No Acts & Articles mentioned in this case
W.P.(C) 10686/2025 Page 1 of 76
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 10
th
October, 2025
Pronounced on: 2
nd
December, 2025
+ W.P.(C) 10686/2025 & CM APPL. 44163/2025 (Directions for Stay
on the Operation of the Impugned Order)
VEDANTA LIMITED .....Petitioner
Through: Mr. Nidhesh Gupta with Mr. Prashanto
Chandra Sen, Senior Advocates, Mr.
Naveen Kumar, Mr. Bikram Dwivedi,
Mr. Ujjwal Kumar Rai, Mr. Rohit
Ghosh, Mr. Jimut Mohapatra, Mr.
Utkarsh Chandra, Mr. Prabhat Kumar
Rai, Mr. Aditya Goel and Mr. Lakshay
Singh, Advocates.
versus
THE NOMINATED AUTHORITY MINISTRY OF COAL
GOVERNMENT OF INDIA & ORS. .....Respondents
Through: Mr. Chetan Sharma, ASG with Mr.
Ankur Mittal, CGSC with Mr. Aviraj
Pandey, Ms. R. Jaiswal, Ms. Jutirani
Talakdar, Advocates for UOI.
CORAM:
HON'BLE MR. JUSTICE AMIT SHARMA
JUDGMENT
W.P.(C) 10686/2025 Page 2 of 76
AMIT SHARMA, J.
W.P.(C) 10686/2025
1. The present petition under Article 226 of the Constitution of India,
1950, has been filed seeking the following prayers: -
“In view of the foregoing facts and grounds, the Petitioner most
respectfully prays that this Hon’ble Court may be pleased to:
(a) Allow the present Writ Petition and issue appropriate writ, order or
directions to quash and set aside Impugned Order dated 21.07.2025
bearing file No. NA- 104/8/2020-NA (hereinafter referred as “Impugned
Order”) issued by the Respondent No. 1 I.e., Nominated Authority,
Ministry of Coal, Govt., of India; And/o
(b) Issue further appropriate orders or directions restraining the
Respondent No. 1 to give effect to appropriation order dated 21.07.2025
bearing file No. NA- 104/8/2020-NA issued by the Respondent No. 1
I.e., Nominated Authority, Ministry of Coal, Govt., of India and refund
any amount so appropriated; And/or
(c) Issue further appropriate writ, orders or directions directing the
Respondent No. 1 to grant an extension of milestone deadlines under the
Coal Mine Development and Production Agreement (CMDPA) dated
11.01.2021, executed in favour of the Petitioner with respect to the
Radhikapur (West) Coal Mine situated in Angul district, Odisha in terms
of the order dated 16.07.2025 filed by the Petitioner before the
Respondent No. 1; And/or
(d) Issue further order or directions to the Respondents to process the
applications of the Petitioner for grant of statutory clearances in a time
bound manner; And/or
(e) Pass such other or further orders as this Hon’ble Court may deem just
and proper in the facts and circumstances of the present case.
AND FOR THIS ACT OF KINDNESS, THE PETITIONER AS IN
DUTY BOUND SHALL EVER PRAY. ”
W.P.(C) 10686/2025 Page 3 of 76
FACTUAL BACKGROUND
2. Brief facts necessary for the adjudication of the present petition, as
stated by the petitioner in the present petition, are as under: -
i) On 18.06.2020, the Nominated Authority, Ministry of Coal,
Government of India, (respondent No.1) issued the Tender Document
for the 11
th
Tranche of Auction under the Coal Mines (Special
Provisions) Act, 2015
1
, for auctioning coal mines for commercial sale
including Radhikarpur (West) Coal Mine, which was subsequently
allotted to the petitioner. After conducting auction under the provisions
of CM (SP) Act, 2015, and associated Rules, on 28.12.2020, the
petitioner was declared ‘successful bidder’ for the Radhikapur (West)
Coal Mine
2
by respondent No.1 in accordance with the directions
issued by Govt. of India vide Office Memorandum dated 23.12.2020
and Rule 10 (10) of the CM (SP) Rules, 2014, pursuant to final offer of
21% of the revenue share for the Coal Mine submitted by the petitioner
(successful bidder).
ii) On 11.01.2021, Coal Mine Development and Production
Agreement (CMDPA) was executed between the President of India and
the Petitioner formalising the obligations and milestones to be adhered
to by the petitioner for operationalising the subject mine. After
execution of CMDPA, on 03.03.2021, respondent No.1 under Rule
1
Hereinafter referred to as “CM (SP) Act, 2015”
2
Hereinafter referred to as “Subject Mine”
W.P.(C) 10686/2025 Page 4 of 76
7(2)(b) and Rule 13(1) of the Coal Mines (Special Provisions) Rules,
2014 read with Section 6(3)(b) and Section 8(3) of the CM (SP) Act,
2015, issued a Vesting Order thereby, transferring all rights, title,
interest including the approved mine plan to the petitioner, enabling it
to undertake further steps toward development of the mine.
iii) On 17.02.2021, the petitioner submitted the Schedule-C Format
of the completion notice in terms of Clause 3.2.1 of the CMPDA and
furnished the 1
st
instalment of the upfront amount of Rs.24.76 Crores
along with a Performance Bank Guarantee
3
of Rs.263.17 Crores and a
fixed amount of Rs.7.69 Crores in terms of the Tender Document.
Further, on 05.04.2021, in furtherance of its obligations under
CMDPA, petitioner submitted the commencement plan for starting coal
mining operations at the allocated mine in terms of Clause 5.1 of the
Tender Agreement. On 08.04.2021, petitioner made an application in
Form-7 to the competent authority for transfer of the existing
Environment Clearance (EC) in its name which was issued on
10.01.2014 in favour of prior allottee in terms of the Clauses 1 (c) & 1
(d) of the Vesting Order.
iv) On 19.07.2021, respondent No.1 issued an Office Memorandum
granting relaxation in the timelines prescribed for achieving efficiency
parameters under CMDPA, in view of the nationwide lockdown owing
to the second wave of the COVID-19 pandemic. Vide this Office
Memorandum, 3 months relaxation was given for achieving efficiency
3
Hereinafter referred to as ‘PBG’
W.P.(C) 10686/2025 Page 5 of 76
parameters in both operational as well as non-operational coal mine by
respondent No.1. In the meanwhile, the request of the petitioner for
transfer of Environment Clearance (EC) and Forest Clearance (FC)
were forwarded to the Ministry of Environment, Forest and Climate
Change (MoEF & CC) for necessary action. On 26.11.2021, Forest
Advisory Committee (FAC) considered the proposal for transfer of
Forest Clearance (FC-I) submitted by the petitioner, however, the same
was deferred with direction for further inspection and clarifications.
v) On 07.12.2021, petitioner submitted a formal application before
Director of Mines, Govt. of Odisha, for grant of mining lease over an
area of 1048 hectares based on the vesting order issued by respondent
No.1. On 17.12.2021, Divisional Forest Officer (DFO), Angul, along
with DGIF(C), Bhubaneshwar, and Range Officer, Chhendipada,
conducted a field inspection of the proposed area and in the inspection
report dated 17.12.2021, it was noted that the location of the mine falls
within an area critical to elephant habitat and identified the site as a
high human-elephant conflict zone.
vi) On 23.12.2021, FAC in its 2
nd
meeting, recommended grant of
stage-I FC-I in favour of the petitioner, subject to certain conditions.
On 21.01.2022, the petitioner submitted all requisite documents to the
Office of the Director of Mines, Odisha, seeking further action for
execution of the Mining Lease in accordance with vesting order. On
04.02.2022, in a meeting held between respondent No.1, Central Mine
Planning & Design Institute Limited (CMPDI), petitioner and M/s
W.P.(C) 10686/2025 Page 6 of 76
EMMRL, issues arose regarding three different boundary coordinates
viz., Mining Plan, Vesting Order, recommendations of CMPDI.
vii) On 08.02.2022, petitioner received 1
st
Show Cause Notice (SCN-
I) for non-compliance of Milestone-2 (MS-2) pertaining to the
submission and approval of mining plan and on the same day, the
Nominated Authority issued a letter correcting the boundary
coordinates and directed revision based on Odisha Space Application
Centre (ORSAC) data. On 09.02.2022, petitioner wrote to CMPDI
informing them about revision of boundary coordinates for the subject
mine.
viii) On 21.02.2022, petitioner submitted its reply to SCN-I, citing
reasons including delays due to the COVID-19 pandemic and issues
with mine boundary coordinates. The explanation given by the
petitioner was accepted and SCN-I was dropped against the petitioner
based on the recommendation of Scrutiny Committee in its 18
th
meeting held on 23.08.2022 for providing relaxation by not
appropriating Performance Bank Guarantee for non-compliance with
the milestone (MS-2) and same was communicated to the petitioner by
respondent No.1 vide letter dated 18.01.2023.
ix) On 06.01.2022, MoEF & CC issued in-principle approval of
stage-I Forest Clearance and in view of the same petitioner applied for
grant of EC in its name. However, MoEF & CC raised Essential Details
Sought (EDS) on 10.01.2022 and directed the petitioner to apply afresh
W.P.(C) 10686/2025 Page 7 of 76
for Terms of Reference (ToR) as per provisions of EIA Notification
2006. On 08.09.2022, MoEF & CC issued ToR to the petitioner for
conducting a public hearing and preparing the Environment Impact
Assessment (EIA) and Environment Management Plan (EMP) for
obtaining Environmental Clearance. On 14.12.2022, Expert Appraisal
Committee (EAC) considered the EIA-EMP report submitted by the
petitioner and recommended the grant of Environment Clearance (EC).
On 23.01.2023, MoEF & CC issued final EC to the petitioner and the
same was allegedly, per respondent No.1, obtained after a delay of
more than 4 months as per the stipulated time period prescribed under
Schedule D- Efficiency Parameters. On 16.03.2024, Chief Secretary of
Odisha issued a notification enforcing the Model Code of Conduct in
view of upcoming General and Assembly Elections, and
simultaneously suspended all public hearing activities during this
period.
x) On 06.06.2024, petitioner received 2
nd
Show Cause Notice
(SCN-II) from respondent No.1 for alleged non-completion of MS-3
specifically regarding delay in obtaining stage-II Forest Clearance (FC-
II) and Environmental Clearance (EC). The petitioner submitted a
detailed reply to SCN-II on 20.06.2024 explaining that due to change in
land characteristics, re-initiation of clearance processes was necessary.
Reference was also made to the delays caused by boundary
discrepancies, new ToR/EC filings, elephant corridor issues and Model
Code of Conduct. On 08-09.08.2024, 24
th
Scrutiny Committee meeting
W.P.(C) 10686/2025 Page 8 of 76
was held in which deliberations were held on SCN-II issued to the
petitioner and the reply submitted by petitioner to the said SCN.
xi) On 12.08.2024, petitioner submitted an undertaking committing
to operationalise the mine in accordance with applicable laws and
clearances before the due date of 06.06.2025
4
. On 23.05.2025,
petitioner addressed a detailed representation to respondent No.1
invoking ‘Force Majeure’ in terms of Clause 25 of the CMDPA
thereby, seeking extension of time for achieving MS-4 & MS-5 under
CMDPA, in light of intervening circumstances which were beyond its
control.
xii) On 16.07.2025, the petitioner submitted a detailed representation
seeking revision of “Zero Date” under the CMDPA in view of the
revised forest area and consequential changes to the land schedule, as
per DFO’s directions. This representation was submitted highlighting
the reclassification and expansion of forest area which have triggered a
chain of legal consequences, including the need to restart the clearance
process afresh thereby constituting classic ‘Force Majeure’ scenario.
