Rakesh Ranjan Prasad, J. - (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: - - "ix. No coal shall be sold, delivered, transferred or disposed of except for the stated captive mining purposes except with the previous approval of the Central Government". Further stipulation as has been made in Clause (xiii) is that "The State Government at the time of seeking previous approval for the grant of mining lease shall submit a draft of the mining lease containing the above relevant conditions for vetting by the Central Government. The final mining lease shall be as vetted/modified by the Central Government. Any deviation from the vetted/modified draft shall render the mining lease deed ab initio null and void and without effect".
(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. Thereupon, as per the case of the petitioner Elctrosteel Steel Limited as sister concern of the petitioner's company established a steel plant at Chandankiyari in the District of Bokaro in which the petitioner company was having 39% of the equity holding. Crores and crores of rupees was invested in establishing the said Company. After its establishment, the petitioner wrote a letter to the Central Government in terms of the conditions as have been stipulated for giving permission to use the coal, extracted from Parbatpur Coal Block in the State of Jharkhand. In response to that letter, an order was passed as contained in letter dated 22/02/2010 (Annexure -7), wherein one amongst the other, the following condition was imposed: - - "The equity shareholding of M/s. Electro -steel Castings Ltd. in M/s. Electro -steel Integrated Ltd. shall have to be raised to 51% and this should be maintained at all times during the life of the two projects, i.e. mining as well as the end use plant. Suitable provisions to this effect shall have to be inserted in the Memorandum of Association and Articles of Association of both the companies and furnish copy of MOA and AOA of ECL and EIL". That order is under challenge.
(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.;