Purohit’s PIL Adds Twist to Coal-Gate Tale!

Mining is a messy affair, no matter where. Open caste mines are an eye sore. Nature in such places looks as if an  enormous animal has been hacked, gouged, and devoured. Washing of minerals or ores consumes enormous quantities of water. Tail ponds left by washing activity add to dismal scenario of ecological degradation. Often mines are located in remote, less developed areas, and locals rarely benefit from the mining for which they have to make way. Mining is a dirty business as well. In periods of economic boom it can generate super profits with little investment. Coal has been a coveted mineral. It holds a lion’s share in thermal power generation, and is also needed in iron & steel making, cement production. It goes to light hearths of poor people eking out existence in the margins of society. Coal mining had another by-product- Coal Mafia, lured by the easy lucre to be made. Bollywood spawned films on Coal-Greed, mesmerised by its violence and gore: Kaala PattharKoyla, and recently Gangs of Wasseypur.
Recently Comptroller and Auditor General’s office, a constitutional functionary, turned its scrutiny  [draft CAG report leaked in March 2012] to coal blocks allotted by the Executive to private firms following dubious procedures. Its report raised a mighty political storm and almost entire last session of parliament turned out to be a total washout as main opposition party chose disruption of functioning over debate. A stratagem that suited the ruling UPA government as well. CAG said correct way to allocate coal blocks like any natural resource should be transparent and competitive auction mechanism. CAG report further added that by changing administrative rules the government could have easily adopted auction route had it so desired. Prime Minister in his reply to the debate in parliament said it was not legally possible to do what CAG said. Para 17 of his reply stated: ^^A meeting was convened in the PMO on 25 July 2005 which was attended by representatives of coal and lignite bearing states. In the meeting the representatives of state governments were opposed to the proposed switch over to competitive bidding. It was further noted that the legislative changes that would be required for the proposed change would require considerable time and the process of allocation of coal blocks for captive mining could not be kept in abeyance for so long given the pressing demand for coal. Therefore, it was decided in this meeting to continue with the allocation of coal blocks through the extant Screening Committee procedure till the new competitive bidding procedure became operational. This was a collective decision of the centre and the state governments concerned.^^. The Wikipedia gives a timeline of Coal-gate that is not authoritative, yet provides fairly good narration of what transpired. UPA government also tried to turn the tables by saying that even BJP ruled State Governments were opposed to auction route. Mining scandals in BJP ruled Karnataka have already left its reputation in tatters just like the grand old party of India- Congress.

A PIL petition filed in Supreme Court by Banwarilal Purohit, senior BJP leader and former member of Parliament, has been now admitted and clubbed with other petitions related to Coal blocks allotment. The PIL calls the Executive action to allocate coal blocks to private parties illegal. It contends that two statutes, The Coal Bearing Areas (Acquisition & Development) Act, 1957 and The Coal Mines (Nationalization) Act, 1973, expressly forbid such allocation. ^^He has questioned legality of allotments made after 1993 on the basis of amendments to Coal Mines Nationalisation Act and sought cancellations and action against the guilty. His petition claimed coal blocks allotted to private players post the 1993 amendment had to be cancelled since the process by the Centre, acquisition of coal-bearing areas using Land Acquisition Act and grant of lease for mining purposes by the state government were legally impermissible and patently illegal….The only leeway provided by the Act is grant of sub-lease under section 3(3)(c) if the government, its fully owned company or corporation is satisfied that the reserves of coal in the area are not sufficient for scientific and economical development in a coordinated and integrated manner….Coal-Bearing Areas Act forbade participation of private sector in unworked land containing or likely to contain coal deposits and yet such lands had been allocated to private parties^^.  If his PIL is upheld by the Apex Court, then all acts of Central Government to allocate coal blocks to private parties since 1993 would be not only illegal, but such leases will be void ab initio.

A quick read of The Coal Bearing Areas (Acquisition & Development) Act, 1957 shows that it deals with prospecting for coal, declaring coal bearing areas of interest to central government, and with establishing primacy of public interest over private by granting absolute rights to Centre. When centre declares its interest in coal bearing areas and notifies such interest, then it automatically becomes the lessee of the concerned State government and if any lessee existed before hand, then his rights are extinguished by force of this law. I could not find any specific bar to private parties to prospect for coal in areas not notified under this act after legally obtaining lease from state government. Are their cases where coal block prospecting or mining leases have been granted to private firms in areas where centre had already notified its sovereign domain? If so, then such cases would run foul of this act.

