Delhi High Court
M/S Strategic Energy Technology ... vs Union Of India & Ors on 2 March, 2016
Author: Manmohan
$-31
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 1741/2016 & C.M.Nos.7472-7473/2016
M/S STRATEGIC ENERGY
TECHNOLOGY SYSTEMS PVT. LTD. ..... Petitioner
Through Mr.Gopal Jain, Sr.Advocate with
Mr.Sidharth Sharma, Mr.Abhishek
Roy, Ms.Trishala Kulkarni and
Mr.Arjun Sharma, Advocates.
versus
UNION OF INDIA & ORS ..... Respondents
Through Mr.Akshay Makhija, CGSC with
Ms.Pallavi Shali and Ms.Mahima
Bahl, Advocates for UOI.
Mr.Soumyajit Pani, Advocate for
State of Odisha/R-3.
% Date of Decision: 02nd March, 2016
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
JUDGMENT
MANMOHAN, J: (Oral)
1. The present writ petition has been filed challenging the order dated
24th June, 2015 issued by respondent no.1 and for refund of
Rs.55,34,79,500/- received upon encashment of petitioner's bank guarantee.
The relevant portion of the impugned order dated 24th June, 2015 is
reproduced hereinbelow:-
"The submissions of SETSPL that it is entitled to full restitution
and refund of the monies that the Government has realized by
invoking the BG in view of the letter of allotment being
rendered void ab initio by the judgment/order passed by
Hon'ble Supreme Court in W.P. (Crl.) No.120/2012
[M.L.Sharma Vs. Principal Secretary & Ors] is not sustainable
because subsequent annulment of coal blocks cannot exempt the
allocates of cancelled coal blocks from invocation/deduction of
BG, even if subsequently de-allocated. The BG has been
invoked for not achieving the stipulated milestone which was
chronologically before the judgment of the Supreme Court in
the matter. Subsequent development or consequence cannot
override the condition precedent or bounden stipulations of
allocation of coal blocks. As per the conditions of allocation
letter, allocates were bound to develop the coal blocks within
the time period stipulated in the allocation letter and for
default, if any, allocates were liable to paying consequences
including damages. It is noticed that neither new facts or new
points of law have been brought by the company in its above
representation."
(emphasis supplied)
2. Mr. Jain, learned senior counsel for the petitioner states that the
respondents have arbitrarily rejected the petitioner's representation seeking
refund of Rs.55,34,79,500/- without appreciating that allotment of coal
blocks was subsequently declared arbitrary and illegal by the Supreme Court
in Manohar Lal Sharma Vs. The Principal Secretary & Ors., W.P.(Crl.)
No.120/2012.
3. In short, the submission made by Mr. Jain is that the petitioner's claim
for refund of bank guarantee which the respondents are seeking to retain, is a
benefit which it had received pursuant to an executive decision, which has
been declared void and illegal.
4. It is pertinent to mention that the petitioner had initially filed a writ
petition being W.P.(C) No.1173/2014 for setting aside the decision of
respondent no.1 dated 17th February, 2014 and for execution of the
prospecting license deed qua the allotment of coal block - North of Arkhapal
Srirampur in Talcher Coalfield of Odisha for captive mining of the coal for
coal to liquid project in favour of the petitioner. The prayers in the initial
writ petition filed by the petitioner are reproduced hereinbelow:-
"(a) Issue a writ, order or direction quashing and setting
aside the order/decision dated 17.02.2014 of de-allocation
being F.No.13016/54/2009-CA-I issued by the Respondent
No.1.
(b) Issue a writ in the nature of mandamus or any other writ,
order or direction to the Respondents to execute a
prospecting license deed in favour of the Petitioner;
(c) Stay of the order/decision dated 17.02.2014 of de-
allocation being F.No.13016/54/2009-CA-I issued by the
Respondent No.1.
(d) Restrain the respondents from taking coercive steps or
acting pursuant to the order/decision dated 17.02.2014 of
the Respondent no.1;
(e) Restrain the respondents from taking coercive steps qua
the coal block allocated to the Petitioner and not to create
third party interests pursuant to the order/decision dated
17.02.2014 of the Respondent no.1;
(f) Restrain the respondents from encashing the bank
guarantee to the extent of Rs.55.34 crores pursuant to the
order/decision 17.02.2014 of the Respondent No.1;
(g) Pass any other order(s) as may be deemed fit and proper
in the facts and circumstances of the case."
(emphasis supplied)
5. The relevant portion of the impugned order dated 17 th February, 2014
passed in earlier W.P.(C) No.1173/2014 is reproduced hereinbelow:-
"5. ........The progres of development of the block with
reference to the milestones and their acehivement is as under:-
Mile Schedule Actual Slippage Remarks Special
Stones date of date of in Observation
completion completion YY/MM
(as on
June'13)
Purchase 11.4.2009 Dec.2010 - GR Exploration
of GR (45 (proved prepared is pending
days)/27.5.11 portion) based on in RE part.
(27 Months) 50%
explored
area.
