In a relief for Jindal Steel and Power Ltd (JSPL) and its promoter Naveen Jindal, the Delhi High Court on Wednesday directed a technical committee to review its own decision to change the end-use of three coal blocks earlier allotted to the company and removing the mines from the auction.
A Bench of Justices Badar Durrez Ahmed and Sanjeev Sachdeva took out Utkal B1 and B2 blocks in Odisha and Gare Palma IV/6 in Chhattisgarh, from the auction process, saying that while changing end-use of these blocks to power sector, the aspect of its adverse impact on steel sector “has not been considered”.
Anil Swarup, Secretary, Ministry for Coal, said: “However, the auctions for the 23 already producing coal blocks will not be impacted as Utkal B1 and B2 as well as Gare Palma IV/6 are not producing blocks.”
Utkal B1 and B2 are in the ready to produce blocks’ list where technical bids will be opened this weekend would now need to be removed from the list. The auction process for Gare Palma IV/6 has not yet started.
Meanwhile, the Delhi High Court also directed the committee, which had been set up to classify coal blocks as well as formulate criteria for their auction and allotment, to review its decision to merge Utkal B1 and B2, saying “there was no application of mind”. JSPL had been allocated Utkal B1 for operating a steel unit and Gare Palma IV/6 for a sponge iron industry. However, the allocations, along with others, were cancelled by the Supreme Court last year.
Differing views JSPL had contended that change of end-use of these blocks from steel and iron to power has prevented them from bidding for them, which could result in their investments of over ₹24,000 crore, to set up units close to these mines, going waste. The Government, on the other hand, had contended that end-use of both blocks was changed in view of the “energy security of the country”.
Disagreeing with the government’s reason for changing end-use, the Bench said the expression “energy security of the country” refers to the coal reserves and not to the power sector and added that power can be generated through various other sources — water, wind, nuclear, solar, etc.