Judgment:
1. The petitioner has preferred this writ petition under Article 226 of the Constitution of India to seek the issuance of a writ of mandamus directing the Ministry of Power/respondent no.2 and the Ministry of Coal/respondent no.3 to place the case of the petitioner in the Standing Linkage Committee (SLC) meeting for issuance of an order granting coal linkage to the petitioner.
2. The case of the petitioner is that it proposed to set up a 4000 mega watt thermal power plant in two phases at Chitrangi, Distt. Singrauli through 100% foreign investment. The petitioner obtained various approvals and permissions, such as approval of Ministry of Environment and Forest and the Central Water Commission (CWC). The petitioner submits that the power plant of the petitioner was expected to be set up in the 11th plan at the pithead of a coal mine.
3. Respondent no.2 granted in-principle coal linkage for the petitioners project vide their letter dated 20.11.2003. The coal for the thermal power project was to be made available from the Mohar Block, which was to be opend with annual capacity of 10 MT of coal. The said in-principle linkage pertained to 2000 Mega Watt capacity power plant, and the coal quantity linked to the proposed project of the petitioner was 9 MT per annum.
4. It is the petitioners submission that the power project initially was to be located in Uttar Pradesh, but on account of difficulties posed by the Govt. of Uttar Pradesh, the same was later relocated under the policy and guidelines of respondent no.3 at Chitrangi in Madhya Pradesh.
5. The petitioner vide its communication dated 10.07.2006 requested respondent no.2, i.e. Ministry of Power for extension of time for execution of fuel supply agreement. The petitioner submits that the Ministry of Power called upon the petitioner to take appropriate action within six months for firming up the project and achieving financial closure. The petitioner does not dispute that it did not achieve the financial closure.
6. The petitioner submits the in-principle grant of linkage named the supplier of coal as Northern Coal Fields Limited, a subsidiary of Coal India Limited. The petitioner held negotiations with Northern Coal Fields Limited to execute the agreement. However, the said agreement did not come to be executed. In this regard, the petitioner has placed on record the letter dated 23.07.2007 issued by the Northern Coal Fields Limited informing the petitioner that the amendment suggested by the petitioner in the draft supply agreement are not acceptable to CIL/NCL.
7. On 02.08.2007, the SLC held a meeting, wherein the proposal of the petitioner was taken up for consideration. In its minutes, the committee, inter alia, recorded that as per the report of the Central Electricity Authority (CEA) dated 31.07.2007, the petitioner had not made any progress in implementation of the project. The committee also took note of the request made by the State of Uttar Pradesh vide letter dated 01.08.2007 informing that the coal linkage in respect of the petitioner may be cancelled and awarded to other better prepared project of Uttar Pradesh Government. The State of Uttar Pradesh informed that two power projects at Bara (3 x 660 MW) and Karchhana (2 x 660 MW), Allahabad U.P. Power Project are being developed through tariff based competitive bidding which are in advanced stage of preparedness. The Ministry of Power also supported the Govt. of Uttar Pradesh and recommended that the proposal of Govt. of Uttar Pradesh may be considered favourably. The decision taken by the SLC and recorded in the said minutes read as follows: "SLC (LT) discussed the recommendations of MoP and Govt. of UP decided that the linkage granted to M/s ISN International for its 2000 MW capacity from NCL may be cancelled. The Committee also recommended that keeping in view the recommendation of Govt. of U.P and Ministry of Power LoA for Bara for entire Capacity (1980 MW) and Karchhana Project (1st Phase 660 MW) may be issued, subject to the stipulation that these two projects would be commissioned during the 11th period".
8. It appears that on 07.09.2007, the petitioner represented to the Ministry of Power for grant of coal linkage for its proposed power project. I may note that the said letter dated 07.09.2007 of the petitioner has not been placed on record by the petitioner. The Ministry of Power responded to the petitioner's communication of 07.09.2007 by stating that, as the proposal is for coal linkage for a new project, fresh coal linkage application may be made as per the existing guidelines to the SLC (long term) headed by Additional Secretary, Ministry of Coal for consideration of the proposal.
