Free Press Journal

HC calls absurd CIL’s reason for cancelling e-auction of coal

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Coal Scam

New Delhi,: Delhi High Court today termed as “absurd” CIL’s reason for cancelling an e-auction of coal, in which Jindal Power Ltd (JPL) had got 49,000 metric tonnes of the fuel due to delay in getting consent to operate two Chhattisgarh mines.

Coal India Ltd (CIL) told a bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva that since consent to operate the mines – Gare Palma IV/2 and IV/3 – had not been provided even after a month of applying for it, the PSU decided to cancel the e-auction.

CIL said as per auction conditions, once it issued the sale order, coal had to be transported from the site by the successful bidder within 45 days, and since it did not know when the consent to operate would be granted, if at all, the state-run enterprise decided to cancel the e-auction.


“We did not want to keep it outstanding, in limbo. We did not know how long the consent will take. So we cancelled the e-auction,” senior lawyer and CIL counsel Sandeep Sethi said. Disagreeing with CIL’s contention, the bench said,”There is no logic to your decision. You could have kept it (sale order) pending. The authorities may have granted consent any day. Your logic is not understandable. It was an absurd decision.”

The PSU, however, contended that JPL cannot challenge its decision by way of an affidavit filed in a petition for quashing of a March 20 order of the government cancelling the bids of the company and Bharat Aluminium Company (Balco) for four coal blocks amid speculation of cartelisation.

It said a fresh application needed to be filed. Following this, the court asked JPL to file a fresh plea during the day and listed the matter for hearing tomorrow.

JPL had in an affidavit told the court that while 49,000 MT of non-coking coal won by it was cancelled citing production issues at Gare Palma IV/2 and IV/3 mines, 2.5 lakh tonne per month of coal from same area was offered to National Thermal Power Corporation Ltd on ‘as is where is basis’.

JPL had said much coal was being offered to NTPC for the PSU’s thermal power plant at Barh in Patna, Bihar and to transport this, the state-run enterprise had invited bids. The company had contended that it had participated in the e-auction on April 11 and had bid the highest price of Rs 1008 per tonne of coal and paid Rs 7.8 crore for the 49,000 MT coal won by it.

It had said that on May 22 it was informed by CIL that the e-auction was being cancelled owing to production issues and the amount of Rs 7.8 crore was refunded. It had also said CIL had on April 3 invited bids for 4.05 lakh tonne of non-coking coal and 1.5 lakh tonne of coking coal.

Of the 4.05 lakh tonne of non-coking coal, 60,000 metric tonne was to be auctioned from the two Gare Palma mines, JPL had said in its affidavit. The court had on March 27 said there was “no evidence of cartelisation” in the auction of the blocks for which JPL and Balco were the successful bidders.

JPL had emerged as successful bidder for Gare Palma IV/2, Gare Palma IV/3 and Tara coal blocks, while Balco had successfully bid for Gare Palma IV/1 coal block. It had also termed as “unfair” government’s decision to annul the bids. Thereafter, the court had on March 27 made CIL the custodian of the two Gare Palma mines.