As per this representation, petitioner had requested respondent No.1
that CMPDI will conduct DGPS survey to ascertain the boundaries and
the petitioner is agreeable to bear the costs of reconducting the survey
and as per revised boundary coordinates, fresh allocation/vesting order
4
As per 24
th
Scrutiny Committee recommendations, undertaking to operationalize mine was before
03.06.2025; however, date mentioned in this letter is 06.06.2025
W.P.(C) 10686/2025 Page 9 of 76
may be issued, and the date of issuance of such order is to be
considered as fresh ‘Zero Date’ for achieving Efficiency Parameters.
xiii) Thereafter, on 21.07.2025, respondent No.1 in purported
compliance of Clause 10 and Schedule D of the CMDPA issued the
impugned Appropriation Order thereby, directing the appropriation of
Rs.29,23,55,117.68/- (Rupees Twenty-Nine Crore Twenty-Three Lakh
Fifty-Five Thousand One Hundred Seventeen and Sixty-Eight Paise
only) from the Performance Bank Guarantee of the Petitioner for
alleged non-compliance with MS-3 within the timeline stipulated in
Schedule D- Efficiency Parameters.
xiv) On 22.07.2025, petitioner submitted a letter to respondent No.1
protesting the unilateral appropriation of Performance Bank Guarantee
and requesting for withdrawal of the impugned appropriation order. On
22.07.2025 itself, the present petition has been filed assailing the
aforesaid Appropriation Order passed by respondent No.1 inter alia
seeking other prayers as noted hereinbefore.
SUBMISSIONS ON BEHALF OF THE PETITIONER
3. Learned Senior Counsels for the petitioner in support of the present
petition have made the following submissions: -
i) The impugned appropriation order has been passed arbitrarily
and without considering the representation of the petitioner seeking
W.P.(C) 10686/2025 Page 10 of 76
extension of the timelines for achieving the milestones and change of
‘Zero Date’ under CDMPA which was, at that time, pending before
respondent No.1. It is submitted that the sole ground on which the
Performance Bank Guarantee has been sought to be appropriated by
respondent No.1 is on account of delay in obtaining environment
clearance (EC) which, in turn, has resulted in delayed completion of
Milestone-3 (MS-3). It is submitted that, as per respondent No.1, MS-3
was due on 03.09.2022 and time limit to achieve the same was 18
months from the completion of previous MS (MS-2), however, it was
achieved on 23.01.2023, therefore, the same entitled respondent No.1
for appropriation of 10% of the Performance Bank Guarantee for delay
in completion of MS-3. It is the case of the petitioner that the alleged
delay of more than 4 months in completion of MS-3 is not solely
attributable to the latter as the same has occurred due to various other
factors such as Covid-19, disrupted administrative and field level
activities, grant of statutory clearances, regarding which respondent
No.1 was duly apprised by the petitioner and despite the same,
impugned order was passed without considering the case of the
petitioner. Learned Senior Counsels have submitted that the petitioner
had given repeated representations to the Nominated
Authority/respondent No.1 for seeking extension of time for
completion of Milestones under CDMPA and still without adverting or
sending any appropriate reply to the said representations, the impugned
order has been passed. Attention of this Court has been drawn towards
a letter/representation dated 16.07.2025 addressed to respondent No.1
by the petitioner for change in ‘Zero Date’ for subject Coal Mine on
W.P.(C) 10686/2025 Page 11 of 76
account of change of Land Schedule as per DFO, Angul, letter dated
11.07.2025 and also, a representation dated 23.05.2025 submitted by
the petitioner requesting extension of timelines to achieve the
Efficiency Parameters.
ii) Learned Senior Counsels have submitted that regarding the
alleged non-compliance of “Efficiency Parameters” mentioned in
CMDPA executed on 11.01.2021, i.e., delay in obtaining ‘Environment
Clearance’ (EC) on 23.01.2023 against the due date of 03.09.2022, a
show cause notice-2 was issued to the petitioner on 06.06.2024 and in
response to the said SCN-II, a detailed reply dated 20.06.2024 was
submitted by the petitioner. Attention of this Court has been drawn
towards the contents of the said SCN-II, and it is submitted that the said
SCN-II was issued in respect of delay in obtaining EC only. However,
it is submitted that in the impugned order in paragraph 7, respondent
No.1 has also taken into the consideration the recommendations made
by Scrutiny Committee in its 24
th
meeting held on 08-09.08.2024 and
the undertaking given on behalf of the petitioner to operationalise the
mine by 03.06.2025, which was a wholly extraneous and irrelevant
consideration for passing the impugned order. It is the case of the
petitioner that no prior SCN was given to the petitioner to explain the
said facts and respondent No.1 has, therefore, gone beyond the
contents/scope of SCN-II thereby, violating the principles of natural
justice. It is also the case of the petitioner that respondent No.1 had not
adjudicated on their representation on the issue of delay in achieving
Efficiency Parameters and has not taken into consideration the
W.P.(C) 10686/2025 Page 12 of 76
relaxations given in achieving the same on account of Covid-19
lockdown as well as the recommendation of the 18
th
Scrutiny
Committee meeting held on 23.08.2022.
iii) Learned Senior Counsels for the petitioner have further
submitted that the vesting order was issued in favour of the petitioner
on 03.03.2021 (vesting date: ‘Zero Date’) and as per the impugned
appropriation order as well as SCN-II dated 06.06.2024, due date for
completion of MS-3 was 03.09.2022 and time limit to complete the
same was 18 months from the completion of previous MS (MS-2). It is
further submitted that as per the vesting order, all statutory licences,
permits, permissions, approvals or consents as per rules, required to
undertake coal mining operations in the mine, if already issued by the
Central Government, to the prior allottee on the same terms and
conditions as were applicable to the prior allottee shall stand fully and
absolutely transferred and vested in the successful bidder. Attention of
this Court has been drawn towards the following covenants of the
vesting order: -
W.P.(C) 10686/2025 Page 13 of 76
It is, thus, argued that the Environment Clearance (EC) stood
vested, as per the vesting order dated 03.03.2021, in the petitioner on
W.P.(C) 10686/2025 Page 14 of 76
the said date itself; however, as per the direction of Ministry of
Environment, Forest and Climate Change (MoEF & CC), the petitioner
had to obtain fresh EC which with all efforts was done within the
prescribed timeline as per the Efficiency Parameters and the impugned
appropriation order has been passed on incorrect calculation of due date
and without taking into consideration the relaxation given by
respondent No.1 in achieving milestones and the dropping/waiving of
SCN-I.
iv) It is further submitted that respondent No.1 has calculated the
time limit/due date of 03.09.2022 for completion of MS-3 from the date
of issuance of vesting order and the same has been done arbitrarily and
on the basis of wrong calculation. Attention of this Court has been
drawn towards the ‘Schedule D- Efficiency Parameters’ wherein,
completion time for MS-2 (Approval of Mining Plan/Project Report
subject to the provisions of Clause 15) was 6 months from the
completion of previous MS (MS-1)/If MS-1 is not applicable, 6 months
from the date of allocation, and further, the completion time for
obtaining ‘Environment Clearance’ (EC) (MS-3) was 18 months from
the completion of previous MS (MS-2). It is, therefore, the case of the
petitioner that the calculation of due date of 03.09.2022 for completion
of MS-3 from the date of vesting is not correct as per Efficiency
Parameters. It has been argued by learned Senior Counsels for the
petitioner that the zero date was the date of vesting order (03.03.2021)
and from that date a period of 6 months was to be given for completion
of MS-2 which was due on 03.09.2021 and beyond the said date, a
W.P.(C) 10686/2025 Page 15 of 76
further 18 months was to be given for completion of MS-3 which was
due on 03.03.2023 and the petitioner has obtained the EC on
23.01.2023 which is well within the prescribed timeline for the
completion of Milestone-MS-3. For the sake of completeness, the said
“Schedule D- Efficiency Parameters” have been reproduced as under:
-
W.P.(C) 10686/2025 Page 16 of 76
v) It is further submitted that SCN-I was issued to the petitioner on
08.02.2022 for delay in filing the mining lease which was a part of MS-
W.P.(C) 10686/2025 Page 17 of 76
2 and for the reasons and justification for delay in submission of
application for mining lease put forth by the petitioner in its reply
submitted on 21.02.2024, the same were duly accepted by the Scrutiny
Committee in its 18
th
Scrutiny Committee meeting held on 23.08.2022
and SCN-I against the petitioner was waived/dropped for non-
compliance with the milestone (MS-2), i.e., Mining Lease Application.
Attention of this Court has also been drawn towards a letter dated
18.01.2023 issued by respondent No.1 to the CEO of the petitioner for
the dropping of SCN-I dated 08.02.2022. It is, therefore, the case of the
petitioner that SCN-II issued to it pursuant to which the impugned
appropriation order has been passed is, in fact, first SCN-I.
vi) Learned Senior Counsels for the petitioner have further
submitted that the delay in achieving the Milestone is also attributable
to a fundamental inconsistency in the demarcation of the mining lease
area as the coordinates notified in the vesting order and the mining plan
differed materially from those demarcated by the Odisha Space
Application Centre (ORSAC) necessitating formal correction only on
08.02.2022. It is the case of the petitioner that said discrepancy is a
failure on the part of public authorities and not attributable to it.
Attention of this Court has been drawn towards a letter dated
27.12.2021 written by Central Mine Planning & Design Institute
Limited (CMPDIL) to Deputy Secretary, Ministry of Coal, Government
of India, regarding the block boundary issue of Radhikapur East and
Radhikapur West Coal mines whereby, it was informed to the latter that
both the allottees have agreed for change in the black bounding
W.P.(C) 10686/2025 Page 18 of 76
coordinates of the subject mines/coal blocks and the same are required
to be revised with reference to ORSAC boundary and approved Mining
Plan boundary.
vii) It is further submitted that the boundary of the subject mines
were agreed to be revised on 04.02.2022 vide meeting held under the
Chairmanship of Additional Secretary & Nominated Authority
regarding boundary finalisation of the subject coal blocks vested in the
petitioner and M/s EMMRL. Attention of this Court has been drawn
towards the following minutes of meeting regarding Boundary of
Radhikapur West Coal Block: -
W.P.(C) 10686/2025 Page 19 of 76
W.P.(C) 10686/2025 Page 20 of 76
viii) It is pointed out that based on the aforesaid discussion, petitioner
addressed a letter dated 07.02.2022 to respondent No.1, proposing that
if the Mining Plan boundary coordinates are kept as it is on the three
sides, i.e., East, South and West, and if only, the north side is extended
further north to coincide with the new bounding coordinate line, it will
cover the entire mining boundary without creating too many changes as
per existing approved bounding coordinates and same will also cover
the ORSAC boundary. Learned Senior Counsels have submitted that
immediately after the issuing of vesting order, respondent No.1 was
informed that there was an area overlapping between the adjoining
Radhikapur East Coal Block requiring reconciliation and that mining
boundary coordinates differed as mentioned in the approved mining
plan, vesting order and recommendation given by CMPDIL. It is
further submitted that despite the revision of the boundary coordinates
in the aforesaid joint meeting held on 04.02.2022 and letter dated
07.02.2022 submitted to respondent No.1 by the petitioner, the
necessary revision in the vesting order along with revised boundary
coordinates for the Radhikapur West Coal Block (subject mine allotted
to the present petitioner) is still pending and despite repeated requests
by the petitioner, regarding the same, as it has created several
impediments in obtaining necessary clearances, the issue is still
unresolved. It is further the case of the petitioner that the aforesaid
developments have taken place after the issuance of vesting order in
favour of the petitioner thereby, resulting in 11 months of delay in
completion of milestones as elucidated in the Schedule D- Efficiency
W.P.(C) 10686/2025 Page 21 of 76
Parameters which have not been taken into consideration by respondent
No.1 while passing the impugned appropriation order.
