Cancelling of Jindal Power Bid, Allotting Mines to CIL 'Wrong': Court

New Delhi: Government's decision to cancel the bid of Jindal Power Ltd (JPL) for two Chhattisgarh coal mines by annulling the tender process and allotting them to Coal India Ltd (CIL) is "prima facie wrong", Delhi High Court said on Thursday .

"This does not smack of fairness. Prima facie we feel that it is wrong," a bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva said in response to Additional Solicitor General (ASG) P S Narasimha's argument that the Coal Ministry had the right to take the decision.

"The more we look into it, the more we feel there should be an interim order. We are not impressed," the court said in response to the ASG's arguments opposing any interim order.

While the ASG said there was no question of an interim order, the bench directed him to take instructions on what interim order could be passed in the matter and inform the court on Friday.

The court also did not agree with the ASG's argument that the tender was annulled as the bid had not inspired confidence, saying "You are not alleging anything, but you are killing them."

It also said that in the petitions challenging the two-phased auction in which 50 per cent bidders are eliminated, the government had said there could be no cartelisation but it was arguing here that the system of auction was operated by the bidders.

The court also gave adverse observations on one of the reasons given by the Coal Ministry to annul the tender process that comparing the price fetched in auction of other mines for power sector, the highest bid for Gare Palma IV/2 and IV/3 in Chhattisgarh did not reflect fair value.

"This is like comparing apples to oranges," the bench said in response to the argument and added that the Ministry's decision to annul the tender and then allot mines to CIL "does not leave a good taste in the mouth".