Home ODISHA LATEST Coal block deallocation: HC stays encashment of bank guarantee

Coal block deallocation: HC stays encashment of bank guarantee


Odisha Sun Times Bureau
New Delhi, Feb 20

The Delhi High Court on Wednesday asked the bankers of Jindal Steel and Power Ltd and Strategic Energy Technology Systems Ltd, a joint venture between a consortium of Tata Group companies and South African company Sasol, not to transmit the bank guarantee amount to the Coal ministry which has sought to encash them.

“Since the court is of the view there have been similar petitions pending in this court in which a stay on encashment of bank guarantee was granted, this court, on the principle of parity, directs the bankers of the petitioners not to transmit the amount, qua the bank guarantee, to the respondent (Coal ministry),” a single bench of Justice Manmohan observed.

The court, while issuing notices to the concerned ministry, State Bank of India and Punjab National Bank on the pleas, allowed the companies to approach it again if the deallocated coal blocks are given to somebody else.

The two companies had challenged the deallocation notice issued by the ministry on February 17 and its bid to encash the bank guarantees.

While JSPL had given the bank guarantee of Rs 104 in relation to allocation of Ramchandi coal-to-liquid block in Odisha, the Strategic Energy Technology Systems Ltd had given a bank guarantee of Rs 55.35 crore for allocation of North of Arkhapal Srirampur coal-to-liquid block.

The ministry had deallocated these two coal blocks on the ground of delay in meeting development-related milestones.

It may be mentioned that the inter-ministerial group on coal, during a review meeting on the performance of 61 coal blocks held earlier this month, had recommended de-allocation of around 30 coal blocks due to delay in timely development of the blocks.

The ministry, till date, has recommended deallocation to over 22 coal blocks.