Centre cautions states against litigation while auctioning mines

As the states kick-off the process to auction iron ore and bauxite mines, Centre has issued an advisory cautioning them against unnecessary litigations and controversies.

“States should have a team of standing legal counsel in all readiness to ensure that the auction process does not get hampered on account of any litigation that may arise due to court cases by prospective bidders”, the advisory from the Ministry of Mines stated.

“Sometimes, the bidders may file court cases across multiple jurisdictions. It is important to ensure that all these litigations are taken care in timely manner for uninterrupted conduct of auctions”, it added.

A senior ministry official told Deccan Herald that the advisory has been issued to avoid litigations arising out of confusions as happened during the coal block auctions.

“While responding to the queries on the tender document raised by the bidders, responses should be specific (yes or no), as far as possible, so that there is no scope for ambiguity which may result in litigation at a later stage”, the states were told.

States should consider bidders as their partners and provide adequate handholding so that they face minimum challenges during the auction process as well as during mine development, the advisory said. Asking state governments to take all appr­ovals from the Centre on time, the advisory called on them to constitute Technical Evaluation Committee (TEC) to facilitate pragmatic and prudent decision making without compromising their interests.

“In case the state government decides to reserve a mineral block for specified end-use, the tender document should clearly specify the eligibility criteria and ensure adequacy of competition pool and avoid cartelization,” advised the Centre to states, learning from the cartelization controversy which happened during coal auction.

Timelines of the e-auctioning process should be designed in a way that prevents any potential for cartelization by industry players, it noted, while asking states to hold a preliminary consultation meeting with the industry to obtain their inputs on the tender process.