HC blocks transfer of Jindal's bid-winning coal blocks to CIL

The Delhi High Court on Monday directed the government to maintain the status quo on two Chhattisgarh mines for which the highest bid by the Naveen Jindal-controlled Jindal Power Ltd (JPL) had been cancelled.

Passing an order staying action on the Tara coal block till 16 April, the court also asked the ministry how it could allot a mine to Coal India Ltd (CIL) when the block had been earmarked for allocation through auction.

As reported, the government is planning to hand over the coal blocks for which it has found the bids 'too low' to sate-owned CIL, which enjoys a virtual monopoly on coal production in India (See: Govt may hand over bid-cancelled blocks to Coal India).

The query was raised after the court was informed that the coal ministry had annulled the tender process to allot CIL two mines- Gare Palma IV/2 and IV/3 in Chhattisgarh-for which JPL had put in the highest bid.

A Bench of Justices B D Ahmed and Sanjeev Sachdeva asked the union government how it could switch from allocation to allotment, while hearing JPL's petitions challenging the government's March 20 decision.

The court issued notice to the ministry and directed it to file response in two days with regard to the Gare Palma mines and listed the matter for further hearing on 26 March.

It also asked the ministry to bring the relevant records regarding the tender annulment and to place it before the Bench for its perusal.

With regard to the plea on annulment of tender process for Tara coal block, the court sought the government's response by the next date of hearing, 16 April.

In its two petitions, JPL has sought quashing of the 20 March order as well as directions to the government to declare it as the successful bidder for the three mines and to award them to it.

During the proceedings, senior advocates Kapil Sibal, Gopal Subramaniam and Rajiv Nayar, appearing for JPL, contended that the only reason the government had given for cancelling their bids and annulling the tender process was that the highest bids did not reflect a fair value.