9. It appears the petitioner kept pursuing the matter and, consequently, the Ministry of Power issued an office memorandum dated 28.01.2008 recording that it had:
"again requested M/s. ISNI to expedite furnishing of the Detailed information of the status of the preparedness and other details regarding the proposed Thermal Power Project at Sidhi, Madhya Pradesh as was sought by the CEA vide their communication No.159/GC/BO/CE(TP&I) CEA/2007 dated 10.09.2007 (copy enclosed)
3. Ministry of Coal may like to take an appropriate decision on the request of M/s. ISNI for their proposed 2000 MW TPP at Sidhi, Madhya Pradesh". (emphasis supplied)
10. The Ministry of Coal issued an office memorandum dated 22.02.2008 in relation to the petitioners case. In this memorandum, the said Ministry recorded, inter alia, as follows: "2. It may be recalled that on the basis of recommendation from Ministry of Power vide letter dated PTC-1/2003-IPC dated 04.07.2003, SLC(LT) accorded "in Principle" linkage to M/s. ISN's 2000 MW TPS at Pithead, Singrauli subject to certain conditions vide order dated 20.11.2003. Initially, the coal requirements were to be met through a new mine on Mohar Block, however, subsequently, keeping in view the recommendation of Ministry of Power a decision was taken to de-link Mohar Coal Block in favour of "Sasan Ultra Mega Power Project" and to provide coal to the extent of linkage as earmarked "in principle" to M/s. ISN from the basket of mines of NCL. M/s. ISN was informed of the decision accordingly and also requested to take appropriate action for firming up their project.
3. Subsequently, Ministry of Power recommended the proposal of Govt. of U.P for transfer of linkage of M/s ISN International Project in favour of Bara Power Project being set up in U.P by State Government of U.P on tariff based competitive bidding. It may be recalled that Govt. of U.P. vide their letter dated 09.05.2006 (copy enclosed for ready reference) inter-alia, informed that as the developer i.e M/s. ISN International had not been able to achieve financial closure and according to new policy of the State Government this project would now be taken up under the Competitive Bidding guidelines. Therefore, Govt. of U.P recommended that linkage allotted to the developers including ISN may be allocated to Govt. of U.P.
4. The proposal was considered in the SLC (LT) meeting taking into account the recommendation of the MOP and the Govt. of U.P and it was decided that the linkage granted to M/s. ISN International for Its 2000 MW capacity TPS from NCL may be cancelled. The minutes have been approved by the Competent Authority. However, no formal letter indicating cancellation of Linkage has been issued to M/s, ISN for want Specific comments of MOP on various representation/letters received from M/s. ISN and forwarded by this Ministry to MOP. As regard request of M/s. ISN International to reconsider cancellation of linkage on account of change of location from U.P to M.P.Ministry of Power may like to examine their request and other details keeping in view their earlier recommendation for this IPP in Uttar Pradesh and send their comments on proposed project of M/s. ISN in Madhya Pradesh, MOP is also requested to offer comments with specific reference and also for their proposed project in the State of M.P further decision on formal communication of cancellation order for their project in U.P and grant of LoA for their project in M.P in terms of new Coal Distribution Policy would be taken on the basis of recommendation and comments received from Ministry of Power." (emphasis supplied)
11. It appears that the comments of the CEA were sought on the issue of grant of coal linkage to the petitioners proposed project of 2000 mega watt pithead power project at Sidhi, Madhya Pradesh. The CEA in its comments dated 01.05.2008, inter alia, observed: "ISN international company was accorded 9 MTPA of coal linkage in year 2003 for setting up of a 2000 MW power project in Singrauli in U.P. Since ISN International Company have shifted their site from Singrauli in Uttar Pradesh, the coal linkage granted for their project in U.P. needs to be cancelled. However, it is noted that the company had received an in-principle long term linkage of 9 MTPA for their proposed project at Sidhi, M.P. on 07.08.2006". (emphasis supplied)
12. The CEA, however, did not recommend coal linkage for the petitioner in the absence of clearance from CWC. It was observed that the recommendation of the CEA would be communicated to the Ministry of Power after receipt of clearance from CWC and latest status of the project from the petitioner.
