JSPL’s statements are false, Centre tells HC

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New Delhi: Govermment today told Delhi High Court that JSPL and its promoter have made “lot of statements which were false” while challenging its decision to change the end-use of two coal blocks in Odisha and Chhattisgarh which had been earlier alloted to them.

Additional Solicitor General (ASG) Sanjay Jain submitted before a bench of justices B D Ahmed and Sanjeev Sachdeva that Jindal Steel and Power Ltd’s (JSPL) and its promoter had made a “lot of statements which were false”.

He also termed as “false” JSPL’s claim that it had paid an additional levy of Rs 295 per metric tonne of coal mined, from two blocks – Utkal B and Gare Palma IV/6 – since the day these were allocated to them, for being eligible for the fresh auction of coal blocks.

During brief arguments, Jain said the amount of additional levy was to be paid only by those companies who were allocated Schedule Two mines – those that were operational – and not by those who had Schedule Three mines, which were non-operational but had all the requisite clearances.

The ASG also said that by claiming to pay the additional levy amount, “no special equity is flowing” in favour of JSPL with respect to the two coal blocks.

The bench will now hear ASG’s arguments further on January 20.

The court was hearing pleas filed by JSPL and Jindal against the government’s decision to change from steel and iron to power the end-use of two coal blocks – Gare Palma IV/6 in Chhattisgarh and Utkal-B in Odisha, both of which had been earlier alloted to the company.

The Coal Ministry through its December 18, 2014, order had changed the end-use of various coal blocks.

Yesterday, the court had asked how the coal ordinance gave the government the power to change the end-use of coal blocks and questioned the “tearing hurry” to hold their auction. It had also sought to know whether the auction process could be kept on hold till it examines the petitions of JSPL and Jindal.

The bench had also questioned the Coal Ministry on why captive power use has been excluded by the December 18, 2014, order when the same has been included in the ordinance as an end-use along with power generation. (More) PTI HMP PPS

JSPL had earlier told the court that due to change of end-use it was unable to participate in the ongoing auction process for the Utkal B block as it has already set up a steel plant near that mine when it was earlier allocated to it.

The company had also said it was currently suffering a loss of Rs 250 crore per month and if it did not get the block then over 30,000 of its workers will become jobless.

It had also said that it would have to import coal at a cost of Rs 2500 per metric tonne when it could have got the same for Rs 500.

The petitioners have sought setting aside of the December 18 order of the ministry as well as the provisions of the Coal Ordinance “which provide for change of end-use from steel to power”.

JSPL in its plea has contended that it was allocated coal blocks in Odisha and Chhattisgarh for the purpose of setting up steel and sponge iron production units, respectively.

After the allocations were cancelled by the Supreme Court through its orders of August 25 and September 24 last year, the Coal Mines (Special Provisions) Ordinance, 2014, was promulgated mandating the government to auction or tender the coal blocks, it has said.

According to the plea, change of end-use has resulted in making JSPL ineligible for participating in the ongoing auction process which is expected to culminate on February 14.

It said that JSPL has set up steel and sponge iron units in Odisha and Chhattisgarh for over Rs 24,000 crore.

The entire investment would be “rendered fruitless” if JSPL was unable to bid for the blocks, which were earlier allocated to them and based on which the steel units were set up after obtaining all necessary environment and forest clearance.

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