Change of end-use of coal blocks flout ordinance: High Court

NEW DELHI: Bhushan Power and Steel Ltd (BPSL) today challenged in Delhi High Court the Centre's decision to classify end-use of Jhamkhani coal block in Odisha for non-regulated sector, saying the move went against the 2014 Coal Ordinance provisions.

Maintaining that such a decision has in many cases led to the aluminium industry "cornering" the mines, the BPSL counsel said this was in contravention of the Coal Ordinance which states that core sectors -power, iron and steel and cement- needed to be protected and aluminium was not in this sector.

BPSL and Monet Ispat and Energy Ltd also challenged the two-round financial bidding process under the ongoing coal auction, saying such a method was "arbitrary and irrational" as the Ordinance and the Rules under it did not provide for such a procedure.

The submissions were made before a bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva by senior advocates Kapil Sibal and P Chidambaram, appearing for BPSL and Monet, respectively.

The court after hearing the brief arguments listed the matter for directions tomorrow.

During the hearing, Sibal argued that change of end-use from steel to non-regulated sector was contrary to the provisions of the ordinance.

He also argued that as a result, majority of coal blocks "have been cornered" by aluminium companies like Hindalco Industries Ltd and Bharat Aluminium Company Ltd.

"But they have bid very high for these blocks," the bench responded, to which Sibal said "the Ordinance does not say end-use is revenue".

On the issue of two-phased financial bidding in which 50 per cent of bidders are to be eliminated after round one, Sibal and Chidambaram said the procedure was not provided for under the ordinance or the rules.