submissions made by the learned counsel for the respondent, but we are satisfied that the interest of justice demands that the impugned order be set aside recording the undertaking of the learned Attorney General mentioned above. Appeal allowed.

Summary

Issues:
Interim order restraining auction of coal block, constitutionality of the ordinance, compulsory acquisition without compensation, setting aside the impugned order.

Interim Order Restraining Auction of Coal Block:
The case involved an interim order passed by the High Court restraining the auction of a coal block pending the writ application challenging the constitutionality of the ordinance. The first respondent, a prior allottee of the coal block, sought to stay the auction, alleging compulsory acquisition without compensation violating constitutional provisions. The Union of India assured not to acquire the end user plant without compensation, preserving the respondent's property rights. The Supreme Court set aside the impugned order, emphasizing the importance of competitive bidding and ensuring property rights are safeguarded.

Constitutionality of the Ordinance:
The Coal Mines (Special Provisions) Second Ordinance, 2014, provided for the allocation of coal mines through public auction following the cancellation of previous allotments by court orders. The ordinance categorized coal mines into Schedule-I, II, and III, with Schedule-I mines subject to auction. Successful bidders were entitled to a vesting order transferring various rights. Compensation under Section 16 was linked to land and mine infrastructure. The respondent alleged the ordinance violated constitutional provisions by allowing compulsory acquisition without adequate compensation, leading to the interim order restraining the auction.

Compulsory Acquisition Without Compensation:
The first respondent claimed that the ordinance allowed for the compulsory acquisition of their end user plant within the coal block without compensation, violating constitutional rights. The Union of India assured that the plant's land within the coal block area would be excluded from the auction process, protecting the respondent's property rights. The Supreme Court, while refraining from examining the pending writ petition's submissions, set aside the impugned order based on the Union's undertaking to safeguard the respondent's property rights.

Setting Aside the Impugned Order:
The Supreme Court set aside the impugned order that restrained the auction of the coal block, noting the importance of competitive bidding and the need to protect property rights. The Union of India's undertaking to exclude the respondent's end user plant land from the auction process ensured that the respondent's rights were preserved. The Court left all legal questions open for further adjudication before the High Court, allowing the appeal and ordering no costs to be paid.