• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

Coalscam: HC Sends Notice To Govt On Jindal's Plea

Photo Credit :

The Delhi High Court on Monday (12 January) sought response of the Centre on a plea of former Congress MP Naveen Jindal's company JSPL challenging a Coal Ministry order and ordinance provisions "which allow change of end-use" of coal blocks in Chattisgarh and Odisha to power from steel.

A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva issued notice to the Coal Ministry asking it to come with answers as to why end-use was changed and where, while hearing pleas of Jindal Steel and Power Ltd (JSPL) and Naveen Jindal who was present in the court.

The petitioners have sought setting aside of the December 18 order of the ministry as well as provisions of the Coal Ordinance "which provide for change of end-use from steel to power".

"Have someone here (on next date) to explain why it (end- use) was changed. Also come ready with answers to the question where all you have changed the end-use," the court told Additional Solicitor General (ASG) Sanjay Jain, who appeared for the ministry.

The court has posted the matter for hearing on January 15.

JSPL in its plea has contended that it was allocated coal blocks in Odisha and Chhattisgarh for the purpose of setting up steel and sponge iron production units, respectively.

After the allocations were cancelled by the Supreme Court through its orders of August 25 and September 24 last year, the Coal Mines (Special Provisions) Ordinance, 2014, was promulgated mandating the government to auction or tender the coal blocks, it has said.

Senior advocates Kapil Sibal, Rajiv Nayar and Abhishek Manu Singhvi, appearing for JSPL and Naveen Jindal, submitted that pursuant to the ordinance, the Coal Mines Rules were notified and under the same the ministry passed an order on December 18 changing end-use of their coal blocks from sponge iron and steel to power.

They alleged that the December 18 order was passed arbitrarily and in violation of the Ordinance as well as the Constitution.

They argued that change of end-use has also resulted in making JSPL ineligible for participating in the ongoing auction process which is expected to culminate on February 14.

They also alleged that while changing the end-use, captive power plants were also excluded from the power sector, hence, they are unable to bid for the blocks even for that.

They said that they have set up steel and sponge iron units in Odisha and Chhattisgarh for over Rs 24,000 crore and the entire investment would be "rendered fruitless" if they are unable to bid for the blocks which were earlier allocated to them and based on which the units were set up after obtaining all necessary environment and forest clearance.

During the proceedings, the ASG said that JSPL can purchase the tender document and submit it any day before February 14, 2015.

He also said there are other coal blocks available for JSPL, including those which have been put up for non-regulated end-use like steel and sponge iron.

Sibal, however, was not in agreement saying very few blocks have been put up for non-regulated end-use.

He also said that bidding for a far away block would not help them as they set up their units based on the Utkal and Gare Palma blocks in Odisha and Chhattisgarh respectively.