The Supreme Court Wednesday refused to stay the Karnataka government’s direction to banks to forfeit JSW Steel’s ₹128 crore performance securities.
The state’s mines and geology director had issued the direction to banks citing the company’s failure to meet minimum production requirement of iron ore from a mine in Chitradurga district. JSW Steel approached the top court after it did not get a favourable order Monday from the Karnataka High Court.
The company through senior counsel AM Singhvi told an SC bench led by Chief Justice Surya Kant that the state mining department issued the order without affording it any opportunity of hearing or even without a notice to show cause as to why the action should not be taken. “It, therefore, constitutes a classic case of violation of fundamental principles of natural justice and is violative of Article 14 as per the law settled by the SC,” the appeal stated.
Singhvi argued that the demand was made after more than four years for 2020-22, ignoring several representations by the company in which it had pointed out that circumstances caused by the authorities themselves had disabled it from achieving the production requirement.
JSW Steel said in its representations it had requested the authorities to remove the impediments and, in the meanwhile, to relax the mandate of minimum production and despatch requirement.
According to the company, it could not take up production during 2020-22 for reasons beyond its control, including the Covid-19 pandemic and the grade and quality of ore deposits being significantly lower than depicted in the bid documentation. JSW Steel won the leasing rights for the mine in an auction in 2019.