ix) Learned Senior Counsels for the petitioner have handed up in
Court, during the course of arguments, an Office Memorandum dated
31.01.2025 issued by Ministry of Coal, Govt. of India, in respect of
Guidelines for Preparation of Mining Plan and Mine Closure Plan for
Coal and Lignite blocks 2025 in Rule 2.7 envisaged in Chapter-II
‘Mining Plans’ providing for ‘Project Area’, it has been mentioned that,
‘For all coal blocks, the project boundary shall be delineated based on
the DGPS (Differential Global Positioning System) survey with
certification by CMPDIL and the certificate must be attached with the
Mining Plan along with the KML file’. In view of the same, it has been
contended that without there being a survey the discrepancy crept in the
boundary coordinates could not have been rectified as it required DGPS
survey along with certification by CMPDIL which was to be
undertaken by respondents and the same was also reflected in the letter
dated 27.12.2021 sent by CMPDIL to Ministry of Coal. It is also
pointed out that the petitioner and other allottee had requested the
respondents for conducting DGPS survey and delay in conducting the
same cannot be attributed to the petitioner. The said Guidelines have
been taken on record.
x) Learned Senior Counsels for the petitioner have submitted that as
per the vesting order approved Mine Plan & EC dated 10.01.2014
issued to the prior allottee stood vested in the petitioner. It is further
W.P.(C) 10686/2025 Page 22 of 76
submitted that the petitioner applied for transfer of EC to MoEF &CC;
however, same was denied without obtaining Forest Clearance-I over
the area. Subsequently, MoEF expedited the process for grant of FC
(Forest Clearance) and FC-1 was obtained on 06.01.2022. It is also the
case of the petitioner that with the revised boundary coordinates being
clarified after joint meeting held on 04.02.2022, there was no change in
the area and land schedule with change in boundary coordinates,
however, EC was again denied on the ground that, as per MoEF
guidelines, FC-1 had to be submitted within 18 months. It has been
argued that even after aforesaid intervening circumstances, and delay
fresh EC was granted on 23.01.2023, i.e., 23 months, as against the
allotted 24 months as per CMDPA including the period of 11 months
during which there was confusion of Boundary Coordinates and
effectiveness of the vested Mine Plan.
xi) Learned Senior Counsels have drawn attention of this Court
towards the clauses (c) & (d) of the vesting order dated 03.03.2021 and
it is submitted that the petitioner in terms of the said clauses applied for
transfer of EC on 08.04.2021 by submitting Form-7. It is further
submitted that respondent No.1 vide its Office Memorandum dated
04.10.2021 issued regarding the transfer of EC and FC of the subject
Coal Mine in favour of the petitioner forwarded the request letter of the
latter along with copy of undertaking for abiding by all the conditions
of EC & FC for further needful transfer of EC & FC (process till
consideration by FAC) in the name of the petitioner. However, despite
the same being forwarded on 04.10.2021, no EC & FC was transferred
W.P.(C) 10686/2025 Page 23 of 76
to the petitioner. But on 10.01.2022, MoEF &CC published on its
website that the proposal for transfer of EC cannot be executed in
absence any formal EC letter, which was not issued by this Ministry,
because as per extant rule of EIA, Notification, 2006, the applicant has
to apply afresh application for grant of TOR as per the provisions of
EIA, Notification, 2006 and the lapse of previous EC for the want of
FC-1 clearance. It is submitted that subsequent to the aforesaid
intimation published on 10.01.2022, the petitioner made a fresh
application for obtaining EC and the same was obtained on 23.01.2023.
xii) Further, learned Senior Counsels for the petitioner has drawn
attention of this Court towards the 24
th
Screening Committee meeting
held on 08.08.2024 and 09.08.2024 and particularly towards, the
observation and recommendations of the Committee in respect of the
Radhikapur (West) Coal Mine and SCN-II dated 06.06.2024 issued to
the petitioner for non-achievement of efficiency parameter within
stipulated time pertaining to Forest Clearance Stage-II, and
Environment Clearance, wherein the Committee has admitted that there
was delay in completion of this milestone (MS-3) due to initial
confusion about the boundary coordinates of the mine and
rearrangement of a part of CA (compensatory afforestation) land. The
Committee also took note of the fact that despite the delay in
achievement of this milestone (MS-3), the Allottee (petitioner herein)
has confirmed that the mine will be operationalised within 51 months’
timeline given in CMDPA, i.e., by 03.06.2025. It is submitted that
W.P.(C) 10686/2025 Page 24 of 76
despite the said explicit admission of delay in completion of milestone
on behalf of respondent No.1, the impugned order was passed.
xiii) Learned Senior Counsels for the petitioner have submitted that
vide letter dated 23.05.2025 addressed to respondent No.1, a
representation was made by the petitioner invoking “Force Majeure” in
terms of Clause 25 of the CMDPA and further, seeking appropriate
orders/directions for extension of timeline for achieving Milestones
under Schedule D of CMDPA due to the delay in completion of
Milestone 4 (Land Acquisition and R&R) primarily due to factors
beyond its control such as discrepancy in area proposed vis-à-vis area
demarcated as per ORSAC, which are intensified by the location of the
mine in an Elephant Zone and ecologically sensitive forest area, which
entitled the petitioner to benefit of force majeure clause. It is, therefore,
the case of the petitioner that respondent No.1 has not passed any order
on the said representation submitted by the petitioner nor on the other
representation dated 16.07.2025 submitted for the change in ‘Zero
Date’ for the subject mine on account of change of Land Schedule and
has arbitrarily passed the impugned appropriation order.
xiv) In view of the aforesaid submissions, it has been prayed that the
present petition be allowed and the impugned appropriation order be set
aside and respondent No.1/Nominated Authority be directed to grant
extension of milestone deadlines under CMDPA to the petitioner.
W.P.(C) 10686/2025 Page 25 of 76
SUBMISSIONS ON BEHALF OF THE RESPONDENTS
4. Learned Additional Solicitor General of India for the respondents,
while refuting the submissions made by learned Senior Counsels for the
petitioner, has made the following submissions: -
i) At the very outset, the respondents have raised preliminary issue
in respect of the maintainability of the present petition on the ground that
the petitioner has not availed alternate efficacious remedy under CM
(SP) Act, 2015, prior to the filing of the present petition before this Court
under Article 226 of the Constitution of India. It is submitted that it is a
well-established principle of law that writ jurisdiction ought not be
invoked without first exhausting the alternate efficacious remedy. It is
further submitted that as per Section 27 of the CM (SP) Act, 2015, which
provides for “Dispute settlement and Bar of Jurisdiction of civil
courts”, any proceedings arising from or in connection to the decision of
the Scrutiny Committee vide the impugned Appropriation Order is
subject to the jurisdiction of the Tribunal constituted under Coal Bearing
Areas (Acquisition and Development) Act, 1957, which is established
and situated at Talchar, Odisha. Attention of this Court has also been
drawn towards paragraph 16 of the impugned order wherein, it has been
noted as under: -
“16. Attention is invited to Section 27 of the Coal Mines
(Special Provisions) Act. 2015 providing for adjudication by the
Tribunal constituted under the Coal Bearing Areas (Acquisition
and Development) Act, 1957. For the instant Coal Mine the
Tribunal situated at Talcher, Odisha shall have jurisdiction.”
W.P.(C) 10686/2025 Page 26 of 76
In view of the aforesaid, it is contended that the petitioner has
deliberately ignored the aforesaid clause and has circumvented the
jurisdiction of the learned Tribunal at Talchar, Odisha, by filing the present
petition without first approaching the Tribunal. It is pointed out that there is
no averment in the present petition as to why the petitioner has not
approached the learned Tribunal constituted for the purpose of seeking
redressal of its grievance, if any, and has directly approached this Court in
writ jurisdiction. Reliance has been placed on Radha Krishan Industries v.
State of H.P.
5
, particularly on paragraph 27, to contend that the High Court
has discretion not to entertain a writ petition as one of the restrictions placed
on the exercise of power of the High Court under Article 226 of the
Constitution is where an effective alternate remedy is available to the
aggrieved person. Reliance has also been placed on Joshi Technologies
International Inc. v. Union of India
6
, particularly on paragraph 69, to
contend that the whenever a particular mode of settlement of dispute is
provided in the contract, the High Court would refuse to exercise its
discretion under Article 226 of the Constitution and relegate the party to the
said mode of settlement, particularly when settlement of disputes is to be
resorted to through the means of arbitration. Therefore, it is the case of the
respondents that the present petition ought to be dismissed as not
maintainable and the petitioner be relegated to seek appropriate remedy in
accordance with law before the Court of competent jurisdiction/appropriate
forum.
5
2021 SCC OnLine SC 334
6
(2015) 7 SCC 728
W.P.(C) 10686/2025 Page 27 of 76
ii) Learned ASG has drawn attention of this Court towards
Schedule D- ‘Efficiency Parameters’ to submit that completion time for
obtaining Environment Clearance (‘EC’) was 18 months from
completion of previous MS (MS-2). It is further pointed out that
completion time for ‘Approval of Mining Plan/Project Report subject to
the provisions of Clause 15’ was 6 months from the completion of
previous MS/If MS-1 is not applicable, 6 months from the date of
allocation. It is submitted that the case of the petitioner regarding non-
lapse of 18 months from the completion of previous milestone as
provided under Schedule D- ‘Efficiency Parameters’ is completely
misplaced and based on incorrect reading of the said schedule and
CMDPA. It is the case of the respondents that the petitioner was not
required to do anything to achieve MS-1 since the subject mine is a
fully explored mine. Insofar as MS-2 is concerned, it is contended that
for the purposes of ‘approval of mining plan/project report subject to
Clause 15’, the petitioner was not required to do anything in respect of
MS-2 as the vesting order dated 03.03.2021 itself records in Annexure-
2 thereof, that the approval of mining plan and mine closure plan has
already been granted by Ministry of Coal on 23.06.2011. Therefore, the
period of 18 months from the completion of previous milestone (MS-2)
for obtaining ‘Environmental Clearance’ would commence from the
date of vesting order, i.e., 03.03.2021, and the same was due on
03.09.2022 and EC was obtained by the petitioner on 23.01.2023
against the said due date, and therefore, the partial appropriation of
performance bank guarantee in terms of CMDPA rightly done by the
respondents.
W.P.(C) 10686/2025 Page 28 of 76
iii) It is further submitted that dispute in the present case is purely
contractual in nature, and thus, not amenable to present jurisdiction. It is
the case of the respondents that the penalty imposed on the petitioner is
in strict abidance with the provisions of CMDPA. Attention of this Court
has been drawn towards the following Clauses of the CMDPA which
read thus: -
“6.2 Events for appropriation of the Performances
Security
6.2.1. The Performance Security may be appropriated by the
Nominated Authority upon occurrence of any of the following
events (the "Appropriation Event"), to be determined by the
Nominated Authority in its sole discretion:
(a) failure of the Successful Bidder to provide the duly
acknowledged duplicate copy of the Vesting Order as required
under Clause 4.6;
(b) failure of the Successful Bidder to make payment of any of
the instalment of the Upfront Amount within the time specified
in Clause 3.1(6) and Clause 5.2;
(c) failure of submission of Commencement Plan within the time
specified in Clause 5.1.1;
(d) failure of the Successful Bidder to comply with the
Efficiency Parameters as required under Clause 10;
(e) any change in Control or transfer of right, title or interest in
the Coal Mine which is not in conformity with Clause 13;
(f) failure to make payment of the Monthly Payment in
accordance with this Agreement;
(g) any sale and/or utilisation of coal which is not in conformity
with Clause 8;
(h) failure to make payments of monthly revenue share for CBM
as per Clause 8.2.3;
(i) failure to pay revenue to the Government in case of shortfall
in coal production as per Clause 16.2.2;
W.P.(C) 10686/2025 Page 29 of 76
(j) cessation of coal mining operation exceeding a period of one
year continuously, or 18 months over a period of two years
without occurrence of any event of force majeure;
(k) surrender of the Coal Mine by the Successful Bidder or
termination of the Mining Lease granted to the Successful
Bidder before (a) the expiry of the period for which Mining
Lease (including renewed Mining Lease) has been granted or
will be granted, or (b) extractable reserves are remaining in the
Coal Mine, whichever is earlier;
(l) any other breach or non-compliance of any of the provisions
of this Agreement including in case of the Warranties being
untrue or misleading or incorrect in any manner whatsoever; or
(m) failure of the Successful Bidder to submit the revised
Performance Security in accordance with Clause 6.1.
