The Orissa High Court in an interim order has pressed the brakes on the progress of three iron ore blocks auctioned in Odisha- Ghoraburhani-Sagasahi, Kamalang West, and Netrabandha Pahar. In the order, the court directed the Odisha government to restrain the three successful bidders- Essar Steel, Bhushan Steel and Bhushan Power & Steel to proceed with mining activities after letters of intents (LoIs) were awarded by the state government.
The next date of hearing on the matter is fixed on September 3, 2018. An Odisha government official said, they will file a counter affidavit in the court on September 1.
The court was adjudicating on a public interest litigation (PIL) filed in July. The key contention of the petitioner was the allotment of blocks to the companies even though they were under insolvency proceedings and their net worth had eroded. The role of SBI Capital Markets (SBI Caps), the designated agency for conduct of e-auctions in Odisha has also come under the scanner as it allowed the bidders to participate in the auctions despite knowing their financials had deteriorated and they owed enormous debt to a consortium of banks which was led by its own parent concern- State Bank of India (SBI).
As things stand now, while Bhushan Steel’s insolvency is through after being taken over by Bamnipal Steel Ltd, a fully owned subsidiary of Tata Steel Ltd, the resolution process of the other two companies- Essar Steel and Bhushan Power & Steel is still pending with the National Company Law Tribunal (NCLT).
In the PIL, one petitioner named Chitta Ranjan Sahu had pleaded to the court to grant a stay on the bid process, terming the bid process as violative of the provisions of the Mines and Minerals- Development & Regulation (MMDR) Act, 2015 and Article 14 of the Constitution of India. The PIL also sought that the High Court instruct the successful bidders to produce all the pertinent documents of the proceedings of NCLT and pass an interim order to probe into the financial statements and bid submissions made on behalf of the three bidders by a committee of experts.
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