B.L.A. INDUSTRIES PRIVATE LIMITEDversusUNION OF INDIA AND ANOTHER

184                      [2022]REPORTS
               SUPREME COURT   11 S.C.R. 184               [2022] 11 S.C.R.


A                 B.L.A. INDUSTRIES PRIVATE LIMITED
                                        v.
                     UNION OF INDIA AND ANOTHER
                      (Writ Petition (Civil) No. 63 of 2015)
B                              AUGUST 17, 2022
             [N. V. RAMANA, CJI, KRISHNA MURARI AND
                         HIMA KOHLI, JJ.]
             Mines and Minerals (Development & Regulation) Act, 1957
      – Mineral Concession Rules, 1960 – Mines (Special Provisions)
C
      Ordinance, 2014 – Supreme Court in Manohar Lal Sharma v. Principal
      Secretary and Others [2014] 8 SCR 446 (the First Judgment) declared
      that the entire allocation of coal blocks, as per the recommendations
      made by the Screening Committee constituted by respondent no.1-
      Union of India (UOI) from 14th July, 1993 onwards and the
D     allocations made through the Government Dispensation Route after
      1993 were arbitrary and illegal – Outcome of the illegal allocations
      was subject matter of subsequent judgment delivered in the same
      case reported as [2014] 12 SCR 110 (the Second Judgment) wherein
      Coal block allotments were divided in two categories on the basis
      of the documents furnished by UOI – First category of the allotments
E
      was quashed outright as illegal and arbitrary – Second category
      comprised of 46 coal blocks mentioned in Annexure-1 and
      Annexure-2 that could possibly be “saved” from cancellation on
      imposition of certain terms and conditions, out of which 42 coal
      blocks were cancelled with a grace period of six months granted
F     for the said cancellation to take effect – Coal blocks allocated to
      the petitioner were mentioned in Annexure-1 extracted at the end of
      the Second Judgment – Petitioner’s name and mining lease area
      included by UOI in the Schedules appended to the 2014 Ordinance
      even though, the Screening Committee had not allocated any coal
      block to it – Held: Allocation of the coal block made in favour of
G
      the petitioner did not run foul of the procedure prescribed in the
      MMDR Act and the MC Rules – Petitioner was not allocated the
      coal block either through the Screening Committee Route or the
      Central Government Dispensation Route, which fact was not pointed
      out by the UOI at the appropriate stage, that led to painting the
H     petitioner with the same brush as the other allottees listed in
                                        184
 B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                    185
                    AND ANOTHER

Annexures- 1 and 2 – It was not a beneficiary of the flawed process,    A
thus the consequences spelt out in the Second Judgment would not
apply to it and thus, it cannot be called upon to pay penalty as
compensatory payment, as demanded by UOI – UOI not entitled to
claim payment of an additional levy for the coal extracted by the
petitioner from the subject mine – Any such demand raised is set
                                                                        B
aside – Contempt Petition filed by UOI is also dismissed as meritless
– Costs of Rs. 1,00,000/- be paid by UOI to the Petitioner –
Deprecation.
       Allowing the writ petition and dismissing the contempt
petition, the Court
                                                                        C
      HELD: 1.1 The issue that requires to be answered in the
instant case is whether the petitioner was allocated coal mines
through the Screening Committee Route and/or the Government
Dispensation Route. Only if the answer to the said question is in
the affirmative, would the respondent No.1–UOI be entitled to
claim compensatory payment from the petitioner in terms of the          D
Second Judgment and not otherwise. [Para 14][196-B-C]
      1.2 Admittedly, the petitioner had submitted a mining lease
application to the Collector (Mining), Narsingpur, Madhya
Pradesh on 8th November, 1994. The said application was
forwarded to the Tehsildar, Gadarwara and the Mining Inspector,         E
Narsingpur for seeking an inspection report for the area applied
for. Ground work was done by the Tehsildar and the Mining
Inspector who submitted a report of the proposed area which in
turn was confirmed by the Mine Surveyor. The map of the applied
area submitted by the petitioner was also certified by the              F
Divisional Forest Officer and a consent from Chief Conservator
of Forest was obtained. Additionally, a mineral analysis report
was sought from the petitioner and after all the aforementioned
information was gathered and analyzed, the Collector, Narsingpur
addressed a letter dated 15th May, 1995 to the Principal Secretary,
Mineral Resource Department, Bhopal (Madhya Pradesh) stating            G
inter alia that if no Government authorized unit was prepared to
operate in the area and the petitioner is granted the lease, it
would result in development of the area and generation of
employment. Therefore, the Collector (Mining) recommended
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186           SUPREME COURT REPORTS                    [2022] 11 S.C.R.


