The Supreme Court on Wednesday sought response from the Centre on an appeal by Essar Power MP, seeking return of the Tokisud North coal block in Jharkhand. A Bench led by Chief Justice Ranjan Gogoi issued notice to the ministries of power and coal on Essar Power’s appeal against the Delhi High Court’s April 15 order that denied relief to the company “by invoking the doctrine of delay and laches” even though the company claimed that it had filed the petition within time. The apex court also said the encashment of `261-crore bank guarantee by the government will be subject to final outcome of the appeal.

After there were delays in key approvals and sudden change in tariff terms, Essar Power had surrendered the Tokisud North coal block in which it had invested `490 crore. The company had won the coal block through a competitive bidding process in February 2015. The Tokisud mines were first with GVK Power, which lost the licence after the apex court had cancelled all the 204 mines in September 2014.
Essar had moved the Delhi High Court in May 2017 seeking quashing of the tender process and refund of the entire investment it had made in the block. “All the coal mines were auctioned under the Coal Mines (Special Provisions) Act, 2015 through a common notified standard tender document for power sector, but on different dates, it said.

All the mines were held to be successful till the government through its notification of April 16, 2015 introduced a completely new condition, altering the very basis of the tender process, Essar Power said. While seeking a level playing field with other similarly situated persons, Essar said Monnet, Jaiprakash Power Ventures and other bidders were allowed to withdraw from the bid. It said the coal ministry had issued a termination notice to the Tokisud North coal mines and asked them to forfeit `261-crore bank guarantee for non-payment of upfront amount for the block.

“No prejudice would be caused to the government in case the petitioner is allowed to return the coal mine only with the return of the performance security,” the petition stated, adding that Essar Power had not utilised the coal mine at all. Its Mahan plant, which had taken a hit after the cancellation of all the 204 coal blocks, had resumed operations in May 2016 after Essar Power procured coal through government conducted e-auctions for the `8,000-crore thermal power project.