Rajasthan court fines Adani-linked coal venture ₹1,400 crore, judge transferred same day

In a major legal development that has drawn national attention and debate over judicial independence and corporate contracts, a Jaipur commercial court in July 2025 ruled against a coal mining joint venture majority-owned by the Adani Group, finding that it wrongfully recovered more than ₹1,400 crore in coal transport charges from a state-owned power utility. The judgment, and the administrative steps that followed on the same day, have since become the subject of public scrutiny and ongoing legal proceedings.

The dispute centers on Parsa Kente Collieries Limited (PKCL), a joint venture formed in 2007 between Adani Enterprises Ltd (holding a 74 percent stake) and Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) (holding 26 percent). The company was established under India’s Mine Developer and Operator (MDO) regime to mine coal from the Parsa East and Kente Basan blocks in Chhattisgarh and supply it to Rajasthan’s thermal power plants.

Under the Coal Mining and Delivery Agreement (CMDA) between the partners, PKCL was responsible for mining and transporting coal by rail, including constructing the necessary railway sidings from the mine to the nearest railway line. However, the required rail infrastructure was not completed even years after the start of mining in 2013.

Because the sidings were delayed, the parties agreed to use road transport as a temporary measure, despite the contract containing no provision for such transport. PKCL subsequently billed RRVUNL for these road freight charges, which over time amounted to upwards of ₹1,400 crore. RRVUNL paid these amounts, reportedly to prevent disruption to coal supplies and avoid power shortages in Rajasthan.

The case reached the Jaipur commercial court in 2020 when PKCL sought to recover dues, including interest claimed on delayed reimbursements. On 5 July 2025, Judge Dinesh Kumar Gupta delivered a detailed judgment against PKCL. He found that because PKCL failed to meet its contractual obligation to construct railway sidings, it should have borne the cost of transporting coal to the railheads itself. The judgment described PKCL’s recovery of transport charges and claim for interest as an effort to secure “wrongful gain,” and ordered the venture to pay a ₹50 lakh fine . The court also directed the Rajasthan government to seek an audit by the Comptroller and Auditor General of India (CAG) into the transactions between RRVUNL and PKCL.

Within hours of issuing this judgment, the Rajasthan government’s Law and Legal Affairs Department issued orders removing Judge Gupta from his post as a commercial court judge and retracing him to the High Court for reassignment. On the same day, the **Rajasthan High Court transferred him to a district court in Beawar, about 200 kilometres from Jaipur. While judicial transfers are administratively permissible and involve state government concurrence, the timing of the move immediately after a judgment against a major corporate interest raised questions about judicial independence and administrative propriety in legal circles and media discussions. Neither the High Court nor the state government provided public explanations linking the transfer to the judgment. Gupta declined comment when contacted, according to reports.

Less than two weeks later, on 18 July 2025 , the Rajasthan High Court stayed the commercial court’s judgment, temporarily halting the fine and the CAG audit order pending appeal. The High Court’s stay is standard procedure during appellate review; its official order did not explicitly tie the stay to Gupta’s transfer. The dispute remains under judicial consideration, with the next hearing scheduled for late January 2026 .

The Jaipur commercial court judgment marks one of the rare public examinations of contractual practices in India’s coal mining sector, especially under the MDO model. Critics of the model have argued that it can allow private firms to reap substantial financial benefits with limited operational risk, as the responsibility for transport and other infrastructure often falls to state utilities under complex contractual terms. The court’s insistence that a company cannot benefit from its own contractual default reflects this concern.

While the High Court’s interim stay means the fine and audit have not been implemented, the case has galvanized debate over corporate accountability, contract enforcement, and the integrity of judicial administration when high-profile economic interests are involved. As proceedings continue into 2026, observers will be watching closely for how the appellate court balances legal merits with broader questions about transparency and governance in public-private mining contracts.