A.Y. Kogje, J. - This petition under Article 226 of the Constitution of India is filed by the petitioner with following prayer :

"C. To issue appropriate writ quashing and setting aside of judgment and order dated 10.02.2012 in invoking the bank guarantee of Rs. 32.5 Crores by Respondent 1-Union of India and further debarring the petitioner from reallocation of coal block in lieu of the deallocation order.

D. To issue appropriate writ in the nature of mandamus or any other appropriate writ requiring Union of India-Respondent 1 to refund the sum of Rs. 32.5 Crores illegally debited by Invocation of Bank guarantee.

E. To the grant of ad interim/ interim injunction restraining Union of India-Respondent 1 from reallocating or creating any right of any nature whatsoever over the Naini Coal Block in favour of any third party, till the pendency of present petition."

2. At the outset, it would be appropriate to mention reported judgment of the Apex Court in case of MANOHAR LAL SHARMA V/S. PRINCIPAL SECRETARY AND OTHERS, (2014) 9 SCC 614 [LQ/SC/2014/1041 ;] ">(2014) 9 SCC 614 [LQ/SC/2014/1041 ;] [LQ/SC/2014/1041 ;] referred to by this Court in order dated 08.07.2015, by which the interim relief granted by this Court stood vacated. In this connection, learned advocate for the petitioner submits that the petitioner will not be able to press for the prayer clause 46(A), 46(B) and 46(E) as the decision of allocation, deallocation of the coal blocks all over India would be now governed by the aforementioned decision of the Apex Court and would therefore restrict his prayer to relief clause C and D which pertains to invoking of bank guarantee of Rs. 32.5 Crores by the respondent Union of India.

3. To assail the decision to invoke the bank guarantee, it is submitted that a situation beyond the control of the petitioner was created as a result of which the petitioner was not able to perform as per the milestone chart and that became the reason for invoking the 50% bank guarantee. It is submitted that as per the milestone chart the first step after the allocation was the prospecting license which was responsibility of the State of Orissa and the Union of India and as the prospecting license of the petitioner was not issued by the State of Orissa, the milestone chart could not be adhered to. The Union of India could not have held, therefore the petitioner responsible for lagging in milestone chart and therefore there was no cause of action for invoking of the bank guarantee. He drew attention of this Court to the communication by non less than the Chief Minister of Orissa himself who had strongly opposed the move of allocation of Coal Blocks to the entities who were out of Orissa State and had requested for reviewing of all the Coal Block allocation in the State of Orissa. The development therefore was beyond the control of the petitioner and therefore the cause for invoking the bank guarantee was not provided by the petitioner.

4. It is submitted that the action of the State of Orissa was not in good faith and the Union of India refraining from intervening to see to it that the Prospecting License is issued by the State of Orissa has created the situation where it was impossible for the petitioner to meet with the milestone chart. The non action of the Union of India is also not in good faith.

5. He drew attention of this Court to Section 17 of the Mines and Minerals (Regulation and Development) Act 1957 (for short The Act), which is the special power of the Government to undertake Prospecting or mining operation in certain lands and submitted that in the facts of this Case the Union of India ought to have exercised the powers under Section 17 of the. It is submitted that the only responsibility of the petitioner is to apply for the Prospecting License and thereafter it is the responsibility of the State Government to deal with such application. It is submitted that the application under Rule 9 of the Mineral Concession Rules 1960 was made by the petitioner to the State of Orissa and under Rule 63 of the Concession Rules 1960, it was the duty of the State Government to dispose of the application for grant of prospecting license within a period of nine months from the date of receipt of such application. The State of Orissa having failed to do so, the petitioner can not be held responsible.

6. As against this, learned advocate for the respondent Union of India has raised a preliminary contention that the action of invoking the bank guarantee was in the realm of the contract between the petitioner and the Union of India based on the allocation order dated 25.07.2007 and would be governed by the terms of contract under such order. As per the terms of the contract the applicant was to furnish the bank guarantee in two parts, 50% of the bank guarantee is to be linked with the milestone chart (time schedule) and remaining 50% to the guaranteed production, both of which the petitioner had failed and therefore a show cause notice came to be issued to the petitioner and after providing an appropriate opportunity of hearing the decision was taken and was communicated to the petitioner vide communication dated 10.12.2012. While taking the decision each and every aspects of the matter was considered, even at the hands of the Inter Ministerial group and thereafter the invoking of the bank guarantee has taken place and therefore a writ petition in aforesaid facts cannot be said to be maintainable.

