This Article is From May 26, 2015

Coal India's Decision to Cancel Fuel Won by Jindal Power Under Court Lens

Coal India's Decision to Cancel Fuel Won by Jindal Power Under Court Lens
New Delhi: The Delhi High Court on Monday asked Coal India Ltd (CIL) how it was offering coal from two Chhattisgarh mines to National Thermal Power Corporation (NTPC) when it had cited production issues to cancel an e-auction of 49,000 metric tonnes (MT) of the mineral, mined from the same area, won by Jindal Power Ltd (JPL).

A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva observed "this was not how the government should function" and asked CIL to come with instructions on the issue on Tuesday.

Jindal Power Ltd (JPL), in an affidavit, has contended that while the 49,000 MT of non-coking coal won by it was cancelled citing production issues at Gare Palma IV/2 and IV/3 mines, 2.5 lakh tonne per month of coal from same area was being offered to NTPC on 'as is where is' basis.

JPL said that much coal was being offered to NTPC for the PSU's thermal power plant at Barh in Patna, Bihar and to transport this, the state-run enterprise had invited bids.

The company contended that it had participated in the e-auction held on April 11 and had bid the highest price of Rs 1008 per tonne of coal and had paid Rs 7.8 crore for the 49,000 MT coal won by it.

Senior advocate Kapil Sibal, appearing for JPL, said that on May 22, it was informed by CIL that the e-auction was being cancelled owing to production issues and the amount of Rs 7.8 crore was refunded.

He said CIL had on April 3 invited bids for 4.05 lakh tonne of non-coking coal and 1.5 lakh tonne of coking coal.

Of the 4.05 lakh tonne of non-coking coal, 60,000 metric tonne was to be auctioned from the two Gare Palma mines, JPL has said in the affidavit filed by it.

The affidavit was filed in the company's plea for quashing of March 20 order of the government cancelling the bids of the company and Bharat Aluminium Company (Balco) for four coal blocks amid speculation of cartelisation. Balco too has challenged the order separately.

The court had on March 27 said there was "no evidence of cartelisation" in the auction of the blocks.

It had also termed as "unfair" the government's decision to annul the bids.

Meanwhile, the same bench disposed of Balco's plea by asking the government to consider the company's petition as a representation and to decide the same within four weeks. It gave the company liberty to approach the court if it was aggrieved by the government's decision on its representation.

During the hearing, JPL alleged the government was behind cancelling of the auction won by it.

Earlier, JPL had had emerged as successful bidder for Gare Palma IV/2, Gare Palma IV/3 and Tara coal blocks while Balco had successfully bid for Gare Palma IV/1 coal block.

Thereafter, the court had on March 27 made CIL the custodian of the two Gare Palma mines.