KOLKATA (miningweekly.com) – The Indian government is readying new legislation to acquire land bought by companies whose coal blocks the Supreme Court declared to be illegally allotted.

The law, in the form of an ordinance prepared by the Coal Ministry, was expected to be approved by the government before month-end, since the country’s Parliament was not in session, a Ministry official said.

The law would enable the government to acquire all land purchased by companies and investors above the coal blocks allotted to them, to start mining operations.

The government has been forced to promulgate new legislation to plug a grey area in the September Supreme Court order, which declared that all 214 coal blocks allotted to various companies and investors since 1993 were illegal and had to be taken back by the government.

But the same order did not make mention of the land above the coal reserves which companies had bought from various private owners to implement mining projects. In the absence of title of such landed vested with the government, the state government would not be able to hold fresh auction of the 214 coal blocks as directed by the courts, the official added.

Legal opinion sought by the Coal Ministry said that even though the government would de-allocate the coal blocks already allotted to investors and ownership of the coal reserves would automatically revert back to the government, existing laws were ambiguous and would not permit transfer of ownership of the land along with coal reserves below it, he said.

Simultaneously, as per draft rules framed for the auction of the de-allotted coal blocks, all investors along with companies that had their coal blocks cancelled, would be eligible to participate in the auctions, including those companies which have been accused of illegally influencing the allotment decision. The latter would be permitted to participate on the grounds that in most cases investigations were still under way and courts had not pronounced any investor guilty as yet.

The eligible bidders would have to pay erstwhile owners of the land, the cost of land along with interest from the date of acquisition of the original land as well as the estimated costs of any mining project that may have been implemented by the erstwhile allottees.

The government had six months from the date of the Supreme Court order to frame all necessary rules and regulations and take back the coal blocks declared illegal and subsequently put them up for fresh auctions.