Setback to Centre on coal auction in Delhi High Court

Government today suffered a setback in the coal block auction process as the Delhi High Court provided relief to several companies which were disqualified from participating in the bidding process on one or the other ground.
The hearing on the issue was conducted in phases till late this evening before two separate benches, which heard the petitions filed by Jindal Steel and Power Ltd (JSPL) and Jindal Power Ltd (JPL), Sesa Sterlite, Sarda Energy and Minerals Ltd, Usha-Martin, Monet Ispat, Utkal Coal Ltd and Jayaswal Neco Industries Ltd.
The day began with the petitions of the Jindals in which a bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw sought government's response on their plea challenging the 2014 Coal Ordinance provisions regarding determination of compensation payable to previous allottees towards mining infrastructure and land value of the blocks.

Later, another bench of justices B D Ahmed and Sanjeev Sachdeva gave a major relief to Sesa Sterlite Ltd, Sarda Energy and Minerals Ltd and Usha-Martin by setting aside their disqualification from bidding in coal auction process.
This bench, while allowing Sarda to place its bids, said "it appears subsidiaries which are not a joint venture cannot be considered for calculating coal requirements of a bidder.
"With this clarification, bids of the petitioner (Sarda) may be examined and only the end-use requirement of the end-use plant holder will be considered, unless there is a joint venture."

Sarda had been disqualified from bidding for six blocks - Gare Palma IV/1, IV/4, IV/5, IV/7 in Chhattisgarh, Birchapur in Madhya Pradesh and Kathautia in Jharkhand by the Centre which said the company had clubbed its subsidiary company along with parent company to increase its coal requirement instead of making a joint venture.

The bench also allowed Utkal Coal Ltd to bid for a coal block which was earmarked for an independent power plant while the company had a captive power plant.
"They (Utkal) are allowed to place their bid subject to the final outcome of their petition," the bench said while seeking response of Centre by next date of hearing on Feb 23.
The bench, which heard the matters till 8.30 pm, said it will hear on February 18, the petitions filed by Monet Ispat and Jayaswal Neco Industries Ltd challenging the two-phased auction procedure in which 50 per cent of bidders are eliminated after the first round.