The Delhi High Court on Friday directed the government to provide with immediate effect “continuous and uninterrupted supply” of 2,50,000 metric tonnes of iron ore per annum to steel manufacturer Sunflag Iron and Steel Co at the rate of 20,000 tonne per month or, as per altered circumstances, for its integrated steel plant at Bhandara, Maharashtra, through appropriate linkage as assured.
Justice Sudhir Kumar Jain also asked Steel Authority of India (SAIL) to make continuous and uninterrupted supply with immediate effect as required by the company till the appropriate linkage is provided by the Union government.
While fixing the price of iron ore, the HC has asked the government to consider the considerable time lost and the investments made by the company.
Setting aside the government’s decision that rejected Sunflag’s application for grant of a prospecting licence in respect of Rowghat F, the HC came down heavily on the government, saying “it is in the public interest that the promises made by any state or any organ/entity of state including a public sector undertaking (PSU) should be kept especially when it is a beneficiary of such a promise.”
Holding the government’s 2006 notification to be “not retrospective,” the judge said that the Rowghat F deposit in District Bastar of Chhattisgarh cannot be reserved exclusively for any government company or corporation until a contractual obligation is created in the company to continuously and uninterruptedly supply the required iron ore to Sunflag Iron.
The government through a 2006 notification had reserved Rowghat F deposit for SAIL and said that no further prospecting licence or mining lease would be granted in such an area for a period of 10 years.
According to the judgement, Section 17A (1A) of the Mines and Minerals (Development and Regulation) Act, 1957 nowhere, either expressly or impliedly, mandates exclusive accrual of minerals so exploited to such reserved PSUs and also nowhere prohibits usage of exploitation minerals by a third party.
Sunflag had moved the HC challenging the arbitrary, illegal and unreasonable actions/decision of the government and SAIL for not providing assured and uninterrupted regular supply of iron ore for its sponge iron and steel plant and for rejecting its application for grant of mining lease.
The company said that the Central government through its Linkage Committee for Coal and Iron Ore had in 1987 approved Iron Ore linkage from Dalli-Rajhara lines of SAIL. Based on this approval, the company had setup its integrated Steel Plant at the initial cost of Rs 300 crore. The plant had commenced its operation from 1988-1989 and was set up purely based on the representations and promises regarding the supply of iron ore from Dalli Rajhara lines of SAIL, the company told the HC.