A     grant of a mining lease for a period of 30 years to the petitioner
      in accordance with the Rules and the policy of the Government.
      Based on the aforesaid input received from the Collector
      (Mining), Narsingpur, the respondent No. 2–State Government
      wrote a letter dated 23rd December, 1995 to the respondent No.1
      – UOI specifically stating inter alia that the petitioner had
B
      furnished all the relevant information as required under Rule 22
      (3) (d) (e) (f) and (g) of the MC Rules, 1960 along with the coal
      mining plan of the specified area and after examination, the
      petitioner was found to be eligible under the Rules for grant of a
      mining lease. Stating that prior approval of the Central
C     Government was necessary under Section 5(1) of the MMDR
      Act, the respondent No. 2 – State Government requested the
      respondent No. 1–UOI to grant requisite approval in favour of
      the petitioner. It was in the aforesaid background that the
      recommendation received from the respondent No.2-State
      Government was acted on by the respondent No. 1–UOI and the
D
      letter dated 27th August, 1997 was issued granting approval of
      the mining lease in favour of the petitioner. The aforesaid
      sequence of events belies the plea taken by the respondent No.
      1–UOI that the mining lease was granted in favour of the
      petitioner solely on the basis of the recommendations made by
E     the Screening Committee. Simply because the petitioner had
      participated in the meetings conducted by the Screening
      Committee cannot be held against it. Participation in the said
      meetings can also not be taken to mean that the petitioner had
      applied directly to the respondent No. 1–UOI for grant of the
      mining lease. In fact, the records reveal that the letter dated
F
      21st June, 1996 issued by the respondent No. 1 – UOI stating
      that the petitioner’s proposal for identification of the captive
      mining block for supply of coal to the 24 MW captive power plant
      in Madhya Pradesh was considered in the meeting of the
      Screening Committee and was approved, never found its way to
G     the respondent No. 2 – State Government. This position is borne
      out on a perusal of the copies of the said letter endorsed by the
      respondent No. 1 – UOI to different authorities. At Serial No.
      (iv), the name of the “Chief Secretary, Government of
      Maharashtra, Mumbai” has been endorsed instead of the “Chief
      Secretary, Government of Madhya Pradesh” which fact stand
H
 B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                   187
                    AND ANOTHER

confirmed from the reply dated 10th April, 2015 issued by the          A
respondent No. 1 – UOI to an RTI query received by it. A similar
stand has been taken by the respondent No. 2- State Government
in its reply dated 6th April, 2015 to an RTI query received by the
concerned department. The petitioner had also clarified that it
had applied to the State Government for grant of a mining lease
                                                                       B
through the District Collector, Narsingpur, Madhya Pradesh in
the prescribed form and it was the said proposal that had been
recommended by the State Government to the respondent No. 1
– UOI for necessary approval. The said position is apparent from
the letter dated 3rd July, 1996 addressed by the petitioner to the
respondent No. 1 – UOI. [Paras 16, 17][197-A-H; 198-A-E]               C
       1.3 Another relevant aspect that tips the scale in favour of
the petitioner is the counter affidavit filed by the respondent No.
2 – State Government which is in consonance with the plea taken
by the petitioner that the decision to grant the mining lease in its
favour was not based on any allocation letter issued directly by       D
the Central Government and/or the Screening Committee, but
was founded on an independent consideration of the petitioner’s
application made by the State Government and done in accordance
with the provisions of the MMDR Act read with the MC Rules.
Respondent No. 2 – State Government has also referred to its
earlier affidavit dated 28 th October, 2013 filed before this Court    E
in the connected matters decided by the First Judgment, wherein
it had explained the procedure adopted for allocation of coal blocks
by the Screening Committee constituted by the Central
Government and had categorically averred that the said procedure
was followed in all cases “Other than one”, where the application      F
was made directly to the State Government and not to the Central
Government. The said one case was explained to be that of the
petitioner herein. In other words, the respondent No. 2 – State
Government has affirmed the stand taken by the petitioner that
the procedure of allocation of the coal block through the Screening
Committee Route/Government Dispensation Route had not been             G
followed in the case of the petitioner and therefore there was no
illegality in allocation of the specified coal mines in its favour,
unlike the other cases. In the light of the aforesaid stand taken
by the respondent No. 2 – State Government which can be co-
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188            SUPREME COURT REPORTS                      [2022] 11 S.C.R.


A     related with the correspondence placed on record, the plea of
      the respondent No. 1 – UOI that the case of the petitioner was
      considered by the Screening Committee in its 9th, 10th, 14th,
      15th, 16th and 20th meetings, would not make the allocation
      illegal. No parity can be drawn between the petitioner and the
      other allottees of the coal blocks when the petitioner followed
B
      the correct procedure of applying through proper channel for grant
      of a mining lease which application on being received, was routed
      by the Office of the Collector (Mines), Narsingpur to the Mineral
      Resource Department, Government of Madhya Pradesh and
      onwards to the respondent No. 1 – UOI, for prior approval. [Paras
C     18, 19][200-A-G]
             1.4 The mining lease granted in favour of the petitioner
      was not tainted by mala fides, as was the case of the other allottees.
      It was the respondent No. 2 – State Government that had
      undertaken a diligent exercise to examine the petitioner’s
D     application before recommending its case to the respondent No.
      1 – UOI for grant of the mining lease. Founded on the said
      recommendations, the respondent No. 1 – UOI had issued the
      letter allocating the coal block to the petitioner and not the other
      way round. The respondent No.1 - UOI ought not to have included
      the name of the petitioner and the coal blocks allotted to it in
E
      Annexure – 1 filed before this Court that forms a part of the
      Second Judgment. Taking the contents of the said Annexures –
      1 and 2 filed by the respondent No. 1 – UOI as true and correct,
      this Court passed the consequential order directing payment of
      compensation as an additional levy. The fact that the petitioner
F     did not get an opportunity to inform the Court about the error on
      the part of the respondent No. 1 – UOI of including its name in
      Annexure – 1 can be discerned from the observations made in
      para 24 of the Second Judgment to the effect that the Court had
      not dealt with any individual case but only with the process of
      allotment of coal blocks which was found to be fatally flawed.
G
      Allocation of the coal block made in form of the petitioner did not
      run foul of the procedure prescribed in the MMDR Act and the
      MC Rules. The petitioner was not allocated the coal block either
      through the Screening Committee Route or the Central

