Court says no evidence of cartel in low bids for coal blocks

By Suchitra Mohanty

NEW DELHI (Reuters) - A court on Friday said there was "absolutely no evidence" of collusion in the low winning bids for three of the 33 coal mines put up for auction by the government over the past two months.

The government earlier rejected four winning bids -- three from Jindal Steel and Power Ltd and one from aluminium maker BALCO -- after examining nine blocks whose unexpectedly low bids prompted the designation "outliers".

The court was hearing the case after Jindal Steel and BALCO, majority owned by mining major Vedanta Group Plc, appealed against the government's decision.

In an interim order on Friday, the Delhi High Court observed that all bidders appeared to have acted as per business interests and there were no irrational decisions.

"Why does the government not name and shame all those involved in cartelisation?" a division bench comprising judges Baddar Durrez Ahmed and Sanjiv Sachdeva asked.

The government, represented by P.S. Narsimhan, said it was not alleging cartel activity by any party but was looking into the matter.

The court also appointed state-run Coal India as custodian for the Gare Palma 4/1, 4/2 and 4/3 mines in Chhattisgarh state until a final decision is reached. The next hearing is scheduled for April 13.

The court hearing on the fourth block, for which Jindal Steel submitted the winning bid, is scheduled for later this month.

(Writing by Aman Shah in Mumbai; Editing by Mark Potter)