Coal mining: Sparks fly over KPCL move

Govt. paid levy only to retain five coal blocks: Energy Minister

In a fresh round of allegations of corruption against the Congress government, the State Bharatiya Janata Party on Saturday questioned the action of Karnataka Power Corporation Ltd. (KPCL) in paying a levy of ₹337.76 crore “on behalf” of a private mining company with which they had a joint venture.

Terming the payment as “the most blatant loot of the State exchequer”, State BJP president B.S. Yeddyurappa demanded a probe by the Central Bureau of Investigation (CBI) into the case. He also alleged that the payment of additional levy “on behalf of a private company” involves “kickbacks and commissions” involving the Chief Minister, the Energy Minister and others.

Congress hits back

However, the Congress government hit back at the BJP by claiming that KPCL paid the levy “on behalf of private company only to retain the five coal blocks”, whose allocations were cancelled in 2014 among 41 other coal blocks following the apex court’s verdict. And the apex court had said that earlier allottees of coal block need to pay an additional levy of ₹295 per tonne of coal mined if they have to participate in auctioning of these coal blocks.

“The private company is still liable to pay ₹337.76 crore to KPCL if their petition in the High Court and the Supreme Court is decided against them,” said Energy Minister D.K. Shivakumar. He added that the decision to pay the levy by KPCL was taken after a direction from the apex court to pay the levy before hearing a petition over the liability issue in March this year.

In another statement, Karnataka Pradesh Congress Committee also said: “Eastern Minerals and Trading Agency (EMTA) has given an undertaking that they would pay the additional levy in the event the writ petition is finally decided against them.”

Case history

The case pertains to KPCL paying a levy of ₹447 crore on behalf of Karnataka EMTA Coal Mines Ltd. (KECML), in which KPCL is only a minority stakeholder (26%), while Kolkata-based EMTA is the majority stakeholder. KPCL, in December 2014, paid only ₹110 crore of the total levy, as per its shareholding in KECML and asked the EMTA to pay the balance.

However, EMTA refused to pay the levy claiming that the coal block was originally allotted to KPCL and the blocks were only leased to KECML on the request made by KPCL.

As the KPCL, based on law enacted by the Ministry to implement apex court’s decision in coal scam, insisted EMTA pay ₹337 crore, the latter in 2015 filed a petition in the High Court of Karnataka against KPCL’s demand. When the petition was pending, the KPCL, in March 2017, paid the remaining levy of ₹337 crore.

Meanwhile, Mr. Yeddyurappa quoted the High Court’s October 4, 2017 judgement in which two judges of a Division Bench had given divergent view on EMTA’s petition.

Chief Justice Subhro Kamal Mukherjee (now retired) had ruled in favour of EMTA saying that private company is not liable to pay levy as coal block was originally allotted to KPCL. However, disagreeing with Mr. Mukherjee’s view, Justice P.S. Dinesh Kumar had observed: “The conspectus of mutual attitude between KPCL and KECML speaks volumes about their unholy nexus...” He had directed the State Chief Secretary to probe into KPCL’s affair.

But EMTA’s petition now will have to be heard by a third judge in view of the divergent view.

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Printable version | Jun 1, 2020 8:43:08 AM | https://www.thehindu.com/news/national/karnataka/coal-mining-sparks-fly-over-kpcl-move/article19898122.ece

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