H
 B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                   189
                    AND ANOTHER

Government Dispensation Route, which fact was not pointed out          A
by the respondent No. 1 – UOI at the appropriate stage, that led
to painting the petitioner with the same brush as the other allottee
listed in Annexures – 1 and 2. The petitioner was not a beneficiary
of the flawed process thus, the consequences spelt out in the
Second Judgment would not apply to it and therefore, it cannot
                                                                       B
be called upon to pay penalty as compensatory payment, as
demanded by the respondent No. 1 – UOI. The respondent No.
1 – UOI is not entitled to claim payment of an additional levy for
the coal extracted by the petitioner from the subject mine. Any
such demand raised by the respondent No. 1 – UOI is hereby
quashed and set aside. Contempt Petition (Crl.) No.7 of 2016 is        C
dismissed as meritless. Litigation costs of ` 1,00,000/- (Rupees
one lakh) shall be paid by the respondent No.1–UOI to the
petitioner within four weeks. [Paras 20-24][200-H; 201-A-H; 202-
A-C]
      Manohar Lal Sharma v. Principal Secretary and Others             D
      (2014) 9 SCC 516 : [2014] 8 SCR 446; Manohar Lal
      Sharma v. Principal Secretary and Others (2014) 9 SCC
      614 : [2014] 12 SCR 110 – referred to.
                       Case Law Reference
                                                                       E
[2014] 8 SCR 446                  referred to          Para 7
[2014] 12 SCR 110                 referred to          Para 8
      CIVIL ORIGINAL JURISDICTION: Writ Petiion (Civil) No. 63
of 2015.                                                               F
      Under Article 32 of The Constitiution of India
       Abhimanyu Bhandari, Mahesh Agarwal, Ayush Agarwal,
Ms. Madhavi Agarwal, Victor Dass, Ms. Rubina, E. C. Agrawala, Advs.
for the Petitioner.
                                                                       G
      Balbir Singh, ASG, Saurabh Mishra, AAG, Rajat Nair, Naman
Tandon, Shyam Gopal, Samarvir Singh, Chinmayee Chandra, Gurmeet
Singh Makker, Manoj Kumar, Sunny Choudhary, Mrs. Shally Bhasin,
Advs. for the Respondents.
                                                                       H
190             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A            The Judgment of the Court was delivered by
             HIMA KOHLI, J.
             1. The petitioner has approached this Court under Article 32 of
      the Constitution of India raising a grievance against the respondent No.1
      – Ministry of Coal, Union of India1 for having included its name and
B     mining lease area in the Schedules appended to the Coal Mines (Special
      Provisions) Ordinance, 20142, even though, the Screening Committee
      constituted by the Ministry of Coal, Union of India had not allocated any
      coal block to it.
             2. A quick glance at the relevant chronology of events, as narrated
C     in the petition, are considered necessary. The petitioner had submitted
      an application dated 8th November, 1994 under Section 2 of the Forest
      (Conservation) Act, 19803 to the District Collector, Narsinghpur District,
      Narsingpur, Madhya Pradesh for permission to undertake coal mining
      on forest land. On 21st November, 1994, the petitioner applied to the
D     respondent No.2 – State of Madhya Pradesh4 in Form-I under the Mineral
      Concession Rules, 19605 for grant of a mining lease. On 7th April, 1995,
      the petitioner submitted an application to the respondent No.1 – UOI
      under Section 5(2) of the Mines and Minerals (Development &
      Regulation) Act, 19576 for approval of the mining plan.

E            3. On 15 th May, 1995, the District Collector, Narsinghpur
      forwarded the petitioner’s application to the Principal Secretary of the
      respondent No.2 – State Government with a recommendation for grant
      of a mining lease in its favour. In the very same month, in reply to a letter
      dated 5th May, 1995 received from the respondent No. 1 – UOI seeking
      essential details regarding the approval of the mining plan, the petitioner
F     furnished the necessary information under cover of letter dated 19th
      May, 1995. On 15th December, 1995, the respondent No. 1- UOI issued
      a letter to the petitioner calling upon it to appear before the Screening
      Committee in a meeting scheduled on 20th December, 1995 for screening
      the proposals relating to captive mining by power generation companies
G     and companies engaged in the manufacture of iron and steel. Accordingly,
      1
        For short ‘UOI’
      2
        For short ‘Ordinance’
      3
        For short ‘FC Act’
      4
        For short ‘State Government’
      5
        For short ‘MC Rules’
      6
H       For short ‘MMDR Act’
    B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                         191
               AND ANOTHER [HIMA KOHLI, J.]

