Common Cause v. Union of India

The most resonant judgment which the Apex Courtdelivered in the year 2014 was the one which cancelled around 200 coal mining licences, in Common Cause v. Union of India. It is the most important decision since its earlier judgment cancelling 2G spectrum licences.

Brief Fact

Coal is king and paramount Lord of industry is an old saying in the industrial world. Industrial greatness has been built up on coal by many countries. In India, coal is the most important indigenous energy resource and remains the dominant fuel for power generation and many industrial applications. A number of major industrial sectors including iron and steel production depend on coal as a source of energy. The cement industry is also a major coal user. Coal’s potential as a feedstock for producing liquid transport fuels is huge in India. Coal can help significant economic growth. India’s energy future and prosperity are integrally dependent upon mining and using its most abundant, affordable and dependant energy supply – which is coal. Coal is extremely important element in the industrial life of developing India. In power, iron and steel, coal is used as an input and in cement; coal is used both as fuel and an input. It is no exaggeration that coal is regarded by many as the black diamond.

Being such a significant, valuable and important natural resource, the allocation of coal blocks for the period 1993 to 2010 is the subject matter of this group of writ petitions filed in the nature of Public Interest Litigation, principally one by Manohar Lal Sharma and the other by the Common Cause. The allocation of coal blocks made during the above period by the Central Government, according to petitioners, is illegal and unconstitutional inter alia on the following grounds:

  1. Non-compliance of the mandatory legal procedure under the Mines and Minerals (Development and Regulation) Act, 1957 (for short, ‘1957 Act’).
  2. Breach of Section 3(3)(a)(iii) of the Coal Mines (Nationalisation) Act, 1973 (for short, ‘CMN Act’).
  3. Violation of the principle of Trusteeship of natural resources by gifting away precious resources as largesse.
  4. Arbitrariness, lack of transparency, lack of objectivity and non-application of mind; and
  5. Allotment tainted with mala fides and corruption and made in favour of ineligible companies tainted with mala fides and corruption.

Principally, two prayers have been made in these matters, first, for quashing the entire allocation of coal blocks made to private companies by the Central Government between 1993 and 2012 and second, a court monitored investigation by the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) or by a Special Investigation Team (SIT) into the entire allocation of coal blocks by the Central Government made between the above period covering all aspects.

However, the present consideration of the matter in this case is confined to the first prayer, i.e., for quashing the allocation of coal blocks to private companies made by the Central Government between the above period.