6.2.2. Provided however that in the event an Appropriation
Event has occurred solely on account of an Event of Force
Majeure which could not have been mitigated by the Successful
Bidder through Good Industry Practice as provided in Clause 25,
then the Performance Security shall not be appropriated for such
specific Appropriation Event.
6.3. Manner of appropriation of the Performance Security
6.3.1. Upon occurrence of an Appropriation Event, to be
determined by the Nominated Authority, the Nominated
Authority shall have the unconditional right to appropriate the
Performance Security by providing a written notice to the
Successful Bidder in the following proportion:
# Appropriation
Event
Amount of the
Performance
Security to be
appropriated
1. Failure of the
Successful Bidder
to provide the duly
acknowledged
duplicate copy of
the Vesting Order
as required under
Clause 4.6
Entire
Performance
Security.
W.P.(C) 10686/2025 Page 30 of 76
2. Failure of the
Successful Bidder
to make payment
of any of the
instalment of the
Upfront Amount
within the time
specified in Clause
5.2
An amount
equal to the
first
instalment,
and/or second
instalment
and/or third
instalment
and/or fourth
instalment of
the Upfront
Amount
together with
12% per
annum simple
interest on
such amount
starting from
the date on
which such
amount was
due and until
the date of
appropriation
of the
Performance
Security.
3. Failure of
submission of
Commencement
Plan within the
time specified in
Clause 5.1.1
An amount
equal to 10%
of the
Performance
Security
4. Failure of the
Successful Bidder
to comply with the
Efficiency
Parameters as
required under
Clause 10
Such per cent
of the
Performance
Security for
each failure to
comply with
the Efficiency
Parameters as
W.P.(C) 10686/2025 Page 31 of 76
specified in
SCHEDULED.
5. Any change in
Control or transfer
of right, title or
interest in the Coal
Mine which is not
in conformity with
Clause 13
Entire
Performance
Security.
6. Any sale and/or
utilization of coal
which is not in
conformity with
Clause 8
Entire
Performance
Security.
7. Failure of the
Successful Bidder
to make payment
of the Monthly
Payment
The amount of
Monthly
Payment due
and payable,
along with a
simple interest
of twelve per
cent per annum
starting from
the date on
which such
amount was
due and until
the date of
appropriation
of the
Performance
Security.
8. Cessation of coal
mining operation
exceeding a period
of one year
continuously, or
18 months over a
period of two
years without
occurrence of any
Entire
Performance
Security.
W.P.(C) 10686/2025 Page 32 of 76
event of force
majeure
9. Surrender of the
Coal Mine by the
Successful Bidder
or termination of
the Mining Lease
granted to the
Successful Bidder
before (a) the
expiry of the
period for which
Mining Lease
(including
renewed Mining
Lease) has been
granted or will be
granted, or (b)
extractable
reserves are
remaining in the
coal Mine,
whichever is
earlier
Entire
Performance
Security
10
.
Any other breach
or non-compliance
with any of the
provision of this
Agreement,
including in case
of the Warranties
being untrue or
misleading or
incorrect in any
manner
whatsoever.
Such
proportion as
may be
determined by
the Nominated
Authority in its
sole discretion.
11
.
Failure of the
Successful Bidder
to submit the
revised
Performance
Entire
Performance
Security.
W.P.(C) 10686/2025 Page 33 of 76
Security in
accordance with
Clause 6.
12
.
Failure to make
payments of
monthly revenue
share for CBM as
per Clause 8.2.3
The amount of
revenue share
due and
payable, along
with a simple
interest of 12%
[twelve] per
cent per annum
starting from
the date on
which such
amount was
due and until
the date of
appropriation
of the
Performance
Security.
13
.
Failure to pay
revenue to the
Government in
case of shortfall in
coal production as
per Clause 16.2.2
The amount of
revenue share
due and
payable, along
with a simple
interest of 12%
[twelve] per
cent per annum
starting from
the date on
which such
amount was
due and until
the date of
appropriation
of the
Performance
Security.
W.P.(C) 10686/2025 Page 34 of 76
6.3.2. Any Appropriation Event resulting in appropriation of the
entire Performance Security shall be a Termination Event for the
purposes of Clause 26 (EFFECTIVE DATE, TERM AND
TERMINATION).
6.3.3. In the event of a part appropriation of the Performance
Security, the Successful Bidder shall be required to: (i) rectify
the Appropriation Event; and (ii) top-up the bank guarantee
constituting the Performance Security within fifteen Business
Days of receipt of a notice under Clause 6.3.1, failure to do so
shall be a Termination Event for the purposes of Clause 26
(EFFECTIVE DATE, TERM AND TERMINATION).
Appropriation Event except as mentioned in Clause 6.2.1 (d)
shall be rectified within seven Business Days of receipt of a
notice under Clause 6.3.1. Appropriation Event mentioned in
Clause 6.2. l (d) shall be rectified within the time specified in
SCHEDULED.
6.3.4. In the event that on account of one or more Appropriation
Events, an amount equal to hundred per cent of the Performance
Security is appropriated in aggregate in one or more instances,
the same shall be a Termination Event for the purposes of Clause
26 (EFFECTIVE DATE, TERM AND TERMINATION).”
iv) Learned ASG has further submitted that Clause 6 of the CMDPA
provided for performance security in the form of an irrevocable and
unconditional guarantee in the format provided in Schedule E of the
contract/CMDPA. Attention of this Court has been drawn towards the
following clauses/conditions of the Bank Guarantee furnished by the
petitioner in favour of the respondent No.1 in terms of CMDPA: -
“1. The Bank for the purpose hereof unconditionally and
irrevocably undertakes to pay to the Nominated Authority
without any demur, reservation, caveat, protest or recourse,
immediately on receipt of first written demand from the
Nominated Authority, a sum or sums (by way of one or more
W.P.(C) 10686/2025 Page 35 of 76
claims) not exceeding in the aggregate the amount of INR
[figures] (Indian Rupees [words]) without the Nominated
Authority needing to prove or to show to the Bank grounds or
reasons for such demand for the sum specified therein and
notwithstanding any dispute or difference between the
Nominated Authority and Successful Bidder on any matter
whatsoever. The Bank undertakes to pay to the Nominated
Authority any money so demanded notwithstanding any dispute
or disputes raised by the Successful Bidder in any suit or
proceeding pending before any court or tribunal relating thereto
the Bank’s liability under th.is present being absolute and
unequivocal.
2. The Bank acknowledges that any such demand by the
Nominated Authority of the amounts payable by the Bank to the
Nominated Authority shall be final, binding and conclusive
evidence in respect of the amounts payable by Successful Bidder
to the Nominated Authority under the Agreement.
3. The Bank hereby waives the necessity for the Nominated
Authority from demanding the aforesaid amount or any part
thereof from the Successful Bidder and also waives any right
that the Bank may have of first requiring the Nominated
Authority to pursue its legal remedies against the Successful
Bidder, before presenting any written demand to the Bank for
payment under this Guarantee.
4. The Bank further unconditionally agrees with the
Nominated Authority that the Nominated Authority shall be at
liberty, without the Bank's consent and without affecting in any
manner the Bank's obligation under this Guarantee, from time to
time to:
(i) vary and/or modify and of the terms and conditions of the
Agreement;
(ii) extend and / or postpone the time for performance of the
obligations of the Successful Bidder under the Agreement, or
(iii) forbear or enforce any of the rights exercisable by the
Nominated Authority against the Successful Bidder under the
terms and conditions of the Agreement.”
W.P.(C) 10686/2025 Page 36 of 76
It is therefore, submitted that the aforesaid bank guarantee
categorically provides that the same is unconditional in nature, with an
undertaking to pay to nominated authority (respondent No.1) without
any demur, reservation, caveat, protest, or recourse immediately upon
receipt of first written demand. Further, that respondent No.1 is not
required to prove or show to the bank any grounds or reasons for such
demand and the existence of any dispute between respondent
No.1/nominated authority and the petitioner on any matter will not be
ground for not honouring the bank guarantee.
v) It is also the case of the respondents that the invocation of bank
guarantee and its encashment cannot be injuncted merely because there
are disputes raised by the petitioner as to the validity of the impugned
order and the demand raised by respondent No.1. It has been argued
that the adjudication of such disputes has no corelation with the
encashment of bank guarantee which is an independent contract in
terms of the bank guarantee issued by the bank. Reliance has been
placed on the judgment of Hon’ble Supreme Court in BSES Ltd. v.
Fenner India Ltd.
7
, to contend that the appropriation of the part-
performance security cannot be deemed to be an irretrievable harm by
any stretch of imagination.
vi) Learned ASG has submitted that SCN-II dated 06.06.2024 was
issued by respondent No.1 for the deviations from achievement of
‘Efficiency Parameters’ noted in MS-3 within stipulated time pertaining
7
(2006) 2 SCC 728
W.P.(C) 10686/2025 Page 37 of 76
to Forest Clearance Stage-II and Environment Clearance to which the
petitioner had submitted a detailed reply on 20.06.2024 and same was
duly considered in a personal hearing given to the petitioner before 24
th
Scrutiny Committee meeting held on 08.08.2024 and 09.08.2024 and
based on the deliberation held, following observations and
recommendations were made by the Committee: -
“Based on the deliberations and the assurance of the Allottee, the
Committee made the following recommendations:-
1. The Allottee will give an undertaking in next 3 days to O/o
NA that they will operationalize the mine before the scheduled
timeline, i.e by 03.06.2025.
2. In the event the operationalization of the mine happens on or
before the due date, the matter will be put up to the Scrutiny
Committee for the final decision on the Show Cause Notice for
MS-3.
3. However, in the event the mine is not operationalized by
03.06.2025, the Committee recommended for imposition of
penalty in the form of appropriation of PBG as per the provision
of CMDPA.”