the petitioner participated in the 9th Meeting held by the Screening            A
Committee on 20th December, 1995.
       4. On 23rd December, 1995, the Department of Mineral Resources
of the respondent No.2 – State Government addressed a letter to the
respondent No.1 – UOI for seeking prior approval under Section 5(1) of
MMDR Act for grant of mining lease for coal in favour of the petitioner         B
for a period of 30 years over an area measuring 249.243 hectares situated
in Villages Mohapani, Richhai and Chargaonkhurd. On 21 st June, 1996,
the respondent No.1 – UOI wrote a letter to the petitioner informing it
that the Screening Committee had identified “Gotitoria (East & West)
Coal Blocks” in Mohapani Coalfield, Madhya Pradesh to meet the coal
requirements of the captive power plant and that the petitioner should          C
approach the authorities for obtaining a mining lease of the specified
blocks. Pertinently, a copy of the aforesaid letter was not marked by the
respondent No.1 – UOI to the respondent No.2 – State Government.
Instead, the same was marked to the Chief Secretary, Government of
Maharashtra, Mumbai. The fact that the said letter was not endorsed to          D
the respondent No.2 – State Government was also confirmed by the
respondent No.1 – UOI in its reply dated 10th April, 2015 to a query
raised in an application under the Right to Information Act, 2005 7.
      5. On its part, the petitioner responded to the letter dated
     st
21 June, 1996 sent by the respondent No.1 – Union of India by writing           E
back on 3rd July, 1996, stating inter alia that it had already applied to the
State Government in the prescribed form for grant of a mining lease
through the District Collector, Narsinghpur, Madhya Pradesh and the
said proposal had been recommended by the respondent No. 2 – State
Government to the Ministry of Coal for grant of approval. The petitioner
requested that the approval to the proposal forwarded by the respondent         F
No.2 – State Government for grant of a mining lease be accorded by the
respondent No.1 – UOI at the earliest.
       6. Finally, vide letter dated 27th August, 1997, addressed by the
respondent No.1 – UOI to the respondent No.2 – State Government,
approval was accorded by the Central Government for grant of a mining           G
lease in favour of the petitioner under Section 5(1) of the MMDR Act.
Pursuant to the aforesaid letter, the mining lease for the area in question
was executed by the respondent No.2 – State Government in favour of
the petitioner on 21st May, 1998. On the petitioner setting up a coal
7
    For short ‘RTI’                                                             H
192             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A     washery operation in September, 2001, coal mining operations were
      finally commenced in October, 2004.
             7. After passage of almost a decade, a group of petitions in the
      nature of Public Interest Litigations were filed before this Court with the
      grievance that coal blocks had been arbitrarily allocated between the
B     years 1993 to 2011 without adhering to the mandatory legal procedure
      prescribed under the MMDR Act and in breach of the relevant provisions
      of the Coal Mines (Nationalization) Act, 19738, to favour ineligible
      companies tainted with mala fides and corruption. The said group of
      petitions were decided by a three Judges Bench of this Court, by a
      detailed judgment dated 25th August, 20149 in Manohar Lal Sharma v.
C     Principal Secretary and Others 10 wherein, the prayer regarding
      quashing of the allocation of coal blocks to private companies made by
      the Central Government between 1993 to 2011, was considered
      extensively and it was held that the exercise undertaken by the Central
      Government of allocation of coal blocks, was neither traceable to the
D     MMDR Act or the CMN Act and the practice and procedure adopted
      by the Central Government for allocation of coal blocks to the beneficiaries
      through the Screening Committee Route, was inconsistent with the extant
      law already enacted and the Rules framed. Consequently, this Court
      declared that the entire allocation of coal blocks, as per the
      recommendations made by the Screening Committee constituted by the
E     respondent No.1 – Union of India from 14th July, 1993 onwards and the
      allocations made through the Government Dispensation Route after 1993
      suffered from the vice of arbitrariness and were illegal.
             8. The outcome of the illegal allocations were the subject matter
      of the subsequent judgment dated 24th September, 201411 delivered in
F     the same case12. After carefully examining all the consequences of
      cancellation of the coal blocks, as put forth by the respondent No.1 –
      UOI and the learned counsel appearing for the allottees, this Court divided
      the coal block allotments in two categories on the basis of the documents
      that were furnished by the respondent No.1 – UOI. The first category
G     was of allotments other than those that were mentioned by the respondent
      No.1 – UOI in Annexure-1 and Annexure-2, filed by it. The second
      8
        For short ‘CMN Act’
      9
        For short ‘First Judgment’
      10
         (2014) 9 SCC 516
      11
         For short ‘Second Judgment’
      12
H        (2014) 9 SCC 614
 B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                              193
            AND ANOTHER [HIMA KOHLI, J.]