13. In response to the petitioner's aforesaid communication dated 07.09.2007, which has not been filed by the petitioner, the Ministry of Coal sent a communication dated 28.07.2008, inter alia, stating: "In this regard, it is observed that the SLC (LT) took a decision in its meeting held on 02.08.2007 to cancel the "in principle" linkage granted vide Ministry of Coal's order No.4701/2/2003-CPD dated 20.11.2003 to 2000 MW TPOSD at Pithead Singrauli of M/s. ISN International. Decision of the committee, has also been approved by the competent authority. Decision of the committee, as contained in Minutes of the meeting, has already been placed on website of Ministry of Coal ( ) for the information of all concerned.
2. Further, in case you are intending to seek long term assurance for you proposed project at 2000 MW TPS in Sidhi District, Madhya Pradesh, you would be required to apply for issue of "Letter of Assurance (LOA)" as per the provisions of the
New Coal Distribution Policy to the Ministry of Coal, in the prescribed proforma along with the requisite processing fee. The details of these are available on our website (www.coal.nic.in). On receipt of application with requisite fee and recommendations from the nodal Ministry i.e. Ministry of Power, the request would be put for the consideration of the SLC (LT)". (emphasis supplied)
14. It is in this background that the petitioner has preferred this writ petition.
15. The submission of Mr. Sidharth Luthra, learned senior counsel for the petitioner is that the petitioner obtained various approvals and clearances for the proposed project. He submits that the decision of the SLC in its meeting held on 02.08.2007 is based on irrelevant considerations. He submits that the power project of the petitioner was always intended and planned to be located in the State of Madhya Pradesh, and not in the State of Uttar Pradesh. Therefore, the decision of the SLC inasmuch, as, it was influenced by the recommendation of the State Govt. of Uttar Pradesh contained in their letter dated 01.08.2007 was bad, since the State of Uttar Pradesh had no role to play in the matter. He submits that the report of the CEA stating that the petitioner had not made any progress in implementation of the project was also not correct, as the petitioner had obtained practically all the clearances, except that of CWC. He submits that the CEA in its later communication dated 05.12.2008 had corrected its mistake by observing that:
"M/s. ISN International Company project presently proposed in Sidhi District of Madhya Pradesh may be restored after the Company obtains clearance of water from Rihand reservoir to the said project. The linkage for the other projects of U.P. (Bara & Karchhana Phase-I) should not be cancelled and fresh linkage from available coal source may be given to ISN International after the company obtains CWC clearance".
16. Mr. Luthra submits that the petitioner has been running from pillar to post and spending huge amounts of money for obtaining one clearance after another. He submits that in the face of the in-principle linkage granted to the petitioner in the year 2003, the stand taken by the respondents that the policy had, in the meantime, changed, and; that long term linkage was no longer granted under the new policy, and; that the petitioner should apply for issuance of letter of assurance as per the new coal distribution policy is incorrect, since, according to him, the said new policy could not be applied to the petitioner's case who had already been granted coal linkage as early as in November 2003. He submits that if the decision of the SLC in its meeting held on 02.08.2007, whereby the said coal linkage was cancelled is set aside, coal linkage of the petitioner as initially granted should revive.
17. He relies upon the judgments of the Supreme Court in MRF Limited, Kottayam v. Asst. Commissioner (Assessment) Sales Tax and Others, (2006) 8 SCC 702, and State of Bihar and Others v. Kalyanpur Cement Limited, (2010) 3 SCC 274 to submit that the respondents were bound by the doctrine of promissory estoppel and could not have withdrawn the coal linkage granted to the petitioner as, premised on the said in-principle coal linkage, the petitioner had altered its position to its disadvantage by incurring huge expenditure and therefore, the respondent was bound to grant coal linkage to the petitioner for its proposed project.