7. It is submitted that as a matter of fact even before the State of Orissa intervened as per the say of the petitioner, the cause of action for invoking the bank guarantee had already arisen prior there to. The contention of the petitioner therefore about the situation beyond his control appears to be an after thought as the alleged act on the part of the State of Orissa in not processing the Prospecting License was never challenged or attempted to be challenged by the petitioner before any forum.

8. It is submitted that by the impugned decision not only the bank guarantee was invoked but the coal block was also ordered to be deallocated and in view of the judgment of the Apex Court in case of MANOHAR LAL SHARMA Supra, the order of deallocation cannot be now questioned.

9. Learned advocate for the respondent Union of India submitted that in the decision of the Delhi High Court in LPA 255 of 2016 the Division Bench had examined the very identical set of facts, examined the question of the issue of invoking of bank guarantee and recovery of the amount thus paid and while doing so, the Division Bench has held that the contract of the bank guarantee is a separate contract in itself and the petitioner therein will have to resort to an appropriate proceedings for recovery of the amount paid.

10. In the rejoinder, learned advocate has submitted that the powers of the Court under Article 226 of the Constitution of India are wide enough to order refund, he referred to the judgment of the Apex Court in case of SHREE BAIDYANATH AYURVED BHAWAN (P) LTD. V/S STATE OF BIHAR, (1996) 6 SCC 86 [LQ/SC/1996/1382] , in case of U.P. POLLUTION CONTROL BOARD V/S. KANORIA INDUSTRIAL LTD., (2001) 2 SCC 549 [LQ/SC/2001/211] and in case of ABL INTERNATIONAL LTD. V/S. EXPORT CREDIT GUARANTEE CORPN. OF INDIA LTD., (2004) 3 SCC 553.

11. Learned advocate also specifically referred to a judgment in case of MANOHAR LAL SHARMA Supra to submit that the decision of MANOHAR LAL SHARMA supra was brought under the review and thereafter the Apex Court had held that the consequences of the previous judgment of MANOHAR LAL SHARMA supra especially the Civil consequences of the quashing of allocation were left open to be decided and it is under such directions the present petition is filed. However he candidly submitted that the aforesaid judgment that is (2014) 9 SCC 614 [LQ/SC/2014/1041 ;] ">(2014) 9 SCC 614 [LQ/SC/2014/1041 ;] [LQ/SC/2014/1041 ;] did not examine the issue of the refund of or staying of the bank guarantee as a consequences of the deallocation under the order of the Supreme Court.

12. I have considered the rival submissions and I have perused the documents on record. From the pleadings it appears that the Naini coal block was allocated vide letter no. 13016/8//2007CA-I dated 25.07.2007 in pursuance of Section 3(3)(a)(i) of the Coal Mines (Nationalisation) Act, 1973 to M/s Gujarat Mineral Development Corporation Limited (the petitioner) and M/s Pondicherry Industrial Promotion Development Investment Corp. Ltd. (respondent no.7) to meet their coal requirement of respective proposed 1500MW power plant at Angul in Odisha or near Dumka in Jharkhand by M/s GMDC and Poposed pit head power plant of 1500- 2000 MW capacity by M/s PIPDICL, subject to the terms and conditions of the said allocation letter. The Allocation Letter prescribes the time-line for various stages of development of the block and and specified end-use plant. The adherence to time-line is a condition of allocation and it is the responsibility of the allocatee to obtain necessary clearance for the development of the block.

12.1 In respect of the Bank Guarantee, The condition (xi) and (xii) of the allocation letter clearly mentions that M/s Gujarat Mineral Development Corporation Limited and M/s Pondicherry Industrial Promotion Development Investment Corporation Limited shall submit a bank guarantee for Rs. 65 Crores (equal to one years royalty amount based on mine capacity of 10 mtpa assessed by CMPDIL, grade of coal and the weighted average royalty @ Rs. 65 per tonne) within three months from the date of issue of this letter. Subsequently, upon approval of mining plan, the Bank Guarantee amount will be modified based on the final peak/rated capacity of the mine.50% of the bank guarantee shall be linked to the milestones (time schedule) set for development of captive block, and the remaining 50% to the guaranteed production. The bank guarantee shall be liable to be encashed in the following eventuality:

(i) There shall be annual review of progress achieved by an allocatee company. In the event of lapses, if any, in the achievements vis-a-vis the milestones set for that year, an proportionate amount shall be encashed and deducted from the bank guarantee.

