Delhi High Court calls absurd Coal India's reason for cancelling e-auction of coal

NEW DELHI: The Delhi High Court on May 26 said that Coal India’s decision to cancel Jindal Power’s bid seeking supply of coal through e-auction does not seem appropriate.

Jindal Power, a Jindal Steel & Power unit, had a day earlier filed an affidavit against Coal India’s decision, saying while the 49,000 million tonnes of non-coking coal won by it in e-auction was cancelled citing production issues at Gare Palma IV/2 and IV/3 mines, NTPC was offering 2.5 lakh tonnes of coal from the same area.

A bench of Justices Badar Durrez Ahmed and Sanjeev Sachdeva had on May 25 said “this was not how the government should function”.

“The matter was briefly heard on Tuesday and the court observed that prima facie the cancellation of e-auction does not look appropriate. Jindal Power has been asked to move an application and the matter will be listed on Wednesday,” a person familiar with the matter said.

Jindal Power has in its affidavit contended that it participated in the e-auction held on April 11, bid the highest price of Rs 1,008 per tonne of coal and had paid Rs 7.8 crore for the 49,000 million tonnes of coal won by it. On May 22, it was informed by Coal India that the e-auction was being cancelled owing to production issues and the amount of Rs 7.8 crore was refunded.

Coal India had on April 3 invited bids for 4.05 lakh tonnes of non-coking coal and 1.5 lakh tonnes of coking coal. Of the 4.05 lakh tonnes of non-coking coal, 60,000 metric tonnes was to be auctioned from Gare Palma IV/2 and Gare Palma IV/3 mines in Chhattisgarh. Coal India is acting as custodian for the two mines as the government cancelled their auction citing low bids. Jindal Power had emerged as the successful bidder for the mines.