category comprised of 46 coal blocks mentioned in Annexure-1 and                  A
Annexure-2 that could possibly be “saved” from cancellation on imposition
of certain terms and conditions. The first category of the allotments
was quashed outright by the Court as patently illegal and arbitrary. This
left the second category of coal block allotments that had come into
production or were likely to come into production.
                                                                                  B
      9. Out of 46 coal blocks, mentioned in Annexure-1 and Annexure-
2, 42 coal blocks were cancelled with a grace period of six months
granted for the said cancellation to take effect. Pertinently, the coal
blocks allocated to the petitioner herein were mentioned at Sr. No.22
and 23 of Annexure-1 that was extracted at the end of the Second
Judgment. Besides deferment of cancellation, this Court issued the                C
following directions:
       “38. In addition to the request for deferment of cancellation, we
       also accept the submission of the learned Attorney General that
       the allottees of the coal blocks other than those covered by the
       judgment and the four coal blocks covered by this order must pay           D
       an amount of Rs 295 per metric tonne of coal extracted as an
       additional levy. This compensatory amount is based on the
       assessment made by CAG. It may well be that the cost of extraction
       of coal from an underground mine has not been taken into
       consideration by CAG, but in matters of this nature it is difficult to     E
       arrive at any mathematically acceptable figure quantifying the
       loss sustained. The estimated loss of Rs 295 per metric tonne of
       coal is, therefore, accepted for the purposes of these cases. The
       compensatory payment on this basis should be made within a period
       of three months and in any case on or before 31-12-2014. The
       coal extracted hereafter till 31-3-2015 will also attract the additional   F
       levy of Rs 295 per metric tonne.”
        10. We have been informed in the course of arguments that the
coal blocks in question allocated to the petitioner have already been
allocated to a third party. Learned counsel for the petitioner states that
the only issue that survives for consideration in this petition relates to the    G
liability of the petitioner to pay compensation towards the coal extracted
as an additional levy demanded by the respondent No.1 – UOI, in terms
of the directions issued in para 38 of the Second Judgment extracted
above. Notably, respondent No.1 – UOI has filed a contempt petition
registered as Contempt Petition (Criminal) No. 7/2016 alleging inter              H
194             SUPREME COURT REPORTS                           [2022] 11 S.C.R.


A     alia that the petitioner herein is in willful disobedience of the First and
      Second Judgments that had directed payment of additional levy
      compensatory amount @ Rs. 295 per MT on the allottees of the coal
      blocks which was to be paid latest by 31st December, 2014. Stating that
      respondent No. 1 – UOI had already filed Contempt Petition No. 2/2015
      against prior allottees, the captioned contempt petition has been filed
B
      against the petitioner herein on account of its failure to pay the additional
      levy for the second phase, i.e., for coal produced from 25th September,
      2014 till 31st March, 2015 that was directed to be paid by 30th June,
      2015.
              11. Mr. Abhimanyu Bhandari, learned counsel for the petitioner
C     has argued that the erroneous inclusion of the name of the petitioner in
      the list of 46 allottees of coal blocks and its mining lease area in the
      Schedule appended to the Ordinance as also the erroneous inclusion of
      its name at serial No. 22 and 23 in Annexure-1 filed by the respondent
      No. 1 – UOI before this Court, has resulted in cancellation /quashing of
D     the lease that was validly granted in its favour. The petitioner was neither
      the beneficiary of the Screening Committee Route nor of the Government
      Dispensation Route. It had followed the correct procedure prescribed
      under the MMDR Act/MC Rules by submitting an application for grant
      of a lease directly to the respondent No. 2 - State Government and only
      after the latter had processed the application and recommended the same
E     for approval to the respondent No.1 – UOI, was the mining lease granted
      in favour of the petitioner. Therefore, the petitioner ought not to be saddled
      with any compensation/levy towards the coal extracted. Learned counsel
      submitted that had an opportunity of hearing being granted to the petitioner,
      the above position would have been clarified but no such opportunity
F     was given.
             12. Per Contra, Mr. Balbir Singh, learned ASG appearing for the
      respondent No.1 – Union of India explained that the levy has been
      imposed in principle on the beneficiaries of illegal allocation just like the
      petitioner herein. The additional levy is in the nature of penalty as well
G     as compensation for the loss caused to the public exchequer. He stated
      that the object and purpose of imposition of the additional levy was that
      since the process of allocation was found to be fundamentally flawed by
      this Court therefore, all the beneficiaries of the said flawed process
      including the petitioner herein ought to suffer the consequences and
      compensate the public exchequer for the loss caused. Stating that as it
H
 B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                          195
            AND ANOTHER [HIMA KOHLI, J.]