In view of the aforesaid recommendation made by the Scrutiny
Committee in paragraph 3 thereof, penalty in the form of appropriation
of Performance Bank Guarantee has been imposed for failure in
completion of MS-3 within the scheduled timeline. Learned ASG has
also drawn attention of this Court towards a letter dated 12.08.2024 with
subject ‘Reply to SCN dated 06.06.2024’ sent by petitioner to
respondent No.1/Nominated Authority post the issuance of SCN-II
whereby, the petitioner had given undertaking as per the aforesaid
W.P.(C) 10686/2025 Page 38 of 76
recommendation to operationalise the subject mine before the due date
of 06.06.2025
8
. It is pointed out by learned ASG that in terms of the said
undertaking, the subject mine has still not been operationalised by the
petitioner. It is further the case of the respondents that vide minutes of
24
th
Scrutiny Committee meeting held on 08.08.2024 and 09.08.2024,
petitioner was not given any clean chit and the Scrutiny Committee had
deferred the exercise of its right to appropriate the proportionate
performance security as per CMDPA. It is further submitted that perusal
of the deliberations happened in the said meeting would reveal that the
Committee did not accept the reasons given by the petitioner and it was
recommended that only in the event, if the petitioner was able to
operationalise the mine on or before 03.06.2025, the matter was required
to be put before Scrutiny Committee again for taking decision on SCN-
II. It is further pointed out that post the submission of response to SCN-
II on 20.06.2024, the petitioner gave the above undertaking and
therefore, all the issues pertaining to SCN-II stood subsumed and it is on
account of said undertaking given by the petitioner, respondents did not
impose any penalty at the relevant point in time; however, as the subject
mine was not operationalised till date, the impugned order for part-
appropriation of the Performance Bank Guarantee was passed. It is also
the case of the respondents that the reasons elucidated in representation
dated 23.05.2025 seeking an extension of time to achieve milestones
were already in knowledge of the petitioner when the aforesaid
undertaking was made by it. It is further submitted that the impugned
8
As per 24
th
Scrutiny Committee recommendations, undertaking to operationalize mine was before
03.06.2025; however, date mentioned in this letter is 06.06.2025
W.P.(C) 10686/2025 Page 39 of 76
order has been passed after providing an opportunity of hearing to the
petitioner and under due intimation to it, and thus, the contention of the
petitioner that the impugned order has been passed in violation of
principles of natural justice is incorrect.
vii) Regarding the contention of the petitioner that EC stood vested
in favour of the petitioner on 03.03.2021 from the date of vesting order
itself, learned ASG has drawn attention of this Court towards Annexure-
5 of the Vesting Order dated 03.03.2021 wherein, it has been mentioned
that, “The Successful Bidder does not intend to adopt and continue with
any of the contracts of the Prior Allottee”. It is, therefore, submitted that
the petitioner has itself agreed to not continue with the earlier EC issued
by Central Government on 10.01.2014 to the prior allotee and therefore,
now they cannot contend that respondent No.1 had forced them to obtain
fresh EC arbitrarily as fresh EC has to be obtained as earlier EC was
discontinued.
viii) Regarding the 1
st
Forest Clearance, learned ASG has drawn
attention of this Court towards a letter dated 06.01.2022 whereby,
Central Government had accorded approval for transfer of process of
seeking approval under Forest (Conservation) Act, 1980, to the petitioner
subject to certain conditions which need to be complied prior to handing
over of forest land. It is submitted that said conditions were to be
complied prior to Stage-II approval; however, same have not been
complied with by the allottee/petitioner till date and in view of the same,
W.P.(C) 10686/2025 Page 40 of 76
the Forest Clearance is still pending. The relevant conditions enlisted in
the said letter reads as under: -
“A. Conditions which need to be complied prior to handing over
of forest land by the State Forest Department and compliance is
to be submitted prior to Stage-II approval
1. Compensatory Afforestation:
i. The Compensatory afforestation over equivalent non-forest
land, shall be raised shall be raised by the State Forest Department at
the project cost. At least 1000 saplings per ha shall be planted over
admissible CA land. If this this not possible to plant these many
seedlings in the identified NFL, the balance seedlings will be planted
in degraded forest land as per the prescription of the Working Plan at
the cost of the User Agency. In such cases CA cost will be revised and
duly approved by he competent authority and deposited online in the
CAF managed by the CAMPA;
ii. 25% of the CA cost additionally will be spent towards soil and
moisture conservation activities in the proposed CA area as per site
requirement and deposited in CAF;
iii. The cost of compensatory afforestation at the prevailing wage
rates as per compensatory afforestation scheme and the cost of survey,
demarcation and erection of permanent pillars, if required on the CA
land, shall be deposited in advance with the Forest Department by the
user agency. The CA will be maintained for 10 years. The scheme
may include afforestation of indigenous species with appropriate
provision for anticipated cost increase for works scheduled for
subsequent years;
iv. The non-forest land identified for CA shall be transferred and
mutated in favour of the State Forest Department and subsequently
notified by the State Government as RF under Section - 4 or PF under
Section-29 of the Indian Forest Act, 1927 or under the relevant
Section(s) of the local Forest Act before Stage-II approval. A copy of
the final Notification shall be submitted along with the compliance of
Stage-I approval;
**** **** ****
14. Wildlife Management Plan:
W.P.(C) 10686/2025 Page 41 of 76
i. It is reported that the area comes under elephant zone and human
wildlife conflict area. The elephant habitat may be fragmented due to
Radhikarpur (East) and Radhikapur (West) Coal Blocks on one side
and Railway line traversing the forest area on another side, which
need to be addressed. User Agency should submit a comprehensive
site-specific Wildlife Conservation Plan approved by the Chief
Wildlife Warden encompassing suitable measures to address Wildlife
conservation and Human Wildlife conflicts. Comments of the Project
Elephant Division of the MoEF&CC shall be obtained and addressed
in the said Plan and a copy of approved Plan shall be submitted to the
Ministry along with the compliance of Stage-I approval;
ii. Cost of implementation of the provisions of the Wildlife
Management Plan, on pro rata basis, shall be deposited into the
account of CAMPA of the State;”
ix) Insofar as the issue of mismatch in the Mining Plan (mining
lease area) along with Mine Closure Plan and the issue of revision of
boundary coordinates of the subject mine are concerned, it is submitted
that in terms of the meeting held under the chairmanship of Additional
Secretary and respondent No.1/Nominated Authority on 04.02.2022
(minutes of which were issued on 08.02.2022) regarding boundary of
subject mine, the petitioner/allottee was to submit the proposal for their
request that the bounding coordinate of subject mine should be changed
in a way that no revision in the Mining Plan is required and the same will
not have impact of clearances already vested to them and timelines for
development of coal block. It is further submitted that the petitioner on
09.02.2022 submitted the request proposing that, ‘the Mining Plan
bounding coordinates are kept as it is on three side, i.e., East, South and
West side and if only the north side is extended further North to coincide
with the new bounding coordinate line, it will cover the entire mining
boundary without creating too many changes as per existing approved
W.P.(C) 10686/2025 Page 42 of 76
bounding coordinates and the same will also cover the ORSAC
boundary’ and in view of the same, request was made for needful action.
As per respondents, the change in bounding coordinates was proposed by
the petitioner itself on the touchstone that Odisha Govt. generally
transfers the land as per boundaries decided by ORSAC. It is, therefore,
submitted that the mis-match of boundary coordinate stood resolved in
view of the letter sent by the petitioner on 09.02.2022 as the change in
bounding coordinates as per the specific requirement of the petitioner
(though not mandated under CMDPA or otherwise) would not have any
impact either on the clearances of timelines for development of coal
mines. Learned ASG has submitted that, even otherwise, the concept of
“boundary of a coal mine” is different from “bounding coordinates” and
there is no dispute with respect to the boundary of the coal mine in the
present case and the petitioner, if at all, only wanted a slight change in
the bounding coordinates of the subject mine. Attention of this Court has
been drawn towards the representation dated 23.05.2025 submitted by
the petitioner invoking “force majeure” and further seeking appropriate
orders/directions for extension of timeline for achieving Milestones
under Schedule D of CMDPA, to show that the petitioner has now taken
a stand that it had no clarity on the Mining Boundary Coordinates ever
since the issuance of Vesting Order till 08.02.2022, when they received a
letter from respondent No.1 finally correcting the Bounding Latitude and
Longitude thereby, clarifying that the Bounding Coordinates were to be
revised as per ORSAC without any changes in the mining plan.
W.P.(C) 10686/2025 Page 43 of 76
x) Regarding elephant corridor passage, it is submitted that FAC in
its second meeting on 23.12.2021 had granted Stage-I FC approval
which was recommended on 06.01.2022 with certain conditions as
pointed out hereinabove, which have not been complied by the
petitioner. It is further submitted that the issue of Elephant corridor had
emerged on 17.12.2021, when the file inspection was done by DFO and
the petitioner had ample opportunity from the said date to take
appropriate steps to obtain requisite permits.
xi) It is further submitted that Essential Details Sought (EDS) for
Compensatory Afforestation (CA) were sought from the petitioner on
08.08.2022 and it was requested to comply with the conditions imposed
by MoEF & CC. It is pointed out that the natural growth of Sal trees over
approximately 36 acres of land resulting in a change in the legal nature
and over the extent of government land was observed during the
inspection of site on 14.02.2023; however, by that time EC was already
obtained by the petitioner on 23.01.2023. Therefore, it is submitted that
same cannot be taken into consideration as it was an event which had
occurred post obtaining EC and, the petitioner had ample time and
opportunity to take appropriate steps to ensure timely operationalisation
of the mine. Learned ASG has thus, submitted the failure to
operationalise the mine has occurred due to the petitioner failing to
obtain requisite FC, EC and Land Acquisition and Possession of Land in
a timely manner and the said issues were already in the knowledge of the
petitioner when the aforesaid undertaking to operationalise the subject
mine was given. Attention of this Court has also been drawn towards a
W.P.(C) 10686/2025 Page 44 of 76
letter dated 29.05.2024 sent by petitioner seeking clarification to show
that the issue with respect to the Elephant Corridor and CA were raised
by the petitioner without specifying the impact of the same as to how
they were creating hindrance in obtaining any particular permit from the
concerned department.
xii) Insofar as the dropping of SCN-I dated 08.02.2022 issued for
non-compliance with ‘Efficiency Parameter’ is concerned, it is submitted
that the said SCN was dropped in view of the reply submitted by the
petitioner on 21.02.2022 and the fact that the petitioner had complied
with the requirements of Clause 15 for MS-2 and in view of the same, no
penalty was imposed on the petitioner.
xiii) Learned ASG has submitted that the letter dated 11.07.2025 was
issued by DFO, Angul, for filing of FC application for additional
lookalike forest land to the stage-I approval for subject mine, however,
the same will have no bearing in the present case as EC was obtained on
23.01.2023 against the due date of 03.09.2022 and therefore, the same
cannot now be a ground to assail the impugned order, after a lapse of two
years, which has been passed for non-completion of MS-3 within the
stipulated time period in terms of Schedule D- Efficiency Parameters. It
is further submitted that the said letter has been issued independent of
the impugned appropriation order. It is also the case of the respondents
that this letter cannot come to the aid of the petitioner as they have
W.P.(C) 10686/2025 Page 45 of 76
defaulted in making good of their own undertaking given for
operationalising the subject mine by 03.06.2025
9
.
xiv) It is, thus, prayed that the impugned appropriation order need not
be interfered and the present petition be dismissed.
REJOINDER SUBMISSIONS ON BEHALF OF THE PETITIONER
5. Learned Senior Counsels for the petitioner have made the following
rejoinder submissions: -
i) Firstly, regarding the preliminary issue of maintainability of the
present petition, learned Senior Counsel has submitted that power to
issue prerogative writs under Article 226 of the Constitution is plenary
in nature and is not limited by any other provision of Constitution.
Further, availability of alternative remedy cannot operate as an absolute
bar in cases where the writ petition has been filed for the enforcement
of Fundamental Rights or where there has been a violation of the
principle of natural justice or where the order or proceedings are wholly
without jurisdiction or the vires of an Act is challenged. It is further
submitted that the existence of an adequate or suitable alternative
remedy available to the litigant is merely a factor which the Court
entertaining a petition under Article 226 of the Constitution will
consider for exercising the discretion to issue writ in said jurisdiction;
however, the same does not impinge upon the jurisdiction of the High
9
The date mentioned in the letter dated 12.08.2024 is 06.06.2025
W.P.(C) 10686/2025 Page 46 of 76
Court to deal with the matter itself when it is in position to do so on the
basis of the affidavits filed. Reliance has been placed on the judgments
of Hon’ble Supreme Court in Whirlpool Corpn. v. Registrar of
Trade Marks
10
, S.J.S. Business Enterprises (P) Ltd. v. State of
Bihar
11
, Union of India v. Tantia Construction (P) Ltd.
