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Informist, Wednesday, Apr. 23, 2025

 

--SC: HC right to reject appropriation of INR 737 mln by govt from Hindalco 

--SC to govt: Refund INR 737-mln to Hindalco in coal mines case in 3 months 

 

NEW DELHI – The Supreme Court on Wednesday upheld a Chhattisgarh High Court order quashing the government's appropriation of INR 737.08 million performance bank guarantees of Hindalco Industries Ltd. in a case related to Gare Palma-IV/ 5 Coal Mines at Milupara, Raigarh in Chhattisgarh. The apex court further directed the government to refund INR 737.08 million to Hindalco in three months. 

 

"Having regard to the materials on record, we see no good reason to interfere with the impugned judgment passed by the High Court. The special leave petition is, accordingly, dismissed," said the bench of Justices J.B. Pardiwala and R. Mahadevan. The top court noted that it has already been five years since the verdict was passed in 2020, but it is yet to be implemented. 

 

Hindalco had pressed for interest on the amount as the government was expected to immediately implement the high court's order as the same was not stayed. "In the facts and circumstances of the case, we do not award any interest to the respondents (Hindalco)," said the top court.

 

The case has its genesis from Hindalco being the successful bidder for Gare Palma-IV/ 5 Coal Mines. Thereafter, an agreement was executed between Hindalco and the government, and subsequently, the former was vested with mines in 2015. After the completion of formalities, Hindalco had furnished a performance security of INR 3.69 billion in the form of an irrevocable and unconditional bank guarantee to the government, which was renewed from time to time.

 

Hindalco said that vesting order obligations were imposed upon the central government and the state government to ensure that all necessary statutory proposals and licences are transferred to them. However, both failed to discharge the obligations and appropriated 20% of the performance bank guarantees penalising the petitioner, said Hindalco. The government had said that Hindalco could not achieve scheduled production from the mines for the financial year 2015-16 (Apr-Mar) and therefore, issued a notice for appropriation of performance security. 

 

On Wednesday, shares of Hindalco Industries ended 1.5% higher at INR 629.10 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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