18. On the other hand, learned counsel for respondent no.3, i.e. Ministry of Coal submits that the proposed project of the petitioner was initially planned to be set up at the Singrauli pithead, which fell in the State of Uttar Pradesh. However, the petitioner subsequently sought to relocate the project at Sidhi in Madhya Pradesh. The initially granted in-principle coal linkage was cancelled and, therefore, no longer valid and the petitioner was required to apply afresh for coal linkage. The petitioner cannot rely upon the initially granted in- principle coal linkage.
19. He further submits that the recommendation of the CEA relied upon by the petitioner in the letter dated 05.12.2008 of the CEA, is of no avail. The CEA addressed this communication to the petitioner and not to any of the authorities. Moreover, the CEA is not an authority empowered to decide on the aspect of coal linkage, which decision vests with the Ministry of Coal. He further submits that the petitioner has no vested right to claim coal linkage in terms of the earlier policy and was bound by the new coal distribution policy evolved in pursuance of the decision of the Supreme Court which became effective on 18.10.2007.
20. Having heard learned counsels for the parties, I am of the view that there is absolutely no merit in this petition. Firstly, it is clear from the petition itself that by the time the cancellation of the petitioners in-principle coal linkage was done by the SLC, the petitioner had neither arrived at a definite agreement with Northern Coal Fields Limited for supply of coal, nor obtained clearance from the CWC. The petitioner had also not attained financial closure for its proposed project.
21. The fact that the petitioner vide communication dated 10.07.2006, addressed to the Ministry of Power, sought extension of time for execution of fuel supply agreement clearly shows that the petitioner was aware of the fact that it was running behind schedule. The petitioner has disclosed that the Ministry of Power called upon the petitioner to take appropriate action within six months for firming up the project and achieving financial closure. The said period of six months would have expired sometime in January 2007. The SLC decided to cancel the petitioners in-principle linkage only on 02.08.2007, after much waiting since the petitioner had not firmed up, inter alia, the coal supply agreement.
22. The observation made by the CEA in its report dated 31.07.2007 placed before the SLC that the petitioner had not made any progress in implementation of the project, therefore, cannot be said to be incorrect.
23. The submission of Mr. Luthra that the Govt. of State of Uttar Pradesh could not have recommended the cancellation of the in- principle linkage to the petitioners project, because the project of the petitioner was not located at the pithead in the State of Uttar Pradesh, but was located in the State of Madhya Pradesh is also misconceived.
24. Firstly, it is not clearly discernible from the documents above referred to as to where the project of the petitioner was initially intended to be located, i.e. at the pithead in the State of Uttar Pradesh (at Singrauli), or at the pithead in the State of Madhya Pradesh (at Chitrangi/Sidhi), when the in-principle coal linkage was granted in favour of the petitioner on 20.11.2003. As highlighted above, some of the documents placed on record do not support the petitioners stand that the project was intended to be located in Madhya Pradesh when the in-principle linkage was granted on 20.11.2003. In fact they point to the contrary. Even if it were to be assumed that the in-principle coal linkage was granted to the petitioner on the premise that the petitioners project was planned to be located on a pithead in the State of Madhya Pradesh, that does not mean that the Govt. of State of Uttar Pradesh could not have sought the cancellation of the in-principle coal linkage granted to the petitioner vide their letter dated 01.08.2007.
25. Pertinently, the said in-principle coal linkage was granted on 20.11.2003. For nearly four years thereafter, the petitioner did not do much, except to obtain a few approvals. There was no actual progress at the site. As aforesaid, the petitioner neither obtained the CWC clearance, nor entered into definite coal supply agreement with the Northern Coal Fields Limited, nor attained financial closure. On the other hand, two projects at Bara (3 x 660 MW) and Karchhana (2 x 660 MW) Allahabad U.P. Power Project were in the advanced stage of preparedness. These power projects were also in need of coal linkage. It is not in dispute that there were many takers for coal in the area and the supply was limited. Therefore, the Govt. of State of Uttar Pradesh advocated for cancellation of the petitioners in-principle linkage from the Mohar Block so that the power projects in the advanced stage of preparedness at Bara and Karchhana could be supplied with the requisite coal. Pertinently, this proposal of the Govt. of State of Uttar Pradesh was supported by the Ministry of Power.
