HC relief for JSPL, three blocks taken off auction

The court also directed a technical committee to review its decision to merge Utkal B1 and B2

In a relief for Jindal Steel and Power (JSPL) and its promoter, Naveen Jindal, the Delhi high court on Wednesday directed a technical committee to review its decision to change the end-use of three coal blocks allotted to the company, Utkal B-1, Utkal B-2 in Odisha and Gare Palma IV/6 in Chhattisgarh. The court has also said these mines would not be auctioned now.

A bench of judges Badar Durrez Ahmed and Sanjeev Sachdeva said while changing the end-use of these blocks to the power sector, the aspect of the adverse impact on the steel sector “has not been considered”.

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.

JSPL contended the change of end-use of these blocks from steel and iron to power had prevented it from bidding for these, which could result in Rs 24,000 crore of investments going waste. The government, on the other hand, contended that end-use of both blocks was changed in view of the “energy security of the country”.

“The judgment of the High Court in the Jindal Steel case will not impact the auction process of Schedule 2 mines that is underway,” said Coal Secretary Anil Swarup.

Disagreeing with the government's reason for changing end-use, the bench said the expression “energy security of the country” referred to the coal reserves and not to the power sector.