High Court seeks govt’s response on Naveen Jindal’s plea against Coal Ordinance

Delhi High Court today sought government’s response on pleas of Jindal Steel and Power Ltd (JSPL) and Jindal Power Ltd (JPL)…

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Delhi High Court today sought government’s response on pleas of Jindal Steel and Power Ltd (JSPL) and Jindal Power Ltd (JPL) challenging the 2014 Coal Ordinance provisions regarding determination of compensation payable to previous allottees towards mining infrastructure and land value of the blocks.

A bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw while issuing notice to the government and seeking its response by March 23, also said that auction of Gare Palma IV/2, IV/3 and IV/4 blocks in Chhattisgarh would be subject to the final outcome of the Jindal group companies’ pleas.

The three coal blocks were earlier allotted to Jindal but the allocation was cancelled by the Supreme Court in August last year.

The Gare Palma IV/2 and IV/3 blocks were linked to JPL’s 1000 megawatt thermal power project at Tamnar in Raigarh district of Chhattisgarh, while Gare Palma IV/1 was linked to JSPL’s 6 lakh tonne capacity sponge iron/steel plant at Raigarh.

Senior advocate Rajiv Nayar, appearing for Jindal, prayed for passage of an order similar to those passed in the matters of GVK Power Ltd and Jayaswal Neco Industries Ltd, which had challenged the Ordinance provisions regarding method of determining compensation of capital costs, including mining infrastructure.

The petitions of Jindal group companies were moved a day after the high court gave them relief in their first set of petitions in which they had challenged change of end-use of two Coal blocks in Chhattisgarh and Odisha which had been earlier allocated to them.

The High Court had taken the coal blocks off the auction process and directed a technical committee to review its own decision to change the end-use of the mines.

In the latest petitions, Jindal group contended that the compensation government had computed for the three blocks in Chhattisgarh that were earlier allocated to it, was “irrational and unreasonable”.

They also sought setting aside the government’s valuation of the land and mine infrastructure.

Maintaining that various expenses incurred by it towards mining infrastructure and acquisition of land has not been considered by the government, the companies have sought that the ordinance’s provision for computing compensation be declared “unconstitutional”.

They have said that compensation for the mining infrastructure should be determined as per market value and not the value written in audited balance sheets of previous financial year.

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First published on: 13-02-2015 at 17:00 IST