Submisison 27.5.09 (3 May, 2009 -
of Bank moths from
Guarantee DOA)
Mining Explored Pending 1 yr 10 Zero date
Lease part Months considered
Application27.5.2009 (3 DOA in
Months)/RE explored
part 27.8.11 part.
(3 months)
Submisison Explored Feb 2011 50%
of Mining part explored
Plan 27.8.2009 (6 part and
months)/RE 50%
part 27.11.11 regionally
(6 monthds) explored
part.
Approval Explored Feb.2012 2 yrs 4 Mining Mine
of Mining part months plan closure plan
Plan 27.10.2009 based on approved by
(8 months 10 Sq.Km Ministry of
from area Coal.
DOA)/RE proved
part 27.1.12 reserves
(8 months
from GR
completion
Application Explored Pending 3 Yrs 6
of Previous part months
approval 27.12.2009 (For
(10 Months explored
from part)
DOA)/RE 1 yr 3
part 27.3.12 Months
(10 months RE part
from GR
completion)
Granting Explort part Pending. 3 Yrs 5
of Previous 27.1.10 (11 months
approval months from for
DOA)/RE explored
part 27.4.12 part 8
(11 months) Months
RE part
Application Explored July 2011 1 Yr 5
of Forest part MOnths
Cleaance 27.2.2010 (For
(12 months explored
from part) 7
DOA)/RE Months
part 27.5.12 RE part
(12 months)
Grant of Explored Pending 2 Yr 10
Forest part months
Clearance 27.8.2010 (For
(18 months explored
from part) 7
DOA)/RE Months
part 27.11.12 RE part
(18 months
from Gr
completion)
Application Explored Nov.2011 1 Yr 9
EMP part months
Clearance 27.2.2010 (For
(12 months explored
from part)
DOA)/RE
part 27.5.12
(12 months
from GR
completion)
Grant of Explored Pending 2 Yrs 10
EMP part months
Clearance 27.8.2010(18 (For
months from explored
DOA)/RE part)
part 27.11.12 7 Months
(18 months RE part
from GR
completion)
Grant of Explored Pending 1 Yr 10
Mining part months
Lease 27.2.2011 (For
(24 months explored
from part)
DOA)/RE
part 27.5.13
(24 months)
Application Explored Pending 1 Yr 9
for Land part months
Acquisition 27.09.2011 (For
(19 months explored
from part) 6
DOA)/Re Months
part 27.12.12 RE part
(19 Months)
Completion Explored Pending 1 yr 14
of Land part Months
Acquisition 27.2.2012 RE part
(36 months (For
from explored
DOA)/RE part)
part 27.5.14
(36 months
from GR
completion)
Application Explored Pending 1 yr 0
for opening part Months
permision 27.6.2012 RE part
(40 MOnths (For
from explored
DOA)/RE part)
part 27.9.14
(40 Months
from GR
completion)
Grant of Explored Pending 11 months
Opening part 27.7.12 (For
permission (41 months explored
from part)
DOA)/RE
part 27.10.14
(41 months)
Coal Explored Pending 10 months OC mine
Production part (For with
27.8.2012 explored forest
(42 MOnths part) land
from DOA)
Regionally
explored part
27.11.14 (42
months from
GR
completion)
6. After detailed deliberations, the IMG made its
recomendation to de-allocate North Akrapal Srirampur coal
block (CTL) which was allocated to M/s Strategic Energy
Technology Systems LImited in its meeting held on 24 & 25 th
October,2013. The recommendations made by the IMG are as
follows:-
"Taking into acocunt the facts brought before it including the
fact that only BG was submitted and that the allocate have not
taken any clearance. IMG noted that in spite of lapse of ofur
and a half years, the allocate has not been able to procure even
the PL which is the first step. Consequently, prepration of GR,
mining lease application, submission of MP approval of MP,
application of Previous approval, application of Forest
Clearance, Application of EMP clearance, completion of Land
acquisition are all pending, IMG recommends de-alocation of
coal block and deduction of proportionate BG linked to the
milestones set for development of the block as per the allocation
letter. IMG also noted that the allocatee has given a
representation subsequently to Ministry of Coal vide their letter
dated 28.10.2013, reiterating the contents of the presentation
without having mentioned any new facts. The IMG felt that a
reasonable notice was givent o the party to make its
presentation pursuant whereto the party actually made a
presentation and his letter only reiterates what was presented
before IMG, the letter dated 28.10.2013 does not warrant any
further consideration."
7. When the cases of CTL blocks were considered by the 23 rd
IMG, the representative of Govt. of Odisha could not participate
and sought deferment of the meeting at the eleventh hour. Since
the date of meeting was decided much in advance and other
States/allocatees were also invited, it was not possible to defer
the meeting. Subsequently, Govt. of Odisha sent their written
comments in respect of these two blocks among other.s The
competent authority decided to refer the replies of Govt. of
Odisha to the IMG. The 25th IMG held on 8th February, 2014
considered the replies of Government of Odisha. The
representative of the Govt. of Odisha was not invited since their
inputs were already available. The concerned parties had
already made their presentation and submitted their contention
in the 23rd IMG meeting. The copies of the letter of Government
of Odisha date 11.11.2013 and 19.11.2013 were circulated to
IMG Members along with the meeting notice dated 06.02.2014.
