Coal blocks: Centre asks SC to start contempt proceedings against firms

If these companies are asked to pay, the Centre would end up collecting over Rs 5,000 crore as penalty

The Centre has asked the Supreme Court to initiate contempt proceedings against nine companies for willful disobedience of the apex court’s directions to pay compensation in lieu of the coal extracted from the cancelled blocks.

“The respondent cannot shirk from this liability by making frivolous pleas that there is no direction/decree for them to pay,” the coal ministry said in its fresh affidavit, adding that the judgment passed by the court is “the law of the land and the directions issued are paramount, to be implemented without any default… the (directions) are required to be complied with and any disobedience thereto tantamount to undermining the dignity of the apex court.”

According to the coal ministry, the object and purpose of imposition of penalty was that “since the process of allocation was fundamentally flawed, therefore all the beneficiaries of this flawed process must suffer the consequences which includes the private companies, which derived illegal benefits, being a part of the JV with the government companies. The idea was to make the beneficiaries of the illegal process to pay and compensate the public exchequer for the loss.”

If these companies are asked to pay, the Centre would end up collecting over Rs 5,000 crore as penalty. The ministry, in its contempt petition filed early this year, claimed that these nine firms had “wilfully disobeyed” the apex court’s ruling of September 24, 2014, which asked them to pay Rs 295 per metric tonne of all the coal mined by them within three months from the date of extraction as per the CAG report.

Alleged contemnors include Ujjal Kumar Upadhya, managing director, Bengal Emta Coal Mines, DVC Emta Coal Mines, Karnataka Emta Coal Mines and Panem Coal Mines, Anup Agarwalla, director, BLA Industries, K Kholie, director, Arunachal Pradesh Mineral Development & Trading Corporation, and Romit Mutsuddi, managing director, West Bengal Mineral Development & Trading Corporation. Mining leases were executed by joint venture companies formed between the state governments and private miners. Emta was engaged in mining from the coal blocks allotted to the West Bengal, Punjab and Karnataka governments, with a majority stake of 74% in the respective joint ventures while the state governments held 26% stake in their respective ventures. After the SC order on cancellation of 204 blocks, it was estimated that West Bengal, Punjab and Karnataka (along with the third party) would pay Rs 1,567 crore, Rs 1,533 crore and Rs 449 crore, respectively, in lieu of the coal already mined. While Emta was supposed to pay over Rs 2,600 crore as its share of penalty, the state-run Damodar Valley Corporation had to pay an estimated fine of Rs 220 crore.

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