The Odisha High Court restrained the Odisha government from proceeding on allotment of three iron ore blocks allotted in favor of three privately owned steel companies. These companies are Essar Steel, Bhushan Steel Limited and Bhushan Power and Steel limited.
In 2016 March 28 Ghoraburhani mines allotted in favor of Essar Steel Limited. Kalamang mines allotted to Bhushan Steel limited in 2017 June and Netrabandha Pahar mine given to Bhushan Power and Steel Limited in 2017 June 4. High Court ruling comes as a big blow for these companies.
The court’s restraining order on 26 August 2018 alludes to one clause of MMDR Act 2015. During a hearing, the High court observed that the State government violated the law when made allotment of these mine. A PIL filed by an advocate Chittaranjan Sahu alleged that, state government underestimated the poor financial condition of these companies and made allotment in favor of them which is illegal.
Mines allotment made mandatory through an auction process in the MMDR Act 2015.
During a hearing, petitioner argued that, the state government did not take the poor financial condition of these companies in to consideration in the tender process. In fact, Letter of Intent issued in favor of these companies after the tender process. At that time, all these companies already became bankrupt and loans are sky high. Banks started the bankruptcy process against these companies. NPA matters of these 3 companies sent to Delhi and Ahmedabad bench of National Company Law Tribunal (NCLT) where all of them declared bankrupt.
In this case, Odisha High Court repeatedly sent notices to Odisha government to know government stand on this matter. First notice sent on May 30 of this year. Second notice was sent on July 3. Court also had given one month time to Odisha government for submission of answer and government failed. Next hearing date was fixed for August 27. Again state government failed to appear in the court. However, the final decision on the same is still awaited.
It is pertinent to mention here that, recently Tata Steel acquired Bhushan Steel Limited in the bankruptcy process. Bhushan Power and Steel limited is in the bankruptcy process and JSW, Tata Steel companies are in the race to acquire this company. Both Essar Steel, Bhushan Steel Limited and Bhushan Power and Steel Limited have their plants in Odisha.
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