Rs 66 cr penalty: NTPC moves Delhi HC against govt decision, HC issues restraining order

• The Delhi HC has issued a notice on the petition by NTPC challenging the order and sought a response from the Central government within 10 days
• NTPC, in its plea, submitted that the Centre did not consider the ground realities which hampered coal production at the Talaipalli coal mine before imposing the fine

New Delhi: The Delhi High Court (HC) has restrained the Centre from acting on its order imposing a penalty of over Rs 66 crore on NTPC Limited for allegedly failing to comply with the production schedule for a coal mine in Chhattisgarh for two years. Justice Yashwant Varma issued a notice on the petition by NTPC challenging the order and sought a response from the Central government within 10 days.

The court observed that the matter requires consideration while noting that the action under challenge is initiated against a government company and that no reasons were recorded by the concerned authorities while rejecting the contentions raised before it.

"Let counter affidavit be filed within a period of 10 days from today. The petitioner shall have 48 hours thereafter to file a rejoinder affidavit," said the court in its interim order dated July 8. Till the next date of listing, the respondent shall stand restrained from taking further steps pursuant to the impugned order dated July 6, 2022, the court added.

NTPC terms govt order 'arbitrary'

NTPC, in its plea, submitted that the Centre did not consider the ground realities which hampered coal production at the Talaipalli coal mine and arbitrarily accepted the recommendations of a Scrutiny Committee and consequently issued the appropriation order dated July 6, 2022, imposing a penalty of Rs 66,01,42,080 towards non-compliance with the production schedule for financial years 2019-20 and 2020-21.

The petitioner told the court that the entire process came to be derailed on account of a failure on the part of the Mines Development Officer to act in accordance with law as well as the anomalies existing in the approved mining plan.

It was further submitted that the period in question was also one during which the pandemic prevailed, which clearly hampered operations, and the issues highlighted to explain the failure to meet the mandated production targets were not accorded consideration.

"This decision (by the Centre) has been taken without taking note of the various difficulties which NTPC has faced in not being able to meet the scheduled targets which have been on account of reasons beyond the control of NTPC," the petition said.

In fact, the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minster Narendra Modi itself has taken note of the difficulties and problems being faced by mine allottees in PSUs in meeting the coal production requirements and development of coal mine on account of reasons like law and order issues, enhancement in the area of forest from what was declared earlier, the resistance of landholders against land acquisition, geological surprises in terms of availability of coal resources, etc, and has decided not to penalise the mine allottees and give them a window to surrender the coal mine, it added.

In the petition, NTPC urged the court to issue directions to quash the appropriation order and also restrain the authorities from taking any coercive steps, including encashment of the bank guarantee for an amount of Rs 66,01,42,080.

The matter would be heard next on July 22.

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