26. The decision taken by the SLC to cancel the petitioners in- principle coal linkage can neither be said to be arbitrary nor illegal. It cannot be said that the same was not founded upon relevant and germane consideration or was actuated by any extraneous factors or considerations.
27. It appears that the petitioner again sought coal linkage by representing to the Ministry of Power on 07.09.2007 for its proposed power project. The petitioner has not placed on record the said communication. Had the said communication been placed on record, this Court could have appreciated whether the petitioner sought a fresh coal linkage for its proposed power project or sought revival of the cancelled coal linkage.
28. The new coal distribution policy came into force on 18.10.2007, i.e. soon after the cancellation of the petitioners in- principle coal linkage, and after the petitioner again applied vide letter dated 07.09.2007. The endeavour of the petitioner to obtain fresh coal linkage for its project at Chitrangi/Sidhi could, therefore, have been considered only under the new policy, and not under the erstwhile policy, which was prevailing when the initial in-principle coal linkage was granted to the petitioner on 20.11.2003.
29. The office memorandum dated 22.02.2008 issued by the Ministry of Coal in this regard is very clear. This office memorandum shows that the Ministry of Coal took the stand that the Letter of Assurance (LOA) for the proposed project in Madhya Pradesh could be considered under the new coal distribution policy. Even for the purpose of considering the petitioners case under the new coal distribution policy, the CEA did not grant its recommendation in the absence of clearance from the CWC. Admittedly, the clearance from the CWC was obtained by the petitioner only on 25.05.2009.
30. The submission of Mr. Luthra that since the petitioner had earlier been granted in-principle coal linkage in the year 2003 under the old policy, it is that policy which would govern the petitioners case is incorrect.
31. In Ram Chander Educational Society & Anr. v. Delhi Development Authority & Anr., 177 (2011) DLT 653, a similar argument was raised in relation to allotment of Nazul land in Delhi by the DDA. On facts, that was a far better case than that of the petitioner herein. Whereas in the present case, the in-principle coal linkage, which was granted in 2003, was cancelled by the SLC in 2007, and the new policy came into force thereafter on 18.10.2007. In Ram Chander (supra), the application of the petitioner therein for grant of institutional land had not been rejected, but was pending when the new policy of the DDA qua allotment of Nazul land came into force.
32. The Court. however, rejected the claim of the petitioner while observing as follows:
"18. The main issue in the present petition is whether the Petitioners’ pending application for allotment of an institutional plot ought to be considered by the DDA and Respondent No.2 in terms of the Nazul Land Rules as they stood prior to the amendment brought about by the notifications dated 9th December 2004 and 19th April 2006? The Petitioners submit that the said question should be answered in the affirmative.
19. In the present case it is not in dispute that there was no formal allotment of an institutional plot made in favour of Petitioner No.1 prior to the notification dated 9th December 2004 amending the Nazul Land Rules. The application of Petitioner No.1 for a changed sponsorship letter was pending as on that date. Before the allotment could materialize the Nazul Land Rules were amended. The Petitioners have not challenged the amendments. They contend that the decision already taken by the DDA to allot a plot in Zone 17 Dwarka in favour of Petitioner No.1 should be given effect to. It is contended that the delay in Respondent No.2 issuing a sponsorship letter cannot deprive Petitioner No.1 of a vested right to allotment of the plot that already stood earmarked in its favour by the IAC in terms of the unamended Nazul Land Rules.
20. The decision of the Supreme Court in Sethi Auto Service Station v. Delhi Development Authority, (2009) 1 SCC 180 is a complete answer to the issue that arises in the present petition. The question that was considered in the said case was whether the applications for resitement of the two petrol pumps of the Petitioners in that case were required to be considered in terms of the policy that was in force prior to 1993 or in terms of the policy that stood changed thereafter in June 2003. Under the old policy, if the Petitioners were able to show that there was a drop in the sales of petrol in their pumps on account of a planned scheme or project, resitement would be permitted. Under the changed policy, resitement would not be permitted for such a reason. The Petitioners in the said case, as in the instant case, did not challenge the change in the policy. However, they contended that the decision already taken by the DDA to allot alternative sites to the Petitioners in terms of the old policy should be given effect to. Just as in the present case, it was contended by the Petitioners in that case that "the mere fact that DDA chose to sit over the recommendations and did not issue formal orders of allotment could not rob the appellants of their valuable right to such allotment." As in the present case, the stand of the DDA in the said case before the High Court was that such allotments could no longer be made after the guidelines for resitement of petrol outlets were revised in June 2003. In terms of the June 2003 guidelines DDA had to dispose of land for petrol outlets only through the competitive mode of tender or auction.
