4. Eligibility to participate in auction and payment of fees.—(1) Subject to the provisions of
section 5, Schedule I coal mines shall be allocated by way of public auction in accordance with such
rules, and on the payment of such fees which shall not exceed five crore rupees, as may be prescribed.
(2) Subject to the provisions in sub-section (3) of this section and section 5, the Central Government
may, for the purpose of granting reconnaissance permit, prospecting licence or mining lease 1
[or
prospecting licence-cum-mining lease in respect of coal] select any of the following companies through
auction by competitive bidding, on such terms and conditions as may be prescribed––
(a) a Government company or corporation or a joint venture company formed by such company
or corporation or between the Central Government or the State Government, as the case may be, or
any other company incorporated in India; or
(b) a company or a joint venture company formed by two or more companies,
2
[to carry on coal reconnaissance or prospecting or mining operations, for own consumption, sale or for
any other purpose as may be determined by the Central Government, and the State Government shall
grant such reconnaissance permit, prospecting licence, mining lease or prospecting licence-cum-mining
lease in respect of Schedule I coal mine to such company as selected through auction by competitive
bidding under this section.]
3* * * * *
(4) A prior allottee shall be eligible to participate in the auction process subject to payment of the
additional levy within such period as may be prescribed and if the prior allottee has not paid such levy,
then, the prior allottee, its promoter or any of its company of such prior allottee shall not be eligible to bid
either by itself or by way of a joint venture.
1. Subs. by Act 2 of 2020, s. 10, for “in respect of any area containing coal” (w.e.f. 10-1-2020).
2. Subs. by s. 10, ibid., for the long line (w.e.f. 10-1-2020).
3. Sub-section (3) omitted by s. 10, ibid. (w.e.f. 10-1-2020).
6
(5) Any prior allottee who is convicted for an offence relating to coal block allocation and sentenced
with imprisonment for more than three years, shall not be eligible to participate in the auction.
5. Allotment of mines to Government companies or corporations.––(1) Notwithstanding the
provisions contained in 1
[sub-sections (1) and (2)] of section 4, the Central Government may allot a
Schedule I coal mine to a Government company or corporation or to a joint venture between two or more
Government companies or corporations or to a company which has been awarded a power project on the
basis of competitive bids for tariff (including Ultra Mega Power Projects) from specified Schedule I coal
mines by making an allotment order in accordance with such rules as may be prescribed and the State
Government shall grant a reconnaissance permit, prospecting licence 2
[mining lease or prospecting
licence-cum-mining lease in respect of such Schedule I coal mine] to such company or corporation:
Provided that the Government company or corporation may carry on Coal Mining in any form either
for its own consumption, sale or for any other purpose 3
[as may be determined by the Central
Government]:
Provided further that no company other than a Government company or corporation shall hold more
than twenty-six per cent. of the paid-up share capital in the Government company or corporation or in the
joint venture between a Government company or corporation, either directly or through any of its
subsidiary company or associate company:
Provided also that a joint venture of any two or more Government companies or corporations shall be
prohibited from alienating or transferring any interest, except the taking of loans or advances from a bank
or financial institution, in the joint venture of whatsoever nature including ownership in favour of a third
party.
(2) No allotment under sub-section (1) shall be made to a prior allottee, if that allottee has not made
the payment of the additional levy within the specified period.
6. Central Government to act through nominated authority.––(1) The Central Government shall
appoint an officer not below the rank of a Joint Secretary to the Government of India as the nominated
authority who shall act for and on behalf of the Central Government for the purposes of this Act and shall
exercise such powers as may be prescribed.
(2) The nominated authority may engage any expert having such qualifications and experience and on
such terms and conditions as may be prescribed to make recommendations to the authority for the
conduct of auction and in drawing up of the vesting order or allotment order in relation to Schedule I coal
mines.
(3) The Central Government shall act through the nominated authority for the following purposes,
namely:—
(a) conduct the auction process and allotment with the assistance of experts;
(b) execution of the vesting order for transfer and vesting of Schedule I coal mines pursuant to the
auction;
(c) executing the allotment order for any Government company or corporation in pursuance of
section 5;
(d) recording and mutating incorporeal rights of whatsoever nature including, consents,
permissions, permits, approvals, grants, registrations;
(e) collection of auction proceeds, adjustment of preferential payments and transfer of amount to
the respective State Governments where Schedule I coal mine is located in accordance with the
provisions of this Act.
(4) The nominated authority shall complete the auction or execute the allotment orders of Schedule I
coal mines within such time and in accordance with such rules as may be prescribed.
1. Subs. by Act 2 of 2020, s. 11, for “sub-sections (1) and (3)” (w.e.f. 10-1-2020).
2. Subs. by s. 11, ibid., for “or mining lease in respect of any are containing coal” (w.e.f. 10-1-2020).
3. Subs. by s. 11, ibid., for “in accordance with the permit, prospecting licence or mining lease, as the case may be” (w.e.f.
10-1-2020).
7
(5) The Central Government may appoint such other officers and staff as it may think fit to assist the
nominated authority.
(6) The salaries and allowances and other terms and conditions of service of the nominated authority
and such other officers and staff appointed under this section shall be such as may be prescribed.
