The Supreme Court Thursday dismissed a plea challenging the ordinance on coal blocks, providing for retrospective recovery of a levy of Rs 295 per metric tonne of extracted coal and linking its payment as a qualification to participate in the cancelled coal blocks’ auction.

The Coal Mines (Special Provision) Ordinance, 2014, was promulgated for the allocation of coal blocks by auction route.

A bench of Justice Madan B Lokur, Justice Kurian Joseph and Justice AK Sikri rejected the plea by the Calcutta Electric Supply Corporation Ltd. (CESC), which contended that because of the levy, it has been saddled with a liability of Rs. 990 crores which it was in no position to pay.

Appearing for the CESC, senior counsel Gopal Subramanium, briefed by Khaitan & Co, told the court that the case of his client company was decided by the screening committee but it was not vitiated by vice of arbitrariness or anything.

He said that CESC should be counted in the exception carved out for the ultra mega power projects by the apex court by its Sep 24 order as it was already operating a captive mine for producing power that was being supplied to 24 lakh consumers at regulated prices.

Subramanium told the court that the status of CSEC as using coal for from the captive mine for the production and transmission of power at regulated price gave it a locus standi to challenge the ordinance and demand the provision which excluded the companies from the bidding process for failing to pay the levy must go.

Opposing the plea, Attorney General Mukul Rohatgi told the court that CESC is a case of taint of screening committee procedure and the wrath of the court, for paying the levy, must fall on it.

Another petitioner Electrosteel Castings Limited who had also challenged the ordinance withdrew its plea which was dismissed as withdrawn after senior counsel KV Vishwanathan, appearing for the firm, so requested.

Earlier the court had turned down the plea of another coal mining company seeking to be excluded from the category of companies whose coal blocks allocations were cancelled.

Addressing the various applications challenging the ordinance, and seeking to be exempted from the court’s judgment cancelling the allocations and imposing the levy, Rohatgi told the court that all these applications are to “delay the effect of ordinance, delay the auction and delay the economy”.

The apex court by its Sep 24 verdict had cancelled 214 coal blocks allocated from 1993 to 2011, except four vested with the NTPC, SAIL and Sasan Ultra mega power projects and imposed an additional levy per metric ton of coal extracted from exempted or operational mines.