(ii) Once production commences, in case of any lag in the production of coal/lignite, a percentage of the bank guarantee amount will be deducted for the year. This percentage will be equal to the percentage of deficit in production for the year with respect to the rated/peak capacity is 100, and actual production is 35, then (50-35)/ 100 X 100 = 15% will lend to deduction of 15 % of the original bank guarantee amount, the block shall be liable for de-allocation/ cancellation of mining lease.

(iii) The allocation shall ensure that the bank guarantee remains valid at all times till the mine reaches its rated capacity or till the bank guarantee is exhausted. Any lapses on this court shall lead to de-allocation/cancellation of mine lease.

12.2. In the allocation letter it has been clearly mentioned that any violation of the conditions imposed above in mining of coal from the Naini coal block will render the mining lease liable for cancellation and withdrawal of allocation.

REVIEW OF DEVELOPMENT OF THE COAL BLOCK

12.3 The progress of allocated coal block as well as linked/associated end use project has been reviewed by the Ministry through an Inter-Ministerial Review Committee from time to time wherein the allocatee company give presentation in respect of the development made by the company with reference to the milestones prescribed in the allocation letter during which it was noted as following:

i) In the Review meeting held on 25/26.03.2008 it was noted that BG and PL application submitted jointly. JV not yet formed nor the date of formation was intimated.

ii) In the Review meeting held on 15/ 16.10.2008 it was noted that this is regionally explored (RE) block. The company procured the GR from GSI and BG submitted. All other activities pending.

iii) In the Review Meeting held on 22/23.06.2009, it was noted that the block is RE block. MoU for JV has been signed. All other activities are pending. The progress is not satisfactory. The Chairman expressed dissatisfaction over not having the JVC formed even after assurance given in the last meeting. Further, it was agreed in the meeting that Government would take action for de-allocation for the block if JVC was not formed by 31.07.2009.

(iv) In the Review Meeting held on 20/21.07.2010, it was noted that it was. RE block. JVC formed. Drilling not yet completed. MDO for drilling selected. PL obtained. Company wanted to prepare GR based on available data and sought advice in this regard. EUP of GMDC will supply coal to Adani Power and Torrent Power Ltd. in Gujarat. Pit head power plant of PIPDCL. Committee asked CMPDIL to advice regarding GR and asked to give details of EUPS to CCO.

(v) In the Review Meeting held on 11/ 12.91.2012, it was noted that the block is RE block. GR prepared on indicated data in December, 2011. CMPDIL will prepare draft Mining Plan within 5-6 months. Land notification issued. EUP of PIPDCL is Pit head power plant. 90 acres of land is acquired. GMDC to sort out the issue of location of EUP immediately. The progress of the block was not found satisfactory by the Committee. The Committee expressed concern over the progress and recommended that the allocatee be served with show-cause notice to explain why the block should not be deallocated. The companies were issued the show cause notice vide this Ministrys letter No. l3016/l9/2012-CA-I dated 2nd May, 2012. The companies furnished their reply to the show cause notice.

12.4 In the meantime, the Government has set up an Inter-Ministerial Group (IMG) on 21.06.2012 under the Chairpersonship of Additional Secretary (Coal), Ministry of Coal having members from Ministry of Power, Ministry of Steel, Ministry of Commerce and Industry, Department of IPP, Ministry of Law and Justice, Department of Legal Affairs, Department of Economic Affairs to undertake periodic review of the development of coal / lignite blocks allotted by the Government. The terms of reference (TOR) of the IMG are:

(i) The IMG shall undertake periodic review and the progress of allocated coal mines / blocks and make recommendations on action to be taken including deallocations, if required.

(ii)The IMG may consider the replies where the show cause notices have been given and recommend action against the allocate companies including de-allocation, wherever necessary.

(iii) The IMG may make its own assessment and recommend action as to deduction of Bank Guarantee, if required.

(iv) Any matter where a reference is made by the Competent Authority.

The IMG has been given the 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.