(7) The nominated authority shall be bound by the written direction given by the Central Government
on the question of policy.
7. Power to classify certain Schedule I coal mines by Central Government.––(1) The Central
Government may, before notifying the particulars of auction, classify mines identified from Schedule I
coal mines as earmarked for the same class of specified end-uses.
(2) The Central Government may in public interest, by notification, modify Schedule III coal mines
by adding any other Schedule I coal mine for the purposes of specified end-use.
8. Nominated authority to issue vesting order or allotment order.––(1) The nominated authority
shall notify the prior allottees of Schedule I coal mines to enable them to furnish information required for
notifying the particulars of Schedule I coal mines to be auctioned in accordance with such rules as may be
prescribed.
(2) The information required to be furnished under sub-section (1) shall be furnished within a period
of fifteen days from the date of such notice.
(3) A successful bidder in an auction conducted on a competitive basis in accordance with such rules
as may be prescribed, shall be entitled to the vesting of Schedule I coal mine for which it bid, pursuant to
a vesting order drawn up in accordance with such rules.
(4) The vesting order shall transfer and vest upon the successful bidder, the following, namely:—
(a) all the rights, title and interest of the prior allottee, in Schedule I coal mine concerned with the
relevant auction;
(b) entitlement to a 1
[prospecting licence, mining lease or prospecting licence-cum-mining lease,
as the case may be] to be granted by the State Government;
(c) any statutory licence, permit, permission, approval or consent required to undertake coal
mining operations in Schedule I coal mines if already issued to the prior allottee;
(d) rights appurtenant to the approved mining plan of the prior allottee;
(e) any right, entitlement or interest not specifically covered under clauses (a) to (d).
(5) The nominated authority shall, in consultation with the Central Government, determine the floor
price or reserve price in accordance with such rules as may be prescribed.
(6) The successful bidder shall, prior to the issuance and execution of a vesting order, furnish a
performance bank guarantee for an amount as notified in relation to Schedule I coal mine auctioned to
such bidder within such time, form and manner as may be prescribed.
(7) After the issuance of a vesting order under this section and its filing with the Central Government
and with the appropriate authority designated by the respective State Governments, the successful bidder
shall be entitled to take possession of the Schedule I coal mine without let or hindrance.
(8) Upon the execution of the vesting order, the successful bidder of the Schedule I coal mine shall be
granted 2
[prospecting licence, mining lease or prospecting licence-cum-mining lease] as applicable, by the
concerned State Government in accordance with the Mines and Minerals (Development and Regulation)
Act, 1957 (67 of 1957).
(9) A Government company or corporation or a joint venture company formed by such company or
corporation or between the Central Government or the State Government, as the case may be, or any other
company incorporated in India, allotted a Schedule I coal mine shall be granted 2
[prospecting licence,
1. Subs. by Act 2 of 2020, s. 12, for “mining lease” (w.e.f. 10-1-2020).
2. Subs. by s. 12, ibid., for “a prospecting licence or a mining lease” (w.e.f. 10-1-2020).
8
mining lease or prospecting licence-cum-mining lease] as applicable, by the concerned State Government
in accordance with the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957).
(10) In relation to Schedule II coal mines, the successful bidder which was a prior allottee, shall
continue coal mining operations after the appointed date in terms of the approved mining plan, till the
mining lease in terms of sub-section (8) is granted, upon the grant of a vesting order and to that extent, the
successful bidder shall be deemed to have been granted a mining lease till the execution of the mining
lease in terms of the said sub-section.
(11) In relation to Schedule II coal mines, the Government company or corporation which was a prior
allottee can continue coal mining operations after the appointed date in terms of the approved mining
plan, till the mining lease in terms of sub-section (9) is granted, upon execution of the allotment order and
to that extent, the allottee shall be deemed to have been granted a mining lease till the execution of the
mining lease in terms of the said sub-section.
(12) The provisions of sub-sections (1) and (2) and sub-sections (4) to (7) (both inclusive) of this
section as applicable to a vesting order, shall mutatis mutandis be also applicable to an allotment order.
1
[(13) The vesting order or allotment order may be terminated by the nominated authority in such
manner as may be prescribed.
(14) Upon termination of vesting order or allotment order, the nominated authority may auction the
coal mine under section 4 or allot the coal mine under section 5 as may be determined by the Central
Government.
(15) The successful bidder or allottee of the coal mine whose vesting order or allotment order has been
terminated shall be deemed to be the prior allottee for the purposes of immediate next auction or
allotment of the said coal mine.]
9. Priority of disbursal of proceeds.––
2
[The compensation for land and mine infrastructure in
relation to a Schedule I coal mine as valued in accordance with section 16 shall be deposited by the
successful bidder or allottee with the nominated authority and shall be disbursed maintaining, inter alia,
the following priority of payments and in accordance with the relevant laws and such rules as may be
prescribed.]—
(a) payment to secured creditors for any portion of the secured debt in relation to a Schedule I,
coal mine which is unpaid as on the date of the vesting order;
(b) 3
[amount payable] to the prior allottee in respect of the Schedule I coal mine.