Coal news and updates

MoC aims to deal with court cases first in BG issue

May 7: The government has decided to take up the 55 court cases filed by various prior allocatees first in its efforts to resolve the matter relating to bank guarantees (BGs). The decision was taken at the latest Inter-Ministerial Group (IMG) meeting.

Accordingly, according to an official communique, the Coal Controller’s Organisation (CCO) has been directed to revisit the comments of state governments and CMPDIL and re-calculate the BG amount to be deducted after computing the slippages against each milestone where court cases had been filed. A list of such cases was handed over to the CCO and the latter has been directed to furnish the BG deduction calculation by May 5, 2015.

Thereafter, it has been decided, the remaining cases would be taken up.

While calculating the amount under BG deduction, the uniform principle would be maintained by the CCO and the views of state governments, wherever available, would be taken as final, an MoC communique said.

It was also suggested by the IMG that where a prior allocatee had not submitted an application in time due to which there had been slippage of a particular milestone, the related subsequent milestones not achieved would logically be considered as a slippage and the CCO would redo the computation of BG deduction on this principle uniformly.

It may be recalled that the BG has been a festering issue and at earlier meets, the IMG had recommended issue of show cause notices to the prior allocatees for delay in development of blocks so as to arrive at an amount to be deducted /forfeited from the BG as per the slippages against each milestone.

Many allocatees had filed cases against the government over BG and the Delhi High Court had delivered a common order filed against the government's action of de-allocation and/or imposition/invocation of BGs, directing it to dispose of the matter in 8 eight weeks' time and the Ministry of Law had proposed that the matter should be considered on a case-to case-basis, based on the HC order.

At the previous meetings it had been decided that in cases of coal blocks which had been allocated prior to the introduction of the BG and where its imposition had been considered at the previous stage and where there had been no condition of BG in the allocation letter of a particular coal block under review, such cases would not be reviewed since no effective mechanism was available to ensure submission of BGs and these blocks had already been cancelled, rendering the matter redundant.

It had also been resolved that cases where de-allocation including BG, if any, had been recommended by the then Review Committee prior to IMG and de-allocation, including return of BG, if any, had been ordered, such cases could not be pursued any further since the matter had already been considered earlier by the government.