Don’t pay creditors of companies which failed to win back mines: HC
20 March 2015 12:08 AM GMT
“Meanwhile, respondents (Coal Ministry and designated authority) shall not proceed with ensuring satisfaction of security interests of the secured creditors,” the court said.
A bench of justices B D Ahmed and Sanjeev Sachdeva told the Coal Ministry to “stay its hands” with respect to paying or disbursing the compensation amount to secured creditors of the various iron and steel and power companies, like Jindal, GVK Power, Jayaswal Neco, Prakash Industries, Utkal Coal and others.
The court also said government orders vesting the mines, earlier owned by these companies, with the successful bidders would be subject to final outcome of their pleas challenging the 2014 Coal Ordinance provisions on method of determining compensation for mining infrastructure.
Senior advocates P Chidambaram, Gopal Subramaniam and Rajiv Nayyar, appearing for the companies, contended that the government’s calculation of compensation is much less than the figures they had submitted, and as a result of this they will have to raise money to pay their debts.
They said the government is not paying the compensation to them, instead it would be disbursed to their secured creditors and sought a stay of the vesting orders till their pleas are decided. They said that as a result of being “undercompensated”, if the vesting orders are passed, then the secured creditors will issue notices for getting back balance of their loans for which the companies will have to raise money from elsewhere and would cause “grave financial loss” to them.
A bench of justices B D Ahmed and Sanjeev Sachdeva told the Coal Ministry to “stay its hands” with respect to paying or disbursing the compensation amount to secured creditors of the various iron and steel and power companies, like Jindal, GVK Power, Jayaswal Neco, Prakash Industries, Utkal Coal and others.
The court also said government orders vesting the mines, earlier owned by these companies, with the successful bidders would be subject to final outcome of their pleas challenging the 2014 Coal Ordinance provisions on method of determining compensation for mining infrastructure.
Senior advocates P Chidambaram, Gopal Subramaniam and Rajiv Nayyar, appearing for the companies, contended that the government’s calculation of compensation is much less than the figures they had submitted, and as a result of this they will have to raise money to pay their debts.
They said the government is not paying the compensation to them, instead it would be disbursed to their secured creditors and sought a stay of the vesting orders till their pleas are decided. They said that as a result of being “undercompensated”, if the vesting orders are passed, then the secured creditors will issue notices for getting back balance of their loans for which the companies will have to raise money from elsewhere and would cause “grave financial loss” to them.
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