8. The IMG in the 25th Meeting held on 8th February, 2014
noted as follows:
"......IMG thereafter went through the letters of Government of
Odisha. It was noted from the letter dated 11.11.2013 of
Government of Odisha that the previous approval for the grant
of Prospecting License (PL) in respect of 'North of Arkhapal
Srirampur' was granted by the Ministry of Coal vide letter dated
13.08.2009; however, the same is stil under process with the
Government of Odisha (GoO). GoO has inter alia informed that
the checklist, compelte in all respect, required for executive of
PL deed was sought from the allocatee company (M/s SETSL)
which was filed by the allocate company vide their letter dted
08.11.2013 before the Director of Mines and the same is under
examination for onward transmision to the State Government for
deciding on executing of the deed.
After perusal of these two letters, IMG felt that no new facts
had been brought to light warranting re-consideration of IMG's
earlier recomendation given in respect of these two CTL blocks.
Therefore, IMG reiterates its earlier recomendation in respect of
these two CTL blocks......"
9. The recomendation of the 25th IMG has since been
considered and accepted by the Government. As the allocatee
company has been given a number of opportunities to develop
the coal block and the CTL project and the company has failed
to develop the same as per the milestones prescribed without
any valid reasons for the delay, it has been decided to de-
allocate the North of Arkhapal Srirampur CTL block in the State
of Odisha allocated to M/s Strategic Energy Technology Systems
Limited (SETSL). The company shal not be eligible for
alocation of coal block in lieu of the de-allocated coal block.
Accordingly, the Bank Guarantee to the extent of Rs.55.34795
Crore (Rupees fifty five crore thirty four lakhs seventy nine
thousand and five hundred only) be invoked and deposited with
the Government in the relevant Head of Account. (The
Calculation of Deduction of BG is as per Anexure-IV)."
(emphasis supplied)
6. On the first date of hearing in the said writ petition being W.P.(C)
No.1173/2014, this Court on the principle of parity had directed the
petitioner's bankers not to transfer any amount to the respondents qua the
bank guarantee in question. However, petitioner was directed to keep the
bank guarantee in question alive till further orders.
7. On 24th February, 2014, learned senior counsel for the petitioner
withdrew the stay application being C.M.No.2457/2014 in W.P.(C)
No.1173/2014 insofar as encashment of bank guarantee was concerned.
Learned senior counsel for the petitioner had stated that it had no objection
to the respondents encashing the bank guarantee in question in view of the
demand dated 17th February, 2014. The relevant portion of the order dated
24th February, 2014 is reproduced hereinbelow:-
"CM No 2457/2014
Mr.Rohtagi, learned senior counsel for the petitioner
states that he has instructions to withdraw the stay
application being CM No. 2457/2014 insofar as the
encashment of bank guarantee is concerned.
In view of the aforesaid, CM No. 2457/2014 is dismissed
as withdrawn and the respondent is permitted to encash the
bank guarantee in question in view of the demand dated 17th
February, 2014. The previous order dated 19th February,
2014 with regard to the CM No. 2457/2014 stands vacated.
It is, however, clarified that in the event, respondents initiate
process of re-allocation of the coal mines in question, the
petitioner shall be at liberty to approach this Court.
Order Dasti."
(emphasis supplied)
8. In the opinion of this Court, once the respondents were permitted to
encash the bank guarantee in question in view of the demand dated 17 th
February, 2014 at the instance of the petitioner and the application for stay of
enchasment was withdrawn, how can the petitioner seek its refund today?
9. At this stage, Mr. Jain submits that even in cases where
injunctions/stay applications with regard to stay of encashment of bank
guarantee have been refused, the aggrieved party has the liberty to seek
refund of the amount received by the other party under the bank guarantee.
He also submits that as the writ petition challenging the order dated 17th
February, 2014 was still pending adjudication after the encashment of the
bank guarantee, the petitioner is today entitled to seek refund of the amount
received by the respondents after encashment of the bank guarantee.
10. Undoubtedly, where injunctions/stay applications with regard to stay
of encashment of bank guarantee have been refused, the aggrieved party can
file proceeding for recovery of the amount paid under the bank guarantee.
But in the present case, encashment of the bank guarantee was permitted
upon withdrawal of the stay application and in view of the demand dated 17th
February, 2014. Since challenge to the demand dated 17 th Febraury, 2014
qua encashment of bank guarantee was withdrawn, in the opinion of this
Court, the petitioner cannot seek refund of the bank guarantee. Moreover,
once the bank guarantee had been encashed and the petitioner's mine had
been deallocated vide order dated 17th February, 2014 and the W.P.(C)
1173/2014 had been confined to reallocation, it is not understood as to how
the subsequent judgment of the Supreme Court of cancellation of allocation
of coal blocks would apply to the petitioner. Consequently, the reliefs
sought in the present writ petition are not maintainable. Accordingly, the writ
petition along with the applications is dismissed, but with no order as to
costs.
MANMOHAN, J
MARCH 02, 2016/KA
