The Delhi High Court on Wednesday granted relief to Jindal Steel and Power Ltd (JSPL) and its promoter Naveen Jindal by asking the Centre to review its decision to change end-use norm for the coal blocks allotted to the company.
A bench of Justices Badar Durrez Ahmed and Sanjeev Sachdeva segregated the blocks - Utkal B1 and Utkal-B2 in Odisha and Gare Palma IV/6 in Chhattisgarh - from the auction process on the ground that the Centre, while changing the end-use from steelmaking to power generation, failed to consider the adverse impact on the steel industry.
The blocks under question are not among the Schedule-II mines (under production) being auctioned by the coal ministry in the wake of the Supreme Court in September last year cancelling their allocation. The high court's decision would, thus, have no impact on the ongoing auction and the ministry is expected to announce qualified bidders on Thursday.
Both Jindal and the steel ministry had raised concerns over the change in the end-use norm affected in January by the coal ministry.
"This court, in exercise of its jurisdiction under Article 226 of the Constitution, has to satisfy itself if as to the Technical Committee applied its mind to the relevant criteria. We are not questioning the decision as such, but, the decision making process. In this context, we find that there has not been proper application of mind while taking the decision to amalgamate Utkal B-1 and Utkal B-2," the court observed while ordering the committee set up to classify and monitor auction and allotment of coal blocks, to review its decision to merge Utkal B1 and B2.
JSPL had been allotted Utkal-B1 for operating a steel unit and Gare Palma IV/6 for a sponge iron industry. The allocations were among the 204 allotments cancelled by the Supreme Court. In its plea, JSPL contended that change of end-use prohibits them from bidding for them, threatening their investments of over Rs 24,000 crore to set up units as per the original end-use close to these mines.
"The points raised by the petitioners and, more importantly, the ministry of steel ought to have been given serious consideration," the court said, while rejecting the stand of the Centre that end-use of both blocks was changed in view of the "energy security of the country".
HC pointed out that the expression "energy security of the country" refers to the coal reserves and not to the power sector since power can be generated through various other sources - water, wind, nuclear, solar, etc.
It observed as per the Coal Mines (Special Provisions) Second Ordinance, 2014, "it cannot be concluded that power has been given priority over steel and other sectors. On the contrary, all the core sectors have been placed at par".
The court wondered why the committee's criteria for specifying end-use was not uniformly followed, while noting that both the blocks fit the criteria for steel and sponge iron but were changed to use for power.
It also questioned the lack of reasoning in the panel's records on why geological reserves were preferred while classifying mines for a specific end-use, instead of extractable reserves when "there is a reference to extractable reserves in eligibility conditions".
"While the investments made by the prior allottees were construed as irrelevant for the purpose of cancellation, it does not follow that the end-use earlier specified in respect of the previous allocations would be irrelevant for the purposes of future allocations," the court specified.
Source: The Times of India
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