NEW DELHI: Ahead of Saturday’s ministerial panel meeting to examine the attorney general’s opinion on the legality of a government decision allowing Reliance Power to divert surplus coal from its Sasan captive mines, the private developer has independently secured a favourable opinion from the country’s top legal brains, including retired chief justices AS Anand and AM Ahmadi and former attorney general Soli Sorabjee.
In opinion given to Reliance Power, the legal luminaries said since there was no violation of Sasan UMPP bid conditions, cancelling the permission granted to Reliance Power to divert surplus coal would be illegal. Anand and Ahmadi also cautioned that the cancellation would amount to violation of the principle of promissory estoppel.
At its December meeting, the empowered group of ministers on ultra mega power projects (UMPPs), headed by finance minister Pranab Mukherjee, had decided to seek legal opinion from the AG Goolam E Vahanvati to defuse the controversy arising from the group’s earlier decision in 2009 to allow Reliance Power to divert surplus coal. The company is now likely to flag the favourable legal opinion before the EGoM.
The government has allocated Moher, Moher-Almohri and Chhatrasal captive coal blocks to help the private developer meet the fuel requirement of the Sasan UMPP, which it bagged through tariff-based competitive bidding.
Tata Power, which bid for the Sasan UMPP, has challenged in court the government’s decision permitting Reliance Power to divert excess coal from the Sasan mines to the Chitrangi power project. The CAG too had found windfall gains for the company from the coal diversion.
The EGoM also gave given in-principle approval to Reliance Power to divert surplus coal from its Tilaiya UMPP in Jharkhand, but deferred a final decision after the CAG said last October that the decision to allow diversion of coal at Sasan and Tilaiya resulted in a windfall gain of Rs 1.2 lakh crore to the private developer. The CAG has since reduced the windfall gain estimate to Rs 15,000 crore. The reference to AG by the EGoM is only in relation to the alleged diversion of coal meant for the Sasan project because in the case of Tilaiya project, the company was not actually allowed to divert coal.
The principle of estoppel in India is a rule of evidence incorporated in section 115 of The Indian Evidence Act, 1872. The section reads as follows: “When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe such a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing.”
Former chief justice of India AS Anand has said that since the permission granted by the government to divert surplus coal did not violate Sasan bid conditions, it cannot be cancelled. “No allocation can be cancelled only on the whims and fancies of the government,” the former CJI said while giving his opinion on the reference received from Reliance Power.
Anand further added: “It would be wholly inequitable to allow the ministry (coal ministry) to cancel the permission validly granted by it to Reliance to utilise surplus or excess coal from three blocks, after meeting the complete requirement of Sasan UMPP, for Chitrangi project. The government is estopped by the application of the principle of promissory estoppel.”
“Any action of cancelling one of the coal blocks or cancelling the incremental coal permission would be against public interest. It would be a hostile step for the government to take ignoring the huge expense incurred by the querist (Reliance Power),” said Ahmadi while giving his legal opinion on the matter.
“Any purported cancellation on the ground of breach of conditions of allocation letters or on the ground that there was surplus or incremental coal will be patently illegal and arbitrary,” Sorabjee said.
Similarly, the private developer has secured legal opinion from Mukul Rohtagi, a former additional solicitor general and a senior advocate of the Supreme Court.