12
, T.N.
Cements Corpn. Ltd. v. Unicon Engineers
13
, India Glycols Ltd. v.
S.R. Technologies
14
, in support of this contention. Learned Senior
Counsels have drawn attention of this Court towards Section 27(4) of
the CM (SP) Act, 2015, to submit that the jurisdiction of the High
Court is not affected by Section 27 of the said Act and this Court is
entitled to exercise jurisdiction, powers or authority in relation to
matters connected with the Act. It is further submitted that the plea of
alternate efficacious remedy before the learned Tribunal is
misconceived as the said Tribunal is not fully functional, and in fact, no
case is being heard as it has been recently constituted and has not
started fully functioning due to the lack of supporting staff and required
infrastructures. It is further submitted that the said Tribunal has been
established for the purpose of dealing with the cases relating to the land
acquisition issued relating to coal bearing areas and for adjudicating on
the disputes pertaining to land acquisition/compensation and thus,
given the nature of the dispute arising in the present case, the same
cannot be subject to the jurisdiction of the said Tribunal.
10
(1998) 8 SCC 1, particularly on paragraphs 14 & 15 at page 9
11
(2004) 7 SCC 166
12
(2011) 5 SCC 697: (2011) 3 SCC (Civ) 117 at page 708
13
(2025) 4 SCC 1: SCC OnLine SC 127 at page 14
14
(2025) 5 SCC 780
W.P.(C) 10686/2025 Page 47 of 76
ii) It is further submitted that the impugned order is contrary to the
express terms of CMDPA wherein, it has been mentioned that the
Performance Bank Guarantee/security will be appropriated only when
there is failure on the part of the petitioner. It is the case of the
petitioner, based on the facts already pointed out hereinbefore, that
since the delay in obtaining EC for achieving MS-3 is not solely
attributable to the petitioner the appropriation of the bank guarantee by
respondent No.1 is therefore, based on incorrect construction of facts.
Attention of this Court has been drawn towards Clause 6.3 of the
CMDPA which provides for ‘Manner of appropriation of the
performance security’ and it is submitted that conditions mentioned for
the appropriation of the Performance Bank Guarantee are not fulfilled
in the present case.
iii) It is further submitted that as per the impugned order, the
direction for appropriation of the Performance Bank Guarantee was
given for non-completion of MS-3 and particularly, for not obtaining
Environment Clearance within the time limit prescribed in Schedule D
– Efficiency Parameters; however, the computation of due date for MS-
3 by respondent No.1 is wholly arbitrary and based on incorrect
construction of facts/timelines. It is submitted that as per SCN-II dated
06.06.2024, the petitioner was to obtain EC within 18 months from the
completion of previous MS (MS-2) and respondent No.1 has erred in
calculating the due of 03.09.2022 for completion of MS-3 from the date
of vesting order, i.e., 03.03.2021, and the same was not be calculated
from 03.09.2021 as for completion of MS-2, the time limit as per
W.P.(C) 10686/2025 Page 48 of 76
Schedule D was 6 months from the completion of previous MS (MS-1)
or if MS-1 is not applicable, 6 months from the date of allocation.
Therefore, it is pointed out that respondent No.1 has not
considered/added the said period of 6 months while calculating the
completion time for MS-3 and if, 18 months from completion of MS-2
is calculated from 03.09.2021 then, the EC obtained on 23.01.2023 is
well within the stipulated time limit. It is further submitted that
respondent No.1 vide letter dated 18.01.2023 issued to the petitioner, in
view of the recommendation of 18
th
Scrutiny Committee meeting held
on 23.08.2022, had dropped/waived off SCN-I dated 08.02.2022.
Attention of this Court has also been drawn towards SCN-I to show
that respondent No.1 while issuing said SCN for non-compliance with
Efficiency Parameters for MS-2 had calculated the due date as
03.09.2021 and whereas in SCN-II, respondent No.1 had considered
due date as 03.09.2022. In view of the same, it is contended that the
said due date of 03.09.2022 has been incorrectly calculated because as
per Efficiency Parameters, MS-3 was to be completed within 18
months from the completion of MS-2 and the due date for completion
of MS-3 should have been 03.03.2023 and the same was to be 18
months from the due date for completion of MS-2, i.e., 03.09.2021.
Thus, the EC obtained on 23.01.2023 is within the stipulated time as
per Efficiency Parameters.
iv) It is further submitted that as SCN-I was waived off based on
recommendation of 18
th
Scrutiny Committee meeting held on
23.08.2022 and therefore, the said period of delay stood condoned and
W.P.(C) 10686/2025 Page 49 of 76
the same cannot be counted towards calculating due date for
completion time for MS-3. Attention has been drawn towards the
following recommendation of 18
th
Scrutiny Committee meeting held on
23.08.2022: -
“Observation &Recommendation: -
The committee observed that there was delay of only 3 months in
achievement of given milestone and sincere efforts were made by
the Allottee for completion of milestone within given timeline.
The committee also agreed with the explanation given by the
Allottee and concluded that the delay cannot be attributed to them.
The committee recommended that penalty should not be imposed
through appropriation of PBG and Show Cause notice be waived
off.”
In view of the above, it has been contended on behalf of the
petitioner that the aforesaid recommendation confirms that the due date
for MS-3 must be computed from 03.09.2021 after taking into
consideration the aforesaid relaxation given by Scrutiny Committee by
waiving off SCN-I.
v) Learned Senior Counsels have drawn attention of this Court
towards Annexures-3 & 4 of the vesting order dated 03.03.2021 to
show that statutory licences, permits, permissions, approvals or
consents issued by Central Government to prior allottee were to be
transferred on the same terms and conditions to the present petitioner
(successful bidder) on application by the latter which has not been done
and the petitioner had to apply afresh for obtaining EC. It is submitted
that the petitioner had moved an application for transfer of EC on
W.P.(C) 10686/2025 Page 50 of 76
08.04.2021 and further that, respondent No.1 vide Office Memorandum
dated 04.10.2021 had forwarded the request letter of the petitioner for
transfer of EC issued to the prior allotee. It is further submitted that the
petitioner got to know that it has to apply afresh application for grant of
TOR as per provision of EIA Notification, 2006, on 10.01.2022 and
even if, period of 18 months in terms of Efficiency Parameters is
calculated from 10.01.2022 then, also the EC obtained on 23.01.2023 is
well within the stipulated time period.
vi) Learned Senior Counsels have further drawn attention of this
Court towards an order dated 20.06.2025 passed by a Coordinate Bench
of this Court in W.P.(C) 8484/2025 titled as “M/S JSW Cement
Limited v. Union of India & Ors.”, to show that the said petition was
filed by a successful bidder of Marwatola VI Coal Mine and the
Coordinate Bench while issuing notice had also stayed the
appropriation of Bank Guarantee subject to the same being kept alive.
It is the case of the petitioner that the latter stands on a better position
in comparison to the petitioner in the aforesaid petition as there MS-3
was yet to be achieved and Scrutiny Committee therein, had deferred
the imposition of penalty in the form of appropriation of PBG as per
CMDPA till MS-3 is completed; however, in the present case, MS-3
has been completed and the impugned order has been passed based on
incorrect calculation of the due date as pointed out hereinbefore.
vii) Lastly, it is the case of the petitioner that the Tribunal under
Section 27 of the Act is non-functional and therefore, the alternate
W.P.(C) 10686/2025 Page 51 of 76
efficacious remedy could not be effectively exercised by the petitioner.
Attention of this Court has been drawn towards Clause 6.2.2 of the
CMDPA to show that the appropriation of PBG could not have been
sought in case the appropriation event has occurred solely on account
of a ‘Force Majeure’ which could not have been mitigated by the
successful bidder.
viii) It is therefore, submitted that the present petition be allowed and
the respondents be directed to grant extension of milestone deadlines
and to process the applications of the petitioner for grant of statutory
clearances in a time bound manner.
6. During the course of hearing, learned ASG has handed over an order
dated 09.05.2025 passed by learned Tribunal constituted under Coal Bearing
Areas (Acquisition and Development) Act, 1957, established and situated at
Talchar, Odisha, to show that the said Tribunal is functional and the petitioner
can exercise their alternate efficacious remedy before the said Tribunal. It has
further been pointed out that by learned ASG that, during the pendency of the
present petition, respondent No.1 had rejected the representation dated
16.07.2025 filed on behalf of the petitioner requesting a change in “Zero
Date” for the subject mine and, it was observed that all the issues cited by the
petitioner in their representation were already within its knowledge at the time
of vesting order and the same have also been deliberated in various forums
including the Scrutiny Committee and accordingly, the request for change in
“Zero Date” was rejected and the petitioner has been advised to ensure full
compliance with the conditions stipulated in Schedule D-Efficiency
W.P.(C) 10686/2025 Page 52 of 76
Parameters and operationalise the mine in accordance with CMDPA
provisions.
7. Heard learned Senior Counsels for the petitioner as well as learned
ASG for the respondents and perused the records.
ANALYSIS AND FINDINGS
8. For the adjudication of the present petition, following dates and events
are relevant: -
Date Event
11.01.2021 Coal Mine Development and Production Agreement (CMDPA)
was executed between the Petitioner and the President of India
03.03.2021 Respondent No.1 under Rule 7(2)(b) and Rule 13(1) of the Coal
Mines (Special Provisions) Rules, 2014 read with Section
6(3)(b) and Section 8(3) of the Coal Mines (Special Provisions)
Act, 2015, issued a Vesting Order thereby, transferring all
rights, title, interest including the approved mine plan to the
petitioner
05.04.2021 Petitioner submitted the commencement plan for starting coal
mining operations in the subject coal mine in terms of Clause
5.1 of CMDPA
W.P.(C) 10686/2025 Page 53 of 76
08.02.2022 Show Cause Notice (SCN-I) was issued by respondent No.1 for
alleged non-compliance with Efficiency Parameters for delay in
achieving MS-2, i.e., Mining Lease Application. The said SCN-I
issued to the petitioner reads thus: -
W.P.(C) 10686/2025 Page 54 of 76
W.P.(C) 10686/2025 Page 55 of 76
23.08.2022 Scrutiny Committee in its 18
th
meeting accepted the explanation
given by the petitioner and concluded that delay in achievement
of MS-2 cannot be attributed to the petitioner. The committee
recommended that penalty should not be imposed through
appropriation of Performance Bank Guarantee and show cause
notice be waived off. The relevant minutes of meeting of 18
th
Scrutiny Committee reads as under: -
W.P.(C) 10686/2025 Page 56 of 76
06.06.2024 Petitioner received SCN-II for delay in achievement of MS-3,
i.e., Forest Clearance stage-2 and Environment Clearance. SCN-
II reads as under: -
W.P.(C) 10686/2025 Page 57 of 76
W.P.(C) 10686/2025 Page 58 of 76
08.09.2024
&
09.09.2024
Scrutiny Committee in its 24
th
meeting considered the
petitioner’s reply to SCN-II and recommended that the
petitioner will give an undertaking in next three days that the
mine will be operational by 03.06.2025 and in the event of non-
happening of same, recommendation was made for imposition
of penalty in the form of appropriation of Performance Bank
Guarantee as per CMDPA. It was also recommended that if the
mine is operational by 03.06.2025, the matter will be before
screening committee for final decision on SCN-II. The relevant
W.P.(C) 10686/2025 Page 59 of 76
minutes of meeting of 24
th
Scrutiny Committee reads as under: -
W.P.(C) 10686/2025 Page 60 of 76
12.08.2024 Petitioner, in terms of the recommendations of 24
th
Scrutiny
Committee meeting, submitted its undertaking to operationalise
the subject mine before the due date of 03.06.2025. The said
letter of submission of undertaking reads thus: -
W.P.(C) 10686/2025 Page 61 of 76
W.P.(C) 10686/2025 Page 62 of 76
September
2024 to
May 2025
It was stated that the petitioner was in discussion with the local
authorities to seek clarifications regarding the issues pertaining
to FC compliances, Elephant Corridor, Compensatory
Afforestation and for conducting GPS (DGPS) survey
23.05.2025 Petitioner made a representation to respondent No.1 invoking
“force majeure” in terms of Clause 25 of CMDPA and further
seeking appropriate directions for extension of timeline for
achieving milestones under Schedule D-Efficiency Parameters
of CMDPA
20.06.2025 Petitioner was informed by Nominated Authority/respondent
No.1 that an opportunity of personal hearing would be provided
to it on 18.07.2025
11.07.2025 Petitioner submitted a representation before Nominated
Authority/respondent No.1 seeking extension of timeline for
achieving milestones under CMDPA
18.07.2025 Personal hearing was provided to the petitioner by Nominated
Authority/respondent No.1
21.07.2025 Respondent No.1 issued the impugned appropriation order for
invocation of 10% of the Performance Bank Guarantee for non-
completion of MS-3 especially for delay in obtaining
W.P.(C) 10686/2025 Page 63 of 76
Environment Clearance. The relevant portion of the impugned
appropriation order reads thus: -
W.P.(C) 10686/2025 Page 64 of 76
9. At this stage, it is apposite to refer to the principles for grant or refusal
to grant of injunction to restrain enforcement of a bank guarantee. The
Hon’ble Supreme Court in Himadri Chemicals Industries Ltd. v. Coal Tar
Refining Co.
