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Jindal firms to SC: Cannot pay coal penalty by Dec 31

Claiming it was “doubly punished” for the government’s fault, Jindal Power Ltd (JPL) on Monday moved the Supreme Court, citing its inability to shell out Rs 1,793 crore penalty by the court-mandated deadline of December 31.

JPL and its parent company, Jindal Steel & Power Ltd (JSPL), need to pay the penalty Rs 1,793 crore at the rate of Rs 295 per metric ton for illegal mining. JPL operates two coal blocks, Gare Palma IV/2 and IV/3, and JSPL has one block, Gare Palma IV/1, in Chhattisgarh.

JPL said it was required to pay Rs 1,024.54 crore as additional levy with respect to its blocks Gare Palma IV/2 and IV/3, and Rs 768.83 crore would be the levy with respect to coal block Gare Palma IV/1, which is operated by JSPL.

As per the plea, the penalty to be paid by them is the “highest among the operational coal block allottees” and it would comprise about 20 per cent of the total additional levy sought to be collected from all operational coal blocks that stand de-allocated.

In the application, which will come up for hearing on Thursday, JPL asked for a time frame of three years to make the payment in 36 equal monthly installments, while also raising apprehensions it may have to close down a few plants if the court does not allow its prayer. It had also pleaded for permission to participate in the future auction of the coal blocks without getting disqualified on the basis of not paying the levy by the deadline.

While scrapping allocation of 214 out of 218 coal blocks, the court had ordered allottees to cough up a penalty of Rs 295 per metric ton of coal extracted as additional levy, as assessed by the Comptroller and Auditor General. It had sought payment by December 31 and also held the coal extracted till March 31, 2015 will also attract the additional levy.

“The payment of additional levy is humongous and back-breaking, which is forcing the applicant to financial ruin. The imposition of such a levy was unexpected and the applicant has not made any provision in the books of account … if this Hon’ble Court does not extend the time to pay the additional levy, grave prejudice would be caused in not only carrying out its expansion plans, payment of debts but also in carrying out operations,” JPL said.

It added that the “financial distress” may lead to closure of its plants, which would also have severe impact on 50,000 families of JPL and JSPL employees. It said that its credit rating had already been downgraded and banks were extremely cautious owing to the uncertainty of coal supplies.

Source: The Indian Express