Stating the Delhi High Court’s ruling to remove two coal blocks from ongoing coal auction will not impact it, Coal Secretary Anil Swarup today said that while the government was fully prepared to contest such cases, it had not yet taken decided whether to move the Supreme Court to contest the decision.
“Currently, we are under the process of auctioning schedule 2 mines and the court’s decision does not mention any schedule 2 mines,” the coal secretary said, adding that a technical committee would review the coal blocks in question.
Swarup was referring to the HC’s ruling disallowing the government to put two mines, Utkal B1 in Odisha and Gare Palma IV/6 in Chattisgarh, on the block after it had decided to change their end use from steel to plant. The ruling came after Jindal Steel and Power, which used to previously use coal from the mines for its steel plants, contested the decision.
The government has started the process of auctioning the 204 blocks whose leases were canceled by the Supreme Court last year, which termed the previous allocation process “illegal and arbitrary”.
But it vested with itself the power to decide upon which blocks will be sold for what end purpose leading JSPL to sue the government on grounds that the SC ruling had only called for previous lessees to pay a fine.
Below is the transcript of Anil Swarup’s interview with Surabhi Upadhyay on CNBC-TV18.
Q: You are hearing the concerns which hare out there in the market. They are there in the analyst community as well. Everyone’s wondering will other companies follow JSPL and therefore will litigation derail or at least push back the auction process?
A: I have had the occasion to go through the order of the honourable High Court and my understanding is that these blocs do not relate to schedule 2. Schedule 2 mine auctions are underway. Technical evaluation will be completed by tomorrow morning and we are as per schedule. The blocs related to some of the schedule 3 mines and the order is specific to those two blocs.
These shall be examined by the technical committee in reference to the order of the honourable High court. They are being referred to the concerned committee and the committee will take a call on that, then accordingly we will move forward. In a high profile auction of this nature we did anticipate litigation and that is how it is emerging but we will continue to clarify wherever the clarification is required and abide by the orders of the court.
In my understanding it will not impact the coal auction process. We have had a number of cases that are being contested in the various High Courts. One such case has been dismissed in Calcutta High Court but we are prepared for contesting such cases and as per the decisions of the court we will comply with that.
Q: I take your point but judgments also set precedents and that is the biggest concern out here and some of the companies for instance Bhushan Steel are already following up with similar arguments in different courts. The whole question is that the court has gone ahead and said that end use for these two blocs needs to be further examined. So, what prevents other companies from going in and seeking similar refuge under the verdict that has been delivered today by the Delhi Court?
A: We are looking at around 101 blocs so far. There could be a likelihood of in some blocs that we may be asked to look at the end use and we fairly prepared. If the court directs we will look at the end use but it doesn’t impact the entire coal auction process. There could be a dispute in few blocs wherein people may say that the end use should not or should have changed and as per the directives of the court we will take a call. In a worst case scenario we may have 8-10 blocs in which we are unable to auction on account of the review of the end use but that does not stop the overall auction process from going ahead.
Q: Could you give us some idea about which are these 8-10 blocs? These are the schedule 2 blocs which were supposed to go in the auction?
A: None of them are schedule 2 blocs.
Q: So, the 8-10 blocs?
A: As I said in the very beginning, there is not even a single schedule 2 bloc in the judgments that have been given so far and we are hopeful that schedule 2, which is the critical auction process, will go ahead. Even in that case if there are a couple of blocs to be left out we have this situation where we can have an alternative auction available with us.
We can nominate a custodian which can look into those stocks but these questions we will look in to only once the situation arises. Right now the questions do not relate to schedule 2 blocs and schedule 2 blocs is as per the schedule that we have worked out for these blocs.
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