was the Screening Committee constituted by the respondent No. 1 –             A
UOI that had identified Gotitoria (East and West Blocks) in Mohapani
Coalfield in Madhya Pradesh for captive mining by the petitioner herein
to meet the coal requirements of the captive power plant vide allocation
letter dated 21st June, 1996, the petitioner was covered under both the
judgments but it has failed to pay any amount towards additional levy in
                                                                              B
the first phase that was to be paid on or before 31st December, 2014 and
the second phase that was to be paid on or before 30th June, 2015. He
specifically referred to the First Judgment in particular, para 125 thereof
to urge that the petitioner’s name was mentioned along with some other
allottees in the 11th Meeting of the Screening Committee held on 26th-
27th September, 1997 and once the allocations made by the Central             C
Government on the recommendations of the Screening Committee have
been held by this Court to be illegal, the petitioner cannot claim any
different treatment from that extended to the other allottees. To rebut
the contention of the learned counsel for the petitioner that principles of
natural justice have been violated in the instant case, as the petitioner
                                                                              D
was not afforded an opportunity of hearing, learned ASG had drawn the
attention of this Court to the observations made in the Second Judgment
to the effect that all parties who were adversely affected, were duly
given a hearing before the First Judgment was pronounced. He submitted
that the petitioner was afforded an opportunity of hearing along with
several other allottees and only thereafter the First and Second Judgments    E
were passed.
       13. In his rejoinder, learned counsel for the petitioner has
vehemently opposed the submission made on behalf of the respondent
No. 1 – UOI that the petitioner was afforded an opportunity of hearing
by the Court which he submits is quite apparent from a perusal of para        F
24 of the Second Judgment, where this Court has itself observed that
“The judgment did not deal with any individual case. It dealt only
with the process of allotment of coal blocks and found it to be illegal
and arbitrary.” He reiterated the fact that the mining lease was granted
in favour of the petitioner in the same manner and sequence as was
approved by this Court in the First Judgment and therefore the petitioner’s   G
case did not fall foul of the said judgment. To reinforce the aforesaid
stand, learned counsel also alluded to the counter affidavit filed by the
respondent No. 2 – State Government on 09th February, 2016 which
supports the plea of the petitioner that the State Government’s decision
to grant a mining lease in its favour was not the result of any allocation    H
196             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A     letter issued by the Central Government and/or the Screening Committee,
      but was based on its own independent consideration done strictly under
      the provision of MMDR Act read with the MC Rules.
             14. We have heard the rival submissions advanced by learned
      counsel for the parties and perused the records in the backdrop of the
B     First Judgment dated 25th August, 2014 and the Second Judgment dated
      24th September, 2014 rendered in the case of Manohar Lal Sharma
      (supra). The issue that requires to be answered in the instant case is
      whether the petitioner was allocated coal mines through the Screening
      Committee Route and/or the Government Dispensation Route. Only if
      the answer to the said question is in the affirmative, would the respondent
C     No. 1 – UOI be entitled to claim compensatory payment from the
      petitioner in terms of the Second Judgment and not otherwise.
             15. A perusal of the First Judgment leaves no manner of doubt
      that this Court held that the practice and procedure adopted by the
      respondent No. 1 – UOI for allocation of coal blocks through the
D     administrative route was not consistent with the statute and the Rules
      and that the legal regime under the MMDR Act imposes a statutory
      obligation upon the State Governments to recommend or not to
      recommend to the Central Government, grant of prospecting license or
      mining lease for coal. This Court also questioned the entire exercise of
E     allocation of coal mines through the Screening Committee Route and
      observed that it suffered from the vice of arbitrariness; that there was
      no evaluation on merits and no inter se comparison of the applicants;
      that the determination of the Screening Committee was subjective and
      most of the companies which had been allocated coal blocks, were not
      engaged in the production of steel, power or cement at the time of
F     allocation and nor did they disclose in their applications whether or not
      the power, steel or cement plants were operational. Noting the aforesaid
      legal flaws that went to the root of the matter, the entire allocation of the
      coal blocks in terms of the recommendations made by the Screening
      Committee in 36 meetings conducted by it from 14thJuly, 1993 onwards
G     and the consequential allocation through the Central Government
      Dispensation Route were struck down as being unfair, ambiguous and in
      gross breach of the guidelines.
             16. To test the veracity of the submission made by the petitioner
      that in its case, the procedure laid down was followed “to the T” for
H     allocation of the coal blocks, it is imperative to examine the chronology
 B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                           197
            AND ANOTHER [HIMA KOHLI, J.]