The Coal Mines (Nationalisation) Act, 1973 does in fact severely curtail private parties from exploiting coal reserves. A fact even the name of the statute corroborates. In 1993 this curtailment was eased. The sub clause (3) of section 3 [Acquisition of rights of owners in respect of coal mines] is germane to Purohit’s PIL and is reproduced below.
^^
(3) 2[ On and from the commencement of section 3 of the Coal Mines (Nationalisation) Amendment Act, 1976 (67 of 1976 ),–

(a) no person, other than–

(i) the Central Government or a Government, company or a corporation owned, managed or controlled by the Central Government, or
(ii) a person to whom a sub- lease, referred to in the proviso to clause (c), has been granted by any such Government, company or corporation, or
(iii) 3[ a company engaged in–

(1) the production of iron and steel,
(2) generation of power,
(3) washing of coal obtained from a mine, or
(4) such other end use as the Central Government may, by notification, specify,] shall carry on coal mining operation, in India, in any form;
(b) excepting the mining leases granted before such commencement in favour of the Government, company or corporation, referred to in clause (a), and any sub- lease granted by any such Government, company or corporation, all other mining leases and sub- leases in force immediately before such commencement, shall, in so far as they relate to the winning or mining of coal, stand terminated;
(c) no lease for winning or mining coal shall be granted in favour of any person other than the Government, company or corporation, referred to in clause (a): Provided that the Government, company or corporation to whom a lease for winning or mining coal has been granted may grant a sub- lease to any person in any area on such terms and conditions as may be specified in the instrument granting the sub- lease, if the Government, company or corporation is satisfied that–

(i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a co- ordinated and integrated manner, and

{1. Omitted by Act 57 of 1986, s. 11 (w. e. f. 1- 6- 1973 ). 2 Ins. by Act 67 of 1976, s. 3 (w. e. f. 29- 4- 1976 ). 3 Subs. by Act 47 of 1993, s. 2.}
(ii) the coal produced by the sub- lessee will not be required to be transported by rail

^^
Sub clause (3) (a) (iii) was inserted in 1993 to enlarge exceptions to the omnibus prohibition of clause (3) (a) *no person shall carry on coal mining operation, in India, in any form*. Purohit petition mentions year 1993 because prior to that only central government, its owned company or corporation, and sub-lessee qualifying by virtue of (3) (c) (i) & (ii) alone could exploit coal deposits in India. The 1993 amendment in fact allowed private sector steel and power producers as well as coal washeries to engage in coal mining for captive purposes only. Captive purpose means only for own consumption and not for sale.This being the case, in my opinion, only those coal block violations that fall foul of captive use for designated purposes clause [which this Act empowers central government to enlarge] would be illegal.
My foegoing analysis was based on what I now see is *utterly flawed* reporting in Indian Express. I still let it stand because what I have said I consider valid but incomplete. The Times of India report, which I found later, has done a better job. ^^According to the petitioner, as per the Coal Bearing Areas Act, 1957, Central Government alone was empowered and duty-bound to acquire coal bearing areas. Without amendment to the said Act, the entry of private sector in coal bearing areas by amending the Coal Mines Nationalisation Act, would be illegal and in contravention of Coal Bearing Areas Act, the petitioner has said^^. The relevant clauses of The Coal Bearing Areas (Acquisition & Development) Act, 1957 here are [not quoted in full],
^^
Section 9.Declaration of acquisition. (1)Declaration of acquisition. When the Central Government is satisfied, after considering the report, if any, made under section 8.that any land or any rights in or over such land should be acquired, a declaration shall be made by it to that effect 2[, and different declarations may be made from time to time in respect of different parcels of any land, or of rights in or over such land, covered by the same notification.
Section 10. Vesting of land or rights in Central Government. (1) Vesting of land or rights in Central Government. (1)On the publication in the Official Gazette of the declaration under section 9, the land or the rights in or over the land, as the case may be, shall vest absolutely in the Central Government 2[free from all encumbrances]. (2) Where the rights under any mining lease 3[granted or deemed to have been granted by a State Government] to any person are acquired under this Act, the Central Government shall, on and from the date of such vesting, be deemed to have become the lessee of the State Government as if a mining lease under the Mineral Concession Rules had been granted by the State Government to the Central Government, the period thereof being the entire period for which such a lease could have been granted by the State Government under those rules.
Section 11. Power of Central Government to direct vesting of land or rights in a Government company(1)Notwithstanding anything contained in section 10, the Central Government may, if it is satisfied that a Government company is willing to comply, or has complied, with such terms and conditions as the Central Government may think fit to impose, direct, by order in writing, that the land or the rights in or over the land, as the case may be, shall, instead of vesting in the Central Government under section 10 or continuing to so vest, vest in the Government company either on the date of publication of the declaration or on such other date as may be specified in the direction. 
^^
From the reading of above sections of Coal Bearing Areas act it is clear that it gives absolute exclusivity to central government or central government company to prospect, develop and exploit coal reserves in areas notified under the provisions of this act. In such areas there is no scope for entry of private firms. Now coal blocks that have been allotted by central government to private firms in areas that were/ are notified under this act patently violate this law notwithstanding the amendment carried out in 1993 to The Coal Mines (Nationalisation) Act, 1973. That amendment in 1993, discussed earlier, permitted specified industries to have captive mines; and that became the basis for allocation of coal blocks to private players. But the Executive overlooked that amendment was also needed to the earlier act of 1957 for its actions to be legal.
Press Information Bureau’s release of 14 May 2012 shows that government was narrowly focused on Coal Mines Nationalization Act and had completely lost track of Coal Bearing Areas (Acquisition and Development) Act in its pursuit to open coal sector to private players: ^^The Central Government decided to amend the Coal Mines (Nationalisation) Act, 1973 to allow Indian companies, both in the public and private sectors to mine coal in the country without the existing restriction of captive mining. Accordingly a Bill, namely the Coal Mines (Nationalisation) Amendment Bill, 2000, was introduced in the Rajya Sabha on 24.04.2000. This in was given by Minister of State for Coal Shri Pratik Prakshbapu Patil in a written reply in Rajya Sabha today. The minister said that all the major Central Trade Unions raised their opposition to the Bill. Though, attempts have been made at the level of the Minister of Coal and the Minister of Finance, several times in the past, no positive result could be achieved. The first Group of Minister (GOM) was constituted to sort out the issues with the trade unions in 2001, which decided that until the final decision taken, the said Amendment Bill would not be taken up for consideration in the Parliament. In 2004, it was again decided that the Bill will not be moved in the Parliament without arriving at a consensus with the trade unions. Also, a view was taken in the Energy Coordination Committee that the Bill shall be moved only after a consensus is arrived at. The present GOM under the chairmanship of the Finance Minister was constituted in Aug’2009, to further carry forward the dialogue with the trade unions^^. Where does this short-sighted eagerness takes the coal scam would become clear after the apex court judgement. 
In search for a picture of a coal mine in India, I stumbled upon a very interesting website of Tom Pietrasik Photography. His interest in India evidently goes beyond photography and he quite obviously cares for issues and concerns facing common Indian. I quote from his website, ^^At the beginning of the year, while eating breakfast one morning in Ranchi, the capital of India’s Jharkhand state, I picked up a copy of the Hindustan Times newspaper. At the top of the front page, under a headline that read, “New Year’s gift for Bokaro: Second steel plant”, correspondent Sanjay Sahay wrote,  “Bokaro is a city, where a majority of the population, either directly or indirectly, depends on the Bokaro Steel Plant (BSL) for a living. Not surprising then that union Steel Minister Virbhadra Singh’s announcement on Friday that they would consider setting up a second steel plant in the city inspired a lot of enthusiasm and hope.” As chance would have it, I visited Bokaro the day before Sahay’s article was published. I was there to photograph those living and working around the Tata open-cast coal mine that neighbours the steel plant mentioned in his report. According to Sahay then, I should have come across a lot of enthusiasm and hope among this population who either directly or indirectly [depend] on the Bokaro Steel Plant for a living. But I didn’t. Instead I was confronted by a poor and dejected community, eking out a living on the fringes of a mine that employes few local residents. I saw women collecting coal as lumps of it toppled from the huge trucks exiting the mines. Close by, families living in grotty hovels, were selling plastic bottles of petrol to passing motor vehicles. This was trickle down economics at work, honouring those who’ve been forced to sacrifice their land in the name of growth^^. An outsider knows so much about our country and writes with so much feeling is both an edifying and humbling experience at the same time. One more photograph from Tom I give below in tribute to the phrase *Trickle Down Economics*, which has its exponents in the foreign educated and World Bank/ IMF tutored cabal in top echelons of power in our country.
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3 Responses to “Purohit’s PIL Adds Twist to Coal-Gate Tale!”