21. The Supreme Court in Sethi Auto Service Station upheld the dismissal of the writ petitions and subsequent appeals of the Petitioners in that case by the High Court. The Supreme Court first held that (SCC, p.185) "notings in a department file did not have the sanction of law in order to put an effective order". Therefore, the mere recommendation of the Technical Committee of the DDA did not confer any legal right on the Petitioners. The decision of the Technical Committee of the DDA did not fructify (SCC, p.186) "into an order conferring legal right upon the appellants." It further held (SCC, p.187) that "mere favourable recommendations at some level of the decision-making process, in our view, are of no consequence and shall not bind DDA". It was held on facts that the doctrine of legitimate expectation was not attracted since the older policy merely laid down a criterion for resitement and did not oblige the DDA to provide land. Therefore, at best, appellants had an expectation of being considered for resitement. Finally, in para 39 of the judgment, it was observed as under (SCC @ p. 193):
"39. We are convinced that apart from the fact that there is no challenge to the new policy, which seems to have been conceived in public interest in the light of the changed economic scenario and liberalised regime of permitting private companies to set up petrol outlets, the decision of DDA in declining to allot land for resitement of petrol pumps, a matter of largesse, cannot be held to be arbitrary or unreasonable warranting interference. Moreover, with the change in policy, any direction in favour of the appellants in this regard would militate against the new policy of 2003. In our opinion, therefore, the principle of legitimate expectation has no application to the facts at hand." (emphasis supplied)
22. In the considered view of this Court, the above decision in Sethi Auto Service Station v. Delhi Development Authority answers the issue in the present case against the Petitioners. In terms of the said decision, which was rendered in similar facts and circumstances, the pending application of Petitioner No.1 for allotment of an institutional plot had necessarily to be considered only in terms of the amended Nazul Land Rules which did not permit allotment by way of recommendation but only by way of public auction. It is significant that there is no ‘savings’ clause in the amended Nazul Land Rules permitting applications pending on the date of the amendment to be considered in terms of the pre-amended Rules. The intention therefore was that once the Nazul Land Rules were amended they would apply to all pending applications for allotment of institutional plots as well. The amendments were in fact prospective since they were not meant to reopen cases where formal allotments had already been made. However, in the instant case, prior to the amendments no formal allotment of a plot in Zone 17 was made in favour of Petitioner No.1". (emphasis supplied) The petitioner has not claimed that the new policy saved the rights of even those whose in-principle coal linkage had been cancelled by the SLC, and who had re-applied thereafter.
33. Therefore, I reject the petitioners submission that the old policy with regard to grant of in-principle linkage of coal on long term basis should be applied to the petitioners case even after the framing of the new policy.
34. Reliance placed by the petitioner on the decision in MRF Limited (supra) is misplaced. This decision is not applicable at all as the facts in those case were entirely different. The claimants in those case had taken effective steps and actually made heavy investments on the basis of the exemption notification.
35. On the other hand, the petitioner, admittedly, did not even attained financial closure, or CWC clearance, and also did not enter into definite agreement with Northern Coal Fields Limited despite grant of extension of time for the said purpose.
36. In State of Bihar (supra) also, the claimant had acted on the consistent assurances given to the respondent/claimant with regard to grant of sales tax exemption. The respondent had suffered losses in the process. It was in those circumstances that the Court bound the petitioner State by promissory estoppel. Neither of these decisions apply in the facts of this case.
37. For all the aforesaid reasons, the present petition is dismissed with costs of Rs.50,000/-.