CUTTACK: The Orissa High Court on Thursday dismissed Vedanta Ltd's petition seeking restoration of the earlier pricing mechanism for bauxite supplied by the Odisha Mining Corporation (OMC) to its alumina refinery and aluminium operations in the state.
A division bench comprising Chief Justice Harish Tandon and Justice MS Raman held that Vedanta could not seek revival or indirect enforcement of agreements that had already been terminated and had attained finality.
Vedanta, which operates an alumina refinery at Lanjigarh and an aluminium smelter and captive power plants at Jharsuguda, had approached the HC claiming that it had made substantial investments in Odisha on the basis of assurances of long-term bauxite availability and stable pricing.
The company relied on agreements executed with OMC, including an October 2004 arrangement for supply of 150 million tonnes of bauxite at a price linked to the cost of production plus 50 per cent royalty.
Subsequently, under the 2018 Long Term Linkage (LTL) Policy, 70 per cent of saleable mineral stock was earmarked for end-user industries and the remaining 30 per cent for national e-auction. Vedanta and OMC thereafter entered into an LTL sale agreement.
The dispute arose after OMC altered the pricing mechanism following the 2019 amendment to Rule 45 of the Mineral Concession Rules. Vedanta argued that the amended provision applied to mine block auctions and not commercial sales.
The company had earlier approached the HC and, following an order, submitted representations to OMC seeking restoration of the earlier formula. OMC rejected the request, leading to the present petition.
The bench noted that OMC had asserted that the original MoU of June 7, 2003, was superseded by a subsequent MoU dated April 4, 2007. The latter also ceased to operate after two years as no extension was granted by the state government.
The court further noted that following amendments to the Mines and Minerals (Development and Regulation) Act, 1957, OMC terminated the joint venture agreements dated October 5, 2004 and February 18, 2009 on September 29/30, 2015, after giving Vedanta an opportunity of hearing.
"The said termination remained unassailed by the petitioner at any point of time and has, thus, attained finality," the bench said and added, "after long lapse of time the petitioner cannot seek revival or indirect enforcement of agreements/MoUs."
The court also held that OMC's computation of the Average Sale Price under Section 17-A of the MMDR Act read with Rule 45 was justified.
Advocate general Pitambar Acharya representing the state submitted that the petitioner's prayer was wholly misconceived, hopelessly barred by delay, laches, waiver and acquiescence and, therefore, liable to be dismissed at the threshold.