Allow Birla Corp in Second Phase of Coal Auction: HC to Govt

New Delhi
Allow Birla Corp in Second Phase of Coal Auction: HC to Govt

The Delhi High Court today asked the government to allow Birla Corporation Ltd to participate in the bidding in the second phase for allocation of a coal block in Madhya Pradesh for which the company was disqualified in the first phase of auction due to its failure to attach relevant documents.

The relief was given to the company after it gave the assurance that the relevant documents would be attached in the bidding for the second phase of auction for the coal block in Birchapur.

A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva said that the government should not take any coercive steps against the company till May 15.

It also restrained the Coal Ministry from forfeiting Rs two crore deposit during the first phase of bidding, till the next date of hearing.

Birla Corporation Ltd has moved the High Court, saying that if it is held to be technically disqualified then it will have to forfeit its Rs two crore deposit and be barred from participating in the auction for one year.

It has challenged its disqualification from bidding for not attaching relevant documents while submitting its bid.

The bench also sought response from the Coal Ministry on the plea of Electrosteel Castings Limited challenging provisions of the 2014 Coal Ordinance on the grounds that it was aggrieved at the "arbitrary" determination of compensation for its mining infrastructure which was much lower than it expected.

The provision pertains to the computation of compensation payable towards mining infrastructure of operators of functional coal blocks.

Electrosteel is aggrieved by the government's January 28 decision by which it "arbitrarily" determined quantum of compensation at Rs 38 crore, while the company claims it should have been around Rs 1,189 crore.

The company also sought a direction to the ministry for making payments of compensation towards land and mine infrastructure for expenditure incurred from April 1, 2014 to March 31, 2015 within a period of 30 days, thereafter based on the audited balance sheet as on March 31. 

Electrosteel challenged the 2014 ordinance' provision which provides the method to determine the compensation payable to a company which had an operational coal mine and the allocation of which was cancelled by the Supreme Court in August last year.

The apex court, however, had allowed such mines to continue operations till March 31, 2015.

In a related development, Sarda Energy and Minerals Ltd challenged removal of some of its units while calculating coal requirements of the company which was disqualified from bidding for Gare Palma IV/7 block in Chhattisgarh.

The company has also challenged its disqualification.

On this, the court asked the Coal Ministry to inform it tomorrow the initial price offered by the company, when it will hear their petition.

Jayaswal Neco Industries Ltd (JNIL), in a separate plea, has sought reassessment of the annual coal requirement of its plant which is part of integrated steel plant.

The court will hear Jayaswal Neco's plea on February 23.

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