of the events and the documents placed on record. Admittedly, the              A
petitioner had submitted a mining lease application to the Collector
(Mining), Narsingpur, Madhya Pradesh on 8th November, 1994. The said
application was forwarded to the Tehsildar, Gadarwara and the Mining
Inspector, Narsingpur for seeking an inspection report for the area applied
for. Ground work was done by the Tehsildar and the Mining Inspector
                                                                               B
who submitted a report of the proposed area which in turn was confirmed
by the Mine Surveyor. The map of the applied area submitted by the
petitioner was also certified by the Divisional Forest Officer and a consent
from Chief Conservator of Forest was obtained. Additionally, a mineral
analysis report was sought from the petitioner and after all the
aforementioned information was gathered and analyzed, the Collector,           C
Narsingpur addressed a letter dated 15th May, 1995 to the Principal
Secretary, Mineral Resource Department, Bhopal (Madhya Pradesh)
stating inter alia that if no Government authorized unit was prepared to
operate in the area and the petitioner is granted the lease, it would result
in development of the area and generation of employment. Therefore,
                                                                               D
the Collector (Mining) recommended grant of a mining lease for a period
of 30 years to the petitioner in accordance with the Rules and the policy
of the Government. Based on the aforesaid input received from the
Collector (Mining), Narsingpur, the respondent No. 2 – State Government
wrote a letter dated 23rd December, 1995 to the respondent No. 1 –
UOI specifically stating inter alia that the petitioner had furnished all      E
the relevant information as required under Rule 22 (3) (d) (e) (f) and (g)
of the MC Rules, 1960 along with the coal mining plan of the specified
area and after examination, the petitioner was found to be eligible under
the Rules for grant of a mining lease. Stating that prior approval of the
Central Government was necessary under Section 5(1) of the MMDR
                                                                               F
Act, the respondent No. 2 – State Government requested the respondent
No. 1 – UOI to grant requisite approval in favour of the petitioner. It
was in the aforesaid background that the recommendation received from
the respondent No. 2- State Government was acted on by the respondent
No. 1 – UOI and the letter dated 27th August, 1997 was issued granting
approval of the mining lease in favour of the petitioner.                      G
      17. The aforesaid sequence of events belies the plea taken by the
respondent No. 1 – UOI that the mining lease was granted in favour of
the petitioner solely on the basis of the recommendations made by the
Screening Committee. Simply because the petitioner had participated in
the meetings conducted by the Screening Committee cannot be held               H
198             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A     against it. Participation in the said meetings can also not be taken to
      mean that the petitioner had applied directly to the respondent No. 1 –
      UOI for grant of the mining lease. In fact, the records reveal that the
      letter dated 21st June, 1996 issued by the respondent No. 1 – UOI stating
      that the petitioner’s proposal for identification of the captive mining block
      for supply of coal to the 24 MW captive power plant in Madhya Pradesh
B
      was considered in the meeting of the Screening Committee and was
      approved, never found its way to the respondent No. 2 – State
      Government. This position is borne out on a perusal of the copies of the
      said letter endorsed by the respondent No. 1 – UOI to different authorities.
      At Serial No. (iv), the name of the “Chief Secretary, Government of
C     Maharashtra, Mumbai” has been endorsed instead of the “Chief
      Secretary, Government of Madhya Pradesh” which fact stand confirmed
      from the reply dated 10th April, 2015 issued by the respondent No. 1 –
      UOI to an RTI query received by it. A similar stand has been taken by
      the respondent No. 2- State Government in its reply dated 6th April, 2015
      to an RTI query received by the concerned department. The petitioner
D
      had also clarified that it had applied to the State Government for grant of
      a mining lease through the District Collector, Narsingpur, Madhya Pradesh
      in the prescribed form and it was the said proposal that had been
      recommended by the State Government to the respondent No. 1 – UOI
      for necessary approval. The said position is apparent from the letter
E     dated 3rd July, 1996 addressed by the petitioner to the respondent No. 1
      – UOI. The letter dated 27th August, 1997 issued by the respondent No.
      1 – UOI to the respondent No. 2 – State Government, contents whereof
      are extracted below for ready reference, is also on similar lines: -
            “13011/1/96-CA                                  Dated : 27.08.1997
F           To,
                       Shri A.K. Trivedi,
                       Under Secretary,
                       Department of Mineral Resources,
                       Government of Madhya Pradesh,
G                      Ballav Bhawan,
                       Bhopal
            Subject: Grant of mining lease over 2.49 sq. kms. of Mohpani
            Block M/s BLA Industries-communication of Prior approval of
            the Central Government Regarding.
H
B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                         199
           AND ANOTHER [HIMA KOHLI, J.]

   Sir,                                                                     A
                 I am directed to refer to the endorsement of this
          Ministry’s letter of even number dated 08.07.1997, addressed
          to Shri Anup Kumar Agarwalla, President, BLA Industries,
          wherein it was stated that fresh recommendation of the State
          Government for grant of Mining lease over 2.49 Sq. kms will       B
          be required. However, this has been re-examined in this
          Ministry. It has been decided to consider the recommendations
          of the State Government dated 23.12.95 for grant of mining
          lease over 2.49 sq. kms. Particularly in view of the fact that
          the area over which the mining plan has been prepared and
          approved and the area which as been recommended by the            C
          State government for grant of mining lease, are same, though
          the date of recommendation precedes substantially the date of
          communication of the Central Government’s approval on the
          mining plan.
   2. In view of the above, the Central Government, on consideration        D
      of the recommendations of the State Government vide their
      letter No. 3-72/95/12/2/5 dated 23.12.95 for grant of mining
      lease over an area of 249 .243 hectares in Mohapani and two
      other villages in Narsinghpur District of Madhya Pradesh, the
      approval of the Central Government for grant of mining lease          E
      in favour of M/s BLA Industries over an area of 249.243
      hectares as recommended is hereby accorded under section
      5(1) of the Mines and Minerals (Regulation and Development)
      Act, 1957.
   3. The area co-ordinates of the mining block of 2.49 Sq. Kms.            F
      Over which the approval of the Central Government has been
      communicated for grant of mining lease are detailed in the
      Annexure for accurate and correct physical identification of
      the Coal Mining block. These may appropriately be incorporated
      in the mining lease deed executed between the State
      Government and M/s BLA Industries Limited. A copy of the              G
      lease deed may also be furnished to the Ministry of Coal.
                                                        Yours faithfully,
                                                                    Sd/-
                                                         (A. Banerjee)
                                                              Director”     H
200             SUPREME COURT REPORTS                          [2022] 11 S.C.R.


A            18. Another relevant aspect that tips the scale in favour of the
      petitioner is the counter affidavit filed by the respondent No. 2 – State
      Government which is in consonance with the plea taken by the petitioner
      that the decision to grant the mining lease in its favour was not based on
      any allocation letter issued directly by the Central Government and/or
      the Screening Committee, but was founded on an independent
B
      consideration of the petitioner’s application made by the State Government
      and done in accordance with the provisions of the MMDR Act read
      with the MC Rules. Respondent No. 2 – State Government has also
      referred to its earlier affidavit dated 28th October, 2013 filed before this
      Court in the connected matters decided by the First Judgment, wherein
C     it had explained the procedure adopted for allocation of coal blocks by
      the Screening Committee constituted by the Central Government and
      had categorically averred that the said procedure was followed in all
      cases “Other than one”, where the application was made directly to
      the State Government and not to the Central Government. The said one
      case was explained to be that of the petitioner herein.
D
             19. In other words, the respondent No. 2 – State Government has
      affirmed the stand taken by the petitioner that the procedure of allocation
      of the coal block through the Screening Committee Route/Government
      Dispensation Route had not been followed in the case of the petitioner
      and therefore there was no illegality in allocation of the specified coal
E     mines in its favour, unlike the other cases. In the light of the aforesaid
      stand taken by the respondent No. 2 – State Government which can be
      co-related with the correspondence placed on record, the plea of the
      respondent No. 1 – UOI that the case of the petitioner was considered
      by the Screening Committee in its 9th, 10th, 14th, 15th, 16th and 20th
F     meetings, would not make the allocation illegal. No parity can be drawn
      between the petitioner and the other allottees of the coal blocks when
      the petitioner followed the correct procedure of applying through proper
      channel for grant of a mining lease which application on being received,
      was routed by the Office of the Collector (Mines), Narsingpur to the
      Mineral Resource Department, Government of Madhya Pradesh and
G     onwards to the respondent No. 1 – UOI, for prior approval.
            20. Given the aforesaid facts and circumstances of the instant
      case, we find force in the submission made by the learned counsel for
      the petitioner that the mining lease granted in favour of the petitioner
      was not tainted by mala fides, as was the case of the other allottees. It
H
 B.L.A. INDUSTRIES PRIVATE LIMITED v. UNION OF INDIA                            201
            AND ANOTHER [HIMA KOHLI, J.]

was the respondent No. 2 – State Government that had undertaken a               A
diligent exercise to examine the petitioner’s application before
recommending its case to the respondent No. 1 – UOI for grant of the
mining lease. Founded on the said recommendations, the respondent
No. 1 – UOI had issued the letter allocating the coal block to the petitioner
and not the other way round. Given the aforesaid position, the respondent
                                                                                B
No. 1 - UOI ought not to have included the name of the petitioner and
the coal blocks allotted to it in Annexure – 1 filed before this Court that
forms a part of the Second Judgment. Taking the contents of the said
Annexures – 1 and 2 filed by the respondent No. 1 – UOI as true and
correct, this Court passed the consequential order directing payment of
compensation as an additional levy. The fact that the petitioner did not        C
get an opportunity to inform the Court about the error on the part of the
respondent No. 1 – UOI of including its name in Annexure – 1 can be
discerned from the observations made in para 24 of the Second Judgment
to the effect that the Court had not dealt with any individual case but
only with the process of allotment of coal blocks which was found to be
                                                                                D
fatally flawed.
       21. It is therefore held that allocation of the coal block made in
form of the petitioner did not run foul of the procedure prescribed in the
MMDR Act and the MC Rules. The petitioner was not allocated the
coal block either through the Screening Committee Route or the Central
Government Dispensation Route, which fact was not pointed out by the            E
respondent No. 1 – UOI at the appropriate stage, that led to painting the
petitioner with the same brush as the other allottee listed in Annexures –
1 and 2. Having held that the petitioner was not a beneficiary of the
flawed process, the consequences spelt out in the Second Judgment
would not apply to it and therefore, it cannot be called upon to pay penalty    F
as compensatory payment, as demanded by the respondent No. 1 –
UOI.
       22. The upshot of the aforesaid discussion is that the respondent
No. 1 – UOI is not entitled to claim payment of an additional levy for the
coal extracted by the petitioner from the subject mine. Any such demand         G
raised by the respondent No. 1 – UOI is hereby quashed and set aside.
The writ petition is allowed on the aforesaid terms. Contempt Petition
(Crl.) No.7 of 2016 is dismissed as meritless.
       23. Before parting with this matter, we are constrained to make
certain observations regarding the conduct of the respondent no. 1 –            H
202            SUPREME COURT REPORTS                             [2022] 11 S.C.R.


A     UOI. Here is a case where a private party followed all the rules and the
      law, as applicable, before investing large sums of money to undertake
      business. In fact, it appears from the facts of the case that it was the
      respondent no. 1 – UOI that did not follow the letter of the law. But
      ultimately, it was the private party that had to suffer the consequences
      of the careless and callous approach of the respondent no. 1 – UOI. To
B
      compound the petitioner’s woes, the respondent no. 1 – UOI filed an
      affidavit before this Court including the petitioner in the list of errant
      mine owners, based on its own unlawful conduct. It did not undertake
      the necessary due diligence to determine as to whether the petitioner
      had been allotted the mine through the lawful procedure. As a result of
C     this callous, careless and casual approach of the respondent no. 1 –
      UOI, the present petitioner had to suffer loss and ignominy.
            24. Therefore, litigation costs quantified at ` 1,00,000/- (Rupees
      one lakh) shall be paid by the respondent No.1 – UOI to the petitioner
      within four weeks.
D
      Divya Pandey               Writ petition allowed and contempt petition dismissed.




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H