SC upholds PSPCL decision on captive coal block

Satya Prakash
Tribune News Service
New Delhi, September 21

The Supreme Court on Tuesday upheld the decision of the Punjab State Electricity Board (PSEB) — now known as Punjab State Power Corporation Limited (PSPCL) — to select the lowest bidder DBL­VPR Consortium for supply of coal, saving crores of rupees for PSPCL.

“A policy decision to get the best operator at the best price, cannot be said to be a decision which no reasonable person would take in his affairs,” a Bench of Justices LN Rao, BR Gavai and BV Nagarathna said.

The top court said the PSPCL’s decision dated April 6, 2018, cannot be questioned on the ground of illegality or procedural impropriety. 

The decision was taken in accordance with Section 11 of the Coal Mines (Special Provisions) Act, 2015 and after following the principle of natural justice, it added.

“In the result, the impugned judgment and order passed by the High Court of Punjab and Haryana is unsustainable in law. The appeals are therefore allowed and the judgment and order passed by the High Court of Punjab and Haryana dated 25th January 2019, is quashed and set aside,” it said.

The verdict came on appeals challenging the High Court’s order allowing the petitions filed by EMTA Coal Limited giving the first right of refusal in the matter of lending of coal mining lease to EMTA.

“While exercising powers of judicial review, the court is not concerned with the ultimate decision but the decision-making process. The limited areas in which the court can inquire are as to whether a decision-making authority has exceeded its powers, committed an error of law or committed breach of principle of natural justice,” it said.

The top court took note of the fact that PSPCL went for a competitive bidding process for the purpose of eliciting the best operator.

It had also referred to its decision that held the allotment should be through a competitive bidding process.

The PSEB — now known as PSPCL — was proposed to be allotted Captive Coal Mines by the Centre.

Following issuance of a tender inviting bids for the purpose of development of Captive Coal Mines, ETMA Coal Limited emerged the winner. Following creation of a Joint Venture Company, the Centre on December 26, 2001 allotted a Captive Coal Block in Pachhwara (Central Block) Coal Mine, Jharkhand to PSEB.

Until 2014, there was no problem. However, on August 25, 2014, the top court in ML Sharma’s case held that the entire allocation of Coal Blocks made between 1993 and 2011, except those which were made through competitive bidding, were invalid, unfair, and arbitrary. And on September 24, 2014, it quashed all Coal Block allocations made by the Central Government between 1993 and 2011.

On March 31, 2015, the Centre again allocated Pachhwara Captive Coal Block in favour of PSPCL and PSPCL entered into a Transitory Agreement with EMTA on June 30, 2015 for nine months or till Mine Developer­-cum-­Operator was appointed by PSPCL through competitive bidding.

When the lowest bidder DBL­VPR Consortium was selected through a global tender issued by PSPCL, EMTA coal ltd challenged it before the high court which on January 25, 2019  held that the ETMA will have the first right of refusal in the matter of lending of coal mining lease. It was this HC order that was under challenge before the SC.

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