12.5 The IMG took up for review the 58 cases where show cause notices were issued consequent to the Review / Recommendations by the Review Committee held on 11th and 12th January, 2012. In addition the cases where a decision was taken on the basis of earlier reviews to deduct BG and were pending, were also taken up. The IMG itself framed its guidelines/ criteria, duly approved by the Government, to be followed for the purpose of making its recommendations in respect of Private companies as well as Government companies. The IMG decided to give an opportunity of personal hearing to the allocatee companies by way of Presentation before the Group. The action taken thereafter is summarized below:

i) The companies allocated coal blocks were asked to provide the following at the time of presentation:

a. The documents indicating current status duly certified by the authorized representative (duly authenticated documents supporting the status shown may be kept available for perusal of MG, if required)

b. Details of investment made vis-a-vis the planned investment in development of coal block duly certified by Chartered Accountant. Investment in respect of end-use plant may be separately indicated with due certification.

c. Progress of implementation of end-use plant.

ii) The IMG also considered the status note furnished by the Coal Controller Organization (CCO)/ Ministry of Coal Which contained the following information:-

(a) Terms and conditions of allotment and subsequent revisions, if any;

(b) Slippages against milestones as stated in the Show Cause Notice,

(c) History of previous reviews and action taken;

(d) Condonation of delay or extension of zero date granted, if any, and permissible grace period, if any; whether any request for condonation is pending with Ministry;

(e) Litigation and orders of the court, if any;

(f) Summary of reply of the company including reasons for delay;

iii) Before deliberating on individual cases, the IMG deliberated upon the broad parameters which may constitute substantial progress of coal block. It was decided that purchase of Geological Report, Approval of Mining Plan, Grant of Environmental Clearance, status of Forest Clearance and progress made in land acquisition shall constitute basic requirement. Physical status of End Use Plant (EUP), investment made and expected date of opening of mine and commissioning of EUP shall also be a material consideration. Where there is no provision for Bank Guarantee (BG) and the block is not found fit for de allocation and there is substantial progress. the IMG may recommend that the allocatee may be asked to submit a BG. The amount of BG that may be asked for would be fixed factoring in the time elapsed since date of allotment. The IMG then took up individual cases and made recommendations after due deliberation and consideration of all material made available.

iv) The IMG was informed that a large number of blocks in the Government dispensation route are regionally explored blocks in which the exploration has taken more time than the 27 months envisaged in the allocation letter. After review in 2009-10, it was decided not to de-allocate these blocks on this account at that time. Taking all factors into consideration IMG took a view that in general, those regionally explored blocks in which detailed exploration has now been completed may not be recommended for de-allocation at this stage.

v) The IMG noted that for the coal blocks allotted under Government dispensation the BG was introduced only from June, 2007 onwards. In case of coal blocks allotted before June, 2007, which are not recommended for de-allocation IMO may recommend imposition of BG to ensure adherence to the milestones. The amount of BG that may be asked for would be fixed factoring in the time elapsed since date of allotment.

12.6 The case of the allocatee company was referred to the IMG. Accordingly, the IMG gave an opportunity to the allocatee companies to make the presentation before it on the progress of development of allocated coal blocks and associated end use project. The representatives of the allocatee company gave presentation on 9th October, 2012 before the IMG. The IMG considered the presentation, the status note of the Naini coal block and associated EUP prepared by Ministry of Coal and Coal Controllers Organization.

13. The Inter Ministerial group with regard to the coal block allotted to the petitioner observed as under:

" The IMG considered the terms and conditions of allocation, the show cause notice issued, the reply and the presentation made by the company along with the status paper placed before the IMG. The IMG noted that more than 5 years have elapsed from the date of allotment i.e. 25.07.2007. JVC of GMDC and PIPDICL has been formed on 08.10.2009. IMG also noted that this is a regionally explored block and application for Prospecting Licence (PL) was submitted on 22.10.2007 and is pending. GR on the basis of borehole data already available in respect of part of the block has been prepared by CMPDI on 05.01.2012. Mining plan is yet to be submitted. Investment made in the coal block as per CA certificate submitted by the company is only Rs. 8.06 Crore mainly on purchase of exploration data and preparation of GR. Progress in respect of EUPs to be set up by GMDC and PIPDICL as envisaged in the allocation letter is not reported in the reply to the show cause notice. At the time of presentation PIPDICL reported that it has entered into coal supply agreement with M/S JR Powergen Pvt. Ltd. For their power plant to be set up at Angul, Odisha for which an investment of Rs. 135 Crore was reported. The CA Certificate in support of this investment is not provided. Site for EUP of GMDC is yet to be finalized. The normative date of production in terms of the allocation letter is 25.04.2013 whereas the company projected possible date of mine opening as April, 2016.

IMG noted that the development of the block is still at the stage of obtaining PL. Though this coal block is included in the list of 11 PSUs in respect of which clearances are held up by Govt. of Odisha, IMG observed that irrespective of this situation which arose only in 2012, the progress and investment in respect of both the coal block as well as end use plants is negligible. In view of the unsatisfactory progress in development of coal mine and end-use plants and taking into account all factors, the IMG recommends that the coal block may be de-allocated in accordance with the terms and conditions of the letter of allocation.

The IMG noted that the allocation letter provides for 50% deduction linked to milestones and 50% to the guaranteed production, once production commences. In view of this the IMG recommends that 50% of the BG related to development of the coal block may be forfeited."

14. The judgment relied upon by the petitioner for supporting his case of issuing Mandamus to direct refund under Article 226 of the Constitution of India it would be appropriate to refer to the case relied upon in case of U.P. POLLUTION CONTROL BOARD Supra where the Supreme Court was considering the exercise of power of High Court under Article 226 of the Constitution of India for refund of the money illegally collected. In that case, the Supreme Court came to the conclusion that the collection of money as CESS was itself without the authority of law and that the amount of CESS that was paid on account of undue enrichment was paid under protest and therefore by observing the principles of pubic interest and equity the refund was ordered. Similarly in case of SHREE BAIDYANATH SUPRA once again the Supreme Court was examined the levy of tax on Ayurvedic preparations under the State Excise Act, which were held to be illegal by the Patna High Court but the High Court did not proceed to order the refund and left it for the petitioner there to approach the State Government. The State Government had rejected the claim of refund by non speaking order which was a subject matter of challenge ultimately before the Supreme Court. It is in this set of facts, the Supreme Court had directed the refund.

15. As discussed above, the facts of the case before the Supreme Court in the opinion of this Court would not cover the facts of this case where the refund claim is of the bank guarantee invoked in terms of the contractual relations between the petitioner and the Union of India.

16. The Division Bench of the Delhi High Court in Letters Patent Appeal No.255 of 2016 in M/S STRATEGIC ENERGY TECHNOLOGY SYSTEMS PRIVATE LIMITED V/S. UNION OF INDIA AND OTHERS had dealt with an issue, where the Ministry of Coal had deallocated the coal block by an order dated 17.02.2014 to the petitioner therein on the ground that the appellant had failed to develop the coal block as per the prescribed milestone chart and therefore it invoked the bank guarantee. After examining the facts in detail the Division Bench of the Delhi High Court had held as under:

"17. In the light of the settled position of law, we are of the view that the encashment of bank guarantee in the present case had given rise to a new cause of action and the Appellant, if aggrieved, has to take recourse to appropriate proceedings for recovery of the amount paid by the Bank.

18. However, we are of the view that the finding recorded by the learned Single Judge that the petitioner cannot seek refund of the bank guarantee since challenge to the demand dated 17.02.2014 qua encashment of bank guarantee was withdrawn, is unwarranted at this stage. It is no doubt true that the subsequent judgment of the Supreme Court in Manohar Lal Sharmas case (supra) had nothing to do with the de-allocation of the appellants coal block vide order dated 17.02.2014 and the consequential encashment of bank guarantee, however, whether the appellant/writ petitioner is entitled for recovery of the amount paid under the bank guarantee or not is an issue which needs to be adjudicated by the competent Civil Court. Therefore, the question relating to entitlement of the appellant for recovery of the amount paid under the bank guarantee is left open and the appellant/writ petitioner is at liberty to work out the appropriate remedy as available under law."

17. From the facts as narrated herein above regarding the development from the date of allocation till the cause of action of invoking the bank guarantee on the basis of non compliance with the milestone chart, there was no issue of opposition by the State of Orissa as the first letter from the Chief Minister of Orissa with regard to this allocation which is on record is of date 10.01.2012. Considering the fact that the date of coal block allocation is of date 25.07.2007 and the milestone chart which would start from issuing of Prospecting License within three months from the date of allocation to the production within the time limit of 36 months, 42 months or 48 months, 54 months, depending upon the nature of allocation, was long over before such first alleged opposition by the State of Orissa through its Chief Minister who had addressed the letter on 10.01.2012 to the then Minister of Coal.

18. Therefore, the Court is unable to accept the argument that petitioner was rendered helpless on account of not receiving of Prospecting License within a period stipulated under the milestone chart. In absence of anything on record to suggest that the petitioner had made due diligence or had within reasonable period challenged such non action on the part of the State of Orissa, the Court is not inclined to accept such argument.

19. In view of the aforesaid reasonings, the Court finds no reason to interfere in the subject matter which is in the realm of contract between the petitioner and Union of India by invoking Article 226 of the Constitution of India. The petition therefore stands dismissed.

Notice is discharged.