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Chhattisgarh Threatens Centre to Take Court on Cancel of Bhatgaon Coal Block

Raipur, December 02, 2012: The BJP government in Chhattisgarh today threatened the Congress-led Government at the Centre to take court over the cancellation of allocation of the Bhatgaon Coal Block.

"The Cancellation order has been passed without taking all facts into account," the Managing Director of the Chhattisgarh Mineral Development Corporation said in a statement here.

Reacting to the cancellation order passed on November 30, 2012 by the Coal Ministry, the MD said "The CMDC would submit fresh representation before the Coal Ministry incorporating all information against the cancellation of the Shankarpur Coal Block by CMDC and if needed legal action will also be taken in that matter".

The cancellation report was also not having any reference of the joint venture company and also the order did not find any fault with the formation of the Joint venture by the CMDC, the statement said without mentioning the name of BJP MP Ajay Sancheti.

The CMDC was having a joint venture with Sancheti related company for developing the Bhatgaon coal block, which created a controversy.

"Being a Government organisation, it took 14 months to obtain money for purchase of Geological Report and deposit of Bank Guarantee," the CMDC MD said.

Similarly the Chhattisgarh Government had also dismissed the grounds cited by the Coal Ministry for cancellation of Coal Block saying there was no discrepancy in the figure of investment on that project and also they had never reported that the land acquisition has been completed.

"Without understanding the differences in figures that were mentioned in the cancellation order" it said.

"Both the figures are correct. In the report sent to the Coal Controller the performance guarantee of the partner of the joint venture company had been included, when the Inter-Ministerial Group had sought direct expenditure on the project, which was mentioned in the certificate of the Chartered Account," the MD said.

"It is never justified to make those figures as reasons for cancellation of the Coal block," the CMDC said.

The Government also clarified that they had never informed the Coal Ministry that the land acquisition process had been completed.

A fresh representation would be made before the Coal Ministry, incorporating all those facts and if needed legal course of action would also be taken, the government said.

In view of the "unsatisfactory progress" in development of coal mine and taking into account all factors, including "misrepresentation" of facts "Shankarpur (Bhatgaon-II) and Extension coal block allocated to M/S Chhattisgarh Mineral Development Corporation Limited is de-allocated," the Coal Ministry order has said.

The Central Government also forfeited 50 per cent of the bank guarantee of the Company and said "The Company shall not be eligible for allocation of coal block in lieu of the de-allocated coal blocks."

The Comptroller and Auditor General had also raised objections in several counts against the works allocated at Bhatgaon Coal block in Sarguja district which was being developed by Chhattisgarh Government with the help of BJP MP Ajay Sancheti related company.

"After detailed deliberations, the IMG (Inter ministerial group) made its recommendation to de-allocate Shankarpur (Bhatgaon-II) and an Extension coal block, which was allocated to M/S Chhattisgarh Mineral Development Corporation Ltd in its 15th meeting, held on November 05, 2012," the Coal Ministry order of November 30, 2012 said.

After allegation of irregularities in allocation of Coal blocks by the Centre, the Government of India had set up an Inter-Ministerial Group (IMG) on June 21, 2012 under the chairmanship of Additional Secretary Coal. The IMG has been given mandate to review the progress of development of allocated coal blocks and associated end use projects and to recommend action, including de-allocation, if required.

The IMG had observed, during the review meeting it was noticed that no serious efforts had been made by the Chhattisgarh Mineral Development Corporation to develop the coal block, even after repeated assurances tendered by the Company during the period.

It was also noticed that all the important/critical milestones such as grant of Forest clearance, EMP, Mining lease are pending, it stated.

The IMG noted that the allotment was made on July 25, 2007 and even after 5 years of allotment, the environment clearance and forest clearance are pending and no land had been possessed.

There was discrepancy in the figure of investment as contained in the Chartered Account certificate and reported to the Coal Controller and it was wrongly reported to Coal Controller that land acquisition has been completed, the IMG noted.

Giving details of the discrepancy in the investment figure, the Coal Ministry said, the investment made in the coal block as per CA certificate submitted by the Company was Rs 57.09 Crore, consisting of Rs 19.84 Crore deposited to Collector as service charge on January 27, 2011 for land acquisition, Bank Guarantee deposit, interest and other expense.

However, in its report to the Coal Controller, the Company has shown an investment of Rs 120.59 Crore in the statement for the quarter ending June 2012.

During presentation on October 09, 2012, the Company mentioned investment of Rs 57 crore only and argued that the entire delay was not attributable to them, according to the order of the Director of Coal Ministry PSS Reddy.

"In view of the unsatisfactory progress in development of coal mine and taking into account all factors, including misrepresentation of facts, the IMG recommends that the coal block may be de-allocated and 50 per cent of the Bank guarantee related to development of the coal block may be forfeited," the order said.

"Accordingly, Shankarpur (Bhatgaon-II) and Extension coal block allocated to M/S Chhattisgarh Mineral Development Corporation Limited is de-allocated. The Company shall not be eligible for allocation of coal block in lieu of the de-allocated coal blocks," Reddy in his letter to the state Government said.

The Bank guarantee, as per recommendation of the IMG, of Rs 1.59 Crore that is 50 per cent of the Bank Guarantee related to the development of the coal block be forfeited and be deposited with the Government and the remaining bank guarantee may be returned, the order said.

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