The Delhi High Court on Friday allowed Coal India (CIL) to take over the operational Gare Palma IV 2&3 and 1 coal blocks in Chhattisgarh but said that the PSU can only act as a custodian for the blocks without any ownership right, given that the court was yet to pronounce the final order in the matter.
The government had cancelled the bidding of the three blocks, Gare Palma IV/2&3 and Tara, bagged by JSPL and Gare Palma IV/1 won by Balco in the e-auction, citing that the winning bids were lower compared to other mines with similar grades of coal and end use. It has given two of these blocks — Gare Palma IV 2&3 and 1 — to Coal India.
The government’s decision was despite it levelling no charges of malpractice or collusive bidding on the successful bidders, citing lack of conclusive evidence. Both companies, which used to operate the respective blocks, moved the court.
The HC said CIL will operate and produce coal from the blocks starting April 1, given the rights of the previous holders end on March 31 as per the Supreme Court order. The SC had allowed the operators to continue mining till March 31, after which their allotment will stand cancelled.
The court said that there was no evidence of cartelisation and the companies, JSPL and Balco, won the blocks “fair and square”.
The HC added that all bidders appeared to have acted as per business interest and asked the government as to why it was not exposing if the companies were involved in cartelisation.
The government, on its part, clarified that it had not alleged cartelisation by any party but added that a stay on the government’s decision to allot two blocks to CIL will be against SC order.
The government in its representation to the HC said that it didn’t need to explain the reason for cancelling blocks and it was within the purview of its power to decide on re-auction or allotment.
JSPL and Balco told the government that no third party rights should be created for CIL even as they agreed to cease mining as of March 31.
The SC order mandated that producing blocks be not disturbed and be transferred to new allottee from April 1. Soon after cancellation, government allotted them to CIL to continue mining post March 31 as they cited paucity of time for re-auction as an alternative. However, for the near-operational block of Tara in Chhattisgarh, the government can either include it in the auction along with other blocks or go for re-auctioning later.