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HC relief for JSPL, 3 coal blocks taken off auction

Directs CoalMin to review decision to change end use of blocks.

Written by Aneesha Mathur | New Delhi | Published: February 12, 2015 2:13:29 am

Coming down on the technical committee of the coal ministry for changing the end use of two coal blocks, the Delhi High Court on Wednesday gave relief to Naveen Jindal-owned Jindal Steel and Power Ltd by directing the committee to review its decision to change the end use of the blocks and removing the mines, Utkal B1 and B2 in Orissa and Gare Palma VI/6 in Chhattisgarh, from the upcoming auction. The high court also cancelled the merger of both mines in Orissa into one block.

The high court bench of Justice Badar Durrez Ahmed and Justice Sanjeev Sachdeva noted that the coal block ordinance envisaged classification of blocks to be auctioned according to specified end use.

“The classification done / to be done under Section 7(1) of the ordinance clearly requires the mines to be classified as per the specified end uses. Therefore, once a mine is classified for the specified end use — power — the same would include generation of power for captive use. This is the legislative intent and the same cannot be altered by executive action,” the court said.

The Court has now held that the classification of end uses for the blocks in Orissa and Chhattisgarh “needs to be reviewed” , after noting that the technical committee had not properly followed the directions provided by the coal block ordinance with regard to end use.

The court also noted that the objections raised by the steel ministry regarding the effect of the end use change on the steel industry was also not considered by the committee.

The court observed that the “obvious” aspect of the “adverse impact” of the end use change had not been considered by the committee while directing change in the end use of the coal blocks.

“There is no discussion in the record notes of the technical committee as to what would be the impact on the steel sector on account of the change of end-use of the coal blocks in issue in the present petitions. That was a vital aspect which has been completely ignored,” the court observed.

JSPL had filed two petitions before the Delhi High court objecting against the change in end use of the mines from steel to power. The company had also objected to the merger of the Utkal B1 and B2 blocks, claiming that the change in end use would block them from bidding for the blocks, even though they had been allotted the blocks previously and had created infrastructure there.

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