The Supreme Court on Thursday held that the inability to sell the iron ore output in the local market due to higher prices cannot be a ground to allow exports and rejected the plea of Vedanta Limited.
The Supreme Court on Thursday held that the inability to sell the iron ore output in the local market due to higher prices cannot be a ground to allow exports and rejected the plea of Vedanta Limited.
A three-judge bench of Justices Ranjan Gogoi, Prafulla C. Pant and AM Kanwilkar in its order said, “The inability of M/s. Vedanta Limited to sell the output from its leases, as expressed, could very well be because of the pricing patterns adopted by it. Inability to sell on account of higher prices cannot be a ground for export of the mineral. Permission for export must be governed by norms and parameters of general application as distinguished from ad hoc decisions in individual cases. Until such guidelines are framed, the prayer of M/s. Vedanta Limited for export of its iron ore cannot be granted. So far as the issue of framing guidelines/norms for exports are concerned, the same will be dealt with separately at an appropriate time and stage in the cases relating to Samaj Parivartana Samudaya.”
The bench also rejected the application of Karnataka Iron and Steel Manufacturers Assoc-iation to direct National Minerals Development Corporation to restrain from adopting differential pricing mechanism for the iron ore sold in the e-auction in the state of Karnataka and to direct the Central Empowered Committee/monitoring committee to fix the floor price of iron ore on realistic grounds. It was submitted by the association that NMDC had all along been fixing the floor price/sale price by adopting uniform pan-India pricing. However, since April 2016, a differential pricing policy has been adopted so far as Karnataka is concerned and the identical floor price/sale price that was prevailing in respect of Chhattisgarh and Karnataka has been altered and the floor price for Karnataka has been increased. NMDC said that the base price/floor price fixed by it has been determined by the market conditions and despite a higher price in Karnataka than Chhattisgarh, the cost of landing in Karnataka is lower than in Chhattisgarh. CEC in its response indicated that as NMDC is working under a special dispensation granted by this court, until such dispensation continues, it should not be allowed to resort to dual pricing.
Not accepting the CEC stand, the bench said, “While it is correct that the special dispensation granted to NMDC by this court cannot continue in perpetuity and the regulatory measures prescribed by this court for other leaseholders must also apply to NMDC, the working of its leases by NMDC under the special dispensation, by itself, cannot be a legitimate ground for not resorting to a dual price mechanism if the same is dictated by market forces...”