15
, while elucidating the principles for grant or refusal to grant of
injunction to restrain enforcement of a bank guarantee, had observed and held
as under: -
“14. From the discussions made hereinabove relating to the principles for
grant or refusal to grant of injunction to restrain enforcement of a bank
guarantee or a letter of credit, we find that the following principles
should be noted in the matter of injunction to restrain the encashment of
a bank guarantee or a letter of credit:
(i) While dealing with an application for injunction in the course of
commercial dealings, and when an unconditional bank guarantee or
letter of credit is given or accepted, the beneficiary is entitled to realise
such a bank guarantee or a letter of credit in terms thereof irrespective
of any pending disputes relating to the terms of the contract.
(ii) The bank giving such guarantee is bound to honour it as per its
terms irrespective of any dispute raised by its customer.
(iii) The courts should be slow in granting an order of injunction to
restrain the realisation of a bank guarantee or a letter of credit.
(iv) Since a bank guarantee or a letter of credit is an independent and a
separate contract and is absolute in nature, the existence of any dispute
between the parties to the contract is not a ground for issuing an order
of injunction to restrain enforcement of bank guarantees or letters of
credit.
(v) Fraud of an egregious nature which would vitiate the very
foundation of such a bank guarantee or letter of credit and the
beneficiary seeks to take advantage of the situation.
15
(2007) 8 SCC 110
W.P.(C) 10686/2025 Page 65 of 76
(vi) Allowing encashment of an unconditional bank guarantee or a letter
of credit would result in irretrievable harm or injustice to one of the
parties concerned.”
10. The Hon’ble Supreme Court in Standard Chartered Bank v. Heavy
Engineering Corporation Ltd. & Anr.
16
, with respect to encashment of
bank guarantee, has observed and held as under: -
“23. The settled position in law that emerges from the precedents of
this Court is that the bank guarantee is an independent contract between
bank and the beneficiary and the bank is always obliged to honour its
guarantee as long as it is an unconditional and irrevocable one. The
dispute between the beneficiary and the party at whose instance the
bank has given the guarantee is immaterial and is of no consequence.
There are, however, exceptions to this rule when there is a clear case of
fraud, irretrievable injustice or special equities. The Court ordinarily
should not interfere with the invocation or encashment of the bank
guarantee so long as the invocation is in terms of the bank guarantee.
**** **** ****
26. In our considered view, once the demand was made in due
compliance with bank guarantees, it was not open for the appellant
Bank to determine as to whether the invocation of the bank guarantee
was justified so long as the invocation was in terms of the bank
guarantee. The demand once made would oblige the bank to pay under
the terms of the bank guarantee and it is not the case of the appellant
Bank that its defence falls in any of the exception to the rule of case of
fraud, irretrievable injustice and special equities. In absence thereof, it
is not even open for the Court to interfere with the invocation and
encashment of the bank guarantee so long as the invocation was in
terms of the bank guarantee and this is what has been observed by the
Division Bench of the High Court in the impugned judgment [Heavy
Engg. Corpn. Ltd. v. Standard Chartered Bank, 2019 SCC OnLine Cal
16
(2020) 13 SCC 574
W.P.(C) 10686/2025 Page 66 of 76
617 : (2019) 3 Cal LT 133] and that reflected the correct legal
position.”
11. Recently, the Hon’ble Supreme Court in Jindal Steel and Power Ltd.
& Anr. v. Bansal Infra Projects Pvt. Ltd. & Ors.
17
, while emphasising that
bank guarantees serve as the backbone of commercial transactions and same
must be honoured in accordance with their terms, has observed and held as
under: -
“11. We are aware of the established legal principle that the Courts
should refrain from interfering with the invocation of a bank guarantee
except in cases of fraud of an egregious nature or in cases where
allowing encashment would result in irretrievable injustice. This Court
in Hindustan Construction Co. Ltd. v. State of Bihar
5
, emphasized that
bank guarantees serve as the backbone of commercial transactions and
must be honoured in accordance with their terms. The following
paragraphs are pertinent in this regard:
“8. Now, a bank guarantee is the common mode of securing
payment of money in commercial dealings as the beneficiary, under
the guarantee, is entitled to realise the whole of the amount under
that guarantee in terms thereof irrespective of any pending dispute
between the person on whose behalf the guarantee was given and
the beneficiary. In contracts awarded to private individuals by the
Government, which involve huge expenditure, as, for example,
construction contracts, bank guarantees are usually required to be
furnished in favour of the Government to secure payments made to
the contractor as “advance” from time to time during the course of
the contract as also to secure performance of the work entrusted
under the contract. Such guarantees are encashable in terms
thereof on the lapse of the contractor either in the performance of
the work or in paying back to the Government “advance”, the
guarantee is invoked and the amount is recovered from the bank. It
is for this reason that the courts are reluctant in granting an
17
2025 SCC OnLine SC 1041
W.P.(C) 10686/2025 Page 67 of 76
injunction against the invocation of bank guarantee, except in the
case of fraud, which should be an established fraud, or where
irretrievable injury was likely to be caused to the guarantor. This
was the principle laid down by this Court in various decisions.
In U.P. Coop. Federation Ltd. v. Singh Consultants & Engineers (P)
Ltd.
6
, the law laid down in Bolivinter Oil SA v. Chase Manhattan
Bank
7
was approved and it was held that an unconditional bank
guarantee could be invoked in terms thereof by the person in whose
favour the bank guarantee was given and the courts would not
grant any injunction restraining the invocation except in the case of
fraud or irretrievable injury. In Svenska Handelsbanken v. Indian
Charge Chrome
8
, Larsen & Toubro Ltd. v. Maharashtra SEB
9
,
Hindustan Steel Works Construction Ltd. v. G.S. Atwal & Co.
(Engineers) (P) Ltd.
10
, National Thermal Power Corporation
Ltd. v. Flowmore (P) Ltd.
11
, State of Maharashtra v. National
Construction Co.
12
, Hindustan Steel Works Construction
Ltd. v. Tarapore & Co.
13
as also in U.P. State Sugar
Corporation v. Sumac International Ltd.
14
, the same principle has
been laid down and reiterated.
9. What is important, therefore, is that the bank guarantee
should be in unequivocal terms, unconditional and recite that the
amount would be paid without demur or objection and irrespective
of any dispute that might have cropped up or might have been
pending between the beneficiary under the bank guarantee or the
person on whose behalf the guarantee was furnished. The terms of
the bank guarantee are, therefore, extremely material. Since the
bank guarantee represents an independent contract between the
bank and the beneficiary, both the parties would be bound by the
terms thereof. The invocation, therefore, will have to be in
accordance with the terms of the bank guarantee; or else, the
invocation itself would be bad.””
12. In view of the aforesaid principles, it is incumbent on the petitioner to
show that their case falls within any of exceptions, i.e., fraud, irretrievable
injustice, and special equities. The Nominated Authority/respondent No.1 has
passed the impugned appropriation order primarily based on the failure of the
petitioner to operationalise the subject mine by 03.06.2025 in terms of their
W.P.(C) 10686/2025 Page 68 of 76
own undertaking submitted vide letter dated 12.08.2024 in pursuance of the
recommendations of 24
th
Scrutiny Committee meeting held on 08-09.08.2024.
Perusal of the letter dated 12.08.2024, as reproduced hereinbefore, shows that
the petitioner, despite claiming time loss for the reasons beyond its control,
chose to submit the undertaking to operationalise the subject mine before the
due date of 03.06.2025. It is also pertinent to note that the said undertaking
was not given under protest to the recommendations of the 24
th
Scrutiny
Committee meeting nor it is the case of the petitioner that they had taken
recourse to the remedies as permissible in law to assail the recommendations
of the 24
th
Scrutiny Committee meeting. The said recommendations were
given after considering the reply of the petitioner to SCN-II submitted on
06.06.2024 wherein, similar issues were raised which were allegedly
prevailing and were within the knowledge of the petitioner. Perusal of the
deliberations of 24
th
Scrutiny Committee shows that the issues of
discrepancies in boundary coordinates and transfer of EC had been agitated in
response to SCN-II dated 06.06.2024 and it was observed by the Committee
that no request for revision of ‘Zero Date’ was made on behalf of the
petitioner till that day. As already noted, that the said findings of the
Committee were never assailed by the petitioner. Thus, in the considered
opinion of this Court, the case of the petitioner, prima facie, does not fall
within any of the exceptions as noted hereinbefore.
13. It is the case of the petitioner that after submission of the aforesaid
undertaking to operationalise the mine vide letter dated 12.08.2024, petitioner
was in discussion with the local authorities to seek clarifications regarding the
issues pertaining to FC compliances, Elephant Corridor, Compensatory
W.P.(C) 10686/2025 Page 69 of 76
Afforestation and for conducting GPS (DGPS) survey; however, it is pertinent
to note that these issues were well within petitioner’s knowledge at the time
of giving the said undertaking.
14. Even otherwise, this Court is not inclined to exercise its jurisdiction
under Article 226 of the Constitution of India as the petitioner has an alternate
efficacious statutory remedy as provided under Section 27 of the CM (SP)
Act, 2015, which reads as under: -
“27. Dispute settlement and Bar of Jurisdiction of civil courts.––(1)
Any dispute arising out of any action of the Central Government,
nominated authority or Commissioner of payment or designated
custodian, or any dispute between the successful bidder or allottee and
prior allottee arising out of any issue connected with the Act shall be
adjudicated by the Tribunal constituted under the Coal Bearing Areas
(Acquisition and Development) Act, 1957 (20 of 1957).
(2) Where the Central Government is of the opinion that any
dispute arising out of any issue connected with the Act exists or is
apprehended and the dispute should be adjudicated by the Tribunal
referred to in sub-section (1), then, the Central Government may by order
in writing, refer the dispute or any matter appearing to be connected
with, or relevant to, the dispute, to the Tribunal for adjudication.
(3) The Tribunal referred to in sub-section (1) shall, after hearing
the parties to the dispute, make an award in writing within a period of
ninety days from the institution or reference of the dispute.
(4) On and from the commencement of the Act, no court or other
authority, except the Supreme Court and a High Court, shall have, or be
entitled to exercise, any jurisdiction, powers or authority, in relation to
matters connected with the Act.”
W.P.(C) 10686/2025 Page 70 of 76
15. In this regard, it is apposite to refer to a judgment of learned Division
Bench of this Court in Trimula Industries Limited v. Union of India,
Ministry of Coal and Others
18
, wherein, learned Division Bench was
dealing with a challenge to an order passed by learned Coordinate Bench of
this Court whereby, the appellant therein, was directed to approach the
Authority as provided for under Section 27 of the CM (SP) Act, 2015, for
assailing the similar appropriation order issued to the said appellant for non-
compliance with the efficiency parameters. The relevant facts of the aforesaid
judgment are as under: -
“8. The vesting order dated 22nd April, 2015 was, thereafter, issued by
Respondent No. 1 in favour of the Appellant, which indicated that the
Coal Mine allocated to the Appellant does not have forest area. However,
it is the case of the Appellant that vide letter dated 12th March, 2016
issued by the Respondent No. 3, for the first time, it came to light that
land allocated for mining to the Appellant also includes forest land of
around 74 hectares. The Appellant contends that there was no mention of
any forest area in the contents of the summary, which was uploaded on
the website portal of Metal Scrap Trade Corporation Limited (MSTC)
and therefore the Appellant verily believed that it has available a total
mining lease area of 949.87 hectares and this does not include any forest
area. The Appellant contends that non-disclosure of existence of forest
area is a gross misrepresentation by Respondent No. 1.
9. However, disputes arose as a Show Cause Notice (SCN) dated 25th
May, 2023 was issued by the Nominated Authority of Respondent No. 1
to the Appellant for non-compliance with the efficiency parameters.
10. The Nominated Authority of Respondent No. 1 thereafter passed
[first] appropriation order on 02nd August, 2023 and directed
appropriation of amount of Rs. 42,34,29,600/- against the performance
Bank Guarantee for non-compliance of efficiency parameters. This
appropriation order was challenged by the Appellant before the learned
Single Judge in a separate writ petition i.e., WP(C) 10453/2023. The
18
2024 SCC OnLine Del 3350
W.P.(C) 10686/2025 Page 71 of 76
learned Single Judge vide interim order dated 08th August, 2023 stayed
the encashment of bank guarantee primarily in view of the dispute
pertaining to disclosure/non-disclosure of the forest area.
11. Subsequently, vide minutes of the 21st meeting of the Scrutiny
Committee held on 10th January, 2024, the Respondent No. 1
recommended for [further] appropriation of performance Bank Guarantee
to the tune of Rs. 3,93,88,800/-, citing failure of Appellant in
advancement of milestone within given timeline. In pursuance to the said
recommendation, [second] appropriation order dated 06th March, 2024
was issued by the Nominated Authority of Respondent No. 1.
12. The [second] appropriation order dated 06th March, 2024 passed by
the Nominated Authority of Respondent No. 1 was challenged by the
Appellant before the learned Single Judge in the underlying writ petition
i.e., WP(C) 3789 of 2024. This writ petition has been disposed of by the
impugned judgment dated 14th March, 2024 and order dated 02nd April,
2024 with a direction to the Appellant to avail the statutory remedy of
appeal against the second appropriation order.”
In the aforesaid facts, after hearing learned counsel for the parties and
perusing the record, learned Division Bench had observed and held as under: -
“17. The primary contention of the Appellant is that the impugned
judgment dated 14th March, 2024 and impugned order dated 02nd April,
2024 declining to entertain the writ petition are inconsistent, inasmuch
as, the learned Single Judge has entertained W.P. (C) No. 10453/2023
pertaining to the first appropriation order, arising from the same CMDPA
and pertaining to the same performance Bank Guarantee.
18. The Appellant does not dispute the existence of alternate remedy
under Section 27 of the Act of 2015, especially after perusing the
compilation of the orders of the Tribunal filed by Respondent No. 1
during the course of the hearing. It, however, assails the direction to avail
the same on the ground that since the facts in issue are admitted, the
same can be adjudicated in the underlying writ petition.
19. The Supreme Court in Radha Krishan Industries v. State of Himachal
Pradesh
1
summarised the principles with respect to maintainability of a
W.P.(C) 10686/2025 Page 72 of 76
writ petition when the aggrieved person has an effective alternate remedy
in law and held as under:
“27. The principles of law which emerge are that:
27.1. The power under Article 226 of the Constitution to issue writs
can be exercised not only for the enforcement of fundamental
rights, but for any other purpose as well.
27.2. The High Court has the discretion not to entertain a writ
petition. One of the restrictions placed on the power of the High
Court is where an effective alternate remedy is available to the
aggrieved person.
27.3. Exceptions to the rule of alternate remedy arise where : (a)
the writ petition has been filed for the enforcement of a
fundamental right protected by Part III of the Constitution; (b)
there has been a violation of the principles of natural justice; (c)
the order or proceedings are wholly without jurisdiction; or (d) the
vires of a legislation is challenged.
27.4. An alternate remedy by itself does not divest the High Court
of its powers under Article 226 of the Constitution in an
appropriate case though ordinarily, a writ petition should not be
entertained when an efficacious alternate remedy is provided by
law.
27.5. When a right is created by a statute, which itself prescribes
the remedy or procedure for enforcing the right or liability, resort
must be had to that particular statutory remedy before invoking
the discretionary remedy under Article 226 of the Constitution.
This rule of exhaustion of statutory remedies is a rule of policy,
convenience and discretion.
27.6. In cases where there are disputed questions of fact, the High
Court may decide to decline jurisdiction in a writ petition.
However, if the High Court is objectively of the view that the
nature of the controversy requires the exercise of its writ
jurisdiction, such a view would not readily be interfered with.”
(Emphasis supplied)
20. The principle laid down by the Supreme Court in paragraph 27.5
is attracted in the facts of this case and therefore, we find no
infirmity in the impugned judgment directing the Appellant to avail
its statutory remedy of appeal. The issues of fact agitated by the
Appellant including non-declaration of forest land in the NIT are
issues which the Appellate Authority is competent to decide.
W.P.(C) 10686/2025 Page 73 of 76
21. Further, in our opinion, the passing of the interim order dated
08th August 2023 by the learned Single Judge in WP(C) 10453/2023
cannot act as a bar to the Court relegating a party to avail its
statutory remedy of appeal. In fact, the impugned judgment/order is
in consonance with the law laid down by the Supreme Court on this
issue. The compilation of orders shown by Respondents No. 1 and 2
also evidence that the Court has in similar matters consistently
directed the writ petitioner to assail the appellate remedy against the
orders passed by the Nominated Authority.
22. The learned Single Judge vide orders dated 14th March, 2024 and
02nd April, 2024 granted interim protection to the Appellant in the
application of stay by the Appellate Authority and directed the Appellant
herein to approach the Appellate Authority on or before 30th April, 2024.
We, hereby, extend the time for the Appellant to approach the Appellate
Authority till 30th May, 2024 on the same terms and conditions.
23. The Appellant is, however, directed to extend the validity of the Bank
Guarantee for a period of six months, within one week from today.
24. The Appellate Authority is directed to hear and decide the appeal
expeditiously preferably within two months from the first date of
hearing.
25. The contention of the Appellant that the learned Single Judge ought
to have entertained the underlying writ petition as the other writ petition
i.e., W.P. (C) 10453/2023 remains pending, is without any merit. In our
opinion, the Appellant ought to have challenged the first appropriation
order dated 02
nd
August, 2023 also before the Appellate Authority under
Section 27 of the Act of 2015. We, therefore, direct the Registry to list
W.P. (C) 10453/2023 before the learned Single Judge on 08
th
May, 2024
for directions. The parties are directed to remain present before the
learned Single Judge on the said date.”
(emphasis supplied)
16. The aforesaid judgment passed by learned Division Bench of this
Court in similar factual context is in relation to availability of statutory
W.P.(C) 10686/2025 Page 74 of 76
remedy under Section 27 of CM (SP) Act, 2015, and is binding on this Court.
The issues raised by the petitioner in the present case have been disputed by
the respondents. The contentions raised by the petitioner pertains to disputed
questions of fact in respect of provisions of CMPDA over which learned
Tribunal established under Section 27 of the CM (SP) Act, 2015, has
jurisdiction/authority to adjudicate upon. Even otherwise, said disputed facts
cannot be decided by this Court in the present jurisdiction.
17. Reliance has been placed by learned Senior Counsels for the petitioner
on Whirlpool Corpn. v. Registrar of Trade Marks
19
, S.J.S. Business
Enterprises (P) Ltd. v. State of Bihar
20
, Union of India v. Tantia
Construction (P) Ltd.
21
, T.N. Cements Corpn. Ltd. v. Unicon Engineers
22
,
India Glycols Ltd. v. S.R. Technologies
23
, to contend that the existence of
an adequate or suitable alternative remedy available to the litigant is merely a
factor which the Court entertaining a petition under Article 226 of the
Constitution will consider for exercising the discretion to issue writ in said
jurisdiction; however, the same does not impinge upon the jurisdiction of the
High Court to deal with the matter itself when it is in position to do so on the
basis of the affidavits filed. The aforesaid legal position is not disputed;
however, the present case is squarely covered by the decision of learned
Division Bench in Trimula Industries Limited (supra).
19
(1998) 8 SCC 1, particularly on paragraphs 14 & 15 at page 9
20
(2004) 7 SCC 166
21
(2011) 5 SCC 697: (2011) 3 SCC (Civ) 117 at page 708
22
(2025) 4 SCC 1: SCC OnLine SC 127 at page 14
23
(2025) 5 SCC 780
W.P.(C) 10686/2025 Page 75 of 76
18. Similarly, reliance placed by learned Senior Counsels for the petitioner
on order dated 20.06.2025 passed by Coordinate Bench in W.P.(C) 8484/2025
titled as “M/s JSW Cement Limited v. Union of India & Ors.” will not
benefit the petitioner, in view of the aforesaid judgment of the learned
Division Bench of this Court in Trimula Industries Limited (supra) which
pertains to Section 27 of the CM (SP) Act, 2015, and is binding on this Court.
19. In view of the aforesaid discussion and in facts and circumstances of
the present case, the present petition is disposed of with liberty to the
petitioner to avail its alternate efficacious remedy in accordance with Section
27 of the CM (SP) Act, 2015, before the concerned learned Tribunal situated
at Talchar, Odisha, within a period of 10 days from today.
20. It is further directed, till that time, interim order dated 23.07.2025
passed by this Court directing maintenance of status quo with respect to
Performance Bank Guarantee No. 1637622BG0000209 dated 15.06.2022
(amended on 25.09.2025) shall continue to operate. It is clarified that this
extension of interim order is for ten days or till the time the petitioner
approaches learned Tribunal under the aforesaid provision, whichever is
earlier. It is further directed that the Bank Guarantee should be kept alive.
21. Needless to state that, nothing stated hereinabove, should be construed
as an expression of opinion (prima facie or otherwise) as to the merits of the
dispute. All rights and contentions of the parties are reserved.
22. Pending applications, if any, also stand disposed of accordingly.
W.P.(C) 10686/2025 Page 76 of 76
23. Judgment be uploaded on the website of this Court, forthwith.
AMIT SHARMA
(JUDGE)
DECEMBER 02, 2025/bsr/ns
Legal Notes
Add a Note....