  1. miningawareness Says:

    Reblogged this on Mining Awareness Plus and commented:
    Excellent piece. The opening lines of this post says it all about mining and its horrors in a few sentences. The pictures speak as loudly. Really nothing more remains to be said. Then we have details related to India’s ongoing “Coalgate” scandal which allegedly involves the Jindal Steel Company (who of course plead innocent). Are they kin to Louisiana’s Bobby Jindal? Certainly kin in spirit, as well as sharing the clan name of Jindal.

  2. The Ongoing Saga 5:  News, Updates, Tidbits & Trivia | Mining Awareness Plus Says:

    […] Our reblogs relating to the above, i.e. dealing with mining in India, Jindal family in Louisiana and India, Coalgate, public hearings, etc.   1) http://miningawareness.wordpress.com/2013/10/25/india-a-public-hearing-in-tamnar-against-the-public/ 2) http://miningawareness.wordpress.com/2013/10/25/former-piyush-jindal-associate-guilty-of-insider-trading-both-worked-for-consulting-firm-mckinsey-co-in-1995/ 3) http://miningawareness.wordpress.com/2013/10/25/online-story-on-jindal-steel-and-power-plant-in-chattisgarh/ 4) https://satark.wordpress.com/2012/12/05/purohits-pil-adds-twist-to-coal-gate-tale/ […]

  3. Mining Awareness Says:

    Excellent piece. The opening lines of this post says it all about mining and its horrors in a few sentences. The pictures speak as loudly. Really nothing more remains to be said. Then we have details related to India's ongoing "Coalgate" scandal which allegedly involves the Jindal Steel Company (who of course plead innocent). Are they kin to Louisiana's Bobby Jindal? Certainly kin in spirit, as well as sharing the clan name of Jindal.

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