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Mining LawSupreme Court of India

Union of India & Anr. v. Sova Ispat Limited & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 1182 of 2015)Decided 27 Jan 2015
Civil Appeal No. 1182 of 2015
Justice J. Chelameswar · Justice Rohinton Fali Nariman

Background

Sova Ispat Limited had been allotted the "Ardhagram Coal Block," but the Supreme Court's earlier 2014 judgments cancelled coal block allocations nationwide, prompting the government to promulgate an Ordinance providing for re-allocation of such mines by public auction. Sova Ispat challenged the Ordinance before the Calcutta High Court, arguing that it allowed compulsory acquisition of its existing end-user plant (partly located within the coal block) without compensation, in violation of Article 300A, and sought a stay of the auction. The High Court declined to stay the auction outright but passed an interim order stating any auction would "abide by the result of the writ application," which the Union of India then appealed to the Supreme Court as harmful to competitive bidding.

Decision Breakdown

Before the Supreme Court, the Attorney General, appearing for the Union, gave an undertaking that the government did not intend to acquire the respondent's end-user plant and would exclude that portion of land from the auction and vesting process, thereby protecting the respondent's property interest. On the strength of this undertaking, the Court set aside the High Court's impugned interim order and allowed the appeal, while expressly leaving all other questions of law (including the constitutional challenge to the Ordinance itself) open for the parties to argue before the High Court in the still-pending writ petition.

Lesson Learnt

A government undertaking given in open court can resolve an interim dispute (such as a stay of auction) even while the larger constitutional challenge remains pending elsewhere: the Supreme Court can finally dispose of the specific interim order appealed against without needing to decide the underlying constitutional question itself.

Union of India & Anr. v. Sova Ispat Limited & Ors. – Legal Case Shots | LegalAware