The Hon’ble Leader of Opposition in the Rajya Sabha, the BJP’s Arun Jaitley, has been a perfect picture of piety and righteous indignation – and rightly so – over the Coalgate scandal. Jaitley, along with his party colleagues, have lost no opportunity to publicly denounce the massive loot of the public exchequer by the Congress-led UPA Government on coal allocations to business cronies by delaying the competitive bidding system (on which the UPA Government had taken a decision but stalled its implementation) and instead used the discretionary and corrupt route (in practice for years, which was also followed by the BJP-led NDA Government) by allotting coal blocks through a screening committee.
In a signed statement Jaitley and Sushma Swaraj, have declared, “It is a battle for safeguarding the economic resources for a larger public good. For us, it is a struggle for a fair policy for allocation of natural resources. Even if there has been a loss of Parliament’s debating time, on account of the very nature of our protest, we are confident that this protest, coupled with our forthcoming battle from Parliament to the people, will cleanse up the process for fair system of allocation of natural resources.”
Now, all this sounds principled and praiseworthy, if the battle is for the nation’s good and safeguard of its natural resources, but what was the Hon’ble Leader of Opposition in Parliament, Arun Jaitley, saying as a leading Supreme Court advocate only in late-2008, on coal allocation, even as he was the leading Opposition MP in Parliament?
In a startling case of bait and switch, Jaitley gave a legal opinion, dated September 11. 2008, on behalf of Tata Sons Ltd and Tata Industries Ltd -owned, Strategic Energy Technology Systems Ltd (SETSI), exhorting the UPA Government that it CANNOT impose profit-sharing or royalty on Tata’s venture of turning coal to liquid. The Government was insisting that Tata and Jindal Steel (the other company also in the venture to turn coal into liquid) MUST pay royalties and share profits with the Government. This would have led to coal block allotees or coal companies to pay a sizeable chunk of their profits from natural resources which they were selected for, to the Exchequer.
Instead, Jaitley argued against this saying that since the statute does not provide for the Government to charge such a share in profit, it cannot do so. As Jaitley said in his opinion, “I am informed that, the process of coal allocation by the Government of India under the MMRDA for other approved end-uses like use in steel and power projects has never involved the adoption of profit-sharing or analogous criteria.”
He further adds, “Upon selection for allotments of a coal block the selected person under the rules is required to pay a lease hold charge for the land where the coal blocks allocated and royalty for the coal which is extracted. This statutory charge is provided by the statute. Royalty has been specifically prescribed under the law… as by way of the 1957 Act a statutory mining lease is granted…” In other words, Jailtley says royalty is in-built in the mining statute, and so when a mining lease is rewarded, the coal company has already paid for royalties at the time of bidding. Then, Jaitley adds, “There is no other payment which is prescribed by law. Article 265 of the Constitution of India mandates that the Executive has no power to impose any levy or tax upon the people without the sanction of the Legislature (referring to the case of State of West Bengal vs Kesoram Industries (2004) 10 SCC 201) .”
Now this must have been music to the ears of the “corrupt UPA Government” as Jaitley loves calling it, because if the UPA Government (Executive) was moving the courts to force Tata and Jindal to pay up royalties and profit sharing, Jaitley says only legislation can do so, a process which he is also part of! Now, if a leading member of the Opposition in the Rajya Sabha is giving legal advice to coal companies fighting the Government in court against profit sharing, the message to the Government is clear: Do not even think of bringing it to Parliament if you fail or want to avoid the court.
And, as if to buttress his legal command and dexterity, Jaitley gives further advice: A question could arise that if the Government is entitled to charge “Profit Petroleum” then why not “Profit Coal”? He then goes to show how liquid coal is an end product like synthetic oil, so even if companies make millions of dollars on both products, they are exempt from paying royalties to Government. Jaitley shows how synthetic oil doesn’t come specifically under the definition of “Petroleum” and, therefore, is exempt from its rules and conditions; similarly, liquid coal is not covered under the MMRD Act, that stipulates rules for coal companies.
He then concludes, “Further, a mere executive action to impose a levy or ‘profit sharing’ criterion will not be valid without express statutory authority, Article 265 embodies the principle of ‘no taxation without legislation.’ An executive order or executive instruction cannot justify an imposition. (Ghulam Hussain Haji Yakub vs State of Rajasthan 1963 (3) SCR 255 & Mehra Harish Vansh Lal vs State of Maharashtra 1971 (2) SCC 54).” It certainly must have rattled the UPA Government from bringing an executive order in the face of such Opposition!
How Jaitley has escaped the ire of the Parliamentary Standing Committee on Coal and Steel (2012-2013) is mystifying. The report was tabled in the Lok Sabha on April 23, 2013, and it has cast its glare on the two “dishonest” allotments to Tata and Jindal.
It says, “With regard to the procedure for allocation of coal blocks allocated for coal to liquid, the Committee finds that although the selection procedure was almost the same as was followed in the Screening Committee route under Section3 (3) (A)(iii) of the Coal Mines (Nationalization) Act, 1973, exception was made that recommendation in this case was to be made by the Inter-Ministerial Group under the Chairmanship of Member(Energy), Planning Commission. The Committee has failed to understand as to why two coal blocks for coal to liquid with and estimated explorable reserves of 3000 million tones were allocated to private companies by ignoring the Government Companies.
“The Committee feels that the Inter-Ministerial Group (IMG) has not performed its duty honestly. Even though the blocks were cleared by the Screening Committee, the IMG should have studied the cases and cancelled the blocks allotted by the Screening Committee. The Committee, therefore, recommends that the allocation of coal to liquid blocks to 2 private companies be examined by the Government and the Committee may be apprised of the details of the technology applied by these private companies to exploit the reserves and also the present status of these projects. The Committee also desires the Ministry of Coal to take necessary steps for coal gasification projects and recommend that these projects should be given to State/Central PSUs only. ”
So, not only was Jaitley allowing Tatas and Jindals to go scot free from paying millions of rupees in royalties to the nation, he was also defending two companies that allegedly got the coal block allocations to make coal to liquid, which should have ideally gone to Government companies, as his own parliamentary colleagues have accused the Government in the above report.
How much did you contribute to the Rs 1,86,000 crore loss to the public exchequer Mr Jaitley, that you allege the country has lost?