Barring Vedanta from bidding: Supreme Court issues contempt notice to Nalco

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August 8, 2020 2:30 AM

Nalco had earlier opposed the participation of Vedanta’s Jharsuguda unit, saying the tender for alumina exports can be issued only to overseas customers and, therefore, Vedanta cannot participate in its tender.

A bench led by Chief Justice SA Bobde sought response from the top Nalco brass as to why contempt should not be initiated against them for “clear deviation from the requirement recorded in it January 14 judgment,” as alleged by Vedanta.A bench led by Chief Justice SA Bobde sought response from the top Nalco brass as to why contempt should not be initiated against them for “clear deviation from the requirement recorded in it January 14 judgment,” as alleged by Vedanta.

The Supreme Court on Friday issued contempt notice to the top brass of National Aluminium Company (Nalco), including its executive director (Marketing) R N Mohapatra and CMD Tapan Kumar Chand, on a petition by Vedanta alleging “willful disobedience” of its January judgment that allowed its UK-based arm to participate in the state-run aluminium producer’s tender for the sale of surplus 30,000 MT of metallurgical-grade calcined alumina.

A bench led by Chief Justice SA Bobde sought response from the top Nalco brass as to why contempt should not be initiated against them for “clear deviation from the requirement recorded in it January 14 judgment,” as alleged by Vedanta.

The top court had allowed Vedanta Resources (VRL) to bid for Nalco’s alumina tenders meant for exports, but said the delivery of consignment would take place at Vishakhapatnam on FOB basis, though the same would be for use in Vedanta’s SEZ unit at Jharsuguda. Nalco had earlier opposed the participation of Vedanta’s Jharsuguda unit, saying the tender for alumina exports can be issued only to overseas customers and, therefore, Vedanta cannot participate in its tender.

While VRL on June 24 bagged the spot tender for sale of 30,000 MT of metallurgical Grade (sandy type) calcined alumina, Nalco, the leading producer of low-cost metallurgical-grade alumina in the world, refused to allow the UK firm to take the consignment to its SEZ unit and insisted on terminating the transaction at the Vishakapatnam Port. Besides, the producer asked VRL to obtain Let Export Order (LET), a mandatory requirement for completion of the transaction, from the Customs authorities at the port – a stand contrary to the SC’s January directions that asked the Anil Agarwal firm to get documentation from SEZ authorities.

Senior counsel Mukul Rohtagi, appearing for Vedanta, argued that Nalco was insisting that the goods should be taken out of India and could not be utilised by Vedanta at its SEZ unit. “Unfortunately, Nalco is making repeated attempts to wriggle out of the SC order,” he argued.

“This was all the more baffling since LEO under the Customs Act is issued for consignment to be shipped outside India….The insistence on issuance of an LEO is in fact a smokescreen to deny VRL usage of the consignment at their SEZ plant. Thus, the CMD effectively sought to undo the SC direction with respect to the certificate. This would have relegated Vedanta to its position at the start of this petition,” the contempt petition filed through counsel PS Sudheer stated.

By refusing to raise the invoice in the VRL’s SEZ office, Nalco officials are “purposely and willfully trying to circumvent the SC’s directions… The judgment is pending compliance since seven months and this is indicative of the lackadaisical and tardy manner in which the transaction has been carried on especially with the intent to frustrate the mandate of the SC,” according to Vedanta.

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