These writ appeals arise from the judgment and order dated December 08, 2015 in W.P. Nos. 45102-103 of 2015 filed by EMTA Coal Limited (“EMTA”) and Karnataka EMTA Coal Mines Limited (“KECML”), the writ petitioners, against Karnataka Power Corporation Limited (“KPCL”) and the State of Karnataka, the respondents.

2. Separate writ appeals challenging the order of the Hon’ble Single Judge have been filed by EMTA, KECML, KPCL and the State of Karnataka. Given the commonality of the questions involved, with the consent of the learned advocates appearing for the parties, the writ appeals have been heard together and are disposed of by this common order.

3. KPCL was allotted certain coal mines by the Union of India for captive consumption of coal in its thermal power projects in Karnataka. Through a lawful process, in the year 2002, KPCL selected EMTA for the formation of a joint venture for the development of the captive mines and for the exclusive supply of coal to its thermal power stations in the State. A Joint Venture Agreement was executed between KPCL and EMTA on September 13, 2002, pursuant to which a special purpose vehicle for mining of coal from the coal mines was established, that is, KECML.

4. It appears from the materials on record that six captive coal blocks were allotted by the Government of India to KPCL on November 10, 2003. On November 19, 2003, KPCL addressed a letter to the Ministry of Coal, Government of India, intimating the latter of the formation of the joint venture company, that is, KECML and intimating that KECML would be undertaking coal mining operations to produce coal and supply it exclusively to the thermal power plants of KPCL. By the said letter, KPCL, also, requested the Government of India to issue a notification under Section 3(3)(a)(iii)(4) of the Coal Mines (Nationalisation) Act, 1973, specifying the enduse as supply of coal exclusively to KPCL. A Notification to that effect was published in the gazette on July 16, 2004 by the Government of India.

5. Pursuant to the request of KPCL, on September 25, 2006, a mining lease was executed between Government of Maharashtra and KECML for mining coal from the captive coal blocks of KPCL for exclusive supply to the thermal power stations of KPCL. This was followed by a Fuel Supply Agreement between KECML and KPCL, which specifically provided for supply and delivery of coal by KECML from the captive coal blocks to the power stations of KPCL for a period of 25 (twenty five) years. KPCL amended the contractual arrangement and obtain approval from the Ministry of Coal, Government of India, to increase the annual supply of coal by KECML from 2.5 Million MTs to 5.0 Million MTs per annum.

6. It is stated that EMTA and KECML made investments to the tune of approximately Rupees six hundred thirty-four Crore for the development of the captive coal blocks allotted to KPCL so as to bring them to such a stage that coal can be mined from them and supplied to KPCL. The various developmental activities undertaken by EMTA and KECML by expending such large quantum of monies to make the captive coal blocks ready for mining operations have been detailed in the order impugned. However, the same has not been a question before us, we do not wish to further dwell on the matter.

7. The coal blocks became operational in the year 2008 and EMTA and KECML successfully supplied requisite coal therefrom to the power stations of KPCL. Such supplies have not been disputed by KPCL.

8. On August 25, 2014 the Supreme Court rendered its decision in Manohar Lal Sharma v. Principal Secretary and Others reported in (2014) 9 SCC 516, declaring as illegal certain allocations of coal blocks made by the Central Government between the years 1993 and 2011. The Apex Court considered the provisions of the Coal Mines (Nationalisation) Act, 1973, and found that allotment of coal blocks to State Governments or State Public Sector Undertakings to mine coal for commercial use was not permissible. The Ap