The Supreme Court on Monday admitted a public interest litigation (PIL) on contentious joint venture pact between the state-owned resource company Odisha Mining Corporation (OMC) and Delhi-based Sainik Mining & Allied Services Ltd (SMASL) for raising of coal from a block allotted to the former.
In the PIL the petitioner has demanded cancellation of the coal block and CBI probe into the joint venture agreement, where OMC has conceded controlling 74 per cent stake to SMASL. The formation of the JV, named Kalinga Coal Mining (Private) Ltd, is in blatant violation of Coal Mines (Nationalisation) Act-1973, the petitioner argued.
The company was to develop the Utkal D coal block in Angul district allocated to OMC with an estimated coal reserve of 138 million.
“Admitting our prayer, the two member division bench of Justice RN Lodha and Justice Anil R Dave has served notices to the Centre, state government and the CBI to reply within four weeks of time,” said Purna Chandra Sahu, petitioner.
The parties to the case are CBI Director, Union coal secretary, Secretary, ministry of environment and forest, state chief secretary, state steel and mines secretary, OMC and SMASL. OMC has, meanwhile, scrapped the deal with the Delhi based firm, after facing a barrage of criticism for allowing controlling stake to the latter. Earlier, the Ministry of Coal had pulled up OMC for violating the Coal Act by conceding controlling stake to a private player for developing a coal block allotted to a state PSU. The ministry had issued a showcause notice to OMC in July 2010, urging the PSU to raise its stake in the JV to at least 51 per cent.
In addition to this, the ministry had also advised OMC to suitably modify the Memorandum and Articles of Association of the JV company. In response, the state Chief Secretary, B K Patnaik in a letter to Coal secretary Alok Perti in February this year had informed that OMC has decided to raise its equity in the JV company to 51 percent from the existing 26 per cent.