The Supreme Court today allowed the appeal of Bhushan Power & Steel Ltd and directed the Orissa government to act according to the memorandum of understanding (MoU) between the two, signed on May 15, 2002. Overruling the Orissa high court order, a bench headed by Justice Altamas Kabir also asked the state government to make recommendations to the Centre for granting iron ore mines, as per the MoU.
The Bhushan group had sought allocation of iron ore mines to it to set up an integrated steel plant in the state. However, after the signing of the MoU, there were disputes among the family members of the industrial family. The state government then stated that the MoU had become naught and asked the company to sign a new one. Later, when the family claimed that the disputes had been settled, the state government still insisted on a new MoU.
According to the group, the government was not complying with its obligation of making recommendations for grant iron ore mines. The industrial house said that in the MoU the state government had committed to provide land, iron ore mines, coal blocks and other facilities to it.
The company claims it has set up an integrated steel plant, which has been operating since 2005. It also claims that it has invested Rs 18,000 crore and is providing employment to at least 10,000 people. Putting forward these claims, it argued before the Supreme Court that the state was obliged to make recommendation to the Centre for grant of iron ore mines.
According to the company, it has been incurring losses since it has no captive mines and is forced to purchase irons ore from the market at five times the normal rate.
