Granting relief to JSPL after it appealed in Delhi High Court against a government notification allocating end use to coal blocks, the court directed the company’s blocks to be withdrawn from auctions.
JSPL had contested the change of end use of Utkal B1 and Gare Palma IV/6 from steel to power.
The high court has directed the government-appointed tech committee to review the change of end use. Bhushan Steel too moved Delhi High Court on Wednesday on similar grounds.
JSPL counsel argued that as per the ordinance, payment of penalty was the only eligibility criteria and the company has already paid Rs 2000 crore as penalty. Beyond this the government does not have the power to pass orders specifying end use.
Further, according to JSPL, the government order will endanger Rs 19,000 crore of investment in existing steel plant. It will also result in having to import expensive coal. The steel ministry on its part opposed allocation of blocks to power.
The attorney general (AG) for the government argued that the ordinance allows the Centre to make bundles, pools of blocks and allocate them to specific sectors.
Over 20 blocks have been allocated to power based on coal reserves and grade of coal. The AG said due to critical shortage of power, the allocation has been made to meet shortfall of 10,000 MW. The AG added that JSPL can’t claim any rights over coal bocks after the Supreme Court ordered cancellation.
JSPL is free to bid for other blocks, closest is 250 kms away from JSPL plant, according to the AG.
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