ELECTROSTEEL CASTINGS LIMITED Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) THE petitioner, a company registered under the Companies Act, had established a steel plant in the State of West Bengal. Its associate company had also established a steel plant in the State of Andhra Pradesh. Upon establishing the steel plants, the petitioner applied for allocation of coal block in the year 2004. Pursuant to that the Central Government vide its order dated 07/07/2005, allocated Parbatpur Coal Block, situated in the District of Bokaro. Conditions was laid down under the letter dated 07/07/2005, wherein one of the stipulations as contained in Clause (ix) was as below: - -

(2.) AFTER allocation of the coal block, the petitioner did approach to the State Government for executing a deed of lease. The State Government did approve the allocation of the grant of coal block by the Central Government subject to condition as laid in Clause 8(ix) to the effect that 80% of the coal, extracted from the coal block, shall be used in the State of Jharkhand and rest 20% of the coal can be used out side of the State.

(3.) MR . Anil Kumar Sinha, learned senior counsel appearing for the petitioner submits that under the guidelines issued earlier by the Central Government equity ownership of the holding company in associate company, had been fixed as 26% but without there being any change in the said guidelines, the Authority by issuing a letter dated 22/02/2010 (Annexure -7) asking the petitioner to enhance its equity share from 39% to 51%, has exceeded its jurisdiction and, therefore it suffers from vice of arbitrariness and, hence, it is fit to be quashed.