The Corporate Affairs Ministry has suggested some ‘fine-tuning’ of the new mines bill, which is being examined by a parliamentary panel and provides for profit sharing by mining firms with the project-affected people, among other provisions.

Questioning a clause in the new bill that provides for issuing at least one share of the mining company to each affected family that will be non-transferable, the MCA in a letter to the panel has said that under the companies Act, shares of Public Ltd, Private Ltd and listed companies are transferable.

“Under the Companies Act, 1956, a window for transfer/ sale of shares ought to be provided to the shareholders, with adequate safeguards for protecting the rights of affected families,” it said to the Parliamentary Standing Committee on Coal and Steel which is vetting the Mines and Mineral Development and Regulation (MMDR) Bill.

“Thus, the clause 43 (3) needs to be fine-tuned in accordance with the provisions of the Companies Act, 1956,” it added.

The clause in the new Mines Bill provides that “where a holder of mining lease is a company, at least one share will be issued for consideration other than cash to each affected family by mining related operations and such shares shall be non—transferable.”

The MMDR Bill, which was introduced in the Lok Sabha on December 12, was referred to the Committee for in-depth scrutiny and the government is hopeful that once the Committee gives its report by March-end, the new bill will be passed in the upcoming Budget session.

The bill proposes to set up a district development fund, where the money accumulated from the 26 per cent profit sharing by coal miners and an amount equivalent to 100 per cent of royalty for others, will be deposited and spent on local population and area development.

Also, the MCA has advocated for allowing Limited Liability Partnership for grant of mineral concession.

It may be seen from Clause 5 that a citizen of India, a Company under the Companies Act, 1956 or a Registered firm under the Partnership Act are eligible for grant of mineral concessions, the letter said.

It, however, added that “LLP, a new form of business entity has not been allowed to participate ... LLP too need to be included.”

The Cabinet had approved the long—pending controversial draft bill on September 30. It will replace the 54—year—old legislation governing the sector, as it was felt that the existing laws have not provided a fair deal to those affected by the mining projects and the leases were not given in transparent manner.

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