Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 1182 of 2015, Judgment Date: Jan 27, 2015

                                                              Non-Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO.  1182  of 2015
         (Arising out of Special Leave Petition (C) No.431 of 2015)


Union of India & Another                                   ... Appellants

                                   Versus

Sova Ispat Limited & Others                                ...Respondents


                               J U D G M E N T

Chelameswar, J.

1.    Leave granted.

2.    Aggrieved by an interim order passed by the High Court of Calcutta  in
AST No.432 of 2014  dated  23.12.2014,  the  respondents  1  and  2  therein
preferred the instant appeal.   The relevant portion of the order  reads  as
follows:-
"As the writ application has been  admitted  and  as  affidavits  have  been
called for and as the constitutionality  of  the  said  Ordinance  is  under
challenge, any auction conducted by  the  respondents,  in  respect  of  the
Ardhagram coal block, as incorporated under serial No.19  of  the  allotment
list in Annexure-II of the  memorandum  dated  18th  December,  2014,  shall
abide by the result of the writ application.  In the event any such  auction
is held, the instant order should be indicated in the auction notice."
3.    The following are the facts relevant for the purpose  of  this  order.
The first respondent, a company registered under  the  Companies  Act,  1956
along with one M/s. Jai Balaji Sponge Ltd., secured the allotment of a  coal
block known as "Ardhagram Coal Block" under the memorandum of the  appellant
dated 6th December, 2007, which was subsequently renewed on 24.2.2014.

4.    Pursuant to the said allotment, the third respondent  herein  executed
a mining lease in respect of the said 'coal block' in favour  of  the  first
respondent.

5.    The legality of the various allotments of the coal blocks  became  the
subject  matter  of  public  interest  litigation  before  this  Court.   By
judgments dated 25.8.2014 and 24.9.2014,  the  allocation  of  various  coal
blocks including the one allocated in favour of  the  first  respondent  was
cancelled.

6.    As  a  consequence,  an  Ordinance  came  to  be  promulgated  by  the
President of India known as  the  Coal  Mines  (Special  Provisions)  Second
Ordinance, 2014 (No. 7 of 2014).

7.    Under  Section  4  of  the  said  Ordinance,  "coal  mines"  shall  be
allocated by way of public auction  in  accordance  with  Rules  as  may  be
prescribed.   For the  purpose  of  the  said  Ordinance,  coals  mines  are
divided into  three  categories  under  Schedules  I,  II  and  III  of  the
Ordinance.   Broadly speaking, 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.

8.    A successful bidder in an auction held pursuant to  the  Ordinance  is
entitled for securing a "vesting order" of the mine under Section 8  of  the
Act.

9.    Such an order of vesting shall transfer and vest upon  the  successful
bidder various rights enumerated under Section 8(4).

10.   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.

11.   From  a  cursory  reading  of  the  pleadings,  it  appears  that  the
respondents have installed certain end user plants in a parcel  of  land,  a
part of which falls within the area of the coal block  of  which  the  first
respondent was the prior allottee and the remaining  part  is  outside  such
coal block but abutting the said coal block.

12.   The case of the first respondent is that the  Ordinance  provides  for
compulsory acquisition of the respondents' end user  plant  or  part  of  it
which is located within the coal block  area  without  the  payment  of  any
compensation and therefore various articles of  the  Constitution  of  India
are violated including Article 300A.  Pending adjudication of such a  claim,
by way of an interim order, the first respondent sought stay of the  auction
of the coal block of which he was the earlier allottee.

13.    While  declining  to  stay  the  auction  as  sought  by  the   first
respondent, the order impugned in the instant appeal came to be passed.

14.   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.    The
observations such as the one made by the  High  Court  (which  is  extracted
earlier) would seriously hamper the prospects of any competitive bid as  the
prospective bidders would be hesitant to acquire any coal block which  would
drag them into litigation in future.  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.

15.   On the other hand, Shri Kapil Sibal, learned senior counsel  submitted
that the Union of India would be  acting  contrary  to  the  letter  of  the
Ordinance in making such a concession and therefore the same should  not  be
accepted.

16.   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.   We  order
accordingly.  There will be no order as to costs.

17.   We leave open all questions of law  to  be  agitated  by  the  parties
before the High Court.
      Appeal allowed as indicated above.
                                      ....................................J.
                                                   (J. Chelameswar)

                                      ....................................J.
                                                     (Rohinton Fali Nariman)
New Delhi;
January 27, 2015
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