By Bizodisha Bureau, Bhubaneswar, May 5, 2018: Odisha government has been barred to conduct e-auction of two iron ore blocks by the Delhi High Court citing ineligibility of one of the bidders for e-auction.

The iron ore blocks are located at Chandiposhi and Purheibahal in Sundargarh district.

Some 17 companies have evinced interest in the e-auctions scheduled for May 5 and 8, officals said.

The Delhi High Court’s order refers to one of the clauses under Section 6 (1) (b) of the Mines and Minerals- Development & Regulation Act of 1957. The auction Rules bar a company to bid for electronic auctions of a mineral block if it already possesses more than 10 sq km of mineral lease area.

The section 6 (1) (b) of the Act says, “The State Government may not be able to issue the letter of intent (LoI) without prior approval from the Central Government in case the bidder holds or may hold (including the area covered under the mining lease being auctioned under this tender document) one or more mining leases covering a total area of more than 10 square kilometres in respect of any mineral or prescribed group of associated minerals in the State of Odisha”.

The Court, however, did not name the bidders ineligible for the e-auctions as its mining lease is beyond the permissible limit or area.

It is noteworthy to mention that the Odisha government appealed to the Centre to raise this permissible limit from 10 sq km to 75 sq km. Interestingly, Tata Steel would have been the benefited if the center would have accepted the state’s recommendations. Tata Steel currently has six iron ore and manganese mines in its leasehold in the state with the combined area stretching over 50 sq km.

Further, the Delhi High Court observed that the tender documents for the two new iron ore blocks were ambiguous. “Also, it is unclear as to whether indeed the State of Odisha’s request for extension of the mining area made through application dated March 13, 2018 would be accepted”, the order said.

The court observed that proceeding on e-auctions can lead to confusion on the eligibility of some bidders with respect to the provisions in Section 6 (1) (b) of the 1957 Act. The Delhi HC also directed the Central government to decide within 15 days of its order.