The discretion of the State Government in allotting coal blocks should be fair, honest, and in public interest, and the court cannot interfere with the State's discretion under Article 226 of the Constitution of India.

Poonam Srivastav, J.

Heard counsel for the petitioner and counsels on behalf of the State and Union of India as well as counsel appearing on behalf of Respondent No. 7.

2. The grievance of the petitioner in the instant writ petition is that the respondents failed to recommend and consider his application for allotment of coal block for captive use and, therefore, a prayer for specific direction to the Ministry of Coal, Government of India for consideration of the petitioner’s claim.

3. The petitioner also challenges the respondents’ recommendation for grant of mining lease in favour of other persons by means of an I.A. No. 1721 of 2008. This was allowed, vide order dated 01.04.2009. The petitioner made a second prayer in the aforesaid I.A. for quashing the letter dated 07.12.2007 and to implead such parties in whose favour mining lease was granted and array such persons as respondent. The said I.A. was allowed.

4. Subsequent thereto, another I.A. No. 1960 of 2009 was preferred with an additional prayer to restrain the respondent from giving effect to the revised recommendation letter dated 16.01.2008 and to stop the respondent from making any allocation pursuant to the aforesaid letter.

5. The controversy in the instant writ petition involves regarding allotment of coal block by the respondent and the grievance is that the petitioner has been deprived of even a recommendation by the respondent for considering his case and thereby he has been subjected to gross discrimination.

6. The petitioner is a Public Limited Company registered under the provisions of Company's Act, 1956. The petitioner proposed to setup a 1.1 MT per annum capacity steel plant under Nala Block, district Jamtara, Jharkhand. In preparation of the setting up of the steel plant, the petitioner signed a 'memorandum of understanding' with the Government of Jharkhand and has provided a complete description of the project/activity. The steel plant was to be setup within a period of five years from the handing over of the land possession and necessary availability of raw material linkage for the project. The company also desired to develop Iron Ore, Coal and Manganese mines for captive use. The expected investment for setting up of the steel plant was for more than a thousand crore rupees.

7. The Government of India had invited application for allotment of identified coal blocks for captive use and the Government had intended to allocate 38 coal blocks to such companies, who were engaged in generation of power production and Iron and steel as well as production of cement. Out of these 38 coal blocks, 15 were earmarked for power generation and the remaining 23 for other specified users. According to the policy adopted by the Government, preference was to be given to the power sector and steel sector. The prospective applicants were given to understand that priority would be given to such projects which had capacity 500 MW and also to the steel sector. Thus, the consideration zone and preference was for such units which had 1.0 MT per annum capacity. Pursuant to the aforesaid policy of the Government, the petitioner made an application for 9 coal blocks, 3 at Madhya Pradesh, 4 at Jharkhand and 2 for West Bengal. Annexure 4 to the writ petition is the letter applying for grant of allotment of captive coal dated February, 2007. A request was also made to the Secretary, Department of Mines and Geology, Jharkhand for sponsoring his case to the Government of India, Ministry of Coal. A similar representation was also made to the Chief Minister of the State of Jharkhand, vide representation dated 20.03.2007 (Annexure 5 to the writ petition). The Director of Industries wrote to the Secretary of Mines and Geology, Jharkhand, vide letter dated 22.03.2007 (Annexure 6 to the writ petition) to examine the matter and do the needful. A reminder was preferred, vide letter to the Secretary, Department of Mines and Geology, Government of Jharkhand, dated 10.04.2007 (Annexure 7 to