Coal news and updates

SC refuses to allow JPL to participate in coal auction

In a  setback to Naveen Jindal-led Jindal Power (JPL), the Supreme Court on Thursday refused to allow the firm to participate in the coal auction likely to start next week and also rejected its request to make payment of around R1,800 crore in 36 equal monthly installments.

JPL and parent Jindal Steel & Power (JSPL) need to pay R1,793 crore towards R295 a tonne penalty for illegal mining as directed by the Supreme Court in a September order that scrapped allocation of over 200 blocks. JPL operates two blocks, Gare Palma IV/2 and IV/3, and JSPL has one block, Gare Palma IV/1, in Chhattisgarh. While JPL has to pay R1,024.54 crore as additional levy with respect to its blocks Gare Palma IV/2 and IV/3, JSPL has to pay R768.83 crore with respect to the block Gare Palma IV/1.

A bench headed by Justice Madan B Lokur refused relief after Attorney General Mukul Rohatgi opposed allowing JPL to participate in the auction as of now, saying “December 30 is the last date and if allowed to participate now the entire auction will go for a six… they (JPL) knew the position for three months after passing of the order”.

Senior counsel Abhishek Singhvi and Kapil Sibal argued the company is being “doubly punished” for the government’s fault. One, by cancellation of blocks and second due to the additional levy. Stating it was unable to cough up the penalty by December 31, the court-mandated deadline, JPL said: “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 provision in the books of account… if this court does not extend the time to pay the levy, grave prejudice would be caused in not only carrying out its expansion plans, payment of debts but also in carrying out operations.”

Source: The Financial Express