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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

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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  

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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).

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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  

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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  

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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)

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…………………………..….J.                                                     (Rohinton Fali  

Nariman) New